What Happens if I Leave the Salary and Benefits?
When considering a career change from teaching, one of the first worries teachers have is leaving a stable salary and benefits. Financial guilt, fear, and even greed are emotions that teachers experience when they consider a possible career move. Seeking guidance from a financial advisor can help educate teachers and allow them to proceed with a more informed perspective towards a career transition.
Poll from Listeners
Today, our guest is Erik Garcia. He is a certified financial planner, a behavioral financial advisor, and the co host of the stuff about money they didn't teach you in school podcast. Oh, and he's married to a teacher. Before we get started today, we want to share results from a poll taken by our listeners about why they feel guilty leaving the classroom.
Erik yesterday, I sent a poll out to our listeners seeing you know why they feel guilty leaving and about 70% of them said that they feel guilty leaving kids and co workers. So the people, that's what they that's kind of like their number one. And 25% said they feel guilty leaving a steady income and another 6% said a pension. But I think that even though these numbers reflect their number one reason they feel guilty, it doesn't mean that they have a one a or a one b or perhaps you know, steady income is a really close second, I still think it's an important topic that we should talk about. And they're they're valid concerns about leaving education because if they are a close second, that steady income or pension could could mean a lot.
Money is About Relationships
That's interesting. What's interesting about that is I think that when we talk about money, and I've done a lot of work over the past 10 or 12 years collaborating with a family therapist, I've learned, I came in as a financial advisor and then learned all this like counsely, touchy feely therapy type techniques, and just trying to understand people. And what I've learned is that we tend to relate to money the same way we relate to people in one way or another. And what's interesting is the majority of people, it's all relationship, right? The first part is their their their lamenting or grieving, maybe broken or lost relationships, things that they've developed. And the second part, this relationship with money, like a steady income, which is comfortable relationships are comfortable. But what's interesting is they're both the two main topics are more short term where the pension is so long term and less people are thinking about that long term. So most people are thinking about the immediacy and not necessarily the long term. That's those are interesting results.
Our listeners have expressed financial guilt related to career transition. And as you mentioned, we know that teaching does provide a stable income, and then other benefits like retirement you just mentioned as well as health care. So we're wondering, talking to a financial advisor, what financial considerations should teachers take into account before leaving the classroom? And I guess, you know, you touched a little bit short term and long term.
Yeah. Wow. That's a loaded question. Man. This is awesome. I would say this, I would start off with this personal finance is personal. Whenever I hear someone give financial advice that is that is global. Like, like, this is the way it should be. I always cringe a little bit because it's not the way it should be very it's every everyone's situation is different. Are you the sole income earner for your household? Are you married? Do you have kids? Do you have debt? Do you have a husband or a wife that is working making a lot of money? Like what's what's the rest of that profile of your financial profile look like? So it's really difficult to give like the silver bullet answer, but I will say this, whenever we make a decision, whenever we put emotion in front of any decision, it our decisions tend to get a little bit messier and harder to make. And I'm gonna put guilt in that kind of that category of, of emotion. So what happens is, as humans, we tend to before the logical part of our brain kicks in, right? We feel emotion, like instantly, that's the first thing that happens it served us well as humans. You know, we had a run from, you know, Saber toothed tigers and lions and substitutes served as well that flight or fight. But when we're making bigger decisions, if we don't engage that logical thinking part of our brain, we're going to tend to make bad decisions. So I would say, if you're feeling guilt or any emotion, fear, you know, I tend to see the two main money making decisions. It's fear and greed and you get their guilt in there as well. I'm afraid so I'm going to do this. I'm greedy. So I'm gonna take more risk. I'm guilty, so I feel shameful. and maybe you don't make a decision or you make a decision and just feel terrible about it. So I would say, if you have an emotion emotions are largely unreliable, but they're typically telling us something. So I would say if you're making a decision about leaving the class or any career change is stopped, consider and bring in a third party person who who is maybe maybe disinterested, who doesn't necessarily have any skin in the game and what decision you make who could offer some some insight, whether it's a financial person or non financial person, I think that's going to help maybe remove some of that emotion from the decision making process. And if it's if it's a money decision, in terms of let's say, let's say the situation is I don't want to walk away from a steady income, because I don't know what's going to happen on the next side, you know, teaching is a grind. And I don't know what what's on the next what's on the other side, I would say this, if you have financial responsibilities that your income is providing for don't have money saved, I would probably say you need to have a plan before you walk away, I get, we want to be happy. And that's kind of that seems kind of like, you know, the the theme for the past few years, you only live once, you know, take chances invest in you. And I get that I'm a big fan of that. I never want to be the person who tells someone not to follow their their dream. But the reality is you still have to pay bills. You know, I was I was in a conversation with someone the other day, they leave teaching, but kind of multiple different career changes. And I was in a conversation just recently, and they finally said it just tired of being broke, they left a good paying job that was fairly steady. They weren't happy, they didn't like it, they want to do something that they wanted to do. And then after a few years, like just tired of being broke. So guess where they're headed back to a job that maybe they're not happy with, but they need. Whereas if the plan to exit was a little bit more intentional, maybe now they're pursuing what they enjoy? I mean, I would say that if you're feeling guilty, stop, pause, you don't have to make a decision on the spot and consider all the factors.
