I’m working toward a $1 million net worth on a teacher’s salary: Here's my best advice

"Make sure you understand how you are paid and what factors affect that pay."

Tawnya Redding is the co-founder of the blog Money Saved Is Money Earned.
Photo by Tawnya Redding

Education isn't a field you typically go into to become wealthy. I'm a teacher in my 30s and while I love my job and getting to make a difference in the lives of my students, a lot of what I need for my classroom does come out of pocket, and I'm living on just my income. Still, I've invested $100,000 and I'm working towards building a million-dollar net worth.

In 2018, I co-founded a blog called Money Saved Is Money Earned to share my experience and be a financial literacy resource for others. Here are some of the most valuable lessons I've learned about working toward your money goals, no matter how much you make. 

Establish good habits early

So much of our relationship with money is shaped by the habits we're taught by our families and communities. I was fortunate to have conversations with and support from my family as I learned about finances from an early age.

As a little girl, I collected my grandfather's loose change. Every so often, my grandmother would take me to the bank to convert it into cash, which I would save in a box at their house. By the time I started college, the money had grown to almost $5,000. I actually used that fund to pay for my first semester of graduate school.

For six years after undergrad, I lived with my parents and paid them a reduced rent. With the money I saved, I was able to pay off my undergraduate loans and cover graduate school. It took a few years, but I eventually had enough for a down payment on a house.

Start with your end goal in mind 

Heading into college, I knew that I was going to have to take out loans for school. But my overarching goal was to do everything I could to limit my debt before and after I graduated. I applied for every scholarship I was eligible for and I kept a consistent budget.

The way my loans were structured, the annual amount was divided into three terms. Whatever funds weren't used to pay tuition were returned to me in the form of a check, usually for around $1,000. When I received it, I put the money right back towards paying the loan rather than spending it.  

I graduated with just under $15,000 in student debt. Over the next two and a half years, I worked full time, took on part-time jobs, lived at home, and used my savings to pay more than the minimum every month in an effort to pay off my loans more quickly. 

During this time, I didn't have a lot of disposable income. Whenever I could, I would buy used. But as my debt situation changed, and as I worked toward my next goal of the house down payment, I tailored my budget to still make sure I had a sense of what money was coming in and going out.

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Use side hustles to grow your income 

During my first year in graduate school, I attended part time in the evenings two days a week. I also worked full time and never made more than $12.45 an hour in a position at a treatment center. 

I also had three part-time jobs: tutoring, working at a Kids' Club at a 24 Hour Fitness, and as a guest services attendant at a sports arena. I typically worked at each for a few hours for at least one day a week.

I maintained this hectic, sleep-when-you-can kind of schedule for two years. I would not recommend it in the long term, but as a temporary sacrifice it helped me lay the foundation for the career and life I have now. I didn't take out any loans to pay for my master's degree program and I started my teaching career debt-free.

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I've continued to utilize side hustles even as my income has increased to reach my goals faster. Last summer, I worked part time at a home improvement store to help pay for some siding and paint work on my house.

If you're looking to launch a side hustle, one way to get started is to take an inventory of your skills and interests and think about ways you could monetize them, whether it's consulting or developing a course or making a product to sell. There are all kinds of side hustles you can start at a low cost and even ones you can do from home.

Maximize earnings at your 9-to-5

No matter where you work, make sure you understand how you are paid and what factors affect that pay. As a teacher, my salary is based on years of experience and education level. 

On the experience side of the equation, my salary increases incrementally every year until year 13. Your education level and how many credits you've taken also factor into your pay. For each 15-credit increment you gain, you also increase your salary by about $3,000. 

Knowing this was how the salary schedule structure worked, early on, I made a concerted effort to move up the education side of the salary schedule, which was the element I could control. I was able to attain a Masters+45 status during my sixth year of teaching, and now earn a full $10,000 more a year than if I had stayed at a Masters+0 status. 

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I have also taken advantage of offerings like continuing education credits, travel funds, extended pay training, and other opportunities to learn and earn more offered by my district.

In your job, if a raise isn't necessarily in the cards right now, are there other benefits offered by your job that you can explore? Maybe your company offers tuition assistance, bonuses, or some additional perk. My best advice is to talk to your manager or HR representative about what might be possible. It never hurts to ask. 

Make the most of what you have

As you reach goals, it can be tempting to increase your spending to match your increased income and cash flow. While it's certainly OK to improve your lifestyle, it's important to remember what got you to that level of success and to continue practice those habits. In other words, avoid lifestyle creep. For me, that means utilizing what I have to the fullest to keep my expenses low

Despite making thousands of dollars more than I did when I was going to grad school, I'm still careful about big purchases. For example, I've continued to drive the 2002 Camry I took off my mom's hands during grad school and I plan on driving it until it gives up the ghost.

It is understandable to want to buy things that will showcase your success or to compare what you own to what others have. But when that feeling starts to creep in, I take a step back and ask myself three questions: Will this item enhance my life? How long will I be able to use it or want to use it? Is there a way to get a discount on it?

Using all of these strategies, within the last six months, I've crossed the $100,000-invested mark. I'm also able to pay extra toward my house so that mortgage debt is decreasing more quickly than I initially planned. Combining my investments, savings, and my home equity, my net worth is currently around $350,000. I hope to cross the million-dollar mark with investments in 10 to 15 years.

Ultimately, my best advice is to remember that everyone is on their own timeline. This mindset has helped me live within my means and maintain the flexibility to save, invest, and spend on what matters most to me. 

Tawnya is an elementary special education teacher by day and co-blogger at Money Saved Is Money Earned by night. She holds an Honors BS in psychology from Oregon State University and an MS in special education from Portland State University. Tawnya and her co-blogger Sebastian have a wealth of knowledge and information about personal finance, retirement, student loans, credit cards, and many other financial topics. They teach people how to save money, make money, and understand money.

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