Nurses and Financial Freedom

klone, MSN, RN · Apr 23, 2015

I don't know you, but you make me proud, grasshopper. :)

ThatBigGuy · Apr 23, 2015

Only $1k in my emergency fund makes me VERY nervous because: 1. I'm a travel nurse and just don't feel it's safe to do that now and 2. 1k is no money. lol So I'm thinking I'll keep 3k in savings and proceed from there.

Personal Finance is just that: personal. My wife did NOT want a $1000 emergency fund, so we had a $3000 emergency fund. The other thing you can do is if you know your current contract will be ending at a certain time, you can hold off on the extra payments. You stick your extra payments into savings to cover the missing income and moving expenses between contracts. Then when you get your first paycheck from your new contract, you can take that extra savings lump and throw it right back at the debt.

Farawyn · Apr 23, 2015

For me, it was all about buying a house we could afford and putting enough of a down payment on it (20%), and having one car we bought cash for. We put money into our 401(k)s, I pay extra on the mortgage every month (a few hundred), and I'll have my student loans paid off in another few years paying a modest amount. We'll pay our mortgage off in about 15 years once I get my student loan debt knocked off the list. I try to put about 10% of my money away in savings per month.
Besides that, we live what I consider a very nice lifestyle- my husband and I have employer-sponsored health insurance, we go out to eat several days a week, I board a horse, I have a gym membership, a cleaning dude, and we're continuously doing projects around the house (setting up a garden, raising fruit trees, setting up a music studio). We could live and have lived much cheaper, but it's nice to have the income for hobbies.

Yea, okay I want your life.

kalycat, BSN, RN · Apr 23, 2015

Just wanted to say....I'm super impressed and inspired by the information in this thread. You guys are awesome! I'm a second career person who went through a bad divorce and had some fairly sloppy financial habits; I then was a single parent for 12 years. I was always able to provide a comfortable enough lifestyle for my kiddos thanks to having a stable and fairly lucrative business career, but I definitely was not disciplined financially. I mainly wasted money on convenience items and entertainment (I've never been a manicure or pedicure person lol) but there were plenty of those small, insidious expenses that really add up.

While in nursing school, I made a commitment to change my financial ways and to really set some goals...Dave Ramsey's information has been incredible for me. My current partner is close to retirement, we have one kid in college, a house to sell, and I'm just embarking on my nursing career; starting over. Many, many transitions are happening for us but we have really been working together to get on top of things; he is very disciplined financially, but I still have a lot to learn. I'm looking forward to sharing all of your outstanding suggestions with him.

OP: way to go. You're so far ahead of the game. Inspiring indeed. :)

Katie71275 · Apr 23, 2015

Follow Dave Ramsey. Follow the baby steps and you will get there. Work more than 1 job if you can.

Soliloquy, MSN, APRN, NP · Apr 23, 2015

Personal Finance is just that: personal. My wife did NOT want a $1000 emergency fund, so we had a $3000 emergency fund. The other thing you can do is if you know your current contract will be ending at a certain time, you can hold off on the extra payments. You stick your extra payments into savings to cover the missing income and moving expenses between contracts. Then when you get your first paycheck from your new contract, you can take that extra savings lump and throw it right back at the debt.

Is your emergency fund in addition to the savings? Or is the savings separate from the emergency fund?

klone, MSN, RN · Apr 23, 2015

While you're working on your debt snowball, your savings *is* your emergency fund.

Jules A, MSN · Apr 23, 2015

While you're working on your debt snowball, your savings *is* your emergency fund.

I'm confused by the $1,000 and $3,000 figure. What exactly is that for? With regard to what I keep in a savings account I aim more for 6 months worth of expenses.

Not_A_Hat_Person, RN · Apr 23, 2015

Consider this: one Starbucks Coffee at 6 x 5 days per week is 30/ week or 120 per month.
Add that to the other take out foods.....it all adds up.

Starbucks coffees do NOT cost $6 unless you buy a super-elaborate drink at an airport.

Red Kryptonite · Apr 23, 2015

Starbucks coffees do NOT cost $6 unless you buy a super-elaborate drink at an airport.

With tax, a plain old venti caffe mocha gets pretty close.

ThatBigGuy · Apr 23, 2015

Is your emergency fund in addition to the savings? Or is the savings separate from the emergency fund?

I'm confused by the $1,000 and $3,000 figure. What exactly is that for? With regard to what I keep in a savings account I aim more for 6 months worth of expenses.

The first Baby Step, according to Ramsey, is to have a $1000 emergency fund. That is all you have in the bank/savings/under your mattress. The rest of your savings/6 months of expenses goes straight to the debt. When you write that check, you will essentially have $1000 to your name in cash/savings account. You won't have any "savings" at all, except for the $1000 Baby Step 1 emergency fund.

This is to cover the cost of minor emergencies, such as your transmission going out, or a co-pay for an ER visit. It's purposefully small, so that you feel uncomfortable and insecure, so that you lean into the debt. Dave always says that personal finance is 20% math, 80% behavior.

According to Dave's Baby Steps, you start with a $1000 emergency fund (Step 1). Then you pay off your debts except for your home mortgage (Step 2). Step 3 is building a 3-6 month emergency/expenses fund. Steps 4, 5, and 6 are simultaneous steps in which you invest for retirement, save for your children's college, and pay extra on your hose. Step 7 is Heaven, which means you are completely debt free including your home and are essentially living the dream.

So you're in Baby Step 2, paying your debt. But 6 months of expenses saved is too much, according to the Ramsey ideology. So you cash out your 6 months of expenses, except for $1000, and pay that right to the student loan. The $3000 number I wrote about is the compromise my wife and I came up with for the initial Baby Step 1 emergency fund. She wanted $5000, I wanted $1000, so we split the difference. Again, personal finance is personal, although Dave really has an incredibly successful framework to get you out of debt.

If you want to share your numbers with us, I can give you a quick and dirty roadmap that's specific to you. You'll also be learning this as you read the Total Money Makeover (TMMO). I would just need your hourly pay rate and how much money you have in your current 6 months of expenses fund. In about 2 paragraphs, I can give you a debt free date, give or take a month or so.

Soliloquy, MSN, APRN, NP · Apr 23, 2015

I just went ahead and paid off my smallest debt of $3600. I'm kind of crying on the inside right now. I didn't think parting with some of my savings would be so hard.