Nursing: The Financial Side

[The_Optimist]

Our finances are mostly decided by the choices we choose to make or not. You do not have to be a Wall Street guru (this is also debatable!) or a whiz kid to understand that if you spend way above your income, you stand a greater risk of falling into debt and other financial messes.

Some situations are simply unavoidable on how one can get into a financial mess (think hospital fees related to lack of insurance or bankruptcy from staggering hospital fees!) and yet others are consciously made with or without thoughts to the long term effects of those decisions.

Some risk factors that can tip you into a financial mess

School Loans

If you decide to pick an Ivy League school for nursing (laughable) or an especially exorbitant one, then please do be prepared to pay the piper when it comes to time to pay the school loan. Except those schools come with a sure guarantee of a job offer after school, it would be your best bet to pick a better affordable school and network like craz before graduation. By all means, do go to that accelerated school, just try and make sure that that expensive accelerated school is at least accredited. Why spend so much money and still have limitations at picking a place of employment?Not a good investment!

Mortgage

Please explain to me again how a five bedroom house with two and a half baths (with the white picket fence) is the right choice to make for a family of three? Things add up. When you begin to pay for space (or things) you do not need, you take away from saving up for things you do need.

Latest Tech gadgets

Apple Air is all well and good. Iphone 6 or is it 7? No wait, its 8! Is even more better, but have you checked how much those run and the contract agree you have to add up along with that.

Constant eating -outs (self-explanatory)

Garage Sale

Out with the old, in with the new! All the time? No you do not need to offload all your clothes from last summer to make new ones for next summer. Pick and choose. You don't always have to follow ALL the latest fashion trends.

Reducing these risk factors

Scholarships/ Tuition Reimbursements

There are a plethora of funds out there, take advantage of them. Write that essay if that is what it takes you to get some finances towards covering some school expenses. Keep your grades up (high school students!).

Be frugal

No, you do not NEED the latest model of the Jaguar. Get yourself, a dependable Honda Accord or whatever else it is that runs well, is good on gas and still looks great, like new.

Cook in!

This might be tricky for some, but have you ever stopped once to tally how much of your spending goes on constant eat-outs? A lot! Learn to cook and have fun with it. Buy basics and staples and play with it, YouTube it, if you like. It's amazing what comes up on You Tube. Save some money while you are at it and know what goes into your meals.

SAVE!

Find a way of paying yourself, it could be automatic payments so you have no idea when it gets taken out, much less painful that way. Save for the rainy day

Get some financial literacy

"I don't know" is no excuse. Find out and then transfer/instill these good habits into your kids.

Share your helpful tips & what has worked for you.

[MrChicagoRN, RN]

Oooooh ooooh - I have one

If your employer offers a matched savings plan.... go for it! This is equivalent to giving yourself a raise. It will also instill a good savings habit. Opting out means that you are leaving money on the table.

Definitely.

And everyone should have flex spending account that allows you to pay for prescription Rx, co-pays and deductibles, glasses, dental work all on a pretax basis.

And regarding 403b/401k and taxes, if you are offered a Roth option, your investments will be post-tax dollars, but every penny you earn will be tax free forever & ever.

[The_Optimist]

I honestly think they need to teach financial management in high school. Kids don't know or understand how to balance a checkbook anymore. So many people make good money but throw it all away instead of saving and planning. I make sure I have a balance. I have learned to save and have fun at the same time. I don't drive a brand new car or have a giant, brand new house but I have no bills either except for utilities. Yes my house is paid for. I am also paying for my schooling out of pocket so I will have no student loans at the end. But that means that I go to a very reputable, community college. You can have it all, you just need to plan for it.

I very much agree with you on financial management being taught in schools (high-school) to colleges, I am also of the mindset that parents can make a positive attempt in modelling the behavior to kids. I also understand that some parents don't have that opportunity either hence school comes in.

Whatever the case may be, financial management is of the essence.

[kcochrane]

You have some really great ideas to share. I'm with the other poster that said she was not going to retire. I don't plan to either. Both my partents are 70 something and still working full time. But as life has shown me, sometimes things don't go as planned. I probably spend too much money on eating out, but I spent 20 something years raising kids and barely getting by. So I'm going to have some fun. I also enjoy spending my money on my grown children. They need it now, not when they are 60 +. I still contribute to my retirement so I will have choices when I'm 70. There is a happy medium with everything we do, but we also need to enjoy life.

I also think it would be great to have financial classes for kids. Wish i would have had them. Perhaps some of my follies would have been avoided.

[bloodorange]

Definitely.

