The Financially Independent Nurse

[meanmaryjean, DNP, RN]

One does not become financially independent by taking out loans (#6). Ever.

[ThePrincessBride, MSN, RN, NP]

^^^

Agree.

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.

[DoeRN]

Going into more debt to pay off debt doesn't make sense.

[elkpark]

OP, 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?

[TriciaJ, RN]

"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.

[Oldmahubbard]

Really stupid article. Please do not follow the advice therein!

[Accolay]

I 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....

Further reading:

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

[llg, PhD, RN]

I definitely agree with the previous posters. This article contains a lot of bad financial advice -- and the author cites no sources or credentials.

[brandy1017, ASN, RN]

I 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.

[Rosina]

One 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.