I have accepted a position at a hospital that will have me earning at least $30 an hour. That is ALOT of money for me. Considering the fact that I will be 24, splitting living expenses 50-50 with mom, and I have a vehicle that is completely paid for, I will have lots of $$$ left over every month ($2800+) after my expenses are paid. What can I/should I do with the excess money? Hurry and pay off student loans (23k)? Save up and buy a new car cash? I don't have kids and I am single if that means much.
What did you do with your disposable income when you began your Nursing career?
ETA: I am not interested in becoming a home owner at this point. I like the flexibility of being able to pick up and go when I please and owning a home would make that difficult.
Man, you guys are really smart. I can't quote and thank you all for your useful comments and stellar advice, but please know that I really appreciate you all taking the time to offer me your wisdom. Im HUGE on Suzie and Dave and their take on money is very similar to some of yall's. You guys have done a great job of solidifying ideas already planted in my head. Okay, so a few take aways:
1. Start saving for retirement by fully funding my 401k and investing in a Roth IRA.
2. Pay off student loans ASAP
3. Don't buy a brand new car. If I am going to buy something newer, buy 2-3 years older and put a modest down payment and finance the rest to help build my credit.
4. Pay myself 10% first.
5. Find a good reputable charity to donate to. (This was only mentioned once, but it caught my eye and stuck out to me because im thankful to be blessed enough to be in a position to give back)
6. If I do things right I can travel while I'm young, AND travel when I'm older.
7. I'm totally looking forward to having Grey hair. The "silver fox" look as awesome.
8. 6-9 months in monthly expenses put away.
9. Don't hire a financial advisor, use a free one.
10. There are some AMAZING, wise, thoughtful, and very educated nurses on this site and I am so happy to be a member of allnurses. YAYYYUUUHHH!
It's a great thing to give to charity when you can. If not money, then with time.
That was a very good point someone made. Throughout the years, I've given money to my alma mater for scholarships, to my hospital's development office to fund scholarships for continuing ed for deserving nurses, and other causes in my community. I view it as a responsibility one has when there is extra money around. It's actually a better feeling to receive a letter from a grateful student than the satisfaction that comes with buying a designer purse or pair of shoes. :)
Specializes in Emergency, Correctional, Indigent Health.
RETIREMENT RETIREMENT RETIREMENT It is a subject everybody seems to forget. Your $30 an hour may seem like real money to you now but it will fade really fast when you become a full adult (I am 71) and realize you are struggling to survive. My own son, a 41 year old doctor was making $170,000 dollars when he came out of his residency. within a year he changed his position and is now 9 years later he is earning over $500,000 a year (almost $300 an hour) He now complains that I never taught him to save his money. I had four kids which I sent through college and on what my wife and I made. We generally went from paycheck to paycheck. Retirement now is from 2 social security checks and a teachers pension. I never got a pension from my hospital endeavors. Now we live but are not wealthy. If you put a small amount away in a fund that pays 8% it will double every 9 years. if you add to that fund, every pay period the progression is phenomenal. Don't be fooled It only takes a small amount to get things started. Add a bit more with each pay raise. and you will be astounded. I met a friend from high school she told a story that her father saved a small amount as a Postmen working for the Post Office. He was a cruel dad, a miserable husband and a curmudgeon. When he died suddenly, they found that he had over $500,000 dollars saved, and put away without the family's knowledge. Thinking his wife would pass away before him, he was saving it for his final days. The Lord works in mysterious ways! So be smart and start a pension fund with a small savings you will maintain every payday.
Don't speak to a financial planner. Talk to fee-only financial adviser. My advise is get a house now while the rate is low. Find a good job with good benefits and stay there long term and buy that house 2-3 bedrooms if you're looking forward to have family someday. Make it a 15 year mortgage loan. Pay it off soon. Then pay your student loan. The house must be close to your employer, much better. Continue what you are doing. Save 3-6 months of income for emergency. Keep your car forever, if you live close, you don't need a new car. Max out 401K. Marry a nurse with the same attitude towards money. I did this later in the lpst 5 years, i was able to amass close to 700K of net worth even in my 40's with the help of my wife of the same mindset. This nursing career is just a tool so you can do what you want in life..maybe savings lives without getting paid.....it is easy to save 1M when you know what you're doing. 1M x 6%= to 60K, that's a nurse salary by living off in the interest. I am a nurse for 23 years, i can't grind this career for another 20. Sacrifice more now, then you'll be rewarded more while chillaxing in Hawaii. Goodluck
While home ownership is the American dream and linked to higher net worth I think one should wait to buy till they are ready to settle down in one place. Yes rates are great right now and it offers a tax advantage but there are a lot of expenses to owning a home from closing costs to maintenance, PMI if less than 20% down, which may or may not be tax deductible depending on the govt every year to property tax.
