The Three Es of Educator Income Growth

You’re an educator looking to grow your wealth. You’ve taken a look at the Educator Career Ladder and decided that the other jobs aren’t for you. No worries! You’ve got plenty of options. Today we’ll review how you can grow your income while focusing on the job you love by using the Three Es of educator income!

If you missed it, the Career Education Ladder showed how an educator can multiply annual income by seeking increasing levels of responsibility. Some people though, love the job they’re doing and (understandably) don’t want to climb to roles with higher pressure and less contact with the students.

The good news is you can still make more without leaving the job you love. Or, you can climb the ladder AND use this information to dramatically increase your earning power.

For an quick overview of all the levers you can use to increase income, check out: Quick Guide: How To Make More Money As An Educator.

The Three Es – Education, Experience, and Extra Duty

If you aren’t looking to “climb the ladder”, don’t want to move, and don’t really feel like a second (or third) job, you can still significantly increase earning power in three ways detailed below.

I have worked for over twenty years in education, in a number of roles and districts, and know these three factors enable everyone to earn more. However, I like to provide you with more than just my assertions, so I gathered data from real examples.

I did a quick search and pulled five teaching contracts/salary schedules from five districts distributed around the United States. I have no familiarity with these districts or their specific conditions. They represent rural, suburban, and urban districts from the following states:

• Vermont
• Mississippi
• Oregon
• Minnesota
• Kansas

Note: The search was not intended as a large-scale statistical analysis, but instead to show that the concept applies across the country.

I used teaching contracts because they represent the largest number of employees and are more comparable. However, in general, these same trends hold true across most education employment positions. The specifics, however, vary widely by district even within a state. Which brings me to an important point if you are looking to maximize income:

KNOW YOUR CONTRACT

I cannot stress this enough. As with everything, knowing the rules of the game matters. In addition to the three Es, contracts can hold other important opportunities for maximizing your income. I’m always amazed by how few educators take the time to understand how their salary is determined. Don’t be one!

Educator contracts (for unionized positions) or salary schedules are almost always publicly available online. I am unaffiliated and unfamiliar with the five district schedules I reviewed. It took me less than ten minutes to find all five documents. While they share similarities, they also each have different strengths and weaknesses. Please take the time to review the compensation agreements for any district you are considering.

If you are currently working for a district and able to move to increase your income, our next post will focus on geoarbitrage. However, if you are staying put, you should review your current agreement in the following areas when seeking to maximize your income potential. Even if you don’t use what you find, knowledge empowers you to make the best choices for your situation.

Study your contract. Know your contract. Use your contract.

Related Post: Analyze Your Educator Contract

Overview of Salary Schedules

This is a typical example of a teacher base salary schedule. I chose this one because it is fairly typical of most schedules and the format is simple. You will note that salaries increase as one acquires steps and/or advances in education columns.

Steps

On the left of the grid, you see the experience steps representing years of experience. The number of steps in a salary schedule varies by district. The five schedules I reviewed contained a low of seven (7) steps to a high of 35. Most commonly, I’ve seen schedules with between 10 and 15 steps, as in our example.

Columns

Across the top are education attainment columns. Most will start with a Bachelor’s Degree (BA), have a Master’s Degree (MA) column, and then a top column with either a Doctorate or a Master’s Degree plus a high number of credits. In between could be any number of credit variations. The example above has 8 columns. The agreements I reviewed had a low of 3 columns and a high of 11.

Comparison Points

Variation makes straight comparison difficult. In order to compare, I selected three columns present in each contract: BA, MA, and the highest column.

For years of experience, I reviewed salaries at year 1, year 7, and year 15 for each contract.

This provides relatively consistent comparison points.

EDUCATION

It is not surprising the education profession places a premium on education credentials. Acquiring higher-levels of education is one of the quickest ways to increase your salary. Teacher salary structures, in particular, are built with degrees and coursework in mind.

If you are considering using this lever to increase your income, make sure you factor in the cost of the additional education. Whenever possible, use available professional development or education credits to pay for your additional coursework. Even if you have to pay for it yourself, it is often worth it over the course of a career to move to higher-levels of education.

What Does the Data Say?

I analyzed three points in each of the five agreements: Bachelor’s Degree, Master’s Degree, and the highest level for each agreement. The highest level varied from a Master’s +45 credits to a Doctorate degree.

The base pay for a year 1 teacher with a Bachelor’s degree ranged from $38,525 – $45,848 per year. Actual pay will be a subject for the post on geoarbitrage. This article doesn’t focus on actual pay level, but instead on how education impacts it. So, let’s review the change in pay based on education.A

As you can see, the effect varies across districts. Again – know your salary schedule!

I have shown the table at set data points, but remember that this effect varies by years of experience and there are typically more than three educational ranges. So, in between each degree level you may get increases along the way.

What is consistent is that higher levels of education lead to higher levels of income in all agreements. And – the effect is significant!

Let’s look at the case of an educator starting with a Bachelor’s degree who intends to stay in teaching for 20 years. We’ll use only the median numbers to create a hypothetical “median” experience. That teacher starts at the median starting pay of $40,363/year. She works hard and by year 7 has obtained her Doctorate degree. This means, in median conditions, she will be making an additional $9291 by year 7.

