The Complete Guide to Personal Finances for Nurses

Terri Heimann Oppenheimer

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Nursing could also be a calling, however that doesn’t imply that getting there’s straightforward. The career requires a big funding of money and time, and when you’ve been licensed, you’re confronted with an entire new set of challenges. 

Knowing tips on how to successfully handle your private funds – together with paying off money owed, rising financial savings, and being prepared for emergencies – is necessary for everyone, nevertheless it’s particularly important for nurses, whose funds plans will be difficult by forces past their management.

In this text, we’ll take you thru the fundamentals of private finance that each nurse must be conversant in. Making the correct strikes now can result in eliminating debt, constructing a nest egg, being ready for emergencies, and even shopping for your individual house. The extra you understand, the higher your monetary selections shall be.

Nurses face some distinctive challenges in the case of financial savings. Here’s why nurses, particularly, cannot afford to not be financially savvy. 

1. Nursing School is Expensive

As nursing college tuition continues to rise, extra nurses are confronted with borrowing cash to realize their profession targets, and plenty of are carrying excessive pupil mortgage debt.

2. Nurses Aren’t Taught Financial Literacy in School

Unlike another professions the place you could take accounting or finance lessons, nurses aren’t taught about their funds, no less than not in class. And this will result in errors like overdrawing their checking accounts or operating up bank card debt. Or greater points like selecting a pupil mortgage with extremely excessive rates of interest or not saving for retirement till it is too late.

3. Shift Work Can Cause Additional Financial Headaches

Unusual shifts and irregular hours make schedules unpredictable and tense and depart little time for monetary planning. One of the more difficult facets of shift work and pay per hour is the mindset it creates. 

  • Want to go on trip? Work an additional shift.
  • Want to purchase a brand new automobile? Get a per diem job.
  • Have to pay on your childs braces? Work that OT and prime time. 

This mentality, sadly, may also create issues. Nurses are likely to depend on the flexibility to select up further shifts or touchdown a per diem gig. In actuality, these shifts and jobs won’t at all times be there. It’s necessary to not get into the behavior of considering, “Oh, I’ll just work more to pay for that.” This is likely to be a brief time period cash answer however it’s not possible  or sustainable in the long run.

4. Paying for Your Own Work Essentials

Nurses are sometimes requested to pay for a few of their very own work provides, together with uniforms and stethoscopes. They might need to pay for their very own parking, and plenty of discover themselves so quick on time that they seize costly meals the place they work, or decide up meals on the best way house.

 It’s no shock that they hardly ever come up with the money for to put aside for financial savings. But it’s nonetheless attainable – even with sudden bills, money owed, and payments, to arrange an emergency fund, pay down your debt, and develop your financial savings.

5. Retirement 

Most full and half time nursing jobs will provide workers 401K and 403B retirement choices. However, this isn’t at all times the case for per diem workers. Now, there are a handful of healthcare programs that may provide them, however this isn’t the norm.

 Nurses who ONLY work per diem jobs might want to work out their very own plans for saving for retirement!

Per diem nurses will need to open a seperate retirement account that is likely to be a Traditional Roth IRA. Even if you do not need to open an IRA or a fund particularly for retirement, open a separate financial savings account. Use this financial savings account for retirement solely. Do not use it as a “rainy day fund” or “for emergencies”.  

Because most per diem nurses won’t have retirement accounts from their hospital they may even lose out on the matching facet. While it would solely be wherever from 1 % to six % per paycheck and this won’t seem to be alot. It is free cash out of your employer and might be hundreds of {dollars} yearly.  

6. Travel Nursing

Travel nurses are additionally in a singular place in the case of retirement. Most journey nurse businesses do provide retirement choices with firm matching however solely whereas on project. 

Like per diem nurses, journey nurses solely receives a commission after they work. So if you’re planning on taking day off in between assignments to journey, keep in mind, you received’t be getting paid. For that purpose it is vitally necessary to funds and save appropriately.

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Setting apart cash for the long run is necessary, and so is paying off debt and having an emergency fund. It’s exhausting to know the place to start out, however your first step is at all times to create a funds that identifies how a lot cash you could have coming in and what your bills are. 

Budgeting is important as a result of there won’t at all times be time beyond regulation or further shifts obtainable and you do not need to issue that into your month-to-month earnings.

Also, for those who maintain a per diem or journey nurse place – you’ll solely receives a commission for those who work. If you might be cancelled out of your per diem shift, or touring in between assignments, you’ll not be incomes a paycheck. 

How to Set a Budget as a Nurse

Budgeting will be overwhelming, particularly in case you have by no means completed it earlier than. It’s necessary to maintain monitor of all your egular mandatory bills, together with:

  • Rent or mortgage
  • Groceries
  • Transportation
  • Utility payments
  • Subscriptions 

What’s most necessary about making a funds is that it offers you a transparent sense of how a lot cash you could have left over – if any – after you subtract your bills out of your earnings. 

If you might be spending greater than you’re making then you definitely both want to chop down in your bills or discover a approach to earn extra. Many individuals discover making a funds eye-opening. It’s a invaluable train in understanding precisely the place your cash goes.

