The past year has been filled with unbearable uncertainty. While, as a teacher, your salary continued to be paid, your partner and loved ones may have lost work or been furloughed. Even as a teacher, the additional income from examination marking will have been lost.
It reminds us that events out of our control lie around every corner.
In some respects, the rich and varied nature of living is what makes life an adventure. It also demonstrates the need for a secure understanding of your finances. Ask yourself: is your money working hard for you? Will you always be able to weather life’s storms?
While we all feel relief as the lockdown eases and simple pleasures return, we need to take our lessons from the events.
Where to start
Do you know what you are paid and the benefits you receive? Are you aware of how this salary might grow as your career progresses? In other words, your starting point is to consider what resources you have at your disposal. Remember, your pension is part of your benefits package for being a teacher, and your school contributes too.
Then, you do the simple maths. When you know what is coming in, you deduct what you know is going out. If there is a sum left over, this is your disposable income.
Making good decisions
Making good decisions is about thinking if everything that leaves your account is used and needed. We are all susceptible to being a little lazy and allowing random direct debits to linger. A tiny bank account hygiene could increase your disposable income.
Then, the question is what to do with this extra money. Sure, you want to push some into the holiday and fun column. But then what?
There are many ways that you can make this disposable income work for you – so you start to benefit from what is called passive income. Passive income is money you earned without having to do work. While your pension is an excellent long term savings plan that allows you to put more money aside, you might want to speak to an independent financial advisor about other options you can consider for your retirement.
Some sort of control
When the world is out of control, or so it seems, all you can do is form a plan. You can have security nets in place that allow you to weather these uncertain times. Seeking advice on how to do this is an excellent first step in seeking some sort of control.
The content in this article was correct on 28th March 2021. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on your Teachers’ Pension Scheme. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.