A Nursing Approach to Personal Finance

This article was originally published in the July/August 2023 issue of Med-Surg Nurse Life Magazine.

There’s a strange trend happening in America: Financial literacy may be declining despite improvement efforts and increased consumer costs. It’s measured with three questions on understanding inflation, interest rates, and risk. Nursing is considered a good-paying, female-dominated profession, but nurses aren’t immune to poor financial literacy. Women tend to score worse than men and are more likely to admit they don’t know the answers. Financial literacy is important because it impacts your vulnerability to financial stress, setbacks, and ability to save and retire.

Financial stress is a common problem for nurses and Americans regardless of income. Effective financial education isn’t provided in nursing schools. This is also strange in a country with the largest consumer-driven economy in the world. We have a sophisticated marketing machine that constantly seeks to sell you something through seemingly simple yet complex financial decisions. It’s akin to putting small fish in a pool full of sharks and saying, “Grow and thrive, be resilient, make good choices!”

Burnout runs high in nursing, and your approach to finances may worsen it. Nurses are in high demand, and higher income is just an extra shift or job change away. Some nurses live paycheck to paycheck. They may scoff at experts’ recommendations to save several months of expenses in an emergency fund, 15% for retirement, budget, and pay down debt. “It won’t work for me!”

Recognizing behaviors or attitudes that are holding you back and knowing where to find quality information will help.

Money is often tied to emotions like fear, shame, and envy. Past attitudes impact how we view money. If our family struggled, we may be frugal or motivated to avoid that lifestyle. Our attitude may be the same since it’s all we know. You may avoid investing for fear of losing money. You may think inflation erodes buying power and savings value when your return doesn’t match it. Since nurses “make good money,” it’s hard to talk about it or get help due to shame. Some spend to improve happiness or impress others. The joy from materialism or impulse buys is short-lived, however. Spending and paying interest leads to more work and  stress, worsening burnout.

What can we do? Try using your approach to nursing: time management, critical thinking, and assessment. Think of your pay as what you trade your time for. Before large purchases, consider how many hours at the bedside it’s worth. Use your rate of pay after taxes and benefit deductions; it’s less (more time) than your gross hourly rate. If you’ll pay interest, wonder how many hours of work it will take in the future to pay for that. Devote a little time to managing your finances, too. Ignorance has costs. It’s hard to live well and relax when too much time is spent on work and money-related issues.

Strive to improve your critical thinking skills on money. Can I pay my credit card off in full each month? Do I really want to pay an extra 20% interest on something? Do I want to pay this fancy dinner off over several months plus interest? Be aware of fees and penalties; they distort prices, and banking alone makes billions off of them per year. Consider 0% APR credit card offers. If the balance transfer fee is 5%, you’re really pre-paying a 5% APR. Not really 0% interest, is it? Compare fees before you buy products and services.

When we see our patients, we get the report, research their chart, and then assess. You can do the same with your money. Assess where it’s coming from (income) and where it’s going (expenses). Look at everything: paystubs, statements, debts, and bills. Simply taking a few hours to calculate your net worth (what you own and what you owe) will provide insight. Hard data doesn’t lie; you’re either living within your means or not. If not, make a plan so you can. The Consumer Protection Financial Bureau has free quality resources and tools to help with personal finances.

Many employers offer free access to personal finance resources, tools, and videos. Your employer’s retirement plan advisers often are on-site quarterly for free, one-onone in-person meetings. Be sure to understand costs and fees before you commit to any major changes or recommendations. Engaging in your finances and simply seeking ways to improve will help with financial literacy and well-being.

References
• Consumer Financial Protection Bureau,
www.consumerfinance.gov
• Global Financial Literacy Excellence Center,
www.gflec.org