Danny Kofke: Your First Steps to Financial Confidence as an Educator

What if a 42K salary could still build a rich, secure life? We sit down with longtime educator and author Danny Kofke to map out the practical money moves that help teachers thrive today and retire strong tomorrow. Danny’s story starts in the classroom—first grade, kindergarten, and a decade in severe and profound special education—and turns into a blueprint for living below your means, creating financial margin, and seizing opportunities that change your future.

We break down compound interest in plain English using the Rule of 72, then show exactly how small, automatic contributions to a 403(b) or 457(b) can grow into six figures. You’ll hear why a teacher pension can mirror the income of a million‑dollar portfolio, how matches are real “free money,” and what changes when a district doesn’t pay into Social Security. For new teachers, we offer a simple on‑ramp: start with a percentage, set it to auto-increase, and let raises boost your savings without extra effort. For mid‑career educators feeling behind, we outline a realistic reset with budgets that actually stick and a clear plan to kill debt.

Debt gets a hard look: the true cost of minimum payments, why credit card rewards are a distraction, and how to choose between the debt avalanche and snowball. We also draw the line between short‑term and long‑term savings so emergencies don’t derail retirement. Finally, we make the case for districts to teach financial literacy to staff—an overlooked but powerful recruitment and retention tool that helps educators make better decisions with pensions, matches, and benefits.

If you’re ready to turn money stress into a steady plan, this conversation gives you the steps, the math, and the mindset. Subscribe, share this with a colleague who needs a win, and leave a review with the money question you want us to tackle next.

Transcript

Meet Danny And His Classroom Story

SPEAKER_01 0:30

Hello, Gale family, and welcome back to another exciting episode of Gale Unscripted. Today we have a special guest, and we're gonna talk about finance for educators. And we've got Danny Kafke here with us. Danny, tell our audience a little bit about yourself.

SPEAKER_00 0:44

Yeah, hey, Ben, thanks for having me on. And that's what everyone loves to talk about, right? Finance. But no, this will be a lot of fun. So I bring to the table uh 18 years as a school teacher. Uh mainly. So I started off when I had a lot more energy, was a lot younger. I started off my career as a first grade teacher. Then I went into kindergarten. I did that for a couple of years. And then one year I had I had a co-teacher, so I was teaching kindergarten, actually had another male in there, and I had five special needs students with me, and then 18 gen ed students. And I really then I'm like, gosh, I really like the special ed kids. It's really neat and exciting. So then a couple years later, I transitioned into special ed. And the last 10 years of my teaching career, it was in a severe, profound classroom. So students basically IQs below 30, so tube feeding, wheelchairs, a lot. But uh I really loved it. It was like, yeah, every day you felt like you gave something. Um so yeah, it was a lot of fun. And, you know, we'll get into the finance part, but a lot of times I think now, like my students actually taught me a lot more than I taught them because I mean, we tend to complain about the little things in life, and like I would just go home and be like, you know, these parents, some of them aren't gonna be able to walk their child down an aisle or have them go to college. I'm like, what am I to complain about anything that I have going on? So just a really uh rewarding experience in my life. That's awesome.

SPEAKER_01 1:59

My mother was a special education teacher, and she started her first day of college at the young age of 42. So when I started first grade, she started college. Uh I was the youngest of four boys, but to be a special education teacher, and she taught severe and profound her entire career.

SPEAKER_00 2:16

Wow.

SPEAKER_01 2:17

And hearing you say that, it just reminded me when I was a principal. Uh, on those days that were particularly a little trying or not so pleasant. Uh, I would always walk down to the self-contained classrooms, and it was amazing how uh my day would change. It's funny you say that.

SPEAKER_00 2:34

My last principal, great principal, one of the best ones I had throughout my teaching career. But he would come almost every single day to my classroom, give the kid the highest five, and he'd say, like, this is the highlight of my day. Like, wow, that's awesome.