And everyone should have flex spending account that allows you to pay for prescription Rx, co-pays and deductibles, glasses, dental work all on a pretax basis.

And regarding 403b/401k and taxes, if you are offered a Roth option, your investments will be post-tax dollars, but every penny you earn will be tax free forever & ever.

So true! My FSA is saving me a few hundred bucks this year. I have a chronic condition requiring meds, so it's easy for me to plan my medical spending.

ALSO, handy tip: Roth accounts are awesome, just like the quote above says, but you can also plan a tax-deferred account to provide you with the first $10,000 or so of annual income during your retirement. The first ~$10,000 of your income is not taxed by the federal gov't anyway, so getting that income from a tax-deferred account means actual tax-free money! Just takes a bit of planning and balancing.

Oh, last thing: I'm young and have always been a saver, but I live in NYC and it's very hard to come out ahead with the cost of living here. (not a nurse yet, either, so making less than I hope to in a couple years' time!) There's a nifty software program called You Need A Budget that's been very helpful for me. (I am not affiliated with the YNAB people in any way.)

[calivianya, BSN, RN]

Random point: plan for excess spending in terms of vacations and things like that, so you can have fun and still save. It's great to live frugally for "retirement," but if you have a debilitating stroke or heart attack at age 64 right before you get out of the workforce, you're just going to be rich and disabled. At least make some really good memories so if you end up unable to do anything at all when you retire, at least make sure you have good memories to look back on. I have seen this happen with my patients. It sounds to me like their biggest regret was not making memories and having fun while they had the ability to. Money is not the be all end all if you are too disabled to spend it.

[allybear]

On a very practical note, I have found the website http://www.mint.com to be very helpful in managing my finances. It works really well if you use your debit card for purchases (which I do). It links up with my account and adds my purchases to categories (there's no actual purchasing when you use mint, it just keeps track of all the transactions that happen in your bank account). That way, I can see exactly how much I'm spending on things like groceries, fast food or coffee shops and set budgets for different categories too. It is way too easy to spend money without realizing where it is all going, and i have found this method of managing my budgets to be extremely helpful. Thought it might be helpful to someone else :)

[sc128]

Ditto @allybear on mint being a lifesaver for budgeting. I use their desktop app and have the app for my phone so I categorize items as soon as I purchase them. It's also helpful to see the student loan debt slowly being chipped away (all available to view on the main screen for mint). For budgeting newbies like myself it's a good starter program/app.

[jessi1106, BSN, RN]

Great ideas!

If you can find time...use coupons. My local grocery store will double them....so every week I get something or things for free. Last week it was toothpaste. I can't pick the brand, but hey, its free.

I also shop resale for much of my growing kids clothing.

[NickiLaughs, ADN, BSN, RN]

One thing to add to the eating in. You HAVE to meal plan or else you will still way overspend on food and throw away a lot of food. Pinterest and other sites out there will definitely help you waste less. My grocery bills were always insane and I threw so much away until I figured this out. Plus many of us tend to overbuy food today.

[2015]

I believe in living a nice comfortable life: driving a nice car, living in a big house and going to a reputable university. I have seen my mother live such a frugal life and I really wonder when she's ever going to enjoy the good things in life. I worked fulltime to pay for my college so that she did not have to worry about me. I also plan to take care of her in her old age because of all the sacrifices she has made. I don't want to be 80yrs old with 300 million dollars in the bank but bed ridden. As someone said, just balance the balance sheet and invest wisely. Go back to school. It is another good way to create disposable income.

[2015]

Something else I wanted to add. Eat healthy and exercise. That's one way to save money and have a high quality of life. Loose weight if you are overweight. That's money in your pocket. Make good memories with your family as someone said. Teach your children good values by being a good example. Let your children see you being generous and kind to others. As a mother, babysit your grand kids when you can. All these acts of kindness are almost equivalent to having a retirement fund.

[OCNRN63, RN]

On a very practical note, I have found the website www.mint.com to be very helpful in managing my finances. It works really well if you use your debit card for purchases (which I do). It links up with my account and adds my purchases to categories (there's no actual purchasing when you use mint, it just keeps track of all the transactions that happen in your bank account). That way, I can see exactly how much I'm spending on things like groceries, fast food or coffee shops and set budgets for different categories too. It is way too easy to spend money without realizing where it is all going, and i have found this method of managing my budgets to be extremely helpful. Thought it might be helpful to someone else :)

I used to love to get a double-shot vanilla latte every morning from a local coffee shop (along with an almond biscotti dipped in dark chocolate). One day, I added up how much my little addiction was costing me a year--$1500! That could have gone into my retirement fund.