The Official Teacher Finance Thread

Discussion in 'Teacher Time Out' started by whizkid, Jul 10, 2019.

  1. whizkid

    whizkid Habitué

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    A few of us on here like talking about various issues surrounding finances, so this thread was inspired by YTG, FMP and of course, yours truly. As much as we talk about it, this thread was long overdue.

    Feel free to discuss any financial topic that comes to mind: retirement, investing strategies, mortgages, car loans, credit card debt/reward strategies, other credit topics, budgeting, savings, student loans, tax strategies, anything that comes to mind. Found a new rewards card? Post it here. Interest rates increasing/decreasing for savings accounts? Yep, throw it in. Our financial futures are up to us!
     
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  3. whizkid

    whizkid Habitué

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    I'll start.
    I try to maximize my cash back on my credit cards. I hear coworkers all the time say that they'll only use debit cards, but they're not seeing all of the money that the credit card company is paying you for using their card and paying the bill on time! Yes, that's exactly what happens. They pay you! My portfolio looks like this:

    2% Citi DC- bills and spending where I'll only get 2% because no other cards offers more than 1.5%.
    5%- Chase Freedom- gasoline in the particular quarter(s), groceries the same
    5% Discover It-same as Chase and Amazon.com, Walmart.com this year
    5%Chase Amazon- Amazon.com
    SunTrust 5% cash rewards- groceries and gasoline until around late October, going to app for the Ducks Unlimited card which will give me 5% all year round on gasoline.
    Amex 3%- groceries, not currently using it, if I can't find a card offering more than this on groceries, this will once again be my groceries card for half the year as a combo of Chase and Discover will cover the first six months if their categories hold the same as in past years.
    BOA- 3% gasoline- not currently in use
    I have others, but I already spent enough to earn the cash back and the bonus, so they're sockdrawered.

    https://creditcards.chase.com/cash-back-credit-cards/chase-freedom-unlimited?CELL=60LC
    Apping for this one late October!
    Also, I am not a fan of annual fees!
     
    Last edited: Jul 10, 2019
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  4. whizkid

    whizkid Habitué

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    I could always app for that SunTrust card again, but meh, they'll catch on.
     
  5. whizkid

    whizkid Habitué

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    For investing, my ROTH IRA is currently 90% equities and 10% fixed income. These allocations will change as I get older when capital appreciation becomes a secondary concern and preservation of capital is the primary concern. Also, I'm considering selling my positions in my brokerage as I rarely put anything in it. One thing to remember when having an individual retirement account and a separate brokerage account is that the brokerage account can knock your asset allocation out of whack if you're not paying attention. This is less of a concern when you're young and can stomach the market swings but not so if you're an older investor headed for retirement.

    I know a guy who invests in currency and says he's made more doing that than he ever did at his six figure salary job, so I'll look into that too.
     
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  6. futuremathsprof

    futuremathsprof Aficionado

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    Right now, my Roth IRA is split into 50% Mid-Cap Growth and 50% Large Cap Growth. It is more risky, but I can weather the storm as the market fluctuates. Plus, they have been performing better than the so-called Aggressive fund, which bodes well for me.
     
  7. futuremathsprof

    futuremathsprof Aficionado

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    I only have like 5 credit cards (Wells Fargo, Target, and others), but I seldom use them. I should wrack up points more or get cash back.

    Right now, I am focusing on paying my yearly bills first and then investing the rest. I’ve already paid several months of rent in advance and will finish paying off my lease soon. Once I do that, I will look into credit cards more.
     
  8. ChildWhisperer

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    I have 3 credit cards and they're all cash-back!
    Chase Freedom (which OP mentioned)
    Capital One - 1.5% cash back everything
    AmEx Blue Cash Back (forgot the actual name) - 3% Groceries, 2% Gas, 1% everything else

    I never use my debit card! I used to to deposit checks, but ever since mobile deposit became available on bank apps, I just use that. So.... I don't even carry my debit card!

    I paid off all my school loans 5 years after finishing my Bachelor's (paid for grad school out of pocket during that time) and my auto loans a month later, so I've been debt free for four years now!

    However, I haven't thought about retirement. I pay into TRS, but that's about it.
     