SPEAKER_01 2:44

That's right. Puts everything in perspective.

SPEAKER_00 2:46

It does, it does.

SPEAKER_01 2:47

So you were a teacher, and at some point you got very passionate about your work that you're doing now.

Living Well On A Teacher Salary

SPEAKER_00 2:52

Yeah, so uh we'll go uh we'll rewind the clock a little bit. Go way back to uh 2005. So at that time, my wife, Tracy, she was a first grade teacher as well when we got married. After a couple of years, we had our first daughter, Ava. Um, we wanted Tracy to be able to be a stay-at-home mom. Had no clue how long this was gonna happen. So at that time, I was making about$42,000 a year. Uh, but we're like, you know, we're gonna give it a go. So we had Ava. So 2005, Tracy's staying home. Some of my colleagues are like, gosh, you should really write a book to tell us how you're able to do this on a teacher's salary. Thought nothing of it. Publishing industry was completely different uh way back then. But I don't know. I think God just put it in my head one week and I sat down and I started writing. And then after a few months, I had my words on paper. I'm like, this is kind of cool. Uh, someone suggested I submit it to a publishing company. I did. Uh, one of them accepted it. But at that time, once again, a lot different industry. So we had to pay$4,000 up front to have this published. Now, there are ways to have make the money back and such. And that was a lot of money. We're making$42 grand a year. She's a stay-at-home mom, Tracy is, and prayed about it, talked about it. Like, okay, let's just take it. Well, that investment, that one book turned into now, I've written six books, a lot of TV experience. I mean, I'm sitting right here talking to you today because I was able to take advantage of that opportunity 20 years ago. So, you know, for a lot of times too, with with when I talk about finances, um, it means a lot for different people. But for me, it it gives you the opportunity to take advantage of opportunities that come your way. If you're living paycheck to paycheck, you don't have a lot of financial margin, it's really tough to do so. So that's, you know, for me, probably one of the best messages I can give others is just have that financial margin in place because opportunities arise for many of us, and you'll be able to take advantage of it.

SPEAKER_01 4:32

Yeah. So, Gail members, you heard that. Danny has written six books. That's six more than I have, but I'm getting close. Um, and you've also been on a number of TV shows, news shows, uh, podcasts. Talk to us a little bit about that.

SPEAKER_00 4:46

So, very, very blessed. So, once again, we'll go back. Tracy's staying at home um with Ava, and then in 2007, we added Ella to the mix, so had two kids, and Tracy's still a stay-at-home mom. So, we ended up having she stayed at home for a total of eight years, lived off my$42,000 a year teaching salary. And we currently sit right now, we have no debt except our mortgage, I have a one-year emergency fund in place. But most importantly, we live wealthy lives on a moderate income. So, even now, I've I've advanced in my career, make more. Tracy's moved up in the county. She's I'm still with a school district, but now an instructoral and technology specialist. But um, we've always just lived below our means. So during that time, so do you think you rewind? So we had Ella in 07. So you think about the end of 07 to 09, what happened? The Great Recession, right? The economy tanked a lot of home prices. So here I was very blessed to be right place, right time. Here was this real life school teacher raising his family on his teacher's salary. So, yeah, that's when some of the media, um, Fox and Friends, CBS, I mean, just a lot of uh cool experiences that we were able to have. It's major networks happens all the time. Well, I mean, well, what I mean, blessed, but right place, right time. But here it was a real life school teacher. I've never taken a finance class in my entire life, but had it figured out. And I think, you know, and that's where a lot of people, and we'll dive into the finance part of it, but um, you know, it's pretty simple on paper. Spend less than you earn. Yeah, it doesn't get any easier than that. It's sometimes hard to do it. Right. So uh, but here it was, once again, just a real life example of hey, the cool thing is, you know, if I can do it, this real life school teacher can do it, then you can as well. Yeah, that's great.

