In the Spotlight:
Financial Planning for Music Teachers at Different Stages of Life

Heather Smith, NCTM

MTNA Business Digest, Volume 3, Issue 3

April 2024

Navigating the landscape of financial planning is an essential aspect of a music teacher’s professional journey, characterized by self-employment, limited working hours and irregular income streams. When and why should a music teacher engage in financial planning?

Financial planning should be considered at different stages of one’s life. Your financial plan should be dynamic. It will likely change as you progress through the various stages of professional development and family life. The initial years may include managing the burden of student loans and other debts, whereas the later stages will focus on wealth accumulation and retirement. This article shares insights and practical strategies for each stage.

Consider your current life stage when devising and implementing financial strategies. Recognize that financial planning is highly personal, and not all situations will apply to everyone. Financial planning encompasses more than long-term investment strategies—it entails a comprehensive assessment of your current financial status, targeted goal setting and strategic planning for your future.

By tailoring financial goals and plans to specific life stages, you proactively address the challenges and opportunities that arise throughout your career as a music teacher. Financial goals and strategic actions can be divided into four timeframes, based on age.

In Your 20s

  • Establish credit
  • Reduce student debt
  • Develop a saving habit
Strategic Actions:
  • Set a budget
  • Track income and expenses
  • Save for major purchases
  • Consider a side job
  • Invest in yourself

To set the financial journey on the right foot, music teachers who are starting their careers should focus on several key aspects. To establish credit and tackle student loan debt, it is paramount to set up a budget. Following a budget involves predicting and tracking both income and expenses. This will help you cultivate healthy financial habits such as balancing debt reduction and jump-starting retirement savings. Planning for major purchases, like expensive instruments or studio equipment, will likely involve saving for a down payment, minimizing borrowing and prioritizing paying off high-interest debt to secure a more stable financial future.

If your income doesn’t adequately cover your expenses, consider a side job to supplement your teaching career. A side job not only boosts your bottom-line earnings but also diversifies your income sources, enhancing skill development and financial resilience in the face of unexpected challenges that may arise. Whether you tutor music students, offer online lessons or freelance in related fields, a side job can provide both financial and professional growth opportunities.

Additionally, investing in oneself is another aspect of financial planning for music teachers. This involves allocating resources every month toward professional development to enhance your earning potential and career advancement. This can include investing in advanced music education, working toward certifications and attending workshops or conferences to network and stay updated on industry trends. By investing in yourself, you will not only increase your marketability and earning capacity but also ensure long-term career satisfaction and fulfillment. (Truist Financial Corporation, n.d.)

When I started teaching in my 20s, I quickly realized the importance of financial planning for my future. As a self-employed music teacher without access to a traditional 401(k) plan, I knew I needed to take proactive steps to secure my retirement. This led me to open a traditional IRA each year and contribute the maximum amount possible. While these contributions were modest at the time, I understood the power of compounding interest and the long-term benefits they could provide. Starting this financial habit early in my career has allowed me to supplement my retirement income and reduce reliance on Social Security benefits as I approach retirement age. (Internal Revenue Service 2024)

In Your 30s

  • Current and future financial security
  • Support dependents
Strategic Actions:
  • save for major purchases
  • consider adding life insurance
  • establish an estate plan

As music teachers transition into their 30s, the financial landscape becomes more complex as priorities change to include such things as starting a family or purchasing a home. Balancing the goals of current and future financial security becomes a focal point during this stage of life. The milestone of home ownership may emerge as a significant consideration, prompting you to assess affordability, save for a down payment and account for mortgage payments, property taxes and homeowners insurance.

In your 30s, it is highly likely that you will have more people who depend on you. Whether it is a spouse, children or aging parents, consider adding a term life insurance policy as another layer of protection for your financial plan. It is far more affordable to purchase a life insurance policy at this age. Having this in place will ensure that your loved ones will be taken care of when you are no longer there to support them.

If you don’t have an estate plan yet, your 30s are an important time to put one in place. Many people mistakenly think that estate planning is something you wait to do after you have accumulated wealth. In reality, an estate plan makes you think proactively about the future. In this plan, you specify exactly what happens to your dependents if you die, who can make medical or financial decisions on your behalf and how you want money or assets you leave behind to be used. Having the foresight to generate an estate plan will relieve pressure from your loved ones if something happens to you. (Pepitone, n.d.)

