The Financially Independent Nurse
An article for all nurses but targeted especially towards nurses leaving the profession
It is not uncommon to read of nurses, either new or old, wanting to get out of the rat race of Nursing due to one reason or the other. And unless there is a pressing reason, BEFORE you make that leap, you need to be financially independent.
To help prepare you before you make that leap, here are seven actions that you must do.
Now that you have finally made up your mind to leave the nursing field, you need to ensure that you have that cushion (savings) to pay your bills and not be stressed while you make the next big decision on how to move on to the next chapter of your life.
Why? Knowing that you have a financial cushion reduces stress and makes it easier for you to be in that perfect frame of mind to find that right next job that you seek.
Set up Automatic Bill Payments
Whether or not you have a job, the utility, cable, etc companies do not truly care, the bills will still come in. One way to make sure that you avoid missing a payment is to set up automatic bill payment. Make sure there is enough time in between for the bill to be paid so you don't get hit with a late payment.
Why? That is one thing off your list to worry about and the bills will always be paid!
Pay off Your Smallest Bills
No matter how little it may be.
Why? This will give you a sense of accomplishment to know that you successfully paid off a bill. So itemize your debt from smallest to largest and check of as you go down.
Consolidate your Debt
if you have debt all over the place, it makes sense to consolidate your debts together.
Why? Consolidating your debt eliminates you having to pay different interest fees on different debts. This way you only pay the one interest fees but still make a bigger dent in your debt amount.
Buy staple items in bulk and stock up- those really last a while and takes another worry off your list.
Why? Regardless of whether you are still in nursing of not, you need to know that things on the home front are taken care of and takes one worry off your list.
Get a Personal Loan
Now this one is going to be dependent on how excellent of a credit score you have- if it is good to excellent, this is for you, otherwise skip this step. Depending on how much of debt you owe, getting a personal loan is one good way to pay off your debt and then take your time in paying off the personal loan.
Why? This is good because the personal loan is a fixed monthly amount that you pay in an allotted time, depending on what your term agreement states. When in doubt, be sure to have another person look over the agreement before you sign.
Cash at Hand
After you quit working, realize that until you find your next job, there will be no incoming income for you, so everything will need to go down to need vs want. If it a need, get it; if it is a want, skip it!
Why? Cash at hand which you can keep anywhere you don't easily reach for it, is a way to give you peace of mind in knowing that you can purchase items you need without needing to reach into your savings.
Skip the Vacation
You can try something different this time around. A stay-cation and just simply relaxing or finding a new hobby that you have always wanted to do, but never had the time to do it.
Why? This is where every penny counts and you need to pour as much as you can into your savings.
If nursing is not for you, that is okay- you owe no one any explanation. What you should be glad about is that you discovered that long before you had a chance to look back on your professional life and think what a waste it was when you could have been doing something else that you loved.
And if after the sabbatical, you discover nursing is truly what you love doing, then you would be glad you took that break and rediscovered your passion.
Thanks for the read!Last edit by Joe V on Jun 14, '18
A writer of healthcare management and consulting
Joined: Nov '17; Posts: 4; Likes: 31Dec 27, '17^^^
Also, consolidation, depending on the situation, can be a horrible idea as it leaves a massive amount of debt at an oftentimes fixed interest rate. The Dave Ramsey "snowball" approach makes more sense (pay off the smallest debt, then the next smallest, etc). However, from a numbers standpoint, it is better to attack the highest interests items first to save money in interest payments.
I also disagree with no vacation. People wonder how I am to work overtime on a consistent basis...taking regular vacations allows for this. I also make it a point to travel to poorer countries and learn more about how others live in order to motivate myself to keep on keeping on.
