As a nurse, you have dedicated your life to helping others. You have worked so hard to get that nursing degree and license! Having a healthy financial future for yourself is so important and well-deserved.
Nursing careers often come with non-traditional schedules, high stress, increased exposure to illness, and long shifts that can bring unique challenges when it comes to managing your personal finances.
This blog post will guide all nurses through budgeting basics, and provide some practical tips to ensure you are on the path to your financial freedom as a nurse.
The Importance of Financial Freedom for Nurses
Financial freedom is not out of reach for nurses. It is realistic, achievable, and essential for a comfortable and low-stress life.
As nurses, we face many things each day that can mean possible interruptions in our income, such as:
-Increased exposure and risk of getting sick
-Injury at work
-Running out of PTO
-Childcare limitations
-Low census/seasonal decrease in hours
It is so important to have control over your personal finances so you are ready for any life situation that comes your way.
By having a plan for your money, you can achieve any financial goal you set, such as:
-Have an emergency fund
-Begin saving for retirement
-Pay off your student loan debt or any other debts
-Be able to afford extra expenses and do what you love on your days off work
The secret ingredient to reaching financial freedom as a nurse is effective budgeting.
How Budgeting Can Help Achieve Financial Goals
Budgeting is like a patient care plan, but it’s for your personal finances. It shows you exactly how much money you are making, where your money is going, and allows you to create a plan for where you want your money to go today, next month, and in the future.
By sticking to a budget as a nurse, you can make sure you are living within your means, have a plan to pay off your debt or stay out of your debt, save money, invest for the future, and know when it’s time to get a new job to increase your income.
Budgeting also empowers you to make the best financial decisions for yourself and prioritize your purchases based on needs versus wants. It’s not all about saying “no” to extra purchases, but saying “yes, but I need to save for that first”
With this level of financial planning and awareness, you can pave the way for significant milestones as a nurse like buying a home, paying off debt, decreasing your work hours, and being ready for retirement.
How to Budget as a Nurse Step 1: Assess Your Current Financial Situation By Taking Your Financial Vital Signs
Calculate Your Income and Expenses: Your Financial Vital Signs
The first step in budgeting is understanding your current financial situation. You need to take your own financial vital signs stat! As scary as it can be, you have to look at those numbers.
Start by calculating your total monthly income. This includes the salary you receive from all of your jobs and side hustles..
Next, list out all of your monthly expenses. I recommend starting with your bills such as rent, utilities, and car payments.
These are called fixed expenses because they must be paid every month with no exceptions, and you cannot change them or eliminate them.
Then move on to listing out all of your additional monthly expenses that are NOT bills, such as food, gas, groceries, and entertainment.
These are called variable expenses because they can be changed based on your choices such as where you shop, how often you go out to eat, etc.
Go through last month’s credit card or bank statement listing out each expense and give it a category such as food, entertainment, or bill.
Step 2: Identify Areas Where You Can Cut Back on Spending: Implement Strategies to Succeed and Improve Your Financial Vital Signs
Once you have a clear picture of your income and expenses by listing out and categorizing each monthly expense, now you can identify areas where you can cut back if necessary.
Are you spending more money than you are making?
Try dining out less, or maybe temporarily pausing some monthly subscriptions.
Are you making more money than you are spending? That’s fantastic, now make sure you set a plan for that leftover money so it doesn’t go to waste.
Decide how much you will save, invest, and what you want to do with that leftover money each month.
Remember small changes can add up to significant savings over time, so don’t get discouraged if you find you aren’t in a good financial place yet.
Step 3: Set Realistic Financial Goals: Making Your Financial Care Plan
Short-term vs Long-term Goals
Just like you help your patients set their daily, weekly, and future goals for their health, you need to set financial goals for yourself.
Some examples of short-term goals:
-Save at least $300/month
-Build a $10,000 emergency fund
-Save $1,000 for summer vacation
Some examples of long-term goals:
-Pay off student loan debt
-Buy a house
-Consistently contribute to retirement savings
Prioritizing Goals Based on Your Needs and Wants: The Budgeting ABCs
How to prioritize your goals is going to be vastly different for each nurse dependent on your specific financial situation and life.
Nurses are the prioritization experts. You know how to keep multiple patients safe at once by using the ABCs, (airway, breathing, circulation), and other methods of further prioritizing patient care.
You want to organize your financial goals from most important to least important depending on things like interest rates, timelines, and how big or small the goal is.
Here’s an example of how you could prioritize some financial goals as a nurse:
Priority one: Pay off credit card with almost 30% interest rate.
