Rolling Hill nursing

A Beginner's Guide to Personal Finance for the New Nurse Part 2
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23

JUNE, 2020

Welcome back for Part 2 of my beginner’s guide to personal finance for the new nurse. I was inspired to write these posts because as a new nurse, this was the first time that I was actually making some money.

I had, of course, had jobs prior to my first new grad nurse job, but nursing was my first career. It was the first time that I was making enough money to pay my bills, eat more than just stovetop ramen, and actually be able to put a little bit away into a savings account.

I thought I was adulting so hard. Little did I know that there was so much more to adulting. Like when you sit down for your hospital’s HR orientation and they start talking about 401K retirement accounts, and whether you want to open an HSA or an FSA. 

Ok, maybe there was more to adulting than just having a job and eating some vegetables. That’s why I wanted to write these two posts because I know that many other new grad nurses probably have no clue about investment plans, budgeting, or if they should get a credit card. 

If you haven’t already, make sure to read Part 1 which mostly focuses on investing and employee benefits. In Part 2, I will focus more on budgeting and credit cards!

I know this sounds pretty boring, but I promise I’ll try to make it a little fun to read and it’s also super important to know. Seriously they should teach some of this in nursing school, or high school, or somewhere!

1. Budgeting

If you are tired of having to constantly check your checking account balance to see if you can afford something or not, then budgeting is for you.

For me, the biggest benefit of budgeting was learning where my money was going, being conscious of how much money I was spending on certain things (like Starbucks), and how much money I could afford to spend on the fun things.

 Gone were the days of blissful ignorance. 

The easiest way to describe budgeting is imagining your money as your patient’s Intake and Output. Nurses are constantly keeping an eye on the I&Os to make sure that it balances.

If your patient’s intake greatly exceeds their output, then you could potentially have a major issue. Similarly, if your money output is greater than your intake then girl, you got some debt.

Remember, debt is bad. In general, you want to avoid debt. Having a small amount of debt, or loans, or financing can actually help your credit score (we will talk more about this further down), as long as you are able to consistently pay your monthly payments. 

Ok, so, how do you make a budget? It’s (fairly) easy. You can do it manually with just a regular old spreadsheet. You can use Microsoft Excel or Google Sheets, whatever spreadsheet you want. This is a great way to make a budget for free. It’s also a little bit more difficult.

Thankfully we live in the age of apps, and obviously there’s an app for that. 

I personally use You Need A Budget or YNAB (I pronounce it why-nab). They have a website and an app that you can use. I like YNAB because it is easy to use and they have great support. 

Unfortunately YNAB is not free, it has a $12/month plan or $84/year plan. The nice thing is you can have multiple budgets, so you can split this with a friend or family member. 

The main reason why I use YNAB is because I can steal my husband’s account and don’t have to pay for it personally. This allows him to have a budget for his personal account, his business, and I get my own separate budget as well that I can use.

If you use the link through my website you get a FREE month of YNAB!

Remember, debt is bad. In general, you want to avoid debt. Having a small amount of debt, or loans, or financing can actually help your credit score (we will talk more about this further down), as long as you are able to consistently pay your monthly payments. 

Ok, so, how do you make a budget? It’s (fairly) easy. You can do it manually with just a regular old spreadsheet. You can use Microsoft Excel or Google Sheets, whatever spreadsheet you want. This is a great way to make a budget for free. It’s also a little bit more difficult.

Thankfully we live in the age of apps, and obviously there’s an app for that. 

I personally use You Need A Budget or YNAB (I pronounce it why-nab). They have a website and an app that you can use. I like YNAB because it is easy to use and they have great support. 

Unfortunately YNAB is not free, it has a $12/month plan or $84/year plan. The nice thing is you can have multiple budgets, so you can split this with a friend or family member. 

The main reason why I use YNAB is because I can steal my husband’s account and don’t have to pay for it personally. This allows him to have a budget for his personal account, his business, and I get my own separate budget as well that I can use.

2. Credit Cards

The Cons

Credit cards can be super cool (more on this later), but they can also be very, very dangerous. I want to make sure that before we delve into the great parts of credit cards, that we have a serious chat about the dark side.

Credit card debt is a very serious problem that can systematically ruin someone’s life. I know people who have dug themselves into thousands of dollars of debt from credit cards. The stakes could be even higher than that.

Never live beyond your means.

The biggest mistake you can make with a credit card is treating it as a loan service. If you are the type of person who is a bit of a shopaholic and would overcharge your credit card. Then DO. NOT. USE. IT.

If you are able to use your credit card essentially as you would your debit card, then it could be a really great benefit to you.

This means knowing with 100% certainty that you will be able to pay off your monthly credit card bill every single time.

Also, don’t even think about utilizing the “minimum payment” nonsense. Just pay the whole thing off each month. This ensures that you don’t start accruing an excess balance. 

