Money Plan When You're Starting Out: A Financial Guide for Travel Nurses

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By Marlon Wesh

August 17, 2021



The Travel Nurse’s Guide to a Money Plan When You’re Starting Out

Hey travel nurses. So many conversations I have are with nurses that are 10 years or less from the start of their nursing careers.

They come to me because they know that they should be saving for their future. But for a nurse that has little responsibility towards others, like a partner or children, it can be really difficult to figure out how much to save or what to save for.

So today, I’m going to give you five tips for planning for your future, even if you’ve got no clue where to start.

Travel Nurse Money Plan

money plan

Tip #1: Self-Insure with an Emergency Fund

Make a plan to reduce your exposure to financial risk. This step should always begin with having an emergency fund – a pot of money that is cash and is set aside for when life doesn’t go the way you plan.

Things may break in your vehicle; things may break in your home, you may have unforeseen medical expenses. It’s always good to have between three months up to six months of cash – living expenses that you can draw on in times of emergency. 

The second part of this piece is taking a look at your money-making machine (yourself) and ensuring that no matter what happens to you, that you’re still able to have an income. 

What am I talking about? 

I’m talking about Disability Insurance because the likelihood of you getting injured on the job as a nurse is so much higher than someone like myself that works in an office all day. So, having a good disability insurance policy will protect your income in times of injury when you can’t work. 

Tip #2: Setup Sinking Funds

We’ve talked about emergency funds, but something even more important in my book is the sinking fund. These are the expenses that don’t happen every month but may happen every year. 

When it comes time to pay them, it’s like: “Aww man, now it’s time to do that! I have to put it on the credit card.” 

What am I talking about? 

I’m talking about birthdays and holiday gifts. I’m talking about your utility bill that may be only billed every quarter instead of every month. I’m talking about your car maintenance – like changing your brakes, changing the oil, changing your tires – which don’t happen every month but may happen every year, every other year… what have you. 

Have a plan to meet those expenses when they occur. So again, you don’t have to use your credit card to meet those expenses. That is the magic of a sinking fund.

Tip #3: Eliminate Your Revolving Debt

You’ve got to eliminate your revolving debt. Credit card debt is so debilitating because, unlike your car loan, your mortgage – even your student loans which hover anywhere from 3%,4-5%, credit card interest rate goes anywhere from 17% to 24%. It is extremely hard if you’ve got minimal income to get out of credit card debt. So, be as aggressive as possible in paying off your credit card debt and staying out of credit card debt. 

Tip #4: When in Doubt Focus on a Savings Rate

Instead of focusing maybe on goals that you feel like you may not have, focus on a savings rate: anywhere from 10-12% of your gross annual income that you put away for long-term savings. 

You should have a target of saving anywhere between 25-40 times your annual spending in order for you to retire comfortably. Most financial experts agree that saving anywhere between 25-40 times your annual spending allows you to have a comfortable rate of withdrawal of 4% every year from your retirement fund. 

Tip #5: Plan for Future Opportunities

This is the kicker, right; if you’re a young nurse and you’re still within 5-10 years of the start of your career, and you may have not had some major milestones like purchasing your first home, it’s really important that you create what I call an opportunity fund. 

An opportunity fund is what I call long-term savings that are held outside of your retirement account, so you are able to take opportunities as they come, like putting a down payment on a home. Perhaps it means moving across the country to pursue a higher-paying job; it also might mean going back to grad school to get an advanced degree. These are all items that require large cash outlays that if all your savings are tied up in retirement accounts, you won’t be able to access them without penalty. 

So, my advice is, again, if you’re between 5 and 10 years from the start of your career and you haven’t quite made it yet to those major life milestones like purchasing a home, maybe getting married, going back to grad school if that’s your intention. Keep 25% of your total annual savings – liquid – in a taxable investment account. 

Nurses, these tips are just broad concepts to help you to start formulating a plan for your money when you don’t know where to start. Of course, I always stress that working with an expert to help you meet your financial objectives will ultimately be what’s best for you. But if you take these 5 tips, you will be well on your way to healthy finances.

We hope you found these tips for setting up your money plan as a travel nurse. Have you created your own money plan? Comment those below.

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