Teachers: How to survive the summer paycheck gap

Months (and months) of grading papers, bringing work home on the weekends, staying on-point for all those young minds you’ve been charged with educating and finally… summer is here! It’s time to put your feet up and relax for a well-earned break from your awesome, and often intense, teaching career. But wait. How do teachers budget with no paycheck during the summer?

The summer paycheck gap doesn’t need to be a cause of stress for educators. You just need to put a plan in place to cover your finances for the months that school is out of session. You can follow these guidelines to create a summer budgeting plan that works for you:

Spread your income over 12 months

How do teachers get paid in the summer? Plan for it! Bobby Hoyt, a former teacher and founder of a personal finance blog, says the beginning of the school year is always a “crazy time” for teachers. Your best bet to cover the summer paycheck gap is to have a budget in place well in advance of the bell on the first day of school.

To start, check to see if your school offers a year-round payment option. This would allow you to opt-in prior to the beginning of the school year to have your paychecks spread out over 12 months instead of the 10 or so months that you are working. “That way you’ll have a consistent paycheck no matter what time of the year it is,” says Kristin Larsen, founder of a personal finance blog. Even though your monthly pay will be lower with year-round paychecks, it could be easier to create a financial plan and manage the summer paycheck gap with the predictable cash flow.

If your school doesn’t offer this type of program or if you prefer to collect your standard paychecks and spread them out to accommodate summer, you can create your own 12-month paycheck plan to manage the summer paycheck gap. First, divide your annual income by the amount of months you receive paychecks. If you earn $57,000 a year and work for 10 months, for example, you’ll arrive at $5,700. Next, divide your annual income by 12 months, which in this example, would be $4,750. Finally, calculate the difference between those numbers. In this case, it’s $950. This is how much you would need to set aside from your monthly income to provide for two months of the same pay during the summer. You’re essentially putting money aside so you can give yourself a paycheck during your time off.

“Then, you’ll want to sit down and create a budget and find where you need to cut back and where you can still do the things you enjoy,” Hoyt says.

Calculate your standard expenses and summer extras

If you’re a teacher living without a paycheck during the summer, Hoyt suggests figuring out how much money you’ll need in the summer months to cover your standard living expenses. Think housing, utilities, groceries, and transportation. The stuff you can’t live without. If you don’t have a baseline for your essential expenses, keep track of what you spend for at least three months, or sort through old credit card transactions and bank account activity by month. This should help you get a clearer idea of the minimum amount needed to cover your bills and basic living costs. One of the best summer budget tips for teachers is to use your highest expense month to forecast your summer costs so you don’t have to worry about coming up short, Larsen says. That way you won’t be as stressed about money. 

Another summer budget tip for teachers is to anticipate discretionary seasonal expenses. Let’s face it—there’s a lot of fun to be had over the summer, and the cost of extra activities and travel can add up quickly. Luxury vacation or the summer festival circuit, anyone? Estimate how much you’ll need for your summer extras, and you can add those to the living expenses mentioned above. If any of your summer expenses recur annually—like a standing trip with family or friends—use what you’ve spent in past years to arrive at how much you’ll need this time.

Whether you receive summer income from a year-round payment program or set aside money monthly to combat the summer paycheck gap, there’s a chance that your total summer expenses may exceed your summer paychecks. Read on for more summer budget tips for teachers that can help you plan for this difference.

Stash summer expenses in a separate account

So how do teachers get paid in the summer? Unless they have a side hustle (more on that below) or do additional summer work for their school, they don’t. But there is one way teachers can feel like they’re getting paid over the summer (even though there are no paychecks coming in). Throughout the year, they regularly contribute money to a separate summer fund that they tap into during the summer months. 

If you’re a teacher looking to close the summer paycheck gap, then set aside a portion of your paycheck into a savings account. Along the way, look for other creative ways to add extra savings to the account. Bonus: If you put your summer paychecks and additional summer savings in a separate account, it may be easier to avoid the temptation to withdraw it for other expenses during the school year.

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Consider parking your summer funds in a high-yield online savings account so you can earn interest while you work your way through the school year. If you plan ahead and won’t need to withdraw your funds for a specific amount of time (say 12 months), you could earn even more interest with a certificate of deposit.

Create a financial cushion

In addition to the money accumulating in your fund for the summer paycheck gap, it’s important to also have a rainy day fund, Hoyt says. An emergency fund is just that—a fund that is set aside strictly for emergencies, like car repairs or medical bills you didn’t anticipate. “It’s always wise to have an emergency fund, but especially if you have gaps in income,” adds Larsen.

If you don’t have one yet, you should seriously consider starting an emergency fund. While experts typically recommend saving at least three to six months of living expenses in your emergency fund, you can start small and add as your budget allows. Any cash set aside in an emergency fund will be helpful if an unexpected bill or expense comes your way, especially if it’s during the summer paycheck gap.

Consider a side hustle

How do teachers get paid in the summer? Yet another way is to “consider a summer side hustle to pay for the extras that can come with warmer weather,” Larsen says. With no paycheck during the summer, a side hustle can be a great way to make money on the side and funnel that extra cash into your summer fund.

According to Hoyt—who actually started his website as a side hustle when he was a band director—many teachers can use their skill set for side hustles related to their profession. For example, teachers can offer private lessons or tutoring within their areas of expertise. Teachers can also pursue unrelated side hustles, like flipping items in online marketplaces to bring in more money in anticipation of not receiving regular paychecks during the summer. 

A side hustle may also be a perfect opportunity to explore a new venture, especially when there’s no paycheck during the summer. You can even turn your side hustle into a full-time job. “The skills that teachers pick up throughout their career—dealing with people, managing a high workload, having high standards for excellence—tend to translate extremely well into entrepreneurialism,” Hoyt says.

Make it a summer to enjoy

Teaching has its challenges, but it also comes with the major perk of having some of the best months of the year off. Planning ahead and implementing these summer budget tips for teachers will help make sure that these hard-earned months of vacation are truly an enriching time.

Summer is always fun, but it doesn’t have to be expensive. Check out these budget-friendly summer activities to get the most out of summer. 

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