SPEAKER_01 6:15

Uh, let's talk about the power of compound interest. You know, a lot of people hear about it. Um, a lot of younger teachers, um, when they start their career, depending on the school district they're in, um, some have things that they're automatically uh signed up for, some are voluntary, some don't have anything. But talk about what is compound interest and what's the beauty of that for a teacher.

Media Spotlight And Simple Money Rules

SPEAKER_00 6:38

I love that question. So I'm gonna go to someone that's a lot smarter than I am, Albert Einstein. Do you know what Albert Einstein said about the power of compound interest? It's the most powerful force in the universe. Now, if Einstein says that, then man, I'm listening. So here, so basically, and I'll give you a couple examples, but compound interest, you can think of it. I can give you a big Wikipedia, you know, uh, of what it means. But basically, you get interest on interest that's already been paid to you. So there's a thing, and I'll just call the rule of 72. So basically, what you do is you take the percent of interest you're earning a year, and then you divide that by 72. So let's just say if you earn 10% a year, then you would double your money every 7.2 years. So what's that mean? Let's just say I invested$10,000 today and earned 10% a year. 7.2 years from now, it's gonna be$20,000. 7.2 years after that, it's gonna be$40,000,$7.80, and that's just with a$10,000 initial investment. So if you start setting yourself up, if you invest a set amount every single month and you just let compound interest work its magic for you, you're gonna have a lot of money. And here's an example. Let's just say you're say 25 years old and you just invest$100 a month. We're gonna say you do this for 40 years, so until you earn until you turn 65, and we're gonna say it averages 8% growth a year. Now, the stock market has averaged, if you go back since the 1920s, it's averaged about 10% growth a year. We're gonna go less than that, but you think about that. That doesn't mean that it grows 10% a year. That's the average. But that's averaged through World War II, Vietnam, COVID, um, you know, the Tiger King, you know, we can go through all the different crazy events that have happened, but that's the average. Now, some years it's down 20%, but then other years it's up 20%, so it kind of balances out. So we'll once again, we'll say you do$100 a month, age 25, do it for 40 years, earn 8% a year until you're 65. Guess how much money you would have? What's that? I took college algebra three times, and then I'll let you tell over$320,000.$100 a month. And if you think if you invest that for teachers, it's a$403B. For if you're in the for-profit world, it's a$401k, it's just the way it's written in the tax code. But$100 a month, a lot of this is also called tax deferred. So what does that mean? That means that money is taken out before taxes. So let's just say you do$100 a month. If it was taxed, after taxes, you'd probably have about$85 a month in spending power, but the entire$100 a month gets invested, right? So with that, over$320,000. So basically, for the price of a Diet Doctor Pepper a day, you could have over$320,000 in your retirement account. That's compound interest. That's amazing.

Compound Interest Explained For Educators

SPEAKER_01 9:10

And that's on top of the teacher retirement system. Yes. Why don't you talk a little bit? You know, there's so much attention on teacher recruitment and retention. Uh getting young professionals, college students to major in education, uh, to uh to enter the education workforce. Talk to our audience just a little bit. Maybe there's some uh principals out there, HR professionals, superintendents, they're they're working on trying to figure out ways to recruit and retain teachers. What what do you think TRS should be a part of that sales pitch if you were an HR professional?