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  9. futuremathsprof

    futuremathsprof Aficionado

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    How long have you been teaching? Is your house paid off? Would your teacher pension be enough to cover everything?
     
  10. TeacherNY

    TeacherNY Phenom

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    We are trying to get our house paid off sooner rather than later. We've been paying for 14 years already on a 30 year mortgage. We're hoping to pay it off in less than 6 years. Then we will start saving more for retirement. I only put in 4% of my income into retirement right.
     
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  11. whizkid

    whizkid Habitué

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    As I usually do, I'm going to go through my budget and try to cut down on my expenses. I'm tempted to go prepaid as I can get the same features on one as I do on my current billed plan. Also, I'm cutting Hulu before work begins. Won't be watching until next summer.
     
  12. whizkid

    whizkid Habitué

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    Now's the time no matter your age.
     
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  13. whizkid

    whizkid Habitué

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  14. whizkid

    whizkid Habitué

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    When you're looking for a FICO credit score, keep in mind that only banks or other lending institutions can give a real (FICO) credit score. Sites like Experian, Equifax and Transunion only offer educational scores, meaning they offer scores they believe would reflect a specific credit report. The credit report itself is legit. Educational scores are also known as FAKO scores. For example, Experian might say based on your credit report, you have a score of 780, but your FICO Experian score might only be 710. The 710 score is the real one, but the credit report is legit on both Experian and FICO Experian.
     
  15. futuremathsprof

    futuremathsprof Aficionado

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    I have a 797 credit score, I think. I have no idea how people get an 850 credit score and I always pay off my bill every month and I have no consumer debt. I just don’t understand it. I’ve established credit since I was 19 and have enough credit cards, but it never seems to rise any. Grr!
     
  16. mathteachertobe

    mathteachertobe Cohort

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    Mine is in the 820s, but as long as you are over 750, you should get best possible terms on a mortgage or other loan. What is your time frame for buying a house?
     
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  17. futuremathsprof

    futuremathsprof Aficionado

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    Well, I still plan to save for several more years before purchasing a home, but it still irks me how I somehow am not deemed credit-worthy enough to have a near perfect score. It is nonsensical considering the fact that I’ve never missed a payment, I’ve never made a late payment, I have zero derogatory marks on my credit report; and I’ve already paid off five out of five student loans, two car loans, and several personal loans. I just can’t wrap my head around it.
     
  18. mathteachertobe

    mathteachertobe Cohort

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    Part of it is your available credit. If you request the limit on your cards to be raised, it may bump your score a bit. I'm not actually suggesting you do so, as I think your score is perfectly fine as it is.
     
  19. Ima Teacher

    Ima Teacher Maven

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    I planned things so that I’d have my house paid for before I retired.
     
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  20. TrademarkTer

    TrademarkTer Groupie

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    I am in a similar boat. The two factors holding my score from going above 800 are average age on each credit card (I tend to open new ones to take advantage of their opening offers). Additionally not having a mix of other credit types like car loans or mortage loans holds it back....it's counterintuitive in some ways. I wouldn't stress about it though. I don't anyone would really scoff at a score in the 700s.
     
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  21. whizkid

    whizkid Habitué

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    I wouldn't even stress it. Like mathteachertobe said, you'll still get a top rate.
     
  22. whizkid

    whizkid Habitué

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    Ikr, that's why people who pay off an installment loan scratch their head when their score drops. It's ridiculous, but the scoring model likes to see that mix of installment and revolving. Crazy thing is....it only accounts for 10 percent of your FICO score.

    [​IMG]
     
  23. whizkid

    whizkid Habitué

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    Getting punished for paying off a debt, ain't it great?
     
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  24. ChildWhisperer

    ChildWhisperer Groupie

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    I just finished my 9th year of teaching, but only 1 year in public school (TRS).
    We don't own a house so we just have rent payments. We don't plan on staying in this town, which is why we're still renting.
    I honestly don't know anything about pensions, I should look into it..
     
  25. whizkid

    whizkid Habitué

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    It's guaranteed income for life once you are vested/retired. Unlike a 401(k) or similar retirement plan, your defined benefit is not at the mercy of the stock market. A pension is why I want to at least get vested to qualify before pursuing other employment avenues.
     
