Kristina Ellis, from Dave Ramsey's team Ramsey Solutions came to chat with me about wealth-building strategies for teachers. We were able to talk about what teachers need more than anything. Financial freedom. 

Kristina has been in the world of college finance for about 10 years. Her journey started during her freshman year of high school. Her mom finally sat her down and said, “I love you. And I believe in you, but there's just no way that I can support you financially once you graduate from high school.  So you’ve got to figure out your own way to pay for college.” 

At first, she was shocked. And then she started to try to figure out what she could do about it. Her dad passed away when she was seven, after a long and painful battle with brain cancer. And her mom did the best she could to support Kristina and her brother.  But they still struggled financially. So even though it was hard to choke that statement out she really was just trying to light a fire in Kristina to figure out what she could do financially after graduation.  

So she started looking into scholarships, got super motivated, and did everything she could to figure out types of scholarships and what she could do to stand out in the process.  She put together a strategy and implemented it throughout high school. And it led her to win over half a million dollars in scholarships for college. Which was such a blessing and gift.  She went to undergrad at Vanderbilt, grad school at Belmont, and afterward decided to help students who were struggling to figure out how to pay for college. She realized that there were a lot of people who had tons of student loans and they didn't have guidance early on. So she started a journey that led to helping other people figure out how to pay for college.

Kristina wants to help all the teachers like us get out of debt and get into a better place financially. One of the reasons she is so motivated to be on this path is she hears it from friends and colleagues all the time.  Nobody told them in high school that they could win scholarships. Instead, they just knew about student loans, and all thought that was the way to go. If you didn't have the money to pay for it, then take out a loan. It'll be easy to pay off because you'll have a great degree after graduation and get a job that pays tons of money.  And then they all realize, ouch, this hurts a lot more than they realized. And it's sad that our society is basically selling debt to 18-year-olds. It really motivates Kristina to get the message out because we have to tell young people that there are other ways to pay for college.

We love to hold the hands of our students and make sure that they know the how-to, and the step-by-step in school. But we forget to show them the step-by-step after high school. 

How Do You Get Started Finding Out About Financial Literacy?

One of the very first things to do, especially if you have kids is, to have real conversations about money with your students. A lot of parents feel uncomfortable talking to their kids about money and a lot of kids don't want to hear about it. Or they just don't have the context to understand money conversations yet.  But it's important to wave through that awkwardness and whatever uncomfortableness there is to it. Because if you don't have that conversation with your kids, somebody else is going to. And it's probably going to be somebody offering them loans and possibly leading them down the wrong path. 

Give yourself (and your children) time to prepare and process and start to understand, oh wait, our family can't just afford college outright. Then they can begin to figure out a path and a strategy that's going to work. Not only does this time allow students to shift their mindset, but they actually have more time to figure out how they can build up their resumé too. 

They can ask themselves real questions like: 

• What do I want to do after high school? 
• Is it college? 
• Is it something else? 

Just being able to have that time to frame things and figure things out helps a lot. 

Kristina always recommends students and teachers treat the process like a part-time job. Doing the research is super important because there are millions of scholarships out there and you obviously can't apply for every single scholarship. So she wants students to be super intentional with their research process.  She still recommends a good old-fashioned Google search. She has her people write down all of their unique qualities about themselves. 

• What do they want to do in the future? 
• What kind of career do they want to pursue? 
• What extracurricular activities do they do? 
• How do they volunteer? 

Even like traits about themselves:

• Are they tall?
• Short? 
• Are they vegan?
• Vegetarian? 

Then they can use those specific qualities to search for niche scholarships. 

This was so interesting since I am always telling my CEO Teacher® students to niche down. And some may fight it at first. But to hear there are even niched scholarships for vegan and vegetarian students just proves my point. Small specific niches will help you grow your business ideas. 

There are also scholarship databases. Search engines specific for scholarships. 

Hello SEO! Another thing we talk about in the CEO Teacher® programs ALL. THE. TIME. 

To get back to SEO databases. You type in your unique qualities and it'll go through all the different scholarships that are out there and match you with scholarships that specifically fit you. Guidance counselors are also great resources.  And a lot of local scholarships will have a point person. A lot of them may not be listed on the big databases or be in a search engine. It may just be a community foundation nearby that decided to put out a scholarship. And they're most likely to go to the local guidance counselor. So it's important to keep in touch with that person too.  And the great thing about those scholarships is a lot of times they have less competition than the larger well-known scholarship. So they can be a goldmine for local scholarship money. 