We Have Different Journeys
Absolutely. I mean, that's just solid advice. And I agree. I mean, we talk about our journeys on this show and how they're so different and unique. And I think our financial positions are the same way, we have to take that into consideration. But you touched on something else that I'm really interested in maybe going a bit into. And that's like fear or greed, those other emotions that we haven't really tapped into. And I know when I was leaving teaching, and I ended up in the nonprofit world first, it was a safe space, like I made a higher income than I did teaching, but I was still, you know, kind of seen in a similar field. But when I moved into management, consulting, and my pay increased, I remember someone actually said to me, in my bio that I wrote, like, former teacher turn project manager, they're like, oh, people are gonna think that you sold out that you, you know, you just left for for money. And I was like, well, that is absolutely not true. I think the perception of, you know, going from a lower income to like a higher income. There's a lot of perhaps, I guess, guilt, I don't know if I want to say shame, but fear of of how things are going to be perceived. And I'm imagining that you've worked with people who've been in that position, right? Where they either came into wealth, or they, they changed careers, and they've gone from making a higher income or lower income. And what are those emotions like when you're working with your clients?
There's like, there's always going to be haters out there, like I deal with people. But I've had to deal with those. When I look when I started podcasting, several years ago, and some of the work that I was doing a lot of advisors in the states were like, What are you doing? Is that leading to business? Why are you doing that? That's, that's crazy. That doesn't make sense. There's always going to be haters. If there's not if there's if there are people not calling into question what you're doing, then you're planning to stop and say, am I am I am I doing it fully with everything that I have, just kind of keep that in the back of your mind. But any decision you make, I think it needs to be values driven. And what I find is particularly with money, and it could be with career changing is people don't stop to figure out what's important to them, until it's too late. People make decisions because it seems like a good decision in the moment and maybe maybe there's like a I'm not happy so I'm gonna make this decision. Well, why are you not happy? What would make you happy? Would you be happier doing this? Is it because of money? Is it because of the environment is because of your co workers like people don't stop long enough to say hey, you know what, what's important to me is spending time with family. Making time for my health, having freedom to do what I want, you know, when I want on the weekends working in in, you know, with charities or nonprofits with you know, your church or your synagogue or whatever it may be, people don't stop long enough to kind of identify what those values are. And then once you do, it makes it makes it a whole lot easier to make decisions. And then when someone calls into question your decision, you can stop and say, Wait a minute, okay? No, I made this decision because this value is important to me. And I think that's a starting point. That's kind of what we do in the financial planning process. And that's really what I learned from, from collaborating with family therapist is really understanding people's values. And that's what drove me to get the behavioral financial advisor designation is that I really want to understand why people make the decisions they do, how can how can I help people make decisions that are more lasting? Why do want to get it? Why do you want to save more? Why do you want to do these things? And identify those drivers? Or if you've read any Simon Sinek that why what's that? Why what's driving me? Then those decisions become easier to make? And it becomes easier to fend off? The haters out there where they call into question, the only people you should care what what they think, are the people that you have allowed into your inner circle, to give advice and speak to those and I'm not saying you should always listen to them. But you should always stop and consider what they're saying. I'm a firm believer what I love. I love Proverbs, and are just kind of ancient wisdoms. And one of them is there's Right There's wisdom in the counsel of many, so surrounding yourself with advisors, mentors, people who can speak wisdom into your life, whatever the whatever, whether it's a money decision or career decision is good. Listen to those people consider what they're doing with what they're saying, and then ignore other people.
