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Guide to Financial Planning for Nurses


Personal financial planning can be challenging. And nurses face specific challenges that can affect different stages of their financial planning lives. General steps like paying down debt, building emergency savings and investing for major financial milestones like homebuying and retirement can help nurses reach their goals. Here’s an overview of a financial plan for nurses. A financial advisor can also help you take control of your financial future. 

Nurse Financial Plan Fundamentals

While nurses can earn significantly more than the average U.S. salary (see Bureau of Labor Statistics data in the next section), professional educational requirements mean that they can also carry above-average student loan balances.

Monthly payments to service this debt can strain budgets. Mandatory licensing fees and continuing education, medical equipment and uniforms also make it more difficult for nurses to cover their expenses and have some left over to save and invest.

Many nurses work per diem instead of taking full-time positions. These nurses face special financial challenges, as they generally don’t have access to employer-sponsored retirement plans, health insurance and other financial benefits as their full-time counterparts.

For all nurses, long work hours in stressful environments may leave little time for improving awareness of financial strategies. However, despite these challenges, a moderate amount of attention to tracking and planning can bring a nurse a comforting degree of financial security.

A Simple Nurse Financial Plan

A nurse keeping track of her financial goals by reviewing her financial plan.

Median pay for a nurse in 2022 came to more than $80,000 annually, according to the Bureau of Labor Statistics. Out of this available pre-tax income stream, let’s put forth an example of a nurse planning to save 10%, or approximately $667 monthly. These savings could be allocated as $300 per month to build up an emergency fund, $200 for retirement savings and $167 to save up for a down payment on a home purchase.

Creating a monthly budget will make it easier to free up that 10%. A carefully crafted budget might help to rein in shopping, dining out and other expenses such as high-priced cable and streaming packages.

Paying down debt is another priority, with student loan repayments a top concern for many nurses. The monthly payment will have to be covered and, ideally, the loan will be paid off early to save on interest. Assuming a 10-year loan with a $20,000 balance at 5% interest, the minimum payment would be approximately $212. By paying an additional $500 on the loan each month, this nurse could pay off the debt in about two and a half years and save approximately $4,000 in interest payments.

The retirement contributions could be split between a 401(k) and a Roth IRA. The 401(k) provides a current tax deduction and the Roth IRA allows for tax-free withdrawals in retirement. Nurses who work per diem and don’t have access to a 401(k) can use a traditional IRA instead.

Within five years, following this plan will allow a nurse to take significant steps for building a solid financial foundation. Key accomplishments would include eliminating student debt, building up an $18,000 emergency fund, putting $12,000 toward retirement and saving $10,000 for a down payment. 

Financial Planning Limitations

A financial plan can likely help nurses work towards a sustainable financial future, but they could still face varying levels of uncertainty. Investment volatility, unexpected expenses, shifting economic conditions and healthcare policy changes are all uncontrollable elements that can interfere with a financial plan.

Consulting a financial advisor could help nurses find solutions for different economic challenges and gain a higher level of clarity by assessing their full financial picture. For example, identifying gaps in insurance coverage can mitigate impacts of unforeseen losses, while tax-reduction moves can boost disposable income. But financial advice costs money and does not guarantee the elimination of all risks.

Automated robo-advisors can also help nurses build a low-cost, personalized portfolio by picking ETFs and mutual funds to align with their financial targets and risk tolerance. But, this software lacks human judgment and adaptability.

Regardless of the approach, all financial planning has limitations. Therefore nurses should be diligent in tracking their savings and investments, balancing their budget and portfolio to avoid and prepare for additional risks.

Bottom Line

A financial advisor showing a nurse different options for his financial plan.

A well-thought-out plan begins by understanding cash flows via thorough expense tracking. This can help nurses identify opportunities to cut down spending and develop a workable budget that is aligned with financial priorities like lowering debts or saving for a financial milestone. Automatic transfers into separate accounts specifically earmarked for emergencies, retirement and big goals can make saving easy. And getting professional advice could help optimize your financial plan to resolve and avoid different challenges.

Financial Planning Tips

  • A financial advisor can help you take control of your finances by working with you on creating a financial plan. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • SmartAsset’s investment return and growth calculator can help you estimate how your portfolio will grow over time.

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