Could you support a family of four on a teacher's salary?
One man is doing just that and he's not only surviving -- he's thriving.
Danny Kofke appeared on Monday's The 700 Club to talk about how his family has saved money following these principles and how you can, too. Click play to watch Pat Robertson's interview with Kofke.
Statistics show that half of all teachers in the Unites States leave the profession within five years because of low salaries. Yet teaching ranks as one of the top ten most gratifying careers.
Special Education teacher Danny Kofke believes a low salary should not be the reason to stop molding young minds for the future. He's discovered how to stay in the profession he loves while living happily within his means.
Kofke works for a public school and supports a family of four on $39,000 a year. In his book, "How to Survive (and Perhaps Thrive) on a Teacher's Salary," Kofke shares how he's able to:
- live debt free
- save for retirement
- support a family of four
- and live a financially secure life
All on a teacher's salary of $39,000 a year.
Laying the Foundation
Before marrying in 2002, Kofke and his wife Tracy, who's also a teacher, decided to teach overseas after their wedding as a way to save for their future life together. They both took teaching jobs in Ooland for two years, and were able to budget their money and have $20,000 in the bank when they returned home to the U.S.
With that foundation laid, the Kofkes continued their frugal habits with the ultimate goal of living on one teacher's salary so Tracy could stay home once they had children.
Smart Saving & Investing
In addition to sacrifice and saving, Kofke shares smart investing tips. He stresses that he is by no means a financial expert. But he says that "if I can do it, anyone can."
He learned about investing, and the "rule of 72" and the miracle of compound interest. He instructs that you must pay yourself first, and take advantage of 401 and 403 retirement plans whenever possible.
Kofke also shares these every day ways to get more out of your paycheck.
Get a new cell phone plan -- This might not apply to everyone, but the Kofkes only use their cell phone for emergencies. A few years ago, they had a plan at $50 per month and were barely using the service. So they switched providers and now spend an average of only $10 per month.
Use cash -- Cash is king these days. Most stores are hurting and are willing to negotiate prices - especially if you are using cash. Kofke had a friend who recently wanted to buy a new TV priced at about $1,000. He told her to walk into the store with $700 in cash and say she really wanted the television, but could spend only the money she had. After some talk, she walked out with the TV for the money she had in her purse. Not all stores will do this, but with the economy where it is, it doesn't hurt to ask.
Use your local library -- We all know the library is a great place to get books for free, but most don't realize many libraries also have CDs and DVDs available for checkout. Instead of renting or buying videos for the Kofke children, they visit their local library and check them out for free.
Ask for free stuff -- This might surprise you, but the Kofkes have the NFL Sunday Ticket on satellite TV. This is one splurge that is important to the them because it has become their family time together watching football on Sundays. Danny said he saw an ad in a local magazine offering new subscribers to this service an added feature worth $99 for free. He called up the satellite company and said he already subscribed, and wanted this free feature, too. He got it. It never hurts to ask.
Save a little every day -- Some people buy their coffee on the way to work. This practice can add up easily to more than $100 a month. Instead, make your own coffee at home and save up to $25 a week, which adds up to more than $1,000 a year. Another way to save is to bring your lunch to work. On average, you will spend at least $5 eating a fast-food lunch, and more for a sit-down restaurant meal.
Instead of eating out every day, bring leftovers from home a couple of days each week. You still get to eat out a majority of the work week, and will save more than $40 each month.
Use coupons at the grocery store -- Tracy said she has gotten serious about saving coupons. She starts with the new year and the results have been great. So far, their family has saved almost $350 in 2010.
These are some of the tactics the Kofkes use to get the most out of Danny's paycheck. For most people, it's not how much you make, but how well you plan your spending that leads to financial success. This philosophy has enabled the Kofkes to live a very wealthy life on a moderate income.
Kofke insists that with smart planning, careful shopping, and diligent budgeting -- you too, can live well on less.