SPEAKER_00 9:45

I mean, so we hear stuff in the comedy, it's like the haves, the have nots, the 99% versus the 1%. Well, if you're a teacher, you're gonna be in the 1%. What I mean? The way the pension system is set up, you're gonna be a millionaire. So amazing. This is the thing, I think the biggest tool that the HR principals, superintendents should use. So I'm gonna kind of just go go to some statistics. Let's just say, and I'm gonna say you're gonna say teach 30 years. We're gonna say the last three years of your career or last two years, if it's the same job, you make$60,000 a year. Okay. So the way the TRS benefit works, you take the number of years times 2%. So 30 years times 2% is 60%. So if you're making$60,000, 60% of$60,000 is$36,000 a year. That's guaranteed. That's not even including the COLIS that you get, you know, with that. So we're gonna, so remember that$36,000 a year. So an average rule of thumb, if you're a financial advisor, and they tell um, you know, the people that are investing, you don't want to withdraw more than 4% of your retirement savings every single year to make sure it lasts you your lifetime. So let's just say you retired with a million dollars. Taking 4% of that would be$40,000 a year. Well, I just told you in your pension, you're gonna make$36,000 a year. So you're just a little bit below than what you would make if you had a million dollars in the bank. And let's face it, most teachers, I use the example of earning$60,000 at your end of your career. You're probably gonna be more like$80,000,$85,000,$90,000. So you're gonna live larger in life and retirement than a millionaire will. That's incredible. TRS is a fascinating million-dollar pension. And that that to me is especially here in Georgia. Like I look at some of the other states, it's not as good as we have it here in Georgia.

SPEAKER_01 11:28

So, yes, that is a wonderful recruitment tool. That's right. And I think more and more uh HR departments and principals, superintendents are tapping into that.

SPEAKER_00 11:37

Yes, they need to.

SPEAKER_01 11:38

Talk a little bit about um before we move into some a terrible four-letter word called debt. Let's talk about some school districts, our social security districts. Some are not. Yeah, some have a match program, a 403B or a andor a 457B match program. Some do not, some are voluntary, but talk about that just a little bit.

SPEAKER_00 12:01

Sure. So it was like in the early 80s that there was some a law that got enacted, and there were some school districts that you were able to opt out of pain into Social Security here in Georgia. And it's kind of like to find that map is pretty hard. Like I try to because I don't know the number, but there's there's quite a few that do that. So in even where I live in Jackson County, a lot of them say, okay, and I know one for sure is Gwinnett County. Gwinnett County doesn't pay into Social Security. So a lot of times we'll be like, okay, we're gonna go to Gwinnett County to make more money. And yeah, the salary may be a little bit more, but you have to also think if you're paying into Social Security, 6% is coming out of your paycheck to go into Social Security. So automatically, by teaching in a county that doesn't pay into Social Security, you're not having to pay that 6%. So yes, you are going to make more, but then down the road, that's where it's going to affect you because you're not going to have Social Security in retirement unless you've had another job that you've worked basically 10 years and paid into the system. So you have to keep that in mind. And I have been around with a couple of the counties that don't pay into Social Security. So what they'll do in their 403B, they'll offer a match. Hey, if you invest 3%, we're gonna kick in another 3% for you. And I always encourage teachers, especially those that are in one of those districts that offer a match, take the match, please. 3%, let's just say it's$100. If free money, if you turn it down, that'd be like me walking outside of this office right now and finding a hundred dollar bill on the ground and just walking by it and doing it every single month. It makes no sense. It's free money that you're getting. And then in addition, if you are in one of those counties that aren't paying into it, really you should probably be investing at least six percent of your salary because that's what you would be investing or paying into social security if you were in a county that paid into it. So it's just you have to keep track of that. And that's where I always recommend to meet with uh, most school districts have a financial advisor that are as part of their supplemental retirement savings plan. I encourage you to meet with your advisor, find out these things. A lot of teachers they don't even know if if they're paying in social security, if they're not. So you have to understand the financial implications. And I get it, if you're 27 years old, you don't really want to think about it, but you know what? We're gonna be 50 before you know it, I can tell you. And uh this stuff's gonna mean a lot more than.

SPEAKER_01 14:08

Yeah, they uh actually the legislature passed uh a bill last year that school districts have to inform their employees when they're hired and when they leave and every five years, you know, whether they're a social security district or not.

