Congratulations! You’ve finished nursing school, and now you are on your way to your dream career helping people and saving lives along with a good salary (and some student debt).  Nursing is a very lucrative career with the national average salary in 2018 for a Registered Nurse (“RN”) of $68,450/year and increasing! Of course, this can be even higher depending on specializations, location, years of experience, and other factors.

This might be the first time that you’ve seen that much money deposited monthly into your checking account.  You are ready to splurge a little on yourself for all that hard work (maybe a trip abroad or a new car).  You might start thinking about saving or retirement, but you aren’t exactly sure where to start.  At Snowball Wealth, the number one question we get from nurses we coach is “What do I do with my first paycheck?” Unfortunately, we’ve seen a lot of people who come to us later in their career who have already started spending excessively or didn’t plan for their future.  By making the right money moves today, you can ensure that just as you are taking care of your patients’ lives, you are taking care of yourself and your financial future.

Here are the top five money moves we recommend nurses take to create a solid financial foundation from our nursing financial guide:

Tip 1: Pay Future YOU First

You should immediately be auto allocating portions of your paycheck to your debt, savings, and retirement or investing (we talk more about these areas below).  You can do this by either setting it up with your employer or auto transferring money from the account that your paycheck is deposited into each pay period.  That way, you won’t have a chance to touch that money and it can go towards your future self.

Tip 2: Have a Budget

It’s totally OK to start spending the money that you are making, you just need to have a plan.  Budgeting can seem boring and intimidating in the beginning, but once you set up a foundation it’s easy to follow. Useful tools for budgeting include Mint.com, Excel, or our Snowball budget. By creating a budget, you can reach your goals more consistently.  This becomes even more important as you increase your income, as the more money you begin to make the more you need to monitor and plan (and know where your money is going!).

Tip 3: Get an Emergency Fund, ASAP 

An emergency fund is money you set aside (in a bank account) that is easily accessible to cover any unexpected expenses that come up.  This can include anything from short-term unemployment or emergency situations such as an ER visit or your car breaking down. An emergency fund can protect you if you lose your income and prevent you from taking on high-interest debt, losing your housing, or going into bankruptcy. Set a savings goal each month so that you can save up to three to six months of living expenses.

Tip 4: Student Debt, Next

The sooner you can pay off your student debt, the sooner you can put that money towards your financial future.  Make sure that you are at least making your monthly payments on your student debt, and if you can start making additional payments to pay off your debt faster.  It should be a high priority if the interest on your student debt is greater than seven percent (you might want to consider refinancing which is basically taking your debt and changing lenders with a lower interest rate).  Have a payment plan and target for when you will pay off all your student debt.

Tip 5: More Credit? No Thanks

Along with the higher salary, you will likely get lots of enticing offers from credit card and other companies to borrow (think snail mail).  It might be tempting to spend on a new entertainment set or car.  We would recommend that you think through any large purchases and instead of putting it on credit, ideally save towards that goal.  Alternatives might also be buying second hand or finding cheaper (but still good) options! Did you know, a new car drops 10% in value right after you drive it off the lot? Instead of taking on more debt, you should tackle your current student debt and start investing in YOU.

If you follow these five tips, you will easily be on your way to a good financial start! As a next step, you should definitely start looking into saving for retirement and investing. Just as you are starting to care for your patients, make sure you also care for yourself.

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