Kristina always tries to tell students to think about it, like if you spend two hours filling out a scholarship application that allows you to win a thousand dollars, that's like making 500 bucks an hour. Where else are you going to make that money? Especially when you're in high school. 

Wealth-Building Strategies And The Importance Of Financial Literacy For Teachers

A lot of the teachers that come here to our corner of the internet are in the same situation that I am in. And they have a lot of student loan debt. Because we didn't have a Kristina when we were seniors in high school. Here's where the problem lies with teachers. Yes, teachers are undervalued and yes, underpaid, especially nowadays with everything that's going on.  So how does a teacher get out of that student loan debt when they're barely making ends meet and they're really struggling financially? 

One of the cool things at Ramsey Solutions is they did a survey of millionaires and in the top five careers for millionaires there were teachers.  Even though it's hard, teachers are known for building wealth and actually once they get the concepts down. And once they really dive into financial literacy, they are often the most successful. Whether it's because teachers are used to forming curriculum and following lesson plans, they really have the skills to win with money.  And it was been proven in the millionaire study, which is just awesome. 

Teachers are tenacious and when they set their minds on something, like wealth-building strategies, they're going to go for it all the way. So if it's building financial wealth, and they know they have to start small, they're willing to do that.  And then they are patient and wait for it to build over time. 

At Ramsay Solutions they definitely recommend diving into the baby steps.  Most people who follow the baby steps pay off their debt within 18 to 24 months. Even those who don’t have a high salary. Now that 18 to 24 months might be really intense, but it's worth it because you could be completely debt-free in two years. Even if you have a lot of debt right now. 

The first thing you're going to do is save a thousand-dollar emergency fund. Now you want that money so that you don't into any further debt. If anything happens, you want to have that little pool of money to kind of just keep you safe.  

And then it's baby step two. And this is where you're going to pay off that debt, all of the student loan debt. They recommend using the debt snowball. So this is where you line up your debts from smallest to largest. And then you're going to start paying on the small one with intensity. So you're going to keep paying minimum payments on all the other debts, but then start attacking that small, that smallest debt. You may need to get a second job for a season, sell some things, and really buckle down on your budget. So you pay off that smallest debt. 

And once that's paid off, you take the money you were paying on that smallest debt and you roll it into the next step. You start attacking that second smallest debt with everything you have. And then once that's paid off, you take the money you were paying on those two debts that you paid off and then roll it into the third.  You start paying that one off and you can see how it's kind of like a snowball rolling down the hill. It just keeps gaining speed and momentum. And it gets you eventually to where you paid off all your debt. 

Financial Literacy For Teachers and Wealth-Building Strategies

The reason this works is that it's all about behavior, like winning with money, it's 80% behavior and 20% head knowledge. So it's all about changing the way you approach money and changing those habits. 

Step 4 is for retirement. So that's where you're going to put 15% of your income in retirement. So that's really important to do because you're going to retire someday and that money really needs to be designated to that. They recommend using employer-sponsored plans like a 401k Roth, Roth, or IRA. They often say match beats Roth, Roth beats traditional. So if your employer offers a match, you want to start there. If they have a traditional 401k and they have a match go for that, that's obviously great free money. They're just adding into your accounts so take advantage of that. And then from there, you can go to a Roth IRA, which is post-tax money, a great place to save. And then if you still haven't finished out your 15%, you can go back to that 401k. Or if your employer offers a Roth 401k, you can do all of your 15% there. That's setting yourself up for success. You definitely want to have that foundation for retirement and also have time to let it compound.

Step five is saving for college. 

And step six is paying off your house. And the reason they're in that order is that you really want to have that foundation for retirement and to be able to make sure that you've set up for success in your golden years and ready to reach that season of life.

Even though my mom has been encouraging me to do this for the last no 10 or 15 years, there were times when I just felt like I couldn't get my head above water. And I know that a lot of our teachers feel the same way. They can't seem to get above or get ahead. Whenever they take two steps forward, they go one step back. And so if someone's in that season of life where things are really difficult Kristina had some advice for us. 