SPEAKER_00 14:21

But you and I know how they but you know I mean how they inform them, it's probably an email that no one reads because as a teacher you get 185 emails a day. So you just so it's just to me, take a little power and meet with that financial advisor just so you you you know, maybe during Thanksgiving break, Christmas break, whenever, when you have a little downtime so you can focus on it.

TRS As A Million-Dollar Pension

SPEAKER_01 14:38

The point is with uh TRS, 403B, especially if it's a match, um, Social Security, there's plenty of opportunities for educators to retire very, very, very well. I think I saw uh was it Dave Ramsey had the top professions of billionaires top five or millionaires.

SPEAKER_00 14:56

That's right. And why is that? It's because we're systematic. That's right. We follow lesson plans to achieve objectives. Uh and actually Dave Ramsey said doctors are one of the worst professions that retire. They have no money and they retire. They make a lot of money, a lot more than teachers do. But yet, why? Uh it's generous because we know as a teacher, I gotta follow this lesson plan. And it's the same with investing. If I follow this path, I'm gonna have money. It's just the way it works.

SPEAKER_01 15:20

Awesome. Well, we've got a live studio studio audience today. We do. We always have Ivy uh filming, editing, producing, all the things she does for the podcast. But we've actually got our social media intern here today, Grace Coston. Uh, and I wonder if she's thinking a little bit about education. I can tell she is. I see the wheels turning a little bit. I think she's really probably gonna call home today and tell mom and dad that she's gonna change her major. I can see it in her eyes right now. All right, let's talk about the four-letter word debt.

SPEAKER_00 15:54

Why is debt so destructive? Yeah, well, I mean, there is a reason uh that credit card companies have big buildings and we have the smaller ones, right? Debt is so destructive. And I'm just gonna use an easy example. Let's just say you decide to go out, you're gonna upgrade your living room. Say you get a new love seat, TV, couch. So we're gonna say you do$5,000 and you think, you know what, I'm just gonna pay the minimum monthly payment, which would be about a hundred bucks a month. I can afford that. No biggie. We're gonna say it's 18% interest, which is what most credit cards um charge. So you make the minimum monthly payment. By the time you're done paying that, guess how long it will have been? Oh. Years. Over 22 years, and by the time that's done, you'll have spent over$12,000 on that$5,000 debt. And in this case, it's living room furniture. So 22 years later, you're probably gonna have to replace that about five times. So what you originally brought is probably sitting at Goodwill and you're still making payments on it and more than double what the original cost was. It when you're in debt, what I just said about compound interest, the magic of it, you're working completely against the power of compound interest. You're paying it. Yeah, you're working for the credit card company. Absolutely. Absolutely. Yeah, that's a great thing. And they trick you, you know. Oh, we're gonna give you some rewards, we're gonna give you points, we're gonna do this and that. Well, there's a reason they don't love you so much. Here, you qualify for this gold card, and we're gonna give you this. Eh, they they don't really think that highly of you. You may think you'd nah, they don't. They don't.

SPEAKER_01 17:18

Well, after you had finished your your fifth book, uh you decided to write a sixth one. So tell us what that title is and tell us why you felt the need to write that book.

SPEAKER_00 17:28

Yeah. Um so yeah, so the title is uh Where to Spend, Where to Save, A Teacher's Guide to Managing Your Finances, and kind of what happened here. So I I was I thought I was done, right? Writing about this because there's some, you know, a lot of time and effort. But I was actually on a podcast, it was a couple of years ago, and I was on with an assistant uh principal, and he was telling me that he was writing a book and who it was published by a company called Solution Tree. And I'd never heard of Solution Tree, but they're really big into uh professional development for teachers. They have conferences all over the country, and then they you know have uh ways that you can present at pres at conferences and then also marking the book. And all my other books, I was I had to market myself. So in between teaching and writing, I was my own marketing person. So I'm like, it might be nice to just have like a company that's able to kind of do that for me. So then when I started writing it, we um the company sent it out to a couple of uh teachers, and they're like, I wish I would have known this when I first started. So, you know, the advice in the book, obviously it can benefit anyone as you go along. But I thought, you know, I really want to hit those beginning teachers, those teachers in years one to three. Because if you can start off your life making sound financial decisions, it's a lot easier than trying to make that change when you're 16, 17 years in, when you're used to the dinners you eat, you're used to the house you live in, you're used to the friends you have. So I wanted, you know, a book just for beginning teachers and thought, you know, especially for teachers that you know graduate from college, fresh out of college. Here's some of the things you can do right away. So the pain isn't as hard. If if you do it at the beginning, then it won't be so hard to make the change later on in life. So it's definitely geared towards beginning teachers. Talk about that.

