7 Must Know Personal Finance Tips for New Nurses
Graduating from nursing school is a big sigh of relief for many new nurses. After I graduated from nursing school I was ready to work and enjoy the fruits of my labor!!
Unfortunately, it also means our spending can go overboard a little bit... now that we finally have some money! Below are just a handful of personal finance tips for new nurses to make sure you stay on track to success.
1. Ask Yourself…Where do I want to be Financially
The first personal finance tip for new nurses is to figure out not just where you want to be financially but most importantly why do you want to be there.
Becoming proactive about your personal finance is not easy. For most, it’s not very fun or interesting. It becomes a little easier when you figure out “why” Figuring out the why allows you to push through tough decisions.
Do you want to buy a “dream home” in the future?
Do you want to be financially independent before you retire so you can “retire with dignity” as Dave Ramsey has said on numerous occasions?
If that is the case, then you need to think about what it will take to get there. After you determine what your goals are, be proactive about them!
2. Delay Instant Gratification
The second personal finance tip for new nurses is to be mindful of your spending habits.
After living the life of a college student and eating ramen noodles for three square meals a day, getting that first paycheck would be tantamount to winning the lottery!
From a personal finance perspective, do not splurge immediately on a new car or a new house. Instead, prioritize other responsibilities such as paying off student loans or organizing your household budget.
You are going to see a lot of your new nurse peers commit themselves to extravagant loans. Avoid the money traps they are falling into.
3. Pay of your Debt
Have you stopped to think about how many different places you have debt? Consider how much money you would have per month if you didn’t have those debts.
It’s not uncommon for the average new nurse to have student loans, credit card debt, car payment etc. You can very easily find yourself in a scenario where a lot of your new found monthly income is going out to other people or institutions in the form of payments.
Prioritize getting out of debt to free up money so you can accomplish your other goals.
4. Learn to Budget
The fourth financial tip for new nurses is a difficult one to master! We all need to learn to budget. A budget determines where your money will go on a daily, weekly, or monthly basis. Dave Ramsey describes budgeting as telling your money what to do. Some people look at a budget and think it will hinder them from spending money. On the contrary, I look at a budget as giving me permission to spend money.
Avoid putting yourself in situations of stress and anxiety, living paycheck to paycheck and not knowing if you have the money for purchases.
With a budget, you always know if you can or cannot afford purchases.
5. Set up an Emergency Fund
Control of instant gratification…check. Game plan to pay off debt…check. Budget in place…check. The next financial tips for new nurses is to set up an emergency fund.
According to the Federal Reserve Board’s Survey of Household Economics and Decision making almost half of their respondents either were not able to cover a $400 emergency expense. They would have to borrow the money or sell something to cover it.
The typical recommendation is to have 3-6 months of expenses for emergencies. Start with a smaller goal if you must, but at least have something.
You never know when a car is going to break-down or a medical emergency arises. Don’t be in a situation where your heater breaks in the dead of winter and you don’t have the resources to fix it.
6. Failing to Think About Retirement
The sixth financial planning tip for new nurses is to save for retirement. Many adults surveyed by the Federal Reserve Boards Survey of Household Economics and Decision making have no money saved for retirement. Newer nurses nowadays do not have pensions as an option. For most, pension plans have been replaced by 401k plans. While 401k plans give you more flexibility it also forces nurses to be more proactive when it comes to saving for retirement.
If you are young, it’s important to start now to let compound interest do the heavy lifting for you. If you are older it is never too late to start saving, though it might mean you have to save more to catch-up.
Don't just think about your personal finance but make sure you actually act on it. It doesn't do you any good to think about retirement if you don't start saving.
Any other personal finance tips for new nurses?
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