One of the biggest things she recommends while working toward your wealth-building strategies is to find your community. Surround yourself with people who are in a similar stage of life, in similar challenges that can help encourage you and push you through.  Get into a financial peace university class, (you can go to Ramsey solutions and find that there have local classes in your area.) It helps when there are other people who can empathize with you and understand this is hard, but we can get through it. I think a lot of people take with them the mentality of “I'm just gonna go splurge this one time.” That be treacherous if they're trying to focus in, on getting out of debt, especially paying off student loan debt. 

It's very, it's very counter-cultural to pay off debt. Many times you have friends or family that just say student loan debt is something we have. Shifting that mindset to understand you're not wearing the fanciest clothes or you're not doing that extra vacation, you are actually building wealth and getting to the next level financially. That is so cool. Having those cheerleaders in your life is so important.

It's a very interesting mindset shift because society thinks that we should have a new car and a nice house, especially as we move up in our careers. And teachers take those steps up every year. Step up on the pay scale and they're always looking for a way to make extra money.  And some teachers go back into student loan debt to get a higher degree so that they can continue to move up on the pay scale.

Kristina says rather than take out an additional loan try to get strategic and creative to try to figure out if there is a fellowship you can qualify for. Are there scholarships for your degree? Will your district pay for a part of the degree? Even if you have to go a little bit slower, will they pay for so many credits every semester? Maybe it takes three years to get it or four years versus just two.  But then you can walk away with no debt. Not needing to work extra jobs in the future to pay off that extra debt. Maybe there's a cheaper college in your area. Maybe there's a local program. 

She is all about exploring every single option you can find and then trying to weigh what's best while you try to climb up the pay scale ladder.  Being at peace with your current season of life so that you can enjoy and live like no one else in the future.

If you've never budgeted, Kristina recommends a zero-based budget when working on wealth-building strategies. They have a really great budgeting app called every dollar. You want to be able to know where all of your money is going. The app is kind of like the envelope system.  You have your envelope for groceries. You have your envelope for eating out. You have your envelope for maybe shopping fund money and just kind of be able to keep those separated.  You know exactly how much money you have left in your envelope. And if you need to adjust, you could potentially move money from one envelope and move it to another. But basically, you know exactly how much cash you have left. And when it is done, it is done. The app allows you to see that digitally.

Step seven is to be able to give back. That is the dream, right? To be able to give and to live a life where that's just what you do.  Because you have no bills. 

Teachers Are Building Wealth Outside Of The Classroom

Teachers can be working on products and services that they can sell online and build an online business outside of the classroom. We're just so excited about teachers making the income that they deserve and finding freedom, whatever that looks like to them. I think a lot of my students are afraid to commit to a system that works and go all-in with it. And they say it all the time, but I feel like people are going to get tired of hearing what I have to say. But Ramsay Solutions is the perfect example of this. They have been telling the same story for 30 years. The Baby Steps plan is a proven system that works. And I think one of the great things about having that story and that history and that track record is that there's data like there's data there that shows that thousands of people have had that success and been through it.  

And for our teachers who are building businesses, Kristina recommended a really good book called StoryBrand. The author emphasizes how much sharing your story and having a story and connecting to people through your story are the backbone of your business plan. It makes such a big difference. Especially in the business world. A lot of times people think like numbers and data, which is really good, but as teachers, we just want to connect with other people. 

I loved when she mentioned the book because we recommend it all the time and it talks a lot about the customer journey. When Ramsay Solutions first got started, the customer journey was the baby steps and the envelope system. And it's grown so much from there. 

Dave Ramsay’s story is a testament to the customer journey and the idea that just because you start here, doesn't mean that's where your business will end. It's allowed to grow and evolve over time and it's encouraging to see.

If you have questions for Kristina: basically you can ask her anything. Questions about wealth-building strategies, paying for college, paying off debt, or anything money-related, you can jump on Instagram, where she is waiting to connect with you. 

You can learn more about wealth-building strategies here:

Financial Literacy and Wealth-Building Strategies For Teachers

More Streams of Income for Less Work

What To Do When Summer Sales Drop With Allie Elliot

3 Tips for Building Wealth From a Millionaire Teacher

Wealth-Building Strategies a Beginners Guide