The average debt for a nurse with a bachelor’s degree is $22,592, according to the Education Data Initiative. As a new grad in nursing, you have the potential to earn a steady income, but with student loan debt, managing your finances could get challenging. While you focus on building skills and transitioning into the professional world, remember that it is also essential to establish a foundation of financial stability. 

Here are some financial tips that could help you establish good habits that set you up for financial peace of mind.

Live on less than you earn 

Living within your means is a key piece of financial stability. It can be tempting to splurge on new gadgets, holidays, dining out, or other forms of instant gratification, but it’s important to prioritize long-term financial goals over temporary satisfaction. Even once you’ve paid off any debt, saving is crucial.

Apply for Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF)

An IDR plan ties your monthly payments to your income, which can help make student loan repayment more affordable. If you are eligible, the PSLF program offers loan forgiveness after 120 on-time payments for those who work in qualifying public service and non-profit jobs, including nursing. Taking advantage of these programs could help you manage your student loans and avoid unnecessary financial stress. 

Set a budget and stick to it

Setting a budget helps you stay in control of your finances. Take the time to list your expenses, track them regularly, and reduce non-essential purchases to stay within your spending limit. Make a habit of reviewing your budget monthly and adjusting to help maximise your savings. 

There are a few different budgeting techniques you can try, including:

Zero-based budgeting

Zero-based budgeting is a technique that requires you to start with a blank slate each month and allocate your income towards all your expenses. This type of budgeting forces you to think about how you spend your money and where it goes each month. It also encourages you to prioritise your spending choices and set realistic goals.

50/30/20 budgeting

The 50/30/20 budgeting technique breaks down your income into needs, wants, and savings. With this method, 50% of your income goes towards needs such as rent, utilities, and food, 30% goes towards wants such as entertainment, dining out, and shopping, and 20% goes towards savings or debt repayment. This approach allows you to plan for future expenses while still having some flexibility in your spending.

Envelope method

The envelope method is a cash-based budgeting technique that divides your monthly income into envelopes labeled with categories such as rent, groceries, entertainment, and so on. You then place the appropriate amount of cash into each envelope so that when it’s time to pay for something, you can take the money out of the designated envelope without worrying about overspending. This method can be helpful for those who have difficulty controlling their spending (especially credit card use) or keeping track of their finances.

Start an emergency fund

Unforeseen emergencies, such as car or home repairs, unexpected medical expenses, or fluctuations in income due to changes at your hospital or employer, are unpredictable. Therefore, it’s important to build an emergency fund into your budget. You can do this by setting aside a portion of your income each month or with each paycheck. The resulting emergency fund creates a financial buffer to protect you from unexpected costs. The general rule is to save up for at least three to six months’ worth of expenses. 

Good financial practices for new nursing grads

Managing finances as a nursing grad can seem daunting, especially when faced with student loan debt. However, it is entirely possible to establish a strong financial foundation, even in these early stages of your professional life. By living within your means and making strategic use of Income-Driven Repayment and Public Service Loan Forgiveness programs, you can more effectively manage your student loan debt. Setting and sticking to a budget is another critical step, and an emergency fund can offer peace of mind in times of financial stress.

Remember that financial stability is a process and requires attention and consistency. By starting these habits today, you can help to set yourself up for success throughout your career.

Ellen Diamond, a psychology graduate from the University of Hertfordshire, has a keen interest in the fields of mental health, wellness, and lifestyle.