In Your 40s and 50s

  • prepare financially for retirement
  • achieve debt-free status
  • save for children’s education
Strategic Actions:
  • accelerate retirement savings
  • accelerate debt repayment plan
  • open a 529 plan

As music teachers approach their 40s and 50s, it is time to start taking a closer look at your retirement savings. You’re now roughly 20 years or so away from retirement. Moreover, as retirement draws near and takes on greater importance, it’s crucial to rethink how you view investments. You should focus on smart financial planning to manage this shift, making sure your investment choices match your risk tolerance, your years to retirement, and what you hope to achieve in your retirement years.

During this time, it becomes even more critical to prioritize paying off debt. With less money going out for debt repayment, you will have more freedom and security as you transition into working less and have less income. If you have several debts, start with the one that has the highest interest rate and then move on to the others. For instance, if you owe money on a credit card, an auto loan and a mortgage, focus on paying off the high-interest credit card debt first. By doing this, you’ll save the most on interest charges over time. (Guide 2023)

As you consider your own financial planning, you may also want to think about your children’s future, including their education. One way to invest in their future is by paying into a 529 plan. These plans offer a tax-advantaged way to save for your children’s future educational expenses, providing a solid foundation for their academic pursuits. By contributing regularly to a 529 plan, you not only help alleviate the burden of college costs when your children are ready for higher education but also demonstrate your commitment to their future success. (Daly 2022)

In Your 60s and Beyond

  • Transition from teaching career to retirement
  • Secure retirement plan
  • legacy plan in place
Strategic Actions:
  • Save for retirement
  • Accelerate debt repayment plan
  • Confirm actual cost of living
  • 12-month trial run living on fixed income
  • Manage investments
  • Plan when to take Social Security benefits
  • Plan medical insurance needs
  • Review and update your will

As you enter your 60s and beyond, you face unique challenges as you retire or cut down on your teaching load and begin to rely more on your savings. It is crucial to revisit and create a strong financial plan during this time, understanding the shift from a teaching career to a retirement-focused lifestyle. You should continue to save a pre-determined percentage of your income for retirement, adjusting your strategies to match your changing financial goals at this stage.

Five Steps for Creating a Financial Plan

Creating a financial plan is a crucial aspect of managing your money effectively, regardless of your age or career stage as a music teacher. Certain principles remain relevant for all teachers.

1. Set Clear Financial Goals

The first step in creating a financial plan is setting clear financial goals. These can range from building an emergency fund and paying off high-interest debt, to saving for your children’s education and for retirement. By categorizing your goals based on their time horizon, such as short-term (less than 12 months), medium (2–4 years) and long-term (5+ years), you can prioritize and strategize effectively. It is also important to regularly check in on your progress to make any necessary adjustments to your goals.

To assist you in planning for your short, medium and long-term goals, here is a worksheet from Regions Bank that will calculate how much money you will need each month.

2. Manage Irregular Cash Flow

As a music teacher, you may experience irregular cash flow, which can make budgeting challenging. However, there are strategies you can use to navigate this, such as building cash reserves and consistently setting aside a percentage of your income for savings each month (Sofi, n.d.). For example, during the summer months, my teaching income is typically half of what it is during the school year. To ensure a steady income year-round, I set aside a portion of my income each month during the school year. This disciplined approach allows me to pay myself a regular income even when teaching is slower. By implementing these tips, you can gain control over your finances and foster peace of mind.

3. Create a Budget

Creating a budget is an important step in establishing a baseline for your financial growth. By assessing your income, expenses, assets and liabilities, you can gain a clear understanding of your current financial situation and identify areas where adjustments and behavioral changes can be made to reduce debt and enhance savings. This will improve your overall financial health and give you more freedom in the long run (Ramsay Solutions n.d.).

When creating a budget, utilizing apps can be a helpful tool to track expenses and manage finances efficiently. I personally use Dave Ramsey’s EveryDollar app, which offers a user-friendly interface for budgeting purposes. However, there are various budgeting apps available, so choose one that aligns with your financial goals and preferences.

4. Pay off High-Interest Debt

Paying off high-interest debt is another important aspect of financial planning. Whether you use the avalanche or snowball approach, or consider debt consolidation, systematically paying off debts can help you regain financial control and reduce financial burdens.