Prioritizing Your Money

Once you’ve created a funds, you may set your priorities. That could also be contributing each week to a financial savings account with a separate quantity put aside for emergencies, or you could discover it makes extra sense to start out by dedicating extra earnings to paying off your money owed.  

Top Budgeting Tips for Nurses

  • Know your weekly earnings
  • Don’t have the mindset of “working an extra shift to pay for vacation”
  • Track your bills
  • Rank what’s most necessary on your “fun” cash (ie. procuring, consuming out, experiences)
  • SAVE!
  • Spend lower than you make
  • Plan for emergencies

Savings is necessary, however so is being sensible about your monetary selections. Many nurses discover that it is sensible to winnow down their debt earlier than they work to avoid wasting vital quantities of cash. 

Each state of affairs is completely different, so the query that it’s important to ask your self is how a lot being in debt is costing you:

  • If you might be carrying bank card debt, there’s a superb likelihood that you’re paying 15-20% curiosity for any quantity that you simply’re carrying from month to month, plus charges for those who’re not paying the month-to-month minimal.
  • Your first objective ought to be to repay high-interest debt, and maybe put aside a small quantity on the identical time into your emergency fund. Even setting apart $25 a month can add up rapidly over just a few months, and should prevent from turning to your bank card once more. 

Once you’ve addressed these two targets you can begin dedicating extra money to financial savings.

An emergency fund is cash that you simply put aside to assist when the sudden occurs. There are some unanticipated occasions which can be minor, one-time issues like an equipment or vehicle restore. 

Emergency funds are extra necessary than ever as a result of most employers are not masking day off for sure medical circumstances, together with covid. 

What precisely does this imply? At the start of the pandemic if a nurse received covid, you got the suitable day off and paid on your shifts. Now, because the pandemic lingeries on and covid is turning into the norm by way of contagious dieases, healthcare programs are not providing this day off pay. 

Emergency funds are additionally wanted if you’re a journey nurse and need to take day off in between assignments. If you might be planning on going again to highschool for a sophisticated nursing diploma and want to chop again in your bedside hours or a per diem solely worker.

What Should Be in Your Emergency Fund?

Traditionally, consultants have advised having a cushion that represents three-to-six months price of dwelling bills put aside to cowl this sort of state of affairs, however at present’s economists consider that that is such an unrealistic objective that it really retains individuals from even attempting. 

Instead, have a look at the funds you created for your self and attempt to put aside the quantity represented in your month-to-month bills. Having this quantity put aside will offer you sufficient cushion to cowl most sudden charges, and can no less than offer you some respiratory room in case your emergency bills are considerably increased.

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As we touched on earlier, retirement planning is much more necessary for nurses, significantly for those who’re a per-diem nurse who’s not getting a standard retirement bundle.

Though it might really feel like they’re one and the identical, there’s a giant distinction between placing cash in financial savings and placing cash away on your retirement. A retirement account is particularly so that you can depend upon when you’re not incomes an earnings. 

Depending in your age, retirement might really feel prefer it’s one million years away, or proper across the nook. Whether you fall into a type of two classes or someplace in-between, it’s important to have a plan on your retirement. 

Types of Retirement Plans


401(ok) accounts are employer-sponsored tax-advantaged retirement accounts that enable workers to make computerized contributions into funds instantly from their paycheck. 

Nurses will discover that almost all hospitals and different employers provide 401(ok) accounts to their full-time workers. 

The tax benefit supplied relies upon upon the precise kind of fund that your employer provides, however is both realized by being deposited earlier than being taxed — thus reducing your taxable earnings — or when it’s withdrawn in retirement. 

Many employers will match worker contributions as much as a sure level, permitting your retirement account to develop considerably sooner. 

The authorities limits how a lot a person worker can contribute to a 401(ok) account annually. For 2022 the annual contribution restrict is $20,500, or $27,00 for many who are age 50 or older.

Traditional IRA

IRA accounts, or Individual Retirement Accounts, can be found to anybody, although there are restrictions on contribution ranges based mostly on annual earnings. Even in case your employer provides 401(ok) plans, you may nonetheless open further IRA accounts. 

Traditional IRAs will let you deposit cash after which deduct the quantity you contribute out of your taxable earnings so long as you make lower than $62,000 if you’re single, and fewer than $99,000 for those who’re married. The cash isn’t taxed till you withdraw it. People who earn lower than $31,000 per yr are additionally entitled to further tax credit in the event that they make deposits into a standard IRA. 

The funds that you simply deposit can’t be withdrawn till you flip 59 ½ with out having to pay a penalty, and you might be restricted to only $5,500 per yr in contributions, although these over the age of fifty can deposit an extra $1,000. This quantity modifications annually with inflation.

Roth IRA

Roth IRA accounts additionally provide tax benefits, however they accomplish that another way. 

The cash that you simply deposit right into a Roth IRA has already been taxed. Though that eliminates the advantage of decreasing your taxable earnings within the yr that you simply deposit the funds, the earnings develop tax-free: you may withdraw  anytime after you flip 59 ½ with out penalty, so long as the account has been open for 5 years.

