Despite the crucial role you play as a nurse in the healthcare system, you may face significant financial challenges and find yourself in debt wondering how you will ever pay it off.
It’s important to stay educated on all of your different types of debt, as well as strategies to pay it off quickly, to improve your finances as a nurse.
If you’re a nurse and want to learn more about:
-Student loans and how to pay off your student loan debt
-Strategies to tackle high interest credit card debt
-Tips on how to build and maintain good credit
-How to save money to pay off your debt faster
-Why having an emergency savings fund is important while paying off debt
Then read on to get some actionable tips and valuable insights into how you can become a debt-free nurse!
Understanding Student Loan Debt as a Nurse, and How to Pay it Off
Student Loans are very common for nurses, so if you’ve taken out a student loan you are definitely not alone. As recent as the year 2022-2023, 2.2 million nurses reported taking out loans to complete their nursing education.
The average amount of student loans for nurses varies based on the length of your degree obtained from 2 year to 4 year degrees. The average student loan debt per nurse as of 2017-2018 ranges from $23,500 to $30,200.
Sometimes you have to spend money to make money; look at your nursing degree as an investment that will continue to pay off in the future.
Exploring Repayment Plans for Student Loan Debt
In order to tackle your student debt, it’s important to understand all of the different types of repayment plans available.
There’s many different options that depend on your interest rate, the type of loan you have, if you have one or multiple loans, and how much your loan amounts are.
Federal Student loans have the following options for repayment plans:
- Fixed Payment Plans: payments are either fixed for a certain amount of time, or slowly increase over time, ensuring the loans are paid off within a certain time frame
- Income Driven Plans: payments are formulated based on your income as well as the size of your household
These two repayment plans also have a subset of specific plans depending on the loan type you have, and you can find more information on those details here.
Debt Consolidation: An Option to Help You Pay off Your Student Loan Debt
Student Loan Consolidation can be a great option if you have multiple different student loans to keep track of paying each month.
Advantages of Student Loan Debt Consolidation:
-lower monthly payment
-fixed interest rate
-One monthly payment, one bill, makes things easier
Disadvantages of Student Loan Debt Consolidation:
-can come with higher interest rates
-May extend the total life of your loan
-Could possibly disqualify you from certain loan forgiveness programs
Get more information at studentaid.gov and decide if this is a good option for you.
Student Loan Forgiveness Programs for Nurses
As a nurse you may also qualify for student loan forgiveness programs, which can significantly reduce or eliminate your student loan debt!
Not all nurses will qualify for student loan forgiveness, and there are many different options for loan forgiveness to research.
You might be eligible to receive Public Service Loan Forgiveness, PSLF, if you work for a non-profit, or if you have a Direct Loan.
Find out more information here about Student Loan Forgiveness Programs, if you qualify, and how to apply.
Credit Card Debt: Tips on How to Pay it Off
Getting into credit card debt as a nurse is very easy to do, and nothing you should be ashamed of. I have been there multiple times myself.
Credit card debt is one of the most difficult forms of debt to get out of because it often comes with extremely high 20-30% interest rates, making it very hard to pay off.
Follow these steps to start tackling your credit card debt.
Create a Budget
This is the very first step in paying off your credit card debt.
You have to understand exactly how much money you make each month, how much you are spending, and how much you have leftover.
A budget gives you a clear picture of exactly how much money you have each month to put towards your credit card debt to pay it off faster.
If you don’t know where to start in creating a budget, we break down the steps for beginners HERE
Use Balance Transfers or Personal Loans to Pay off Credit Card Debt Faster
I have actually used BOTH of these options on two separate occasions when I got myself stuck in credit card debt and they WORK to pay off your credit cards fast.
Balance transfers: this involves opening up a new credit card and transferring the balance from one or more current credit cards and consolidating the debt on a new card..
This will usually come with an interest free period to buy you time, and prevent additional interest from accumulating on your current credit card debt.
There is typically a fee that’s a percentage of your total balance being transferred to the new credit card.
Taking out loans: This is another great option when trying to pay off high interest credit card debt.
Personal loans or home equity loans will typically come with much lower interest rates than credit cards.
You can do this by adding up your total amount of credit card debt, taking out a loan in that amount, paying off your credit card debt in full, and then working on paying off the loan.
This can save you a massive amount of money in the long run, as the loan will come with a lower interest rate, and a fixed monthly payment.