Fear with Finances
Yeah, something I want to loop back to is, you know, the fear topic. And when I reflect on my experience, it wasn't really the the salary that I feared leaving, it was the consistency. And a lot of my journey goes to roots of myself. Growing up, I was in a household had a lot of influx in income. So my parents had a lot of instability and a lot of stability. So it just kind of fluctuated because they were both entrepreneurs. And so when I became a teacher, and I had that steady income, that was therapy to the, the traumas I had as a child having the instability of income. And so the stability was what I was scared to walk away from. I didn't want to feel the way I felt, in those moments when my parents were having conflict in their relationship regarding money, because my husband and I hadn't we hadn't had that experience, yet. We were very consistent with with our income, we were very consistent in the way we talked about money. And when I when my husband and I started talking about before I left, it was those conversations of making a plan. Before I just kind of stop, we have to have a solid plan to one to help me emotionally. So I don't revert to those fears that I felt when I was my younger me. But also having a plan provided relief. This is achievable. We can do this. And luckily, you know, he has a knack for numbers he had, he taught me many ways to talk and think about money that I did not learn. And so that relief provided me the courage to take that next step after I got over the point of relationships. It was like, Okay, well, how do I walk away from the steadiness that I have experienced for over 13 years and to feel confident and comfortable with that. And I think that can relate to a lot of people that have financial trauma, or, you know, not everybody grows up in a steady household income. And I think that informs a lot of people's decision to stay in those steady positions because they don't want to feel the way that they felt in those moments of unsteadiness.
Yeah, they didn't like what they saw or like what they experienced. So, there is a lot, there's a lot of really good stuff that you said, there are two extremes. There's two types of clients that I work with. There's the clients who come to me who need a lot of help, maybe they need help getting out of debt, they don't know how to invest their money, they left several jobs and a bunch of like, 401 K's that they need that they need management on. And then those people who come to me who I used to think that I wasn't helping them because there wasn't much I could do. They're making good decisions. Everything seems to be an order. I mean, there's some small changes we can make to their finances, but yet they lack confidence in what they're doing. And, and I've since changed in my mind, I'm like, No, I'm actually helping these people because what I'm able to do is look at what they're doing and say, Hey, JoDee, look what you're doing is good. You can make this decision you can afford to make decision because of these things that you have been doing. And then they leave with a confidence and just kind of a okay, like an affirmation of okay, what I've been doing is good so I don't have to be fearful it's fear that's misplaced. And then come to address the, the for those entrepreneurs if you're leaving the classroom to become an entrepreneur. One kind of a little income hack here isn't it takes a little bit of time to plan for it. But if you know your income is going to be, is going to fluctuate. Number one, figure out what's a comfortable lifestyle for you, okay? And then rather than all the revenue that you're making, from your side hustle or from your hustle going into your normal operating account, let it go into a savings account and then pay yourself a steady income from your savings account. And just make sure in that savings account that you you're keeping a comfortable amount, you know, whether it's six to nine months of, of, you know, of expenses or income in there, so that that account always has a balance in it. And then you're paying yourself a steady amount from that account. So you can you can create that, that steady income to mimic what you're getting from teaching, but it might take you a little bit longer to build up that account to a comfortable amount to where you can generate that, that steady income. And now you have six months, nine months of a runway of income, so that if you do have a slow month, you're cool, you're set, you don't have to worry, you don't have that anxiety that comes with not having enough money. You know, you've you've dealt with that. And that's a that's like a really small kind of, you know, when people think financial planning, too often they think of this like, huge, comprehensive, I gotta like plan out every single dollar and every single cent and put it on my entire financial future. But sometimes if you just make like a simple plan for that steady income or simple plan to pay off debt, that's a financial plan that in of itself is a good step. Right. And in terms of like transitioning with a brought up debt, I would say that's something that you, you want to try to get, you know, get your hands around before you walk away from a steady income, because debt tends to debt magnifies financial problems in ways that that are not good, particularly for relationships, a lot of stress and a lot of anxiety. So planning for those things makes that transition a lot easier. And again, there's intentionality there, it takes time, sometimes it might take a year or two, to plan that exit. That's, that's common, you know, talk, I work with a lot of business owners who are planning on selling their business as part of their retirement. And then sometimes that's a, that's a three to five to seven year plan to plan that exit.
Yeah, I would say my exit, I probably had almost a year to plan just to make sure that we were we were all good. And we made choices during that year, to set us up for me to be able to make that exit until I secured my next job, which was also something that I had to plan to because I wanted to make sure that whatever job that I got, I I was being paid my worth of working in education for more than 13 years and the skills that I was bringing, because this will be another episode we talked about as you leave teaching after all these years and your title is teacher you're not executive vice president, teacher, you know, you don't have these titles to go that pair well with other industries. So I had to make sure that when I did make my next move that they were they were valuing me at what I thought I was I should be valued at.
But I think teachers are outside if you if you consider mother as a profession. I think teaching is the second most difficult profession behind mothering. So every year we've been doing this for five or six years, right around mother's on Mother's Day, we do a special either video or podcast has been a podcast episode. It's called, I can't afford my wife. And this was back before my wife went back to the classroom, at salary.com They do a they look at all the roles that a mom plays. And like I think I would owe my wife like $147,000, you know, chauffeur, counselor, therapist, RN? I think teachers are very equipped to go into a lot of different fields. Yeah, I mean, y'all have you have classroom management. So you're managing the most difficult depending on the age you teach the most difficult group of people to manage, you have to be a little bit of a therapist and a counselor and a motivator to be able to get them to do what they want to do. You know how to plan. Like I sit there and watch my wife lesson plan. I'm like, Oh my gosh, like I need to I need to I need to learn from her how to how to plan. She's such a great planner. And she looked looking so let me she's looking forward, you know, nine months and then working backwards. It's great planning. I love that. I mean, so y'all have a lot of skill set that you can walk in, you can probably run, you can run a fortune 500 company.
