A healthy lifestyle starts with a sound financial plan. And financial planning is an important part of life, especially for nurses who build a career taking care of others. As a nurse, it is important to also practice self-care and that includes financial planning for retirement. Sound financial planning can help nurses meet their life’s goals and obligations. Read on to learn more about financial planning for nurses at every career stage.
Early Career Nurse
When I was a new nurse, it was amazing how much money I made. Working as a Unit Secretary and Nurse Tech through nursing school paid a decent wage and the hospital benefits helped with raising a family. But I was pleasantly surprised to receive a $10 an hour increase as a graduate nurse! My challenge, early on, was that I had no financial plan. I paid my bills responsibly and I spent irresponsibly. My biggest regret, looking back, was that I did not start financial planning until later in life. If you are a new nurse, it is important to start financial planning as soon as possible.
Here are some financial planning tips for early career nurses.
- Create a budget. A budget is a terrific way to keep track of your income and expenses. A budget will keep you aware of your financial plan and stay focused on keeping more money than you spend.
- Save Money. Saving money is key to reaching any financial goal. Open a savings account and set up automatic transfers to help make saving easier. Save as much as you can but try to save at least 10% of your paycheck each month. Consider a high yield savings account so you earn money on your savings.
- Pay off Debt. Debt can accumulate fast, especially if you pay the minimum balance each month. Review your expenses on your budget and look for ways to cut expenses and use the extra money to pay off debt faster.
- Review your employee benefits. While retirement may seem far off, consider enrolling in a retirement plan your employer offers. Learn all you can about the benefits, especially if an employer matching contribution is available.
Mid-Career Nurses
Although the length varies, you are in the middle of your career around ten to fifteen years after graduation. Financial planning gains importance in your mid-career. At this point, you may have additional financial obligations such as a mortgage or expenses for your children. But you most likely have a higher income too. Here are some financial planning tips to help mid-career nurses.
- Continue your Budget. And re-evaluate your budget often. Look for ways to reduce expenses to free up money you can use for savings.
- Negotiate a Higher Salary. By mid-career, you have gained valuable experience and extra skills. Talk with your nurse manager to find out if your wage or salary is aligned with the market and equal to your experience. Then save your raises.
- Pay off Debt. And apply extra money to savings, especially to your retirement fund.
- Save Money. Besides retirement savings, start an emergency fund and aim to save 3 to 6 months of living expenses. If you have children, consider opening a college savings fund.
- Evaluate Your Insurance Needs. Risk tends to increase with responsibility. Insurance helps protect you from risk. Review your insurance needs such as life, personal liability, and disability in addition to your homeowners and auto plans to help make sure you are adequately covered. Also, shop around for the best rates for auto and homeowners. Take advantage of a good driver record and credit history.
- Begin Estate Planning. Meet with an attorney to discuss the pros and cons of a will versus a trust to manage your estate if you are incapacitated or on death. Also, complete Power of Attorney and other documents to make sure your wishes are carried out if you cannot speak for yourself.
Late Career Nurses
Retirement is typically the focus in late career. If you began financial planning from the start of your career, you probably included a retirement plan. As you look towards retirement consider these tips for late-career nurses.
Negotiate a Higher Salary. Like the mid-career milestone above, talk with your nurse manager to ensure you are receiving a wage equal to your experience and market standards.
Pay Off Debt. Look for ways to eliminate debt. Consider consolidating loans and negotiating with your credit card companies to lower interest rates. You may want to apply all raises to pay down debt faster.
Continue to Save. Review your emergency savings fund to make sure it will cover 3 to 6 months of your living expenses. Aim to optimize your retirement savings and consider taking advantage of catch-up limits available to you if you are over fifty.
Review Your Health Insurance Needs. Health expenses typically increase in retirement because of longevity, normal aging, and chronic illness management. Besides health insurance, consider your long-term care planning needs. If you worked most of your adult life, you most likely will qualify for Medicare. Give yourself time to learn all you can about Medicare by visiting Medicare.gov. Medicare provides good coverage but there are limits and strict enrollment rules that you need to be aware of to avoid lifetime penalties.
Plan for Social Security Benefits. Start by learning all you can about Social Security benefits available to you at ssa.gov. If you do not have one yet, create an account and explore all the features available to you to help you prepare for claiming Social Security.
Review your estate plan. As uncomfortable as it may be, review your will, trust, and Power of Attorney documents to make sure they are up to date with your wishes and beneficiaries, trustees, and successor trustees. Update beneficiary records also, especially if you have had significant life events like divorce or marriage.
In conclusion, regardless of where you are in your career, take control of your money by starting a financial plan. Financial planning for nurses starts with learning all you can about money, credit, and debt. Creating a budget that works for you can help you create financial stability throughout your career stages. Review your budget and financial plan regularly and make adjustments as your needs change. Consider speaking with a Financial Advisor to help you create your financial plan and keep you on track, especially as you prepare for retirement.
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Georgene Collins, RICP®, RN, PhD, MBA is a registered nurse turned Financial Advisor at Airey Financial Group. Georgene helps other nurses take control of their finances and prepare for retirement. Georgene began her career with Airey Financial Group in 2017 after retiring from 30 years in healthcare.
Georgene holds the Retirement Income Certified Professional (RICP®) designation from The American College of Financial Services. She holds health and life insurance licenses and a long-term care certificate in Indiana, Illinois, and Wisconsin. Georgene is a Registered Representative and Investment Advisor Representative and has earned the FINRA Series 63 and 65 registrations.
