Empowering women educators with smart financial planning

Educators form the backbone of our society, teaching children and creating community hubs of information, connection, growth, and creativity in our public schools. Given this important role, all educators should receive guidance and professional support to help ensure they are able to make the most of their salary and benefits and fully enjoy their retirement when the time comes. In this article, we explore how financial planning can be a tool for empowerment for women educators.

The importance of financial planning for women educators

Women educators experience unique dynamics and challenges within their profession. It’s therefore wise to seek professional guidance in financial planning. It’s no surprise that educators tend to be well-educated—  51% of public school teachers hold a Master’s degree. However, salaries for educators tend to be lower than other professions which require an advanced degree. As a result, the Education Policy Institute reports educators “earn 23.5% less than comparable college graduates.” Additionally, around 45% of educators report taking out loans to pay for their own education, with an average debt of $55,800.00. Due to school district budget cuts as well, as many as 90% of educators find themselves spending personal money on necessary classroom supplies— an average of $500 annually.  Beyond these financial commitments, teaching requires enormous dedication and tends to draw people willing to make significant emotional and personal investments.

For many women in education, the demands of the profession are matched by personal responsibilities including parenting or caretaking of older family members. Many educators also take on extra responsibilities within their school- coaching or acting as an advisor for student activities. Additionally, up to 17% of teachers work second jobs outside the school system. Given all these factors, it’s understandable that financial planning might seem overwhelming or out of reach. However, with the right guidance and tools, developing a comprehensive financial plan can be a source of confidence and empowerment, easing stress and planning for a future of stability and freedom. 

Financial planning should ideally be tailored to your lifestyle and priorities, though there are basics that apply to everyone: creating a spending plan, managing debt, and building savings, for example. Professional financial planning guidance and support, can help provide investment strategies designed to maximize your portfolio at every stage of your career and into retirement. Financial planning also provides women educators with the means to identify and pursue their long-term financial goals. Whether it's saving for a down payment on a home, funding their children's education, or enjoying a comfortable retirement, planning and strategizing early can help achieve these goals.

Protection strategies

Since life can be unpredictable, and unexpected events such as illness, job loss, or emergencies can disrupt even the best-laid plans, a good financial plan equips women educators with the tools to weather these storms, ensuring they have the necessary resources to overcome financial setbacks and maintain stability. The earlier you start your financial planning journey, the more confident you will feel that your needs will be met no matter what happens. Starting earlier also allows you to make changes to your financial plan based on your priorities at different phases.

To ensure you stay on track with your financial planning and long-term goals, there are several important tools to consider as protection strategies for your income and lifestyle:

• Insurance: While health insurance is a standard benefit for most educators, consider adding life insurance as a safety net for your loved ones in the event of untimely death, as well as disability income insurance to protect against loss of income due to disabling illness or injury.
• Emergency fund: Maintain an emergency savings fund to help ensure you have money reserved for unexpected expenses, job loss, or emergencies without resorting to high-interest loans or credit card debt.
• Estate planning: Create your will and establish a power of attorney to make sure your assets are protected and loved ones provided for. Working with a trusted estate planning attorney reduces the risk of legal complications while ensuring your wishes are carried out.

Retirement savings strategies

Starting to save for retirement as early as possible is highly advantageous for women educators. By leveraging the power of compound interest, even small contributions made over a longer period can grow significantly. Starting early allows more time for investments to grow and help achieve retirement goals. Many educators will save for retirement through employer-offered retirement savings plans, either through defined-benefit plans like pensions or defined contribution plans. Other options, such as annuities, can be a smart investment for those who want to have an additional income stream in their retirement. 

Due to the persistence of the wage gap and factors such as taking time off from a career to care for children or other family members, research shows women save on average 30% less than men. To close this gap, you might take advantage of opportunities for additional retirement contributions, such as catch-up contributions for individuals aged 50 and above. This option allows individuals over the age of 50 to contribute additional amounts above the annual maximum to various retirement savings plans such as 401(k)s, 403(b)s, IRAs and others.

Educators in public schools may also have access to retirement planning resources and programs specifically designed for their needs. Exploring these resources, such as financial education workshops, retirement calculators, or retirement counseling services, can provide valuable insights and guidance for long-term financial planning.

The value of professional financial planning guidance

Seeking expert advice from financial professionals who have experience working with educators can provide personalized guidance. These experienced professionals can assess individual circumstances, goals, and challenges to develop a tailored financial plan that maximizes resources and works to help minimizes risks. Financial professionals may also provide access to specialized financial knowledge and strategies, and offer insights on tax efficient strategies, investment options, and retirement savings strategies specific to the unique needs and challenges faced by educators. In one online survey of 1001 K-12 professional educators, respondents reported feeling more informed about their savings plan and "more confident in their investment choices.” Respondents also reported feeling able to make better investment decisions as well as higher mean annual contributions to their retirement savings account.

Educators are central to the foundation and future of our society and deserve the support and resources to thrive through the career years and retirement alike. By taking proactive steps and seeking professional support, you can overcome financial challenges, work to secure your financial future, and enjoy the rewards of your hard work and dedication. Start early, plan diligently, and enlist the expertise of a financial professional today to help you pave the way for a stable and prosperous future.