Show 133 - How much should teachers have in savings?
In this episode, I share three reasons to save and how much you should have in each of those buckets.
11/4/20261 min read
There are so many competing priorities for your money, investing, saving, paying off debt, and don’t forget enjoying it! While I can’t explain the balance for each of these things in one episode, the item that gets ignored the most is saving. How much should you actually have in savings? Well, let’s find out!
Show Notes
Financial Roadmap Strategy Session - Meet me Shaun to become financially confident!
The Teacher's Roadmap to Financial Confidence — a free five-question worksheet for teachers who want greater financial confidence.
Ally Bank (The only online bank I recommend)
The Bond Ladder Strategy episode (we also discuss Target Date Funds)
Worthy Bonds (My recommended bond product for higher yields)
Recommended Books (Amazon Affiliate Links)
A Teacher's Net Worth Book
Key Ideas
I recommend starting with one month of expenses.
Your emergency fund should be separate, accessible, and reserved for genuine emergencies.
Save for large expenses like a car, home down payment, medical bills, or family vacation without going into debt.
Use a high-yield savings account, CD, or short-term bond for money you're saving (depending on when you need it).
Retirement cash reserves can protect you from sequence-of-returns risk.
Your teacher pension affects how much money you need to keep available in retirement.
A bond ladder can help protect your retirement income during a market downturn.
Bonus Tip
Here is a bonus tip I didn't get to in the episode.
When you think of bonds, you probably are thinking of municipal bonds or treasury bonds. While these are extremely safe, they are also extremely low yield. There is another option! I use Worthy Bonds when I want a bond product. As a private bond their yields rival that of the S&P 500 (about 7-8%) without the ups and downs of the market. So, if you’re looking to implement the bond ladder strategy, or need a good place to store cash for a while, use Worthy Bonds.