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Savings Strategies for Nurses

Published June 16, 2022

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Budgeting & Goals
Article

Nurses can earn and save money in unique ways thanks to their unconventional schedules and in-demand skills.

While nursing jobs can be financially rewarding, being a nurse comes with its challenges: many nurses take on a lot of debt before they even begin their careers. According to the American Association of Colleges of Nursing, 76% of undergraduates and 69% of graduate nursing students took out loans to earn their degrees. That’s why it’s important for nurses to learn actionable tips to save money so they can make the most of their earnings.

With the right savings strategies, nurses can be better prepared to build an emergency fund, pay off student loan debt, and save for the future.

5 steps for nurses to save money

Wondering how to start building your savings? Here are 5 strategies to save money as a nurse:

Build a budget for savings

A budget is a spending (and saving) plan based on your income and expenses. You can build a simple budget by reviewing your monthly income and expenses.

First, tally up your expenses, such as rent or mortgage payments, student loan payments, groceries, and utility bills. Then subtract your expenses from your income. The amount that’s left over is the maximum you can save each month.

The 50-30-20 rule is a quick way to create a budget for your money: 50% of your income goes toward needs, 30% toward wants, and 20% into savings. Watch our short video for more quick budgeting tips for nurses.

Review & automate bill payments

Once you’ve cataloged your expenses, you can automate bill payments where possible.

Automating your bill payments will not only help you save time, but will also help you make consistent on-time payments and better understand your remaining income. Automated bill payments can even lead to savings with lenders like Laurel Road who may offer an autopay/EFT discount on student loan payments.

Negotiate or refinance your monthly bills

Nurses can potentially reduce expenses and save money by negotiating for lower monthly bill payments. You can call service utilities, like your internet or cable provider, and ask for a lower rate. It’s even possible to ask your credit card company for a lower interest rate.

Practicing nurses with a stable income and good credit score are likely in a better financial position than when they first took out student loans. This can make refinancing a solid option to save money if your circumstances have improved. Refinancing your student loans could help you get a better interest rate and save a big chunk of money each month.

Consider all your options to make the most of your student loan refinancing savings. For example, Laurel Road offers an additional discount off your student loan refi rate when you open a Laurel Road Linked Checking account and set up qualifying monthly direct deposits. Keep in mind that if you have federal student loans, refinancing to private loans will mean you’ll no longer enjoy benefits including, but not limited to, income-driven repayment plans, Public Service Loan Forgiveness, federal forbearance, the temporary federal loan payment and interest pause, and any other benefits offered to federal borrowers.

Build your emergency fund

Once you’ve reviewed, automated, and/or refinanced your monthly bills, you can start building an emergency fund. So, how much should you save and where should it go? An emergency fund should cover at least 3 to 6 months of necessary expenses and should sit in a savings account for easy access without penalties. Learn more about building your “rainy-day fund” or emergency fund here.

An easy way start saving is to decide how much you want to put toward your emergency fund, then set up monthly automatic deposits into a high-interest savings account.

Invest in tax-advantaged accounts

After you’ve established an emergency fund, it’s time to start thinking about investments and saving for the future.

Next, you can start adding your additional savings into tax-advantaged accounts, like a Roth IRA or 401(k). These will help you grow your money and prepare for retirement. Other useful tax-advantaged accounts include a 529 plan for college savings and HSAs for medical expenses. It’s never too soon to start building your long-term savings, even if you can only start with small increments. To learn more about how nurses can start saving early for retirement, click here.

How to save more money with increased income

Since nursing is a fast-growing, in-demand profession with a variety of fields and career paths, there are many ways to make the most of your earning potential.

Take on additional shifts

For many nurses, the option to take on additional shifts or work overtime is often available. If your personal schedule permits, take advantage of these extra income-earning opportunities, but also make sure you build in time to your schedule for rest to help avoid burnout. Make sure you’re balancing your current goals and earning potential, without sacrificing your own health in the long run.

