The cost of living is going up. Between gas prices, rent and daily necessities, everyone is feeling this financial burden on all levels.
A proper budget can make a huge difference in reducing money-related expenses and helping you save for your goals. For nurses today, this is especially relevant.
This guide will show you how to create and follow a proper budget plan, as a nurse.
Why do nurses need to budget?
While nursing can pay well (especially at the higher levels), you still need to be smart with your money. To start with the obvious, budgeting lets you account for equipment, supplies and other work-related expenses that most nurses accrue.
Nurses also have to cover significant student loans, after they graduate. Budgeting helps you stay on track before the interest goes out of hand.
Finally, there is the matter of further education. You could be a nurse with a bachelor’s degree and looking to get a master’s. In the nursing field, higher degrees equate to better pay and more professional opportunities.
Pursuing that education, however, will cost a pretty penny. With a budget, you can create a plan to save money for further education sometime in the future.
With all this in mind, here is a step-by-step guide for creating a nurse budget.
Calculate your income
Before you even start creating a budget, you want an idea of how much you make within a month. Obviously, the best place to start is with your monthly paycheck.
However, you have to account for some variability. If you take overtime shifts, for example, that might change how much you earn from month to month. For people who pick up shifts with VitaWerks, that is another thing to consider.
To get started on calculating your budget, calculate how much you earn on average per month, across several months.
List and categorize all your expenses
As soon as you know how much you earn on average, it is time to calculate your expenses. Consider how much you spend in a month, and what you spend it on. As you list them down, you want to split them into two categories; necessities and luxuries.
Necessities come first. Utility bills, food, nursing equipment costs and rent (if applicable) are relevant examples. If you spend on something because you need them to live, this is a necessity.
After that, you want to track your leisure spending. From video games to books, to movie tickets, account for everything you spend purely on entertainment.
Be sure you are covering all your spending. Access your credit card bills and bank statements for the month. When you spend with cash, keep your receipts or write down the amount spent on your notes or budgeting app.
Set your goals
Now that you have a clear understanding of how much you earn and how much you spend, it is time to set financial goals. When you set clear goals, you can save money with purpose and plan accordingly.
For nurses, a common financial goal would be long-term education. If you are interested in pursuing a BSN, MSN or DNP, see how much the tuition would most likely cost and account for that in your future plans.
Create your new budget
With everything laid out, you can begin creating your new budget. Many budgets follow a 50/30/20 ratio: 50% of the budget is spent on your needs, 30% on wants and 20% on savings.
This ratio is not universally applicable, but it is a great framework to work on. With some math (or help from online budgeting apps), you can calculate how much you have to save to reach your financial goals within a reasonable time frame.
From there, you can adjust your monthly spending accordingly. If you are spending more than you would like, cutting down on your luxury spending is the first place to start. Small sacrifices like watching fewer movies in the theatres or cancelling some subscriptions that you do not use can go a long way in the future. Treating yourself every now and then is good, but it is nice to strike a balance.
If you are still unhappy with how much you are spending, then you could think about cutting down on how much you spend on necessities. For nurses, looking for cheaper alternatives to their perishable equipment could be considered. These kinds of decisions come with huge tradeoffs, so keep that in mind.
Stay on track
Maintaining a budget is a constant process. Nurses have to monitor what they are spending, make adjustments when necessary and account for variability whenever necessary.
Keeping track of everything you spend, cutting down on costs and doing so every month can be demanding. Those who stick to it, however, will be richly rewarded.
Budgeting empowers you to reach your goals and practice some extra discipline. In the long run, it will help you save on unneeded financial stress.