Social Security, Matches, And Free Money

SPEAKER_01 19:02

So let's talk about the difference between I'm a beginning teacher. You you said the importance of them just starting off that first job, go ahead and start investing. And then move to the all right, Danny, I hear you. I'm in year seven. I didn't make those decisions. And now I've got I've got a good bit of debt. I've I've paid for vacations, I've bought cars, maybe I shouldn't have, the prices. Anyway, so we talk about the two things perfect perfect early career teacher just starting, hopefully coming out of college with very little to no debt, hopefully. Um, and then the teacher that's been in it for a while and does have some debt, wants to do all the things you're talking about, maybe give them some tips and strategies of how to eliminate.

SPEAKER_00 19:49

All right, so yeah, so we'll start beginning teacher, fresh out of college. So the beauty of that is for for most of us, especially teachers, you're gonna start off making more than you ever have in your life. I mean, that's kind of the even though we know you take a vow of poverty when you become an educator, but you're still starting off making more. So if you can get used to living off of less from the beginning, it's not so difficult. If you say, you know what, I'm gonna make my 100%, my salary, my 80%, and then that 20% is what I use to invest for retirement, uh, build up my emergency fund and things like that. Well, then you're never gonna get used to spending that much. So you're always your 80 becomes your 100. And then if you do that throughout your life, I mean, you're golden. So that's the benefit. And also, especially beginning teachers, a lot of times, and we'll get into where I work now and what we're doing with retirement, but you just set a percentage. And a lot of times we'll say 3%. So you just start off your career, you say I'm gonna invest 3% of my salary. The cool thing about that is you can set and forget because every year, and in education, a lot of times you do get a raise every year, cost of living sometimes, or if you get a bump, that 3% then increases too. You don't have to go in and change how much you're investing, it automatically increases as every time your salary goes up. So it's a great uh strategy to use. So you do that, you're good, but you've already gotten used to it. All right. Year seven teacher, you're like, you know what, I've blown everything 100%. You know, it's my 100% is 120% because I'm spending more than I earned, um, which is common, but it's okay. So, first, what we have to do, and it's gonna be that B word, not the cuss word. A lot of people say this is the B word, the budget. It all goes back to our budget. And thing is, a lot of people don't like to call it a budget, call it a spending plan. If it's change the semantics, that's what you need to do. But we have to know how much, you know, where our money is going, how it's behaving. And I realized that when I taught kindergarten many years ago when I started off, I realized that dollar bills act a lot like a five-year-old. So at that time I had 24 students. If they came into my classroom and I gave them no direction, in about five minutes, you can imagine what my classroom would look like. Yeah, money's the same thing. If you do not tell your money how to behave, it tends to act like a five-year-old. So when you analyze your spending, you analyze your budget, you're like, okay, gosh, and you make it personal. I can give general tips. Don't go to Starbucks, don't eat at whatever. That doesn't apply to everyone. So you have to track your spending. And I recommend start off with one month, hopefully advance it to at least three months. It's not easy. Guarantee, I mean, it's hard to track everything, but then you can say, gosh, we went to the movies three times, or we did this, we went on vacation, we could have. You're able to cut back on those areas that affect you. And then you have more money in your in your spending account, and then you're able to say, hey, either pay off debt, increase your retirement savings, whatever it may be. But the budget dictates exactly how you're gonna spend your money, especially as an educator. You can increase our income, you can work after school program, tutor, whatever. But many of us are exhausted after teaching all day. You don't want to have to do that. So the way to, you know, to put more money in your pocket is analyze how you're spending it.

