You’ve taken on (or are considering) the awesome responsibility of education leadership? I’m so excited for you and our profession. It’s a challenging, but rewarding role. Today, I want to share with you 7 money things I think every principal should know.
School leaders are so important. There is clear research on the impact of effective leadership on student outcomes. Every teacher, paraprofessional, and student knows the value of having a good administrator supporting them.
Last week, I shared the 15 Money Things I’d Tell a New Teacher. Those were based on my own personal misses and how I’d correct them if I could do it all over. (Today’s post builds on those things, so I’d advise reading it if you haven’t.)
I have the pleasure of working with many young educators looking to step into leadership positions. We focus largely on supporting instruction and the challenges of managing people but other topics surface.
These 7 pieces of advice are based on real challenges and pitfalls I’ve seen new leaders face and (sadly) often fail. Financial health allows us to focus on other important parts of our lives.
I use the term principal because that’s the most common entry point for education leaders. However, these apply to all new administrators, whether you are serving a school, program, or in a district role. Follow these, and you’ll be well on your way to professional and financial success.
The 7 Things
1. Don’t Waste Your New Income
Moving from a teacher into an administrative role you’ll likely see an income increase of 20% – 100%. That’s substantial! Big increases don’t come around very often in an educator career. Usually, raises are gradual over time.
DO NOT WASTE THIS MOMENT!
Keep living like a teacher. Make a plan for the new income.
- Pay down debt
- Crank up your retirement accounts
- Build your emergency fund
Use this opportunity to set up your future! These are the moments when you can increase your savings rate for good.
If you are in a district where your teacher checks were spread over a 12-month period, and you start your principal job in July, you’ll get two months of “extra” pay. It’s just a timing issue, but it feels like a bonus! Do not do what I did, and blow it
Celebrate your new success a bit, but use this small windfall to make an investment in your future. Kill off some debt or fund a new account.
If your paychecks don’t overlap, I’m sorry. You still just got a good income bump. Take advantage.
2. Know Your Contract – Investment and Education Options
Yes, this is a repeat from the teacher recommendations – but it’s still important. Administrative contracts are different than teacher contracts. You have higher pay but less job security, typically fewer years of steps (automatic raises) and more work days.
However, you may also have additional benefits.
Many admin contracts contain great education benefits. As with teachers, this recognizes that continued licensure likely will require some coursework in the early years. Check out your benefits and make a plan. Get that schooling done without paying out of pocket if possible!
Also – some contracts include support for completion of a doctoral program. If you are thinking of continuing up the career ladder, this can be a powerful benefit.
Always do a cost/benefit analysis on time and money for future education options. The only way you can do that is by knowing your options.
One common benefit is an employer contribution to a 403b plan. If you haven’t started a 403b during your time as a teacher, this provides the kick you need!
Also, did you know the contribution cap on 403b ($19,000 for 2019) applies to employee contributions only? Your employer can contribute too! The two together can total up to $56,000 in 2019!
Let’s say your contract includes a $300/month 403b contribution from the district. $3600 a year is a nice little benefit.
If you were able to also contribute the employee maximum of $19,000 you are now putting over $22,600 a year into your retirement account!
As always, check the fees carefully.
Don’t forget to check your healthcare options. Sometimes administrators have different benefits than other staff. (I don’t agree with this
Know your contract to maximize your benefits. This will also empower you when the time comes to negotiate the next one.
3. Don’t Buy the Luxury Car
The most common thing I’ve seen new admin do is immediately buy a car.
Don’t do it.
Please don’t do it. I’m literally begging you.
No one is impressed seeing a Mercedes parked in a school parking lot. Quite the opposite. Whatever status you think you’re claiming, you are losing far more.
Oh, and this isn’t financial – but if your school/district office has a reserved space for you, get rid of that thing. Trust me, you don’t want to advertise which car is yours. (Hello
Drive a reasonable car.
4. Learn About School Budgeting
We’d be better off personally and as a profession if more administrators took the time to build expertise in understanding and managing budgets.
Depending on your position, and the authority your specific district grants, you may or may not be directly involved in the budgeting process itself. However,
Administrator preparation programs often do a horrible job of preparing educators to become budget leaders. Do whatever it takes to prepare yourself. Take an extra class, do some reading, connect with mentors who are good at it. Ask your district business manager to dig in with you. Take the time.
If you are good with budgets, you will stand out – this is good for your career.
Even more importantly, understanding budgets will give you the ability to be creative and innovative. An organization’s true values are revealed by its budget. Know yours so you can change it to fit the vision and mission of your school or program. It can be a game changer for you and the kids you serve.
5. Know Ethics Rules
At the very least, you have to be very careful about gifts from those you supervise or vendors looking to infiltrate your school or program.
Look up your district policies on gifts, donations, and fundraising. Check state rules on ethics for public employees.
Technically, these things apply to all public employees often including teachers. But people really pay attention to administrators.
Know these to stay out of trouble, avoid losing credibility, and prevent ethics fines. Those are all bad for your professional and financial health!
6. Giving is Now Required – Make a Plan
In the previous post, I asked teachers to give what they can. Know that as an administrator, giving isn’t really optional. It’s a career expectation. This was a hidden expense I never considered until I got my first administrative role. It’s held true in every role since.
People know that you make more money. You are likely the highest-earning person in the school or program you oversee. Parent and community groups support your school and depend on fundraising. They will expect your support. It may not seem fair, but it’s
My advice is to budget an amount for giving each year. Consider it a job expense like clothing or supplies.
Take time to think about what activities and organizations you want to support. Prioritize those that are working directly with you and your school initially.
Spend the first year learning the patterns. There will be regular fundraisers, events, and drives. These become predictable over time and you can allocate your giving accordingly.
I currently prioritize four organizations. I know the big asks comes in February, May (2), and December. We budget for these, and then an additional amount for small donations to organizations supporting the students I serve directly.
All other requests are gently denied using the phrase “That’s really important. But, our giving for this year is currently going to <insert priority here.> We evaluate that every year if you want to check back later.”
If you use that phrase with an organization directly serving your school, make the promised adjustment. They’ll remember, trust me!
I’m glad to give and have never regreted a donation. Like anything, it’s best to be intentional.
7. You Are a Model
Finally, I’ll close with the most important advice. You underestimate your impact on others. It won’t always be apparent.
Know that others watch what you do far more than what you say. Staff, community, and students see the choices you make.
Be transparent with the school budget. It builds staff and community trust.
Give as generously as you can, without hurting your long-term financial health.
Model responsible financial decision-making. Reject unnecessary consumerism.
Every staff member, every student, and many community members will see it. You might be changing the trajectory of hundreds of lives simply by making choices that will ultimately benefit you.
Be the model we all wish we’d had.
Those are my 7 money things for new leaders, a companion piece to the 15 money things for new teachers. I want you to be successful, and help others bulid a bright future. Please contact me if I can help.
All of us have seen new leaders step into new positions. What did I miss?