Financial Wellness

How Nurses Can Achieve Financial Freedom

The Trusted Team
November 10, 2020
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We recently hosted an event with Naseema McElroy, RN, MHA, MSN (and founder of Financially Intentional) entitled “Healthy Finances: Financial Freedom for Nurses,” where we covered everything from knocking out debt to retiring within 10 years. 

You can watch the full event recording below!

Nurses have what it takes to build wealth in a relatively short amount of time. This gives us the freedom to fully show up in our roles and serve. During this event, Naseema talks about how to create a set-it-and-forget-it approach to personal finances and achieve financial freedom within 10 years or less. You have what it takes to be wealthy — consider this event your starting line. 

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How Nurses Can Achieve Financial Freedom

Naseema, using some of the tactics she shared during the event, was able to pay off $1 million in debt in 2.5 years (including a mortgage loan). She’s also been a Labor and Delivery nurse for over 11 years.

Throughout the event, Naseema covered:

  • How every nurse can become a millionaire in 10 years or less 
  • How to give yourself a raise and stop living check to check 
  • The common mistakes to avoid while paying off debt

Here’s a little bit of her story… 

"I had all the things that made it look like I had it all together on a Facebook reel. I had the new house, the luxury car, and the coveted six-figure income

But the truth was that I was struggling. 

My daughter was turning one, I was a single mom, and I was broke. I was living paycheck to paycheck with no savings, and I had no idea where my money was going. I knew things had to change… if not for my sake, for my daughter’s.

The major issue was that I had a great income but no savings and nothing in place for my daughter if something were to happen to me.

I struggled a lot with my student loan payments, which added up to $1,900 a month, with $1,500 of that going to interest alone! Think about that, that’s more than some peoples’ mortgages, not even touching the principal amount.

I also missed out on one of the biggest bull markets in US history, simply because I didn’t understand investing. Then, I was under the misconception that I couldn’t invest while I was still in debt.

Honestly, I was scared. In 2007 I lost everything due to making bad investments; I went through two foreclosures and two short sales on properties. Then, I ultimately had to file for bankruptcy to save what I had left.

I had convinced myself I needed to take a PhD level course in finance in order to understand how to get back into the market and on my financially literate feet.

This was all before I figured out how to budget, and once I did that, I was able to pay off nearly a MILLION dollars in debt in 2.5 years.

This is also when I decided to focus on my savings rate. After deciding to relocate out of state, I was able to only have to work five L&D shifts a month and still have over half my income to save and invest. This is while living in a gated community and driving a Tesla. You don’t need to live in desperation to meet your goals, you just need to strategize ahead of time."

Let’s Take a Look at the Numbers

The average savings rate in America is 3%. Most financial advisors suggest you have a savings rate of at least 10-15%.

The challenge for you to consider if you want to achieve financial independence early is to aim for a savings rate of 50% or higher. Most people in the Financial Independence community focus on accumulating 25x their income, therefore grinding hard for a short period of time to reach this before not having to work again (but of course having the option to do whatever it is you want to do/focus on). 

You can definitely set a timeline and grind it out for a decade, and/or you can focus on maximizing your savings rate. Your savings rate is your monthly take-home pay, minus your monthly expenses, divided by your monthly take-home pay, and then times 100. This is the golden ticket. The closer you can get this rate to 100% (theoretically, of course), the faster you can find financial freedom. 

Here are some specifics to keep in mind and help get you started:

  • Make a monthly budget 
  • Takes at least 3 months to nail down the in-and-out flow of money
  • Adjust accordingly 
  • By the 20th of each month you should have your next month's budget figured out
  • Your savings/debt elimination goals come first
  • Set up automations where you can

Lastly, a few tips on what NOT to do:

  • Pay for a debt relief service
  • Focus on consolidating your debts
  • Try to pay off more than one loan at a time
  • Let collection companies scare you

Remember, it’s all about taking action… even just one action a day (baby steps)! Make sure you check out the event recording above to hear everything Naseema had to say!

Ready to Pay off Your Debts Faster?

If you want to know where you can make the most money as a nurse to help you pay off your debts faster, check out our Nurse Salary Explorer and Calculator.

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