For me it was while in the process of buying a home that I really started to learn about personal finance. I researched everything, was guided by a free home counseling service provided by my employer. The counselor was a godsend I had no clue how little I knew about money till she opened my eyes. She reviewed my income, credit, suggested I consolidate my student loans to a fixed rate, refi my car loan, didn't even know that was possible, set me up with a first time buyers fixed rate mortgage, guided me thru the whole process, even discovered my insurance lender lied to me about the replacement cost coverage I had asked for! When he was called out he gave an excuse that he didn't know if I had copper pipes that's why he didn't offer me the correct coverage, although he was happy to lie to me and let me pay more for inferior coverage if he hadn't been caught. It was shocking because he had been my family's insurance agent for decades! You really cannot trust people and need to read the fine print. With the legalize involved in a mortgage loan or refi it may make sense to have a lawyer, especially if you would be foolish enough to get an adjustable rate loan!
When you decide you are ready to buy a home do a lot of research so you get the best interest rates. Ilyce Glink has many good books on home buying and even some on personal finance. Personally I believe in fixed rate loans, many tout ARM's if you are planning to live in a house for only a short time, but there is no guarantee that will happen or you will be able to move or refinance. Frankly if you are only going to stay for a short term I think you would be better off renting. If you are lucky and home prices appreciate you might still make a profit or avoid a loss, but will still have stress and hassle of selling your home and moving. Renting gives you flexibility and usually lower housing costs which allows one to save more till they are ready to settle down.
Home appreciation is not guaranteed as we have seen depreciation across the country where many find they are underwater on their loans! A 15 year mortgage is ideal if you can still pay your other bills and save for retirement. The sooner you start saving for retirement the greater impact it has due to the decades of interest capitalization! If you wait till your 30's or 40's there is no way you can catch up and make up the lost time of your 20's without extreme sacrifice.
When you are young it is the time to experiment and learn where you want to work and what specialty you want to do. Ideally, if you can, stay at one hospital system for at least 5 years so you can keep the 401k/403b employer contributions or you may lose them. I worked for one place just under five years when I was younger and regret not staying for five years if I had known the rules I would have extra retirement money to show for it!
Even if I'm sitting on an excess of $1500 bucks a month, I'M STILL BALLIN FAM! **makes it rain all over the haterzzz**
Instead of annoying a good amount of your fellow nurses (oh wait...) why don't you go on over to Purse Forum and ask them how to spend an extra $1500 a month "fam"?
Ironically they'll probably tell you to oh I don't know... save it as $1500 will hardly even cover one luxury item.
Or you can take that $1500 a month and give a new car salesman free reign, ask a Bloomingdale's associate to help you spend it, do something nice for your mother, etc...
There are tons of ways to blow $1500 none of which you need nurses to tell you about. Actually you know, nurses tend to be a practical bunch so you probably won't get the answers you're looking for here. How you earn your "disposable" income hardly has anything to do with how you spend it.
Just to add to what others have said, I worked full time when first hired and made almost 35 dollars per hour. I ended up with about 3500 net per month (then bills came out of that). As a single person with no dependents or other deductions, I lost almost 40% of my income in taxes and other deductions. Your employer might mandate payment pensions and disability and the like, as mine does.
That said, as a single person you might be able to get tax deductions by putting money away for retirement (I don't know what it's like in the US but in Canada we can get a deduction for contributing to a registered retirement fund), which would be a good thing to do with some of the money after paying off loans. Charitable contributions are also often tax deductible.
Girlafraid13
309 Posts
Yeah, I just Googled Billy Joel.