financial planning for the young!

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Specializes in ICU.

Hi people,

I am graduating this August and I already have a job lined up (cardiac;)). At 23, I don't have a huge amount of experience with handling money. During college, I received about $800/month from the VA for education benefits. I realize now that before taxes, I will be making close to this amount of money in one WEEK.

I really feel like I need advice, tips, etc on ways to handle money. Better yet--a recommendation for a book, sort of a "how-to" guide on getting started in my financial life. I am still young and I don't want to go crazy and blow it. I don't feel like I am all that educated on money, especially topics such as how much of my money should go where, investments, retirement, savings, etc. I want to be smart about this and start young, so I don't have to suffer and worry too much when I am older.

Thank you for any advice:yeah::heartbeat

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Specializes in ER/ICU, CCL, EP.

Dave Ramsey 'Total Money Makeover'

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Specializes in ob/gyn med /surg.

start a 401K and the max you can take out is 10% a pay.. that is what i have taken out... start it as soon as you can some hospitals won't let you start a 401K for 6 mos after you hire on...

good job on thinking of the future... i am soo happy for you

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I would say as far as retirement, make sure to put every penny you can in a 401k, max it out if you can. Does your employer match any portion of your contributions? Even if it does not, you should still try to max out your contributions because any money that you put into a 401k account is tax free, which means that not only are you saving money, but you're also making money by investing.

Also, read Suze Orman's The Money Book for the Young, Broke & Fabulous. You definitely don't want to be foolish with money now because that means when you are 45-50 you will be kicking yourself for not building enough of a retirement fund and will end up in a pinch trying to make up for the years you lost. At least that's what I tell myself to make sure I'm wise about money.

Also, I suggest that you not make a lot of silly purchases that you will have nothing to show for after the purchase, whether it's that day or 5 years from now. For example, you go out and eat and after you eat the food at the restaurant and pay your bill, you will never see that money again and you will have nothing to show for how you spent that money. You could have bought clothes, and you would immediately have something to show for the money you spent, BUT in the long run you will replace those clothes and have nothing to show for your money. Of course you need to once in a while you need to treat yourself to a dinner out or new clothes, but make sure it is a TREAT, meaning it is not something that occurs regularly. However, if you bought a house for your money, in a few years you will have a HOUSE to show for your money AND your house will (hopefully) be worth more than what you paid for it. I think a house (at least saving for one, at this point) and a 401k are the two best investments a person our age could make. You end up funneling your money to your house and investments instead of having extra cash laying around to spend on clothes and nights out.

As far as how much of your paycheck should go towards housing, I have read that you shouldn't allot more than 30-36% of your gross (pre-tax) income. If you are renting, I would try to be as frugal as possible without being in a totally rundown place. If you are renting that basically means that you are working to pay off someone else's mortgage so they can get a free home in a few years, thanks to you. So, spent as little as possible and save for your own home!

Also, try to work with what you have; don't try to rush out to buy a brand new car (if at all possible), etc. Take these first few years to save save save and once in a while treat yourself. I would rather drive my current car, save as much as possible, and treat myself to a nice vacation somewhere every year than go out now and buy a car which means I would have extra payments to make each month and, unlike the house, the value of the car would only depreciate!

So, for now I suggest that 1) you invest the maximum you can afford into your 401k, 2) set up a direct deposit account so a) a portion of your check goes directly into an account for saving up for a down payment on a home and DO NOT touch this money not matter what!!! b) a portion goes into a savings account, and c) the rest just goes into your checking, 3) make a budget and stick to it--Suze Orman's book can help you with that.

Don't make any large unnecessary purchases for now--wait to buy the living room set of your dreams for when you can happily afford the house you want and settle for just some decent furniture for now...you get the point. Also, definitely read a couple of books on personal money management. What good is having a good salary if you squander your money?

Best wishes : )

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I have some great books for you to read:

The Money Book for the Young, Fabulous and Broke.

By Suze Orman

If you're a young lady, also check out:

Women and Money

By Suze Orman

Both of these books will give you easy to read, practical information on how to send, save and invest your money.

You said you were worried about blowing it, Another good book full of more practical principles to use your money wisely is:

You're Broke Because You Want To Be.

By Larry Winget

Hope that helps. Have fun reading!! :specs:

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Specializes in Day Surgery, Agency, Cath Lab, LTC/Psych.

The best book for younger people is Suze Orman's The Money Book for the Young, Fabulous and Broke. It is an easy read for a money idiot (which I am). If I can understand it, you can understand it.

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The two major authors have already been listed, but I would like to add

Jean Chatzky - financial editor for the Today Show. She has some great, simple to understand material. Good luck! I think you're already intelligent and on the right path for beginning your plan before hand.

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Thanks for the advice!! This is right up my alley and I really needed!

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Thanks for the info guys. I'm going to be starting my first RN job soon and I'm terrible with money! I have to pay back my parents for a bunch of stuff first, but after that, most of it is going into savings so I can get the heck out of here! :)

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Specializes in ICU.

Thank you everyone! I'm going to head over to the library today to see what their selection is (see, already thinking about not spending;)).

And if anyone else has any more advice, I am sure there are more young nurses who are eager to hear it, as well.

:twocents::bow:

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Dave Ramsey "Total Money Makeover" is a 100% sure fire way to manage money. No get rich quick, just pure financial responsibility that works.

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Specializes in ICU.

Is "Total Money Makeover" geared more towards people who are in debt or everyone?

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