How to Budget Lump-Sum Summer Pay

By Andrew Hawk

How to Budget Lump-Sum Summer PaySummer months bring teachers a much-deserved break from the daily routines and challenges of teaching. However, summer can bring its own set of challenges depending on how school districts choose to distribute teachers’ pay during these months. Teacher pay is usually distributed in one of three ways. Teachers’ salaries may be divided into 24 equal payments that teachers receive twice a month for a year. Salaries may be divided into eighteen equal payments that teachers receive twice a month during the school year only. Or teachers may receive regular paychecks during the school year and then one lump-sum payment at the beginning of the summer.

Every year I have taught, I have had my salary divided into 24 equal payments—except for one year. That year, I taught in a small school district where I was given my summer pay in one lump sum. This presented me with added responsibility. However, with a little careful planning, I think you will see that it is not hard to budget lump-sum summer pay. Here are some ideas that might help you if you ever find yourself in a similar situation.

Write Your Own Paychecks
This was my strategy. I deposited the lump sum in my checking account. Then I wrote checks to myself in the amount of my normal pay, one for each day that would have been a payday throughout the summer. On each of those “paydays,” I simply tore up a check and threw it away. The money was always in my bank account, but because I’d written those checks, it looked on my ledger as if it wasn’t. When I tore up a check, I added the amount of the check back into my ledger. This may sound a little backward to some people, but it worked for me.

Pay Your Bills Early
Most bills have a set amount. Car payments, house payments, and credit cards can all be paid early. By paying these bills early, you can divide and budget the leftover income (disposable income). You will still need to set aside some money to pay bills that do not have a set amount, such as your water and electricity bills.

The Envelope Method
A former colleague of mine described this strategy to me. She and her family used it throughout the school year. Her family was having trouble spending their money too quickly, so when she and her husband got paid, they would pay their bills and then withdraw the rest of their money from the bank. They came up with a list of expenses, such as gasoline and eating out. They wrote these expenses on a series of envelopes and then put the amount of money they could afford for each category into its envelope. During the time in between paydays, they spent the money in the envelopes. When all the money in an envelope had been used, that expense was finished until the next payday. This strategy is easily customizable to meet the varied needs of any household.

Make Your Own Star Chart
On a piece of posterboard, list all the bills and expenses you are going to have during the summer in a column. Then across the top, make a row of due dates. Place star stickers on your chart as you pay each expense. This visual representation can be a helpful reminder of how much money is needed and how much can be classified as disposable.

Use a Calendar
On a physical or digital calendar, record all your bills and expenses on the dates they are due. Now you can add up these expenses and subtract them from the total of your lump sum. This will indicate to you how much of the lump sum is disposable. From this point, you can divide and track your disposable income. Using this method helps keep all your bills paid and ensures you do not run out of money before the end of summer.

Ask a Friend for Help
I have had a couple friends who needed help budgeting their money, so they gave me lump sums to keep for them. I was instructed to only give them money for certain things. This helped them save their money and keep all their bills paid. What we learned was that after a couple months, my friends had established good spending habits and were able to go back to keeping their own money. This can work to budget lump-sum summer pay too. Pick a trusted friend or family member and work out a plan.

Research Your Purchases
Never rush into large purchases. In this day and age, there are more buying options available than have been available in the past. If you need to buy something such as a washing machine or a new laptop, shop around to find the best deal. Practicing this due diligence is extra work, but it can save you lots of money. Sometimes it is even cheaper to travel to a neighboring city to visit a store that is having a sale than it is to buy something in your hometown.

Prioritize Your Disposable Income
Make a list of things you want to accomplish during the summer. Do you need to complete some home repairs? Do you want to go on a trip? Do you need a new appliance? The advantage of lump-sum pay is that you get a lot of disposable income all at once. You can use this to your advantage and perhaps pay for something in full that before you might have had to finance. Once you have your list, you can prioritize your goals based on your needs and wants.

Andrew HawkAndrew Hawk has worked in public education for 16 years, starting as a teaching assistant in a special education classroom. He has taught first, second, and fifth grades as a classroom teacher, and for the past five years, has worked as a resource room teacher, providing services for fourth and fifth graders. Working as a special education teacher has given him the opportunity to work with a variety of age groups and exceptionalities. Andrew earned a bachelor’s degree in elementary education at Indiana University East in Richmond, Indiana. In 2011, he earned his master’s degree in special education from Western Governor’s University, and in 2016, he completed a second master’s degree in educational leadership, also from WGU. When Andrew is not preparing for school, he enjoys spending time with his wife and daughter.


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