Sunday, 17 August 2014

Money Issues

(If you're a newcomer to this blog and you'd like to start the story of how I came to leave teaching from the beginning, then click here.)



Right then: money. Let's state the obvious right from the beginning: if you stick to my plan of leaving your teaching position and taking a lower paid job, you will have less money.  But how much less? I'll go through my situation and tell you some of the things I've done to try and help the situation. Bear in mind that this is a worst case scenario (in money terms). If things are a struggle, supply is still viable and if you're really desperate there will always be teaching posts. 



The total gross income for my household has dropped by 40% (my new job borders on minimum wage but my wife has a moderately paid job). That sounds like a pretty big drop. But let's look at net pay. The drop is now only 32%. This is due to me virtually not paying any tax (not because I'm Lewis Hamilton but because of my low pay). That sounds slightly better, even though it amounts to a fair amount of money lost per month.



So it is still a big drop. I had learnt a valuable lesson earlier in my teaching career when I went part time for a few years. We wrote down how much we had to spend on essentials: mortgage, gas, electric, water, council tax, food. Some of those are fixed but we found cheaper deals on things like gas and electric (MoneySavingExpert.com was great for tips on this, along with bank accounts etc.). Plus we made savings  on gas and especially electric usage. For example, we didn't leave anything on standby and we only turned on lights in the rooms that we were in. Food was another thing that was easy to cut back on, we changed from a luxury brand to a normal brand, or a normal brand to a basics brand. Note that eating out didn't come under essential food, that came under a different budget. We saved some money on the essentials but more savings were still needed.



The next layer down were the things that we needed to help us work, the main one was probably a car (although walking or biking to work would be a massive saving). Again, comparison websites were great at getting the best deal for car insurance; companies don't reward your loyalty in the slightest. 



After all of those things were taken out of our net pay we were left with a figure. This figure had to pay for everything else, food out, presents, vet bills... everything really. So we gave ourselves a weekly budget. Any time we spent anything we wrote it down and it came out of the budget. If we wanted anything more expensive, we had to save for it. 



In my first ten or so years teaching I used to buy a lot of stuff. After all I was working hard so I deserved a treat: DVDs, CDs, computer games and consoles (all bought on the day of release), stereos, flash televisions, expensive holidays etc. All of these things gave me pleasure. For a short time. That initial buzz of a purchase soon left me and I had to buy something else. So I took on a management role so I could buy more stuff. And I entered a vicious circle: work to buy stuff, want more stuff, work even more. My purchases were a plaster on my general unhappiness at my lack of a life. But the plaster was one of those useless ones that kept peeling off, revealing the raw wound beneath.



Having a weekly budget forced me to think about two things when I wanted to buy something: Do I really need it? Can I afford it? If the answer to both was yes, then I'd buy it. My spending stopped immediately. I had more time from working less and so I didn't feel the need to spend, spend, spend.



When I went back to working full time I carried on with the budget, I had broken the cycle. In my new job I've got loads more free time. Instead of getting that quick fix of retail therapy I now enjoy doing activities that cost little. One of my favourite things is meeting my wife after work and sitting in a cafe chatting about our respective days. (Please note that this  isn't in a Costas but in a proper cafe run by proper people who can be bothered to greet you with a real smile and make sure that the tables are clear and clean and don't hassle you to buy Portugese Custard Tarts. Rant over.) I'm enjoying the extra time way more than the extra money.



I haven't mentioned mobile phones yet. You may have been shocked to see that a mobile phone contract wasn't on my essentials list. I know I'm extreme, but my retro pay-as-you-go phone costs me about £30 a year. All I'm saying is that it's worth thinking about the two questions I asked myself from above: Do I really need it? Can I afford it? It's definitely a place where savings can be made. (I think I've done well not getting really ranty again there.)



Mobile phones bring me to an important point: status. This is something new to me. I've been surprised at how much people value status. I always knew that it was an issue but recently I've been reading books on consumerism and economics and the fact that status is such a driving force has been a revelation. When I left teaching it didn't enter my head that people would see or treat me differently. One of the books I read said that people are worried that if they take a lower paid job they won't be able to stay in the same social circles, they will be cast out as a low paid leper. All I can think is that if their friends are that shallow then I'd rather be without them. My friends have all stuck by me and don't treat me differently at all. The status problem boils down to this: How desperate is the urge to leave teaching? Does the happiness gained from status outweigh the unhappiness of teaching? 



All of this is from my point of view and the situation that I'm in. We haven't got any children so that's an added complication we don't have and I can't really comment on how that would change my actions. My only thought is that I would include them in the budgeting process as it is an important life skill. Sacrifices do have to be made. To lose that much money a month means that things can't carry on in the same way. For example, I used to buy DVDs on the day of release from HMV because I needed them there and then. Now I wait until they have come down in price and buy them online, sometimes in a used condition. Also what I've done recently is downsize my car from a Focus to a Seat Mii. It has way better fuel economy and the car tax and insurance is cheaper too. (I also bike the 9 miles to work three days a week but this is more for fitness than penny pinching.) The thing that has surprised me is how much it hasn't bothered me. The gains have been too great.



I probably jumped into all of this in a pretty harsh way but there are ways to test the water first. It is always possible to carry on teaching and try the above things to make savings and see whether it is possible. Supply teaching is also a nice midway point because the wages are closer to a full-on teaching post but without a lot of the pressure. You will obviously come up with other savings that can be made in your own life. An extreme example would be to downsize to a smaller house, so there are always options. This may be something that you feel that you can't do right now at this moment in time but maybe things can be put in place to enable you to do it in three or five years. It's well worth it.



You may think after all of the above, here's this frugal mad man, leaving his permanent post and putting his wife through a life of scrimping and saving hell, and we're only hearing his side of the tale. So okay, the next post will be from my lovely wife, giving her perspective on things. See you soon.

2 comments:

  1. Great post. Waiting for part 2...

    ReplyDelete
  2. Cheers. She's busy writing it at this very minute.

    ReplyDelete