7 also confuses me. Never quit a job without another one lined up or if you are retiring/financially independent. EVER.Dec 27, '17OP, who are you and why would we take financial advice from you? Do you have some kind of actual credentials? Is the article based on research of valid sources/experts, or is this just stuff that seems like a good idea to you?Dec 27, '17"Financial independence" means different things to different people. Since this is a forum for nurses, I expected an article about financial independence to be geared toward professionals. What followed were basic money-saving tips regularly published in newspapers and health newsletters. Some of these tips (not all) would be useful for teens and young adults interested in prudent money management and how not to live paycheque to paycheque.
For the rest of us, it fell a bit short.Dec 28, '17I have no financial credentials. Kudos to the OP to try and bring up a difficult subject people don't want to talk about. But I think OP is actually referring to "F-you money." Why you need F-you money I would define financial independence as not having to trade your time for money any longer.
I think this is a truly important topic for nurses, a majority female profession, especially considering the following: women on average take more time off from work years to raise children, there are more single female parent households than single male, women have a longer life expectancy than men, less than half of American women participate in a retirement savings plan, among other things.
But I think I would do it like this. There is no one size fits all. In a nut shell. Caveats: This will be difficult especially for single parent household, lower middle class and below incomes.
1. Write down your budget. The first step is to know how much you need to spend. This will identify where your money should go. Also write down debts and interest rates for these.
2. Track your income and write down where your money actually goes. Every penny. That morning coffee can add up. This is where you can pair up your actual budget to the ideal you wrote down in step one. Give you something to work on.
3. Build your emergency fund. This can take time. Many middle class Americans don't have $1000 cash they can retrieve at a moments notice. The old standard for an emergency fund was to save 3 months of your budget. After the 2008 crash, "experts" were recommending 6-12 months of your budget saved. It's different for everyone though- have liquid assets to a level you're comfortable. It depends on many factors. Will you use a credit card as an emergency fund? Is your job rock solid? Are you healthy? Do you have dependents? Because where would you be if you hurt your back tomorrow? Your car dies? You break your leg? Your hospital went on strike for two months?
4. Pay off the high interest rate debt first. The average American credit card debt in 2017 was $8377. How much the average US family has in credit card debt Use your budget and money tracking to find money gaps you can use to pay this off. Then go down your list, highest to lowest interest rate. Some argue that it's cheaper to continue making small payments for interest rates below 5% than paying it off. Some also prefer to put more money into their mortgage. It's up to you.
5. Put money into tax advantaged accounts. Maybe an HSA if you use that, 401k to your max contribution Roth/Traditional IRA.
Now you can either pay off other debts, lower interest rate student loans, invest the rest in a taxable account.
In a nutshell. There are more ins and outs once you're getting to steps 5 and beyond. Again, no one size fits all, but I think that's a good start. You don't have to eat dried ramen (unless you want to, yum!) but at least know where your money is going and have a active role in your money management. Or ignore it and become a statistic when you get to retirement age. Better now before the economy has a correction....
See Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century: Vicki Robin, Joe Dominguez, Monique Tilford: 978 143115762: Amazon.com: Books
Amazon.com: the simple path to wealth: BooksDec 28, '17I definitely agree with the previous posters. This article contains a lot of bad financial advice -- and the author cites no sources or credentials.Dec 29, '17I like having an "FU" or freedom savings account so you are not trapped in a bad job or left destitute if you end up laid up or laid off. I started my Roth IRA for just those reasons. Hopefully I won't need to use it till retirement, but it's good to know I have options.
I wouldn't advise leaving your job without having another one lined up.
While it would be best to be debt free, many of us aren't and still need to juggle debt repayment while starting a new job or career. It's a good idea to take out a HELOC if you have home equity to provide a bridge of cash if you think you might be facing a job loss or pay cut. It will give you added financial flexibility till you can get on your feet.
In these days it is not always burnout, but for many in administration, management, and education they are losing their jobs thru layoffs and corporate restructuring ie "downsizing" so it's good to be as prepared as you can to deal with a cut in pay for whatever reason.Dec 30, '17One would still need to work while exploring another career or have someone to help financially. Having a steady income is crucial because bills unfortunately doesn't stop.
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