Priority two: Contribute money each month to saving for an emergency fund
Priority three: Save a small amount each month towards Christmas to prevent going into more debt during the holidays
Priority four: Pay off student loan debt with a 8% interest rate
Step 4: Create a Budget Plan: Your Unique Financial Care Plan
Tips for Creating an Effective Budget Plan
Once you have gotten very specific on your financial goals, now it’s time to make a care plan for your money, called your budget.
Start by dividing your income into categories such as:
-housing: rent, mortgage, utilities
-transportation: gas, car payments, oil changes and repairs
-Savings: emergency fund savings, holiday savings, vacation savings
-Debt Payoff: organize debts by interest rates and amounts, list them out, decide which one to work on paying down first
-Food/groceries/household: everything you would spend each month on groceries, eating, household products
-Extras/Entertainment/Discretionary Spending: This would include everything that’s not a need in the categories above.
Allocate a specific amount to each category, ensuring that you do not exceed your total income.
Using Budgeting Apps and Tools
It’s 2024, and there’s many digital tools to help you with budgeting if you don’t want to use traditional paper and pen.
Some great budgeting apps are Mint, You Need a Budget, and EveryDollar. These help you keep track of your spending, create a digital monthly budget, and update your financial goals as much as you want.
My personal favorite is the EveryDollar app which I have used to help me pay off over $50,000 in debt, and I still use this app to do my monthly budget and stay on track with my finances as a nurse.
Step 5: Follow Through with Your Financial Care Plan: Stick to Your Budget
Strategies for Sticking to Your Budget
Sticking to a budget can be more challenging than 3 12-hour shifts in a row. But seriously, it’s easier said than done.
Here’s some strategies to help you stick to your budget:
-Use cash envelopes: By using Cash instead of card, you can truly visualize how much money you have to spend for each category and be more mindful of how you spend it. It’s much easier to swipe a card and forget about it.
-Plan your meals: stick to your grocery and food budget by planning your meals and preventing those last minute fast-food purchases.
-Treat yourself: budgeting and cutting back on spending is really hard, and you deserve to treat yourself. You want to continue to enjoy life and the things you love while you are on a budget.
Pick something that is your favorite treat or means the most to you to have as a luxury, and treat yourself to this weekly, bi weekly, or monthly depending on the cost.
Maybe you want a $10 Starbucks drink once a week, or want to splurge on a girls night out once a month. Maybe it means the world to you to be able to pay someone to do your nails once or twice a month.
As long as you put it in the budget and don’t overspend, you can still have these things. Commit to your goals and schedule your luxuries and treats instead of depriving yourself of them.
-Review your budget: don’t set it and forget it! You’ve gotta do your hourly rounds on your budget or your financial plan will crash and burn.
Add your expenses into your budget and review it daily. Revisit your budget weekly, or as much as needed, to be sure you are still on track with your goals.
Things can change multiple times throughout the month and you will most likely need to make frequent adjustments and that’s OK.
Increase Your Income: Negotiating for Higher Pay or Benefits
In addition to cutting back on expenses, another important way to stick to your budget as a nurse is to increase your income. Here’s some ways you can do this:
-Look for a new job with better pay and benefits.
Make sure to do the math and be sure changing jobs would improve your finances first.
-Pick up additional overtime shifts.
Even if you commit to doing this once a month, or once a week, it can make a huge difference in moving quicker towards accomplishing your financial goals.
-Work a side hustle.
There’s so many side hustle options as a nurse that can work especially if you work 3 12-hour shifts per week in the hospital.
Plan how you can make some extra money on your days off work to save more money and pay off your debt faster.
-Get a second job
Get a PRN, or second part-time nursing job to really propel your finances to the next level.
You don’t even have to get a second job in the nursing field either; money is money and you can work any type of job you would enjoy on your days off as a nurse.
-Ask for a raise.
We all know those yearly hospital reviews are not cutting it. I have successfully negotiated a $4 raise after a performance review when I initially was going to get only 50 cents!
Ask around at your company and organization on how to go about this and find the right person to ask.
Getting a raise at your current job can be much easier than changing jobs and starting all over at a new company.
Conclusion: Financial Freedom Can Be a Reality for Nurses with Budgeting
Achieving true financial freedom is a very realistic goal for any nurse who commits to making a budget and sticking to it.
By checking your spending, setting your financial goals, making a budget, and taking action to follow through with your plan you can take complete control of your finances to enjoy your life today and in the future.
You work hard as a nurse and deserve to be financially free! Be sure to check out the rest of our posts on budgeting and personal finance for nurses, follow us on social media, and leave a comment or question below!
