As a busy teacher, the last thing you want is to fill in more forms or have more admin, but hear me out. Getting your personal finance in order is actually one of the most rewarding things you can do, and a few hours spent on admin is time saved. Let me explain.
The unit of earning and spending isn’t £$€¥, but time. If you think in terms of ‘how many hours of work does something cost?’ You will change your attitude to impulse spending and the relatively small amount of time you ‘spend’ maximising your personal finances.
Furthermore, getting your personal finances in order isn’t about living like a pauper, but using your finances wisely to spend on what matters and living like the prince/princess that you are.
I have put together this continually updating financial section for teacher because I know that, as an educator myself, there just are not enough hours in the day.
A few disclaimers first. I am not a financial advisor but have been investing for more than two decades and I know my way around a calculator. This should not be seen as financial advice, but as a few things, you might like to investigate further. Lastly, none of the products are paid advertisement and the views outlined here are completely independent. These are simply products that I have tried myself and liked. However, I have included a few links which will give both you and I a boost if you choose to use them. I encourage you to do your own research and choose the right course of action for you.
Here are 10 financial tips to help you get on top of your finances.
1. Start Early
Whatever you chose to do about your finances, begin now. There are so many different courses you can take, but chances are that inaction will cost you in the long run. Because of the miracle of compound interest (earning interest on previous interest year after year) the money, whether you are paying it, or it is being paid to you, will soon mount up. The earlier you start, the more the percentages work for you, and the greater the gains in the long term.
2. Reducing Debt
Because interest is such a powerful force, clearing any debt is always your top financial priority. Some debt is a necessary burden of life (a mortgage for a home) or to do something important (a student loan), but if you are not reducing your debt, you need to address this first before you can make gains.
Make a copy and use this spreadsheet with your own figures via https://docs.google.com/spreadsheets/d/15sHO-WEWLgep2AV0XRnAN-7QBa-IaADbsPK7hb8c7-U/edit?usp=sharing
Taking the 5% interest example above, overpaying a loan by, say £100, isn’t just giving your future self £100, but you will give your one-year-from-now self £105. Your five-year-from-now self will receive £127.63. Your twenty-year-from-now self will thank you for your gift of £265.33. This is why it is usual for mortgage payers over 25 years to pay two and a half times what they originally borrowed. Therefore, reducing your debt’s growth should be your top priority.
If you are struggling with debt, the first thing to do is talk about it and seek help. The worst thing you can do is remain silent.
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