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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.
I have read some very sad posts from nurses who have NO retirement funds to speak of and are in their late 50s or early 60's. Retirement can seem very far off, but the time to start saving is NOT when it starts to become real to you.
And don't ever pull money out of your retirement savings unless your life literally depends on it.
Travel is fine at any age, just don't blow all your money on that or material things, or when you are in your 50s and really wanting to back off or get out of nursing entirely, you are not FORCED to keep working, or live at poverty levels because you are disabled, or ill.
You are SMART to balance youthful spending with thoughtful saving. This will give you OPTIONS later in life that many people do not have.
You should save your money because you never know if you were to have some kind of an emergency down the road. Put away for your retirement so you can retire early from nursing if you choose. Money may not be there tomorrow. It is better to save for a rainy day when you need it. You could also donate to your favorite charity.
Uncle Sam will make sure that you have little disposable income haha. I was like you when I got my offer letter, I make 38 an hour and thought I would be rolling around in disposable income. Being single with no dependents means that the government helps themselves to a large amount of my pay. After retirement, taxes, and union dues I'm left with a little pocket change to enjoy life on a budget lol. Don't count your chickens before they hatch.
That's another reason to fund an HSA and 401k/403b because it will lower your taxable income.
A Roth IRA is after tax $5500 max but it will be tax free in retirement, not to mention an emergency fund if needed and also balances out your taxable and nontaxable retirement income.
I forget to mention get short and long term disability while young and healthy, own occupation clause, many places provide it as part of the benefit package.
You guys are offering incredible advice. I really appreciate the time you all took to give me positive words and such great advice. I have a question: as far as insurance is concerned, I am a young, fit and very active female with no preexisting conditions. Do I need an extensive health care plan or do I just need a bare bones package? Does it even work like that? Thanks!
You are the ideal candidate for a high deductible health insurance plan if you have that option. Pair it with an HSA and you will have money in the future when you have a child or other medical, dental, vision, etc expenses. Look at the deductibles and max out of pockets of insurance. It can be as much as 6,500 max! The HSA allows you to save tax free over time for the future whereas the traditional FSA you have to guestimate your medical/dental expenses and if you guess wrong could lose that money at the end of the year!
When I began my nursing career we had little if any out of pockets, now it can be over $6,000 a year and if you have a family over $12,000 a year! So saving in an HSA now while your young and healthy will protect you and your future family!
You guys are offering incredible advice. I really appreciate the time you all took to give me positive words and such great advice. I have a question: as far as insurance is concerned, I am a young, fit and very active female with no preexisting conditions. Do I need an extensive health care plan or do I just need a bare bones package? Does it even work like that? Thanks!
Every employer offers something different. This one may offer various levels of insurance or a standard 1 type package. Only the employer can answer this
If the OP has to cross that bridge, there is always Seeking Arrangement
I have a friend on that hahaha some very weird offers she has received
My math is correct. I will bring home around $4300/month. I will only have $1200-$1500 in living expenses. Thank includes my student loan repayment of $230/month (in deferment until 6 mos after I graduate anyway, but I will start paying early.)
Grossing and netting are two different things.
30x36x4= 4320.
As a single and childless person, expect to lose at least 25 percent to taxes.
4320x.25= 1080. 4320-1080= 3240-1200=2040.
And that isn't even including medical, dental, and short term disability. So...
Again, recheck your math.
Grossing and netting are two different things.30x36x4= 4320.
As a single and childless person, expect to lose at least 25 percent to taxes.
4320x.25= 1080. 4320-1080= 3240-1200=2040.
And that isn't even including medical, dental, and short term disability. So...
Again, recheck your math.
Reminds me of the episode of "Friends" when Rachel was all excited about getting her first paycheck and then saw the difference between gross and net:
"Who's this 'FICA' guy and why did he take all my money?"
1. Pay down any debt you have.
2. AT THE SAME TIME, start putting some away in savings.
3. If you haven't taken advantage of retirement plans offered through your work, do so. If they don't offer anything, open up a IRA of your own and start putting some money in it. You can do this at the same time as every thing else, or wait until you have most of your debt paid off. And no, you are never too young to start doing this...in fact, the younger you start, the better
4. Once the debt is nearly or totally paid off, start socking away money like mad in savings/retirement funds.
5. Try to live below your means. The fact you have a lot of disposable income doesn't mean you should dispose of all of it :)
6. But still remember to treat yourself occasionally. Saving for the future is great and all, but don't forget that you're also living in the present.
brandy1017, ASN, RN
2,910 Posts
Learn about personal finance by either taking a class or reading some good books like Personal Finance for Dummies by Eric Tyson, Deal with Your Debt, and Your Credit Score by Liz Pulliam Weston.
Fund a Roth IRA to the max that is after tax income that accrues tax free and is tax free in retirement. One plus it can double as an emergency fund without penalty as long as you don't touch the interest. Use index funds like Vanguard Total Stock Market or Vanguard Star fund which is a balanced stock & bond fund.
Fund your 401k/403b at least to the company match, be aware of the vesting schedule up to 5 years before you can take the employer contribution with you. If you have a pension, still save money because they are very rare and many are being frozen so don't count on it! The old advice was 6% if you had a pension, but 10-15% is better given there is no way to know if the pension will still be around by the time you retire!
If you have the option for a high deductible health insurance plan take advantage of it and max out the HSA every year, currently $3350. It is especially great for someone young without health problems. You can see your Dr free once a year for prevention and can get basic labs free then or if you have a wellness plan option. Wellness plans can be a hassle but if you already young and fit you can usually get a discount on your health insurance and even make some money on the side by wearing a fit bit and doing 10,000 steps a day, easy working a hospital shift! By us people can get lots of gift cards if they play the game!
While you may think why fund an HSA the time will come when you need the money, whether for a surprise illness or emergency or for when you have a baby! The money grows year by year, can be put in the stock market mutual funds and if used for medical expenses is tax free. There is a 20% penalty if used for other reasons and it becomes taxed. Keep records of any and all medical expenses as you don't have to use the HSA at the time of the expense but can use it later down the line if you want, as long as you have the records in case of a tax audit. Best case scenario when you retire you'll have a pot of cash for medical expenses, from reimbursing yourself for Medicare Part A to paying for Medicare supplements and Part D prescription drugs, long term care insurance if you choose that to any and all out of pockets for medical, dental, vision and prescription expenses. You can even use the money for regular expenses after 65 years old, but then must pay taxes on it. Most people will find legitimate medical expenses to use it tax free!
Even people with chronic health problems might be better off with an HSA if they use generics, look up Walmart, Kmart, Target's $4 generics and see if you can use those. Each one is slightly different and can change over time. Otherwise Costco has the best prices for other meds as they only have a low flat markup on all meds and even publicize all their prices. You don't even have to join to use the pharmacy. If something isn't on the list just call a local Costco and they will let you know.
Lastly pay your student loans off over the ten year period, faster if there is money left after saving in your Roth, 401k/403b and HSA. Don't forget to save some money for yourself for your dreams such as a nice vacation, a new car, or house down the line.
Keep at least a $500-1,000 pad of cash in your checking account as an emergency stash and slowly grow your emergency fund to 6-9 months of expenses.
Your twenties are the best time to save for retirement as the money has decades to capitalize and grow so if in the future you can't contribute as much you will still be ok! Deal with Your Debt offer practical strategies of using debt as a tool to be richer in the long run. It emphasizes saving for retirement and having financial liquidity before paying off student loan or car debt. Even if you don't think you have a lot of debt it is worth reading!