Thank you so much, Eric. And I think this discussion has just been so engaging to me personally, and I hope our listeners agree addressing a lot of topics that we have around the financial fears and guilt of leaving the classroom. I want to wrap it up with just one last question and that's we have some entrepreneurs who we've spoken with and one of their fears is leaving the benefits. So I know you talked about having a bigger picture of financial well being. But what would your advice be? We spoke with one entrepreneur, for example, who decided that their well being, their personal interest was worth the battle of like letting go of the health insurance, for example, right? So we have these costs that are covered for us as educators, such as health insurance, and then we have money given towards our pension. And I know you and I've spoken before about, if you leave teaching, and you go into something else, you can still cover those costs. But just wondering what advice you could give to listeners who are maybe really like me, I'm such a planner. So that makes me nervous to like, not have my, my health insurance plan or not know that 10% is going into my pension. So maybe what advice could you give them around that, and definitely, keeping in mind, the big picture of financial well being also.
So if you're leaving the classroom, to a job that's going to pay you more, you can recreate all your benefits on your own, okay, you might be on your own, you might need to hire a financial planner, a financial advisor to help you set all that up. But let's just say, depending on where you are in the country, your health insurance, that's the thing a lot of people realize, like I get paid x, but the cost really to employ someone is x plus, you know, an extra 20% when you when you look at all the benefits, so benefits are when they're called benefits for a reason. But you can recreate that, and oftentimes, oftentimes, particularly the pension side, you can maybe even get a little bit more robust in what you do for yourself. Now, if there's a match, you lose the match. But if you're leaving teaching them a 25% more and keep your salary the same. So if part of teaching is just the grind, and you're just you're just tired of teaching. So income wise, it's a lateral move, just set your income the same, and then just take the difference and start funding a health insurance plan or funding a retirement plan. And then I mean, I'm not going to get to the specifics and the technical parts of it. But there's a really good chance that you can recreate your benefits and have extra money on the side. When you when you go out, you're working in a in a in a different industry work, you're starting your own company and look, if you're if you're going off to start your own company, part of the plan may be Hey, you know what, I am not going to fund a retirement account for the next two years, because I know that all revenue has to go into building a company, that's okay. Make make that a goal and say, Hey, in two years, I'm going to start funding my retirement make that decision on the front end. So you're not like fraught with guilt, like, Oh, I'm not funding my retirement, that's okay. Because you're building something that is going to presumably generate way more revenue, and that you'll have time to catch up. But if you make those decisions in the front end, you can certainly you can certainly recreate a lot of those benefits.
Teachers Should Consider Total Compensation
And how would someone find their total compensation? Would that be something they would ask human resources to help them out? Like, here's my salary here are benefits? What is my total compensation packet, so I can actually fully understand what it is that I'm walking away from?
Yeah, I mean, HR, I mean, I think that's a good thing. Sit down with HR and bring your bring your, your pay stub with you and have someone at HR walk you through your pay stub, I mean, there's a lot, there's a lot of that paste that we throw that in all those little line deductions like like taxes, taxes, disability insurance, you know, group life insurance, health benefits, sometimes you're paying a portion, sometimes you're not. Sometimes everything shows up on there, sometimes it doesn't. But I would certainly sit down with HR and just say, hey, just kind of walk me through this. I think anytime we up our financial literacy, we're gonna have more confidence in decisions that we make. And trust me, there is no shame there's there's no question that you can ask that's, that's really a bad question. Particularly when it comes to like w two and total compensation. It's complex. It's not easy. It's complicated. I mean, this stuff is complicated. So don't don't assume that you're the only one who doesn't know it. And asking makes you look silly. That's not the case at all.
I couldn't agree more. I think having the most knowledge you can about your compensation, about financial guidance and planning. That's going to empower you when you're making this transition. And you want to feel confident when you decide if you decide to transition, that you have all of all of that information. And so planning long term planning sounds like a really important part of this discussion. So to learn more about Erik Garcia, visit, plan-wisely.com. That's www dot p l a n dash W i s ely.com, where you can find links to Eric's podcast, and ebook Five Pillars of Financial Security, A Guide to Managing Your Money Wisely. Thanks again, Erik for your time today.
Yeah, thanks for having me.