5. Savings and Investing

Finally, establishing an emergency fund and investing in your future are essential components of a comprehensive financial plan. The emergency fund should start with as little as $1,000 but should eventually grow to the point that it can cover 3–6 months of your basic living expenses, should an injury or other emergency occur.

A few years ago, my husband experienced a motorcycle accident that rendered him unable to work for four months. This unexpected turn of events could have been financially devastating, but, fortunately, we had the foresight to establish an emergency fund. This fund became our lifeline, providing the financial stability needed to navigate through this difficult period without compromising our long-term financial goals.

By setting aside money for unexpected expenses and long-term goals like retirement or education, you can ensure financial security and peace of mind for your future.

When approaching retirement, it is important to prepare yourself financially for this significant transition. One helpful step is to conduct a trial run in the year leading up to retirement, simulating living on your fixed income to see if it meets your needs. This “dry run” can give you a realistic preview of your financial situation and highlight any adjustments you may need to make. (Amend 2021)

During this period, review and confirm your actual cost of living. Take a close look at your expenses and be honest about what you expect life to cost during retirement. Consider factors such as housing, health care, groceries, entertainment and any other recurring expenses. By having a clear picture of your financial needs, you can better prepare yourself for retirement and make any necessary adjustments to ensure a comfortable and fulfilling lifestyle.

Managing investments becomes increasingly important, requiring a careful look at your comfort level with risk, how you spread out your assets and what goals you have for the long term. Social Security also needs thoughtful planning, including when to start drawing benefits. Health care costs during retirement can be a concern so have a plan in place to handle medical expenses. Look into different health insurance choices, think about long-term care options, and keep in mind health care costs might go up over time, so make sure you have adequate coverage.

As part of your estate planning, ensure your will is up to date and reflects your current circumstances and wishes. It’s also important to review your will annually, as circumstances can change and what was relevant in the original will may no longer apply. When my husband and I first created our will, we made sure to include a clause about who would take care of our children. Now that our children are grown, that clause is no longer relevant. As we updated our will, we also decided to include which organizations we would like to leave some of our wealth to, besides our family. If you haven’t already, now is the time to start thinking about how you want to pass assets on to loved ones or organizations. This proactive approach to estate planning can provide peace of mind and help secure your financial legacy. (Charles Stanley & Co. Limited 2023)


As you progress through life’s various stages, significant changes occur in how money flows in and out, impacting financial decisions from budgeting to goal attainment. Whether just starting out after college, establishing a music studio, purchasing a first home, starting a family or planning for retirement, your cash flow undergoes evolution with each milestone. Understanding how life events shape financial situations aids in better money management during these critical periods. Successfully navigating these stages will enable you to attain financial stability and security throughout your career and into retirement.

Please be advised this article does not serve as legal, tax, accounting, financial or investment counsel. It is recommended that you seek guidance from qualified professionals in these fields according to your individual circumstances.


Amend, Patricia. 2021. “Key Financial Decisions to Make in Your 60s.” AARP.

Charles Stanley & Co. Limited. 2023. “Financial planning in your 70s.” Charles Stanley.

Daly, Lyle. 2022. “5 Smart Financial Goals for 50-Year-Olds.” The Motley Fool.

Ent Credit Union. 2023. “Financial Goals for Your 40s: Milestone Financial Planning.” June 9, 2023.

Internal Revenue Service. 2024. “401(k) limit increases to $23,000 for 2024, IRA limit rises to $7,000” IRS.

Pepitone, Julianne. n.d. “Guide to Financial Planning in Your 30s.” Northwestern Mutual. Accessed February 10, 2024.

Ramsey Solutions. n.d. “Financial Peace University.” Accessed February 10, 2024.

Sofi. n.d. “The Fundamentals of Personal Finance Specialization.” Coursera. Accessed February 14, 2024.

Truist Financial Corporation. n.d. “Finance Goals for Your 20s: 11 Money Moves to Master” Truist Bank. Accessed February 10, 2024.

Heather Smith



Heather Smith, MM, MBA, NCTM, is the MTNA Secretary-Treasurer and serves on the Foundation Fund Development Committee and the Business Network. She is the director of development and advancement for the Frances Clark Center.

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