Remember, people, debt is bad. If you can, it’s best to just avoid it all together and leave it at that.

Now that I have harped the negative side of credit cards enough, let’s talk about the benefits.

The Pros

And those benefits come in the form of points. Points, once you accumulate enough, equate to sweet, sweet cash.

When you use your credit card for your everyday purchases that you’re going to make anyway, you can passively build up those points pretty quickly. 

There are so many different card options that offer different rewards that are catered towards your interests.

There are cards that offer extra points for groceries, or extra points for restaurants, or getting gas for your car. Of course, there are airline specific credit cards.

If you use one airline for all of your travel and you travel a decent amount, one of these airline cards could be worth your while. They offer really good miles rewards and often give you extra perks like priority seating or sometimes access to members only clubs at the airport. Also, sometimes free seat upgrades!

If you don’t have a certain airline that you always use, then I highly suggest the Chase Sapphire Preferred Card. This is the card that I personally use everyday. I first applied for this card within a month of starting my first nursing job.

 Best. Decision. Ever.

The biggest benefit of this card is that you get double points for all travel and dining. You then get a 25% higher cash equivalent when you redeem your points for travel. This means extra money for ANY airline.

Honestly, this is a nurse’s dream. The number one best part of our crazy three 12-hour shift weeks is being able to arrange our schedule to have a considerable chunk of days off without taking PTO! If you take advantage of this scheduling hack and use it to travel, you could seriously benefit from the points this card gives you.

There is an annual fee for this card, most of the cards with the best benefits have annual fees. The yearly fee is just under $100, but think of it this way. In three years, I have earned over $1,500 worth of points. Obviously, this way makes up for the annual fee.

If you use my link, you can earn a 60,000 point bonus (up to $750). I also get some extra points if you sign up using my link, so I would deeply appreciate it if you used my link!

3. Debt

Having fancy gadgets and flashy clothes doesn’t mean anything, especially not if it is going to put you into debt. Always make sure that you are truly able to afford anything you purchase.

Nurses are incredibly intelligent people, but we don’t learn this type of stuff in nursing school. When I first graduated nursing school and my classmates and I all started to get our first jobs, I know several people who bought a new car.

There is nothing wrong with this, because, girl, treat yo’ self. Cars and mortgages and big purchases that require you to take out a loan are fine. They can actually help you boost your credit score.

When making a big purchase like this, make sure that you know you can afford to pay your monthly installment. This is just like a credit card payment. 

Make sure that you are able to afford the monthly payment before jumping behind the wheel of a new BMW or something.

When you start to get behind on your payments for anything, you accrue debt. This debt then creates overdue fees. Essentially when you can’t afford to pay something, it actually gets more expensive. This seems like a pretty rigged system, but that’s the way it works.

4. Credit Score

Having unpaid debt then screws up your credit. When your credit tanks, this can make your future life very difficult. 

If you ever want to apply for a loan or a car or house or credit card, the company will run a credit check. The credit score essentially tells that company whether or not you are trustworthy enough to loan you money.

Your score can be very difficult to bring back up when it falls. 

Like when you lose a patient’s trust, you have to work extra, extra hard to get them to trust you again. 

Having a loan or credit card and paying your monthly payments on time, everytime, is how you build credit. The more responsible you are with your debts and payments, the higher your score.

The first step is to know what your credit score is. I use Credit Karma to keep up-to-date with what my credit score is.

Seriously, go right now and make a profile to see what your score is. Credit Karma is completely free and always is. There really is no catch. So go do it.

Like I said many times, nurses don’t learn these financial principles in nursing school and many of us probably don’t know much about it at all. 

I had to learn all of this stuff by myself, and while I definitely am no expert, I hope that Part 1 and Part 2 have helped you at least a little bit.

My aim is to be as helpful to all of the nurses reading this as possible, so please make sure to comment or send me an email with anything I can do to help!

As always, I would love to connect with you on social!

Read Past Posts

How to Make Your Holiday Nursing Shift Less Sucky

I know it sucks working holidays, but read this post for some ideas to make your shift the best it could possibly be!

A Beginner’s Guide to Personal Finance for the New Nurse Part 2

Part two of how the new nurse can figure out their personal finances and feel prepared to be financially responsible.

A Beginner’s Guide to Personal Finance for the New Nurse Part 1

Part one of a two part series discussing how new nurses can dip their toes into investing and how to get their finances together.

How to Fit In and Make Friends at Your First Nursing Job

Read my tips for how to really feel like you belong on your new nursing unit.

How to Make Mistakes and Learn from Them – A Guide for New Nurses

Use this guide to learn about the mistakes I’ve made as a nurse and how I’ve learned from them and moved on. After all, everyone makes mistakes.

Feel Prepared for Your New Grad Nursing Interview – Example Questions and Answers Included!

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Tips for Writing a Great New Nurse Resume – Free Downloadable Resume Template

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The Best Nursing School Graduation Gifts of 2020

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