The key with both of these methods is that they handle the problem of the high interest rate that comes with credit card debt.
The extremely high interest rate is what makes credit cards so difficult to pay off once they get to a certain point. It can be impossible to pay off, because money keeps getting added to your total balance making it climb higher and higher.
Try to avoid credit cards as much as possible
Try to avoid getting into more credit card debt by using credit cards as little as possible, and don’t use them unless you know you will be able to pay off your statement balance in full each month.
Another Important Part of Debt Payoff: Maintaining Good Credit
Your Credit Score Can Have an Impact on Job Opportunities
Did you know that potential employers often check credit reports as a part of their screening and hiring process?
You never know if your poor credit may be impacting your ability to get a better, high-paying job.
Your Credit Score Can Influence Your Bills and Insurance Rates
You can end up paying more on things like car insurance, renter’s insurance, utilities, or your phone if you don’t have a good credit score.
Having good credit ensures you are qualified to receive the best rates and best chances of approval if you do need to take out a personal loan, get a quote for cheaper car insurance, or set up utilities at a new home or apartment.
Steps to Improve Your Credit Score
To improve your credit score and keep it from going down, try to:
-Make your payments on time, even if you can only pay the minimum payment each month
-Try to keep your credit card usage under 10-30% of your total amount of credit
-Avoid accounts going to collections whenever possible, as this can make a huge impact on your credit score
-Check and monitor your credit report regularly
How to Save Money on Expenses to Help You Pay Off Your Debt Faster
In order to have extra money available to pay off your debt, and prevent you from overspending and adding on more debt, lifestyle changes might have to be made.
Here’s some examples of things you can try to help you save more money each month, prevent more credit card usage, and help you pay off your debts faster:
Meal Planning
-Plan out your meals each week, and only buy what you need for those meals at the grocery store.
Packing your lunch for work with your planned meals will save you so much money compared to buying meals from the cafeteria, vending machine, or getting food delivered to your workplace.
Cut out the expensive dining and coffees
Limit eating out as much as you possibly can to save money and pay off your debt SO much faster.
Eating out will always be more expensive than shopping for your own groceries and planning meals to make at home. And I think we all know that making coffee at home will always be cheaper than buying it anywhere else, even though it’s less fun!
All of these lifestyle changes can add up quickly to leave you with a big chunk of money leftover each month to pay down your credit card debt faster.
Cut Out Unnecessary Subscriptions
Monthly subscriptions can easily get out of control, and they don’t seem like they cost that much until you have 20 of them!
One subscription for $15 a month that you use all the time is much better than 10 subscriptions at $8 a month that you hardly use at all.
Review your subscriptions to see if you can cancel some temporarily or permanently, and use that extra money to get rid of some of your high interest debts.
Avoid Adding On More Credit Card Debt by Building an Emergency Savings Fund
The Importance of an Emergency Fund
An emergency fund is a rainy day savings account that you don’t touch unless you absolutely have to.
It’s a safety net of cash for any unexpected expense that might come up such as:
Medical bills
Car repairs
Unexpected time off work due to illness or other temporary loss of income
Job loss
By having a cash savings emergency fund, instead of putting unexpected expenses on a credit card, you can pay for these expenses in cash without the extra stress of added debt.
Remember to only use these funds for actual TRUE emergencies, otherwise it defeats the purpose entirely and risks you adding on even more debt for yourself.
How Much to Save in Your Emergency Fund
Try to save for at least 3 to 6 months of your current monthly living expenses to have a healthy emergency fund.
Depending on your current life situation you may feel comfortable with less, or you may want to save a lot more than that.
You’ll want to make sure to add up your estimated total monthly expenses to help you get this number.
Where to Keep Your Emergency Savings Fund
Keep your emergency fund in a separate account, or in cash, where it is easily accessible but not easily visible.
You don’t want to be tempted to rely on this fund for everyday purchases, and want to make sure you can easily access it when needed, but otherwise keep it out of sight and out of mind.
Final Thoughts
Managing your debt as a nurse can seem impossible at times and super overwhelming. It’s tough to visualize where to start.
With the right strategies, you can make a plan to pay off your debt, and work towards becoming debt-free as a nurse.
Take the first step towards financial freedom today and start implementing some of these strategies. Be sure to follow us on social media, and check out the rest of our articles to learn more!