Let’s just use the data above and assume she made an additional $9291 from years 7 – 15, and an additional $11,148 from year 15 – 20.

If those raises were automatically invested in pre-tax accounts earning 6% a year, in year 20 she would have an additional:

$197,190

Almost $200,000 simply from the education increase! That would be over and above any other savings and investment efforts she was making. Also, due to its simplicity, it’s a conservative estimate because it neglects the yearly increases and any increases from experience increments between Year 1 and 7.

Continuing education can supercharge your income!

Remember:

• Consider the cost of acquiring the education when making your financial calculation
• Use professional development or education credits whenever possible. If your district pays for your coursework, it’s free extra income!
• The earlier you acquire education, the more years you maximize income

EXPERIENCE

Okay – the cost of education is expensive and/or doesn’t fit with your current life plans. The good news is your income will increase simply by remaining in your job. If you are strategic, you can use this to build your path to financial independence.

Virtually all salary structures in education are built on the premise that time matters and you are worth more each year you work in education. There is some evidence that teacher experience really does matter in improving student results. I know I was a far better teacher at year 5 than 1, and a far better school principal after 5 years as well. Salary increases are typically built in for each year of work, up to a certain point where the steps “top out.”

These increases are in addition to any cost-of-living adjustment that is applied. For example, an educator may get a step equivalent to a 5% raise and a COLA of 2%. This can lead to solid salary growth in early- and mid-career. Although COLA’s have been smaller and/or non-existent since the Great Recession.

What does the data say?

I reviewed the five contracts and analyzed salaries at year 1, year 7, and year 15. The contracts ranged from as few as 10 yearly steps to as many as 35.

The base salaries ranged from $33,900 to $58,570 depending on district and starting education level. How did years of experience impact income?

Remember, this isolates the effect of experience at each degree level. District salary structure variance created an interesting situation in this example where the median gain from experience is actually higher for a Bachelor’s degree at year 7. This is not true for all districts, and remember the base salary is much higher for the higher education level.

This quirk is demolished by year 15, when the gain from experience for the highest degree levels significantly outpaces the Bachelor’s degree holder gains.

At every level though, income will increase with time in job. If you can limit lifestyle creep, you create savings simply with annual increases. A teacher after 7 years on the job will be earning significantly more annually than a beginning teacher.

I can personally speak to the poverty of the early years of teaching, particulary with student loan debt. This makes it seem daunting to create savings in the job we love. However, if you intentionally put the majority of your annual increase into savings and investments, you can build up momentum over time.

The gains from education and experience are additive. Across these 5 sample districts, the average difference between a year 1 teacher with a bachelor’s degree and a year 15 teacher with the highest level of education is more than $30,000 a year. In one, it was $44,000 more!

EXTRA DUTY

Our final E is for “extra-duty” or “extracurricular” duties. The specific title may vary by district. These are options within your district to assume extra duties. The extra duties can range from minor organizational tasks to basically entire extra jobs.

I will cover Educator Side Hustles in a later post. Extra duty could be considered a side hustle (consider it whatever you want) but I differentiate it because you are paid by your primary employer. In some cases, these duties are fulfilled during the normal workday.

Even more than basic salary structure, extra duty pay evolves almost haphazardly across districts, making comparison difficult. As always, I suggest you review what your current or prospective district offers in terms of opportunity for extra pay.

In reviewing the five salary agreements, I found more than 150 extra duty positions and pay, ranging from a low of $50 for organizing an elementary spelling bee to as much as $8091 for an instructional coordinator position. Coaching positions are also often considered extra-duty or extracurricular.

Other examples include, but are definitely not limited to:

Those are just a few examples from a list of more than 200 across the five agreements reviewed. I intentionally included three Yearbook positions so you can see the wide span.

If you have access, time, and qualifications for an extra-duty position you can increase your income while still focusing on your primary professional passion! (How’s that for alliteration?)

What About Using All Three Es?!

We just reviewed Education, Experience, and Extra-Duty alone to show that each individual factor allows you to make progress. An ambitious educator looking to maximize income can use all three!

As a quick example, let’s assume a new teacher started year 1 with a Bachelor’s degree. By Year 7, she has moved to the Master’s column in her district and is using her time to coach a fall sport for a stipend of $5000. In our mythical median district, she would be earning $16,000 more annually before factoring in any potential cost-of-living-increases.

That amount would continue to increase each year due to experience (until hitting the top step.) By making intentional choices to increase income AND limit the growth of spending, our educator has created significant savings that can be used to build wealth.

A real example: My partner, TFI (Teacher F.I.) started as a new teacher at an annual salary of $36,500. She now has a Master’s Degree + 40 credits, is maxed on the experience steps, and performs two extra duties for a total of $3200. This year her income will be just short of $80,000. That’s a solid income from doing what she loves.

Summary

Using Education, Experience, and Extra-Duty you can stay focused on the job you love while still significantly increasing income. The Three Es won’t 10x your income, or allow you to earn the salary of a typical lawyer. But, with intentional use, in combination with educator investment advantages, you can take control of your finances and make steady progress to financial independence.

Check out your current contract to see how you can take advantage of your own three Es! Please let me know if you have any questions or need help reviewing your salary schedule.

For more about all the levers you can use to increase income, check out: Quick Guide: How To Make More Money As An Educator.