You finally graduated from nursing school and landed the perfect new grad position. Congratulations!
You’re most likely about to make more money than you’ve ever made.
Do you have a plan for your money?
It’s okay if you don’t, I’m just happy you landed here.
If you’re just getting started with money management as a new graduate nurse, here are three personal finance tips to kickstart your financial confidence. Following these tips can help you build wealth and allow you to make choices independent of pay during your career.
Don’t Buy A Fancy New Car
This advice was given to me when I told my supervisor I would be switching from the nursing assistant float pool to the new graduate program. She looked at me and said, “promise me you won’t do something dumb and go buy a new car.” And you know what? I took that advice, and to this day I have paid cash for my cars.
According to Lendingtree, the current average monthly car payment is $550, you get a slightly better bargain if you lease for an average of $452. I hope you can see that I’m joking about that being a good deal because that is a ton of money. Did you know that’s about as much as a 1 bedroom apartment in many affordable US cities?
A car is a depreciating asset, which simply means that it goes down in value. Except in rare circumstances, you will never get as much as you paid when you sell, and you definitely won’t make money. I would much rather see you driving an older vehicle and using that $550 for just about anything else.
Personal Finance Actionable Tip #1
Create a simple and measurable car replacement goal. Decide how much you need to save to buy a “new to you” car and how long you can tolerate driving your current vehicle. Divide the amount by time and that’s how much money you’ll need to put away every month to meet your car replacement goal.
Live On Less Than You Make
My biggest piece of advice is for you to be proactive with your money. Set a monthly budget and pay yourself first. Give your money boundaries, within those boundaries you will flourish in your finances, I promise you.
It might be hard to imagine but there will come a time when you no longer think your paycheck is huge. Lifestyle creep makes it easy to become accustomed to your pay, and it doesn’t take much for the shift to happen. Add in a car payment, mani/pedis, travel, shopping, eating out — all of a sudden you’re back to living paycheck to paycheck, you’re just a fancier kind of broke now.
I want you to have fun and spend your money on what you value most. But you need to give that fun a monetary limit or else YOLO is going to steal from you. Pay attention to your money, save a portion every month, and it will be there for you when you need it most.
Personal Finance Actionable Tip #2
Make saving effortless. Set up an automatic savings transfer for paydays. You’ll be shocked six months from now when you log onto your savings account and see the balance.
Plan for Your Future
Retirement planning is easy to overlook during orientation. It’s often thrown at you like an afterthought. “By the way, don’t forget to log onto your benefits portal and sign up for your retirement plan.” It only takes a few minutes to sign up and it’s one of the most satisfying adult financial moves you can make.
Most hospitals offer killer retirement programs. A common benefit is a 100% match on up to 3% of your contributions. If you make $100,000 and put 3% of your pay in your retirement account, that’s $3,000 a year. The 100% match means your hospital will also put $3,000 in your account for a total of $6,000. That can grow to be an insane amount of money for the future grandma in you.
Personal Finance Actionable Tip #3
Just do it. Show up to work a few minutes early and set up your account and contributions. If you aren’t sure how to set it up don’t let that keep you from investing. Call your HR department and make an appointment to have someone do it with you.
If you follow these three simple tips you’ll become more intentional with how you treat and spend your money. True self-care is taking care of yourself financially.