SPEAKER_01 22:38

Yeah. My nephew's actually a middle school teacher uh down in Effingham County. And in the summers and holidays, he drives for Amazon just to make a little extra money.

SPEAKER_00 22:47

Well, there's been no better time in the history of our country right now to have a side hustle, right? I mean, between DoorDash and and Google and I mean anything. I mean, it's with teaching, you can tutor, you can do it. There's a lot you can do. But once again, probably tired at the end of the day after teaching all day, so you may not want to do it. So, first start off with that's something that doesn't take any extra work on your part. You just cut back on what you're spending on.

SPEAKER_01 23:10

Remind some of our educators out there, um, especially if there's some young young educators listening. If I've got five debts, should I should I pick one debt in particular to attack first? Talk to us a little about that.

Why Debt Destroys Wealth

SPEAKER_00 23:23

Great question. I love this question. Okay. There are numerous strategies to get out of debt. So, two big ones a lot of financial professionals use are what we call the debt avalanche and the debt snowball. So, with the debt avalanche approach, what you do is you list your debts in order from the most interest charged to the least interest charged, okay? That makes complete mathematical sense. But for about 90% of us, the math didn't get us into the trouble. Yeah, right. That's where the other approach comes in, the debt snowball. So with this debt snowball, we're not worried about the interest that we're paying on it. What you do is put your debts in order from least amount owed to greatest amount owed. So let's just say you have a medical debt, we're gonna say$500, we're gonna say you have a credit card, we're gonna say$1,000. We'll say a car payment,$2,000, just to keep the math easy. So first we focus on the$500 debt. Once that's eliminated, let's just say we're paying$200 on that. Very quick, you're done with it in two and a half months. If you're paying$200 on that, once that debt's eliminated, you've freed up$200. What you do is you apply that$200 to the next debt. In this case, it would be the five uh the$500 debt. So in a couple of months, that$500 debt's done. Now you take that money and you apply it to the next debt and you just keep going down this until all your debt's eliminated. Now, from a mathematical point of view, it may not make the most sense because if you have a car that you're paying 20% interest on and another debt that you're paying 50%, of course it makes more sense to pay off the 50% first. But let's just say it's gonna take a year to pay that off. A lot of us become frustrated because I can guarantee you the moment you try to get serious about paying this off, something's gonna happen. You're gonna need new tires, the brakes are gonna go out, the roof's gonna, whatever, because that's Murphy's law. So then you get upset. You're like, oh, I knew I couldn't do it, I'm just gonna be in debt the rest of my life and I'm gonna give it up. No, with the debt snowball, it's like going on a diet. You lose two pounds for one week, then you lose three, then you lose two. Your momentum, you're like, hey, I can do this, I can do this, and that's what the debt snowball does. It's that mental thing of like, yes, it empowers you to want to continue. And you're like, oh, this isn't as hard as I thought it would be. That's right. Perfect.

SPEAKER_01 25:18

So easy to say, but it's hard to do. Why is it so hard for us to do? Because if we're single, married, I mean, it just because we're not just paid off at 70. I've got an extra$200 a month. The the natural inclination is I've got an extra$200 a month. You know, and sometimes I in my history anyway, I didn't make great decisions with that extra$200 a month. And sometimes I went to even more debt instead of practicing that.

SPEAKER_00 25:44

Well, we see like$5,000 or hear$5,000 ads a day. So it's a it's a hard game. I mean, there are people out there that spend billions of dollars to get us to spend our hard-earned money. So there's that. And then, yes, I mean, it's just it's easy because a lot of times, especially with educators, we we work hard and at the end of the day, you're like, oh, I deserve X. So yeah, it doesn't sound so much fun to apply it to the debt that I have. This sounds a lot more enjoyable. And that's why, I mean, it's very easy to fall into that trap.