Roth IRAs have most annual contributions of $6,000 for single, head of family or married submitting individually/dwelling aside, or $7,000 if you’re 50 or older. 

Maximum contributions are decrease for many who earn greater than $129,000 and usually are not permitted for many who earn $144,000 or extra. The most contribution for married submitting collectively taxpayers can also be $6,000/$7,000 for 50 or older, with no contributions allowed for these incomes $204,000 or extra, and contributions lowered for these incomes over $204,000.

Investing is a completely completely different exercise from saving. Though each monetary actions are necessary, they’ve completely different targets and are acceptable at completely different occasions. 

Should Nurses Invest?

While saving places cash away into accounts which can be each secure and rapidly accessible, if you make investments you might be buying one thing that you simply hope and consider will enhance in worth – however there is no such thing as a assure that it’ll. 

Though you select to spend money on property which can be thought-about conservative, there’s at all times a degree of threat concerned in investing. 

You could make an unlimited sum of money by choosing investments that achieve vital worth, however those self same picks have the potential to lower in worth, leaving you with much less cash than what you began with.

Investing is a long-term exercise that ought to come after paying down your money owed and assembly each your emergency and nest egg financial savings targets. You ought to solely make investments cash that you’ll not want inside 5 years.

Investment Options


A 401(ok) is each a retirement account and an funding automobile. They are a very good selection for nurses whose employers are providing an identical program, as your contributions are instantly elevated. 

Financial consultants encourage anyone whose employer provides an identical contribution to contribute no less than sufficient to benefit from this free cash.


Purchasing inventory represents shopping for shares of possession in a public firm.  You should purchase inventory by yourself, however it’s often a good suggestion to open a brokerage account with a web based dealer who will make suggestions based mostly in your funding targets and your degree of threat.


Bonds are fixed-income devices which can be issued by governments and firms to boost cash by borrowing from traders, often for particular tasks. 

When an investor purchases a bond, they obtain a promise that their cash shall be paid again in a sure period of time, with curiosity.


Officially often known as non-fungible tokens, they symbolize traces of blockchain code that symbolize a one-of-a-kind object. 

NFTs are a comparatively new funding asset that few individuals actually perceive, and consequently, they’re considered as each doubtlessly invaluable and doubtlessly dangerous.  


Cryptocurrency is one other new asset class that’s considered as extremely speculative, carrying vital potential in addition to threat. It is a sort of digital forex that’s not linked to a central financial institution or managed by any central authorities or authority. Most are based mostly on public blockchain expertise

Buying a house is an almost common objective. Whether you’re on the lookout for a condominium, a townhouse, or a single-family house, it takes loads of planning, to avoid wasting sufficient, to qualify for a mortgage with optimum phrases, and carry the prices of shifting. 

Purchasing a house as a nurse will be difficult. If you’re a easy full time or half time worker, it’s simpler as a result of you’ll be incomes a set paycheck each two weeks. 

Travel nurses and per diem workers will discover this harder. Because of the irregularity of shifts and paycheck, mortgage lenders would possibly need to see paychecks from the previous yr, tax returns, or perhaps a letter out of your employer. The most suitable choice is to debate your state of affairs with a mortgage specialist. 

Nurses may additionally be eligible for first-time house purchaser help applications and specialised applications particular to your career. You can learn extra about these choices on, in our article 4 Tips To Get The Best Mortgage As A Nurse (or Travel Nurse).

Your nursing wages are taxable, and so too are some retirement advantages or pension funds, unemployment advantages, sick pay, and fringe advantages. 

You additionally need to pay tax on unearned earnings from curiosity, dividends, royalties, digital currencies, and income from the sale of property. But they are going to be dealt with in a different way relying on whether or not you’re employed for an employer like a hospital or whether or not you are self-employed:

Traditionally Employed Nurses

If you might be an worker, your employer will deduct the taxes that you simply owe based mostly in your wages and the private info that you simply present to them from every of your paychecks and undergo the federal government in your behalf.

Self-Employed Nurses

If you might be self-employed then you might be anticipated to calculate the quantity that you simply owe and pay it quarterly.

Deductions for Nurses

Smart tax planning and data of the deductions and write-offs that you’re entitled to personally and professionally as a nurse could make a big distinction in how a lot you owe the federal government (and in how a lot you may get again). Here are a few of the prime deductions you may make as a nurse!

  • Uniforms, together with scrubs, medical sneakers, and scrub coats
  • Equipment, equivalent to your stethoscope, pen lights, scissors, and many others.
  • Licensing charges, i.e. something you pay to maintain your nursing license, or any state registrations
  • Continuing training prices, together with the charges, meals, and journey to conferences or CE programs
  • Expenses associated to staying educated in your career, equivalent to journal entry charges, subscriptions to publications in your area, {and professional} group membership dues

For extra info on optimizing your taxes, discover extra info in our Best Tax Tips for Nurses article.

As a nurse, you know the way necessary it’s to keep up sound bodily, psychological, and emotional well being. Your monetary well being is equally necessary for a profitable future. 

The extra you understand, the extra successfully it is possible for you to to funds, handle your debt, and obtain your financial savings, investing, and retirement targets.

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