How Teachers Juggle Budgets with a 10 Month Salary

How Teachers Juggle Budgets with a 10 Month Salary
August 29, 2016 North Jersey Marketing

Ask Lourdes

Volume 3 Issue 10 September 2016

How Teachers Juggle Budgets with a 10-Month Salary

By Lourdes Cortez

For many teachers, budgeting their salary is extremely important, and sometimes difficult. That’s because teachers receive paychecks over a 10-month pay period instead of the standard 12-month pay period. Unless they teach summer school, they do not receive paychecks in July or August.

North Jersey Federal Credit Union was founded by teachers in 1936.  As a result, we work hard to help educators make their budget work for them throughout the year.

In an effort to survive the two month “summer pay gap,” teachers must develop effective saving strategies. So, how do they do it? The following are some strategies that teachers use.

Billing cycles do not fluctuate, and mortgages, rent, utilities, food and other personal expenses do not change from month-to-month. Thus, it is crucial to always save a portion of your money to cover these expenses. Set aside money from each paycheck and put it in a savings account. You can calculate how much you need to save by doubling your monthly expenses and then dividing that number by ten months. If you use direct deposit, schedule automatic transfers to your savings account.

In certain school districts, teachers are offered the option of receiving summer paychecks. This means that their annual salary will be divided into 12 equal payments instead of 10. Teachers typically have to opt-in at the beginning of the school year to receive the 12 equal payments through direct deposit. If you teach in a school district that offers summer paychecks, this is the most practical and beneficial option to ensure that you will be receiving money for the full year.

At NJFCU, we have a Vacation Club savings plan just for educators who receive 10 months of paychecks.  Throughout the school year, teachers can opt-in to have a set amount of money put into the Club account regularly from another NJFCU account. The money in the Vacation Club is available to teachers on July 1st each year, for the purpose of helping them meet their summer budgeting needs.

We also have a program called Skip-A-Payment. This allows educators to skip two consecutive payments on a consumer loan without any penalties, particularly during those summer months.

Regardless of your profession, saving money on a year-round basis is crucial. Never hesitate to use digital codes and coupons when making purchases to save a couple of dollars. Money-saving apps such as Ibotta and RetailMeNot can help you save by finding deals and offers from both brick and mortar and online businesses.

Using other mobile apps, such as Mint, will aid you in tracking all of your financial activity. Your transactions are automatically categorized and recorded. As a result, your spending patterns are analyzed, which allows you to see how you are spending your money on a month-to-month basis. Ultimately, this provides you with valuable insight on how to make  adjustments on your spending to stay within your monthly budget.

Using “cash back” or rewards-based sites such as Ebates, allow you to get paid to shop online on a variety of websites.  If you are an avid online shopper, make sure you are seeking the best deal for the things that you need, as opposed to the things that you want.

Many teachers work summer jobs. Whether working at a summer camp, summer school, or a seasonal job in the retail or hospitality industry, a temporary job is a great way to keep receiving steady income. There are also opportunities to do private tutoring. Online teaching has also become more popular over the past few years.

Another great idea is to save gift cards for use during the summer months. As you receive gift cards throughout the year for the holidays or your birthday, save them and use them to make purchases during the periods that you do not receive a paycheck.

Lastly, remember that other teachers or seasonal employees can be a great resource for advice and tips. Teachers can offer each other personal tactics that have allowed them to comfortably budget during the summer. They may even offer advice on how to make money, how to save money and where to find jobs.

Summers are meant to be an enjoyable time for teachers. Having a well-planned budget will allow you to relax just a little bit more.


Lourdes Cortez began her professional banking career in 1984 as a representative at the North Jersey Federal Credit Union (North Jersey Federal). After progressing through several positions, she became CEO in 2005.  In the past 10 years, North Jersey Federal’s assets have steadily grown from $168 million to $233 million.  As the first Latina CEO of a major credit union in NJ, not only has Lourdes’ stewardship increased the assets of North Jersey Federal, but her commitment to giving back to the community has been tremendous. This has included building the first student-run credit union in NJ. As CEO, Lourdes crystalized the credit union’s community involvement with the creation of the North Jersey Federal Credit Union Foundation.  Organizations that have received support from the foundation include Autism Radio, the Boys & Girls Club, Boy and Girl Scouts, Eva’s Village, and the Marines Care Organization
Lourdes has been honored by NJ Biz magazine as one of the Best 50 Women in Business in NJ, the 2015 Brava Awards from SmartCEO and the 2015 CIANJ/Commerce Magazine Best Practices Awards, among other accolades. Recently, Lourdes was appointed to the Community Depository Institutions Advisory Council of the Board of Governors of the Federal Reserve.