How teachers can manage the summer paycheck gap

After months of lesson planning, grading papers and giving your all to your students, summer is finally here. It’s time to enjoy a well-deserved break and make the most of your time away from the classroom. But what about your finances during the summer break? 

The summer paycheck gap doesn’t need to cause stress for teachers. You just need a plan in place to cover your finances for the months that school is out of session. Here’s how teachers can manage the summer paycheck gap and stay on track.

How do teachers get paid in the summer? It’s simple: Plan for it. Bobby Hoyt, a former teacher and founder of a personal finance blog, says the start of the school year is a challenge for teachers. Your best bet to cover the summer paycheck gap is to have a budget in place well before the first day of school.

To start, check to see if your school offers a year-round payment option. This would allow you to sign up before the beginning of the school year to have your paychecks spread out over 12 months. “That way you’ll have a consistent paycheck no matter what time of year,” says Kristin Larsen, founder of a personal finance blog. Even though your monthly pay will be smaller with year-round paychecks, it could be easier to create a financial plan and manage the summer paycheck gap with predictable cash flow.

If your school doesn’t offer a 12-month pay option, you can create your own plan to stretch your earnings through the summer. Setting aside a part of each paycheck during the school year can help cover expenses and make the summer paycheck gap easier to manage. 

• First, divide your annual income by the number of months you receive paychecks. If you earn $57,000 a year and work for 10 months, for example, you’ll arrive at $5,700. 

• Next, divide your annual income by 12 months. In this example, it would be $4,750. 

• Finally, calculate the difference between those numbers. Here, the difference is $950. That’s how much of your monthly income you’d need to set aside to provide for two months of the same pay during the summer. 

“Then, you’ll want to sit down and create a budget and find where you need to cut back and where you can still do the things you enjoy,” Hoyt says.

If you’re a teacher living without a paycheck during the summer, Hoyt suggests figuring out how much money you’ll need in the summer months to cover your standard living expenses. Think housing, utilities, groceries and transportation. 

Not sure how much you usually spend? Start by tracking your essential expenses for at least three months. You can also review past credit card and bank account transactions to figure out spending patterns. Having a clear picture of your regular bills and basic living costs can make it easier to build a realistic summer budget.

One of the best summer budget tips for teachers is to use your highest expense month to predict your summer costs, Larsen says. That way you won’t be as stressed about money during the paycheck gap. 

Another summer budgeting tip for teachers is to prepare for seasonal expenses. After all, summer is filled with chances to get out and enjoy yourself, and those costs can add up quickly. Whether you’re planning a vacation, going to a music festival or enjoying other seasonal activities, including those expenses in your budget can help you avoid overspending.

Estimate how much you’ll need for your summer extras, and you can add those to the essential living expenses mentioned above. If any of your summer expenses repeat annually, like a vacation with family or friends, use what you’ve spent in past years to arrive at how much you’ll need this time.

So, how do teachers get paid in the summer? Unless they have a part-time job (more on that below) or do additional work for their school, they don’t. But there is one way teachers can feel like they’re getting paid over the summer. Throughout the year, they regularly contribute money to a separate summer fund.

If you’re a teacher looking to close the summer paycheck gap, then set aside a portion of your paycheck into a savings account. Along the way, look for other creative ways to add extra savings to the account. Bonus: If you put your summer paychecks and other savings in a separate account, it may be easier to avoid the desire to withdraw it for other expenses.

You may also be able to have your savings automatically added to a savings account via direct deposit from your paycheck. You should consult with your employer to confirm this is possible.

Consider putting your summer funds in a high interest rate online savings account so you can earn interest while you work your way through the school year. If you won’t need to withdraw your funds for a specific amount of time (say 12 months), you may be able to earn more interest, depending on the term, with a certificate of deposit (CD).

Another option for how teachers can manage the summer paycheck gap is to have an emergency fund, Hoyt says. An emergency fund is money set aside strictly for emergencies, like car repairs or medical bills. “It’s always wise to have an emergency fund, but especially if you have gaps in income,” Larsen adds.

If you don’t have one yet, you should seriously consider starting an emergency fund. While experts typically recommend saving at least three to six months of living expenses in your emergency fund, you can start small and add as your budget allows. Any cash set aside in an emergency fund will be helpful if an unexpected bill or expense comes your way. Keeping your emergency fund in a high interest rate savings account can help those funds continue to grow while staying accessible when you need them.

Another way for teachers to get paid during the summer is to “consider a part-time job to pay for the extras that can come with warmer weather,” Larsen says. With no paycheck during the summer, a summer job can be a great way to make money on the side and put that extra cash into your summer fund.

According to Hoyt—who started his website as a side hustle when he was a band director—many teachers can use their skill set for jobs related to their profession. For example, teachers can offer private lessons or tutoring within their subject areas. Teachers might also try unrelated jobs, like being a lifeguard or camp counselor.

A summer job can also be a chance to explore a new career path or pursue a passion. You may even discover a role or business idea that grows into a full-time opportunity. “The skills that teachers pick up throughout their career—working with people, managing a high workload, having high standards for excellence—tend to translate extremely well into being an entrepreneur,” Hoyt says.

Summer break is one of the many rewards of a teaching career, but a gap in income can make those months feel stressful without the right plan. With a smart budget and some extra planning, you can enjoy your time off while staying on track financially.

How teachers can manage the summer paycheck gap:

• Using a 12-month income plan or a dedicated summer savings fund can help you feel more confident and create a more even cash flow throughout the year.

• Building a budget that includes both everyday expenses and summer activities lets you enjoy your time off while keeping your finances on track.

• Growing an emergency fund and thinking about a summer job can give you added peace of mind and extra financial flexibility when regular paychecks pause.

Teaching has its challenges, but it also comes with the major perk of having some of the best months of the year off. Planning ahead and putting these summer budget tips for teachers into action will help make sure that these hard-earned months of vacation are truly a rewarding time.

For a teacher managing the summer paycheck gap, budgeting and saving are important, but choosing the right place for your money can help it go further. Earn more with a 360 Performance Savings account, offering one of the top savings rates in the country.