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  26. TrademarkTer

    TrademarkTer Groupie

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    Has anyone here used Fundrise? It looks pretty simple to use, and advertises good returns for investing in real estates.
     
  27. futuremathsprof

    futuremathsprof Aficionado

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    This is not good. That means that you are nowhere close to being vested as you have to work X number of years before retiring from the district. For example, in CA if you have taught at least 30 years and are age 50, then you can retire. Also, if you have worked at least 5 years and are age 55 or older then you can retire.

    1 year is no where close to meeting the minimum requirement.

    How many more years are you planning on teaching and, if you don’t mind me asking, how old are you?
     
    Last edited: Jul 11, 2019
  28. futuremathsprof

    futuremathsprof Aficionado

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    I’ve not, no. Sorry I can’t be more helpful.
     
  29. futuremathsprof

    futuremathsprof Aficionado

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    This is good to know! Thank you.
     
  30. geoteacher

    geoteacher Habitué

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    My credit score is somewhere in the high 700s/low 800s, and this formulary does a good job of explaining why. DH and I have always a been of the “pay it off” mindset. We paid off the house in seven years, and we only get a car loan if it lowers the overall price.

    Seriously though, do you have a target amount of money where you feel that you’ll have enough to retire?
     
  31. futuremathsprof

    futuremathsprof Aficionado

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    My target amount is at least $3 million.
     
  32. whizkid

    whizkid Habitué

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    If I can draw between $3,500-$4,000 monthly in retirement I think that'll be enough for bills and some vacations. Hopefully two pensions plus social security will get me there. My ROTH money will be for any emergency medical issues or something like that, I hope not to even have to touch it. If I can accumulate around $500,000 or so in it, I can make it stretch. I'm not the type to go out and get a new car or Rolex just for retirement. To get steady income without getting up and working is my reward.
     
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  33. futuremathsprof

    futuremathsprof Aficionado

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    I want to live lavishly until I kick the bucket and so $3,500-$4,000/month just wouldn’t be enough for me. I envy you, actually, because it is much easier to save $1 million than $3 million.
     
  34. whizkid

    whizkid Habitué

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    Well, some vacations, sports and good food is all I'll want. I won't want anything else. Peace and quiet and not be bothered, that's all I'm really going to want. I wanted all the fancy cars, clothes and three story homes when I was younger, but that just brings unwanted attention. I want my retirement to be just like my summer, peaceful and unbothered. I won't need millions for that.
     
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  35. ChildWhisperer

    ChildWhisperer Groupie

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    I'm 31 and only plan on teaching until I have kids, which will hopefully be soon. Then I'll go back to work when the youngest starts school.
    This would be the ideal plan, but I know life doesn't always work out the way we plan so we'll see.
     
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  36. futuremathsprof

    futuremathsprof Aficionado

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    Oh, thank goodness. You are still very young. I thought you were nearing retirement age with only the aforementioned number of years of public school teaching under your belt, haha! Phew!

    You have plenty of time. :D
     
  37. whizkid

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  38. whizkid

    whizkid Habitué

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  39. Ima Teacher

    Ima Teacher Maven

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    Teachers in my state do not qualify for Social Security benefits. We pay into the Kentucky Teacher Retirement System. Government borrow against our system, then didn’t pay it back. Now our governor is trying to “reform” it saying it’s a mess, when it was actually doing well until borrowed against. It has caused a huge issue. I’m close enough to retirement that it wouldn’t matter to me and DH, but some of his proposed changes would make a huge difference to newer teachers. Two of my coworkers gave up teaching at 7 and 12 years because of the changes.
    I also contribute to mutual funds just to have extra funds for retirement.

    Some of my coworkers qualify for both KTRS and SS, but they get adjusted amounts because you can’t be paid both. It’s called the Windfall Elimination Provision.
     
  40. Ima Teacher

    Ima Teacher Maven

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    My DH and I clear about $2800 a month each, and we live quite comfortably. There’s definitely a plus to being in an area with a lower cost of living.
     
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  41. futuremathsprof

    futuremathsprof Aficionado

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    On average, what are your monthly expenses, if you don’t mind me asking?

    I’m just curious about the COL comment you made.
     

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