Consider a new specialty

Nurses who follow careers into certain nursing specialties may have the opportunity to earn higher salaries during their careers. If you’re eager to increase your income, you might consider training and preparing for a different field or specialty.

According to the U.S. Bureau of Labor Statistics (BLS), nurse anesthetist was one of the highest paying occupations in 2021. BLS also found that registered nurses (RNs) working in government organizations and hospitals earned more on average than RNs working in nursing and residential care facilities.

Invest in a higher nursing degree

Many schools make it easy to earn a nursing degree while still working. Earning an advanced nursing degree, such as a Master of Science in Nursing (MSN), can provide nurses with the skills to pursue higher-paying jobs, like advanced registered nurse practitioner (ARNP). Be aware that earning an advanced nursing degree is a significant time and financial commitment.  Make sure your lifestyle and budget support your decision before you enroll in an advanced degree program.

How nurses can save money with Laurel Road

Laurel Road offers a range of services to help nurses save money and manage their finances.

In fact, Laurel Road is launching the first checking account designed specifically for nurses. With a Loyalty Checking account, nurses can earn a $20 monthly cash reward for the first year and $10 every month after that with qualifying direct deposits,1 plus a $300 welcome bonus.2

Or, for nurses focused on tackling student loan debt, Laurel Road could help you save thousands by refinancing your student loans.4 If you open a Linked Checking or Linked Savings account with Laurel Road, you can access even lower student loan refi rates to help maximize your potential savings, to learn more click here.

Questions for nurses trying to save money

Still have questions about how to maximize savings as a nurse? Use these answers to guide you.

What is the 50-30-20 budget rule?

The 50-30-20 rule says that you should put 50% of your income toward needs (housing, groceries, utilities), 30% toward wants (dining out, streaming services, travel), and 20% toward savings. Watch this short video to learn more or try our budget calculator here.

How much should an emergency savings fund be?

As a rule of thumb, an emergency savings fund should cover at least 3 to 6 months of necessary expenses, to help cover unexpected events, such as sudden home or car repairs, or caring for a family member.

What is the 30-day savings rule?

According to the 30-day spending rule, you should wait 30 days before making a non-essential or impulse purchase. Take this time to think about whether you really want that item or service. After the 30 days are up, if you’re still committed to making that purchase, do it. On the other hand, you may realize that you don’t really need or want that product and save your money for something else.

What is the difference between a high-interest savings account and certificates of deposits (CDs)?

A certificate of deposit (CD) is a savings account with a guaranteed interest rate that you can access after a set time period, such as a few months. A high-interest savings account, on the other hand, is a standard savings account that will accrue monthly interest over time. You can withdraw from a savings account without forfeiting interest. Most standard savings accounts allow a maximum of six transfers or withdrawals each statement period.

While CDs may offer higher interest rates than savings accounts, you can’t access the money in a CD until after a set amount of time, usually months or years. If you access the money before the term is up, you’ll pay a penalty fee, generally a certain amount of interest. That’s why CDs are best for building savings for medium- or long-term goals, like buying a house or car. Savings accounts are best for storing money that you’d like to access as needed, such as for an emergency fund or short-term spending goal.

Are discounts available specifically for nurses?

Nurses may be able to enjoy discounts and special offers from certain retailers, banks, and lenders. Nurses with Laurel Road Loyalty Checking or Linked Checking accounts, for instance, can access special Perks! discounts on premium brands and subscriptions, as well as financial education tools and resources to help them reach their financial goals. Members of associations such as ANA, AANA, and AANP may also be eligible for special offers and discounts. To learn more, visit laurelroad.com/nurses.

 

In providing this information, neither Laurel Road nor KeyBank nor its affiliates are acting as your agent or is offering any tax, financial, accounting, or legal advice.

Any third-party linked content is provided for informational purposes and should not be viewed as an endorsement by Laurel Road or KeyBank of any third-party product or service mentioned. Laurel Road’s Online Privacy Statement does not apply to third-party linked websites and you should consult the privacy disclosures of each site you visit for further information.

 

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