SPEAKER_01 26:10

Talk about the difference between short-term and long-term savings.

SPEAKER_00 26:13

Okay. So, with long-term savings, that's kind of what we're talking about with retirement savings. Long term is things like like long term, like it sounds. I I kind of say long-term is like basically five years or more in the future. So for a lot of people, things like retirement, or if you have young children, maybe you're doing a college savings account for them. Things that are coming down the road, but a good ways down the road. Short term are those things that are within five years. So for some of us, you know, it may be college. If you have a kid that's getting ready to go to college, um, could be like if you have a daughter that's getting ready to get married, something like that. You know it's coming up. But also short term, what it can help are the emergencies. So, once again, if you live in a house long enough, the roof is gonna leak. Promise you. If you drive a car long enough, you're gonna need brakes. If you have kids, they're gonna break something, a body park, something in the house, probably both. Those are things that happen that short-term savings can take care of. The benefit of having them, and I see it now working in the retirement industry with teachers, if you do not have short-term savings, what happens is then you have to borrow from your long-term savings, your retirement account. And with that comes penalties and it comes interest, and it just is a lot more expensive. So, with short-term savings, those are there for protection, and you're not worried about how much interest you're earning. Like my short-term savings, I'll say they're just in a bank account, a savings account at a bank. I'm earning probably like 0.001%. But what they're doing is preventing me from having to put that money on a credit card in case of an emergency and paying 18 to 24% interest. So it's for things like that. And a lot of people, I recommend at least three months of living expenses to have in a savings account, move it up to six months at some point, hopefully, because things happen in life that we have no control over. Like not many educators were affected, but I know people in the private industry, a pandemic shut down the world. No fault of anyone here, but yet some people lost out on work, some people were laid off because of something that was completely out of their control. So when you have that, it can turn what could be a major catastrophe into an inconvenience instead.

A New Book For New Teachers

SPEAKER_01 28:08

Yeah. Yeah, that's awesome. Um, you know, I just thinking about teacher retention such a big topic. The thought just came to my head that um wow, what if a school district, an HR department, or at the school level principals, you know, the the state stepped in and said, Hey, we gotta teach financial literacy to our high school students requirement. But you know what we don't do as school districts, and I'm just sitting here thinking, um, we don't teach financial literacy to our employees. We may offer, we may offer a great match program. We may offer a lot of different things. They've got TRS they're paying into, and the employer, of course, is paying into. But do we spend any time you talked about PLCs and all the stuff? We we get so focused as educators on others, you know, serving our students, serving our communities, but we don't think about ourselves sometimes. And I'm just sitting here thinking, what a great retention tool it might be if school districts and HR departments started offering these type of finance courses and workshops for their employees.

SPEAKER_00 29:19

That would be and maybe maybe someone like say maybe the executive director of Gale, maybe he could something propose some of these. I mean, I think I know that. He only knew someone that was smart with finance. That might be a great idea. But no, that is a great seriously, that is a really great like yeah, yeah. There's a great many things that were that we offer that uh really uh I don't want to say as an educator, a lot of the PLS I took really uh they didn't stick with I mean it really was kind of kind of like college. I didn't really you know live alive. And honestly, those districts that did adopt it, what a great recruitment retention tool.

SPEAKER_01 29:54

Yeah, we're we're learning things here today together. Well, we're gonna come back for another episode. This is going to wrap up our first episode with Danny, but he's going to be back with us to talk a little bit more about finance for our educators.

SPEAKER_00 30:07

Thank you for joining us today, Peter.

SPEAKER_01 30:08

Awesome.

SPEAKER_00 30:09

Thanks for having me on, Ben. This has been great. All right.