Let's Get To The Money: 4 Ways to Get Your Financial Life Together
Money.... Money...Money! If you were raised like me, then money is one thing that I was always taught that you do not discuss with people. And honestly, until this day I don't know why! But here is what I do know... the lack of these conversations caused me to make so many money mistakes once I started making a descent salary as a nurse. The reality is that as nurses, while we definitely should make more money, we do still make really good salaries. However, 67% of us are living paycheck to paycheck! Yes you heard correct, many of us live from payday to payday just like people who make half of our annual salaries ( I was one of them...thank God for hitting rock bottom, LOL).
Now while I know there are several different factors that can contribute to the paycheck to paycheck cycle, such as unavoidable acquired bills, illnesses, cost of living, etc., I also know that it doesn't have to be this way. The reality is that we simply lack some money management skills that we were never taught or that we chose to disregard. However, that stops NOW because we are about to get to the MONEY!
Here are 4 Things you can do NOW to get your Financial Life Together:
1. Find out Where Your Money is Going - Pull your last 3 months bank statements and really determine where your money is going. If you are anything like me, I was so shocked and hurt to learn that I was spending a whopping $300 plus on eating out and another $100 on apps (Netflix, Pandora, i-Tunes, etc.). That was $400 that I could take and divert into paying off my debt or investing into something that could help me build wealth. This part is painful, but necessary so that you can effectively identify how much money you really have... whether it be a surplus or a deficit.
2. Create a Budget Already - There isn't one successful business or organization that operates without a budget, so why we nurses don't have one puzzles me. While I know the word "budget" is a turn off for some people, it is crucial because it helps us live within our financial means and not within how many shifts do I need to work to make a certain amount of money ( y'all know thats how us nurses budget, LOL). When you budget, you are clearly able to see how much money is coming in and going out every month. Adopting a budgeting system and more importantly sticking to it is a sure way to start to build wealth for you and your family.
Here is a basic budget formula:
50% for fixed expenses, such as housing (28% or less for housing expenses), basic food, insurance premiums, etc.
20% for financial goals. This would include extra debt payments, your cash cushion, retirement, etc.
30% for variable expenses, such as dining out, entertainment, travel, etc.
Note: A create app to create a budget is Every Dollar and then my other favorite is a good ole excel spreadsheet
3. Live Below Your Means - One of the biggest mistakes we as nurses make is living a life style that is equal to our income. What that means is if we have a net income of $3,000 monthly, then our monthly expenses ( rent/mortgage, utilities, car, etc.) account for $2,700 of it. This is ridiculous! I can say that because that was once me. So to avoid this, our monthly expenses should account for approximately 40%-50% of our overall monthly income. A good strategy to use is 50/20/30 rule, which states that 50% of our income should be spent on basic essential needs, 30% should be on our wants (shopping, brunch, travel, etc.), and 20% should be going to savings.
Note: STOP LIVING BEYOND YOUR MEANS!
4. Start Investing- The reality is we LOVE being a nurse, but most of us do not want to be at the bedside all our life. We want to have the flexibility to work however many shifts we want to work, vacation when we want to vacation ( on a budget of course...don't forget this falls under your 30% wants category), and really live life on our terms. However, the only way to do this is to make our money work for you rather than you having to work for your money. While investing can be a rather challenging process that comes with no guarantees, it is essential to building financial freedom. So start investing at the level at which you can, be it $10 per month or $10k per month, find something that can make more money off or your money ( stocks, bonds, your business, real estate, etc.).
Note: Check out some of my favorite apps that I used when I first started investing... you can start investing NOW for as low as $5
Nicole Thomas, MSN RN CCM
Nicole is a educator, mentor, nurse, and purposeful living strategist to healthcare professionals. She has over 12 years of experience in leadership, healthcare management, clinical knowledge, and business acumen. Her mission is to help female healthcare professionals to awaken their God-given purpose as a healthcare professional through education and ACTION-ORIENTED empowerment. She is the Author of the book “In Health, On Purpose! Awakening Your True Calling In The Healthcare Profession”. She is also the co-founder of The Nurse Power Network.