Personal Finance and Financial Wellness Tips for Nurses

Achieving financial wellness begins with an understanding of how you spend your money. Shoup recommends expense tracking to see where your money actually goes. This can be easily accomplished by saving receipts. You can also use free apps and software that provide financial planning tools and downloadable spreadsheets.

Once you have a clear picture of your income and spending habits, you can develop a realistic budget to help you prioritize your needs and prevent impulse purchases. A budget ensures that you will cover necessary personal expenses, such as rent and debt repayments, while building a savings and an emergency fund.

Budgeting can be especially important for nursing students as a way to develop responsible spending habits. Prospective nurses must make sure their income, whether from employment, financial aid, or other sources, covers the costs related to becoming a nurse, including tuition, supplies, licensing fees, and food and lodging.

Nurses just entering the workforce are often saddled with credit card and nursing student loan debt, making monthly payments that eat into their incomes. Graduates of bachelor’s nursing programs carry an average debt load of $23,700 while the amount almost doubles for master’s nursing degrees.

The best way to reduce your debt load, according to Shoup, starts “by looking at all debt together and evaluating balances, terms, and rates.” Strategies for eliminating debt include paying off loans with the highest interest rates first, refinancing the outstanding balance at a lower rate, or paying more than the minimum each month.

Student loan forgiveness programs for nurses provide a way for students to begin their nursing careers with a reduced debt load. However, make sure you understand that these programs may come with strings attached, such as employment commitments for a specific length of time or with particular patient populations.

With the right savings strategy, nurses can pay off their student loans, build up an emergency fund, and plan for their retirement and other life goals. Shoup advises nurses to make saving a habit by automating it with technology “just like retirement plans deduct from paychecks for contributions.”

He says, “One can open a second bank or investment account to have money automatically pulled on a certain day of the month.”

Financial planners often suggest you put aside between 3-6 month’s salary to cover emergencies. If you are concerned about getting access to your savings should you need them for unexpected expenses, consider opening a high-yield savings account that is easier to access and poses less risk from market fluctuations than an investment account or a locked-in retirement plan.

Shoup contends that the key to successful investing is risk management and longevity that take into account how markets perform over time:

“The best advice I can give to first time investors is to really understand what volatility and returns have looked like historically for whatever you are investing in. This can help build a framework for what is normal in down and up years for the market.”

Beginning investors may not understand how the market works. If nurses have a negative experience when they begin to invest, they may make poor decisions. They may pull money out of the market when stock prices trend downward rather than taking a long view.

Nurses can avoid these pitfalls by working with a financial advisor or by using a robo-advisor app that provides automatic investment services for a small fee.

Nurses who are new to investing should be wary of ventures that offer immediate high rewards with little risks. Successful investing is a slow process rather than a get-rich-quick scheme.

Financial planning takes time and effort but, when done intentionally, can have a significant impact on your current and future well-being. A financial plan provides a road map to achieve both short- and long-term financial objectives, whether they involve getting out of debt, going back to school, or buying a house.

Planning does not always have to be about big goals, like building up a huge investment portfolio or a retirement nest egg. It should be adaptable to your changing personal and career needs. Shoup reminds nurses “… to focus on tracking the small steps of progress one makes. It can become frustrating to focus on an end goal when there is adversity but refocusing on steps of progress can be powerful over the long run.”