Pursuing a degree in nursing can mean accruing a significant amount of debt, whether it’s student loans, credit cards, or otherwise. Choosing which debts to pay first and how quickly to pay them off, while staying within a budget, can require some strategy and planning. To help, here are four ways nurses can prioritize paying off their debts and take control of their finances.
Refinance student loans
Nurses who have student loans with a high interest rate can often benefit from refinancing their nursing school student loans. Refinancing typically involves taking out a new loan with private lender, potentially at a preferable rate and term. Refinancing at a lower interest rate could help nurses save money every month as well as over the life of the loan. Many companies offer student loan refinancing, so it’s important to compare rates and terms before choosing one. It can also be helpful to keep an eye out for special perks and refinancing programs for nurses, such as a linked checking account that offers a discount on loan interest.
It’s important to note that borrowers with federal student loans who refinance with a private lender may lose access to certain benefits, such as student loan forgiveness, income-driven repayment, and more; see studentaid.gov for more information.
Prioritize paying off high-interest debts
Not all debt is created equal. In particular, high-interest debt could be extremely costly, eating into nurses’ budgets and preventing them from reaching their financial goals. Interest can compound quickly on these types of debts, which is why it’s important to prioritize paying off high-interest debt as soon as possible. Addressing high-interest debt first can make it possible to save money on interest payments and free up more income to put towards other expenses or savings in the long run.
Make a budget and stick to it
Creating a budget is a crucial step in getting a handle on finances. It allows nurses to see where their money is going and adjust accordingly. Many budgeting apps and methods are available that can be calibrated to meet a variety of individual needs and lifestyles. Factoring debt payments into a budget can help nurses stay on top of their finances, and extra money saved can go toward paying off debts more quickly.
Use overtime wisely
Nurses who have a sudden influx of overtime pay may be tempted to spend it right away. However, using all or some of the money made from picking up extra shifts to pay down debt can save nurses a lot of money long term.
One trick nurses can try is to budget for just their base salary. Any overtime can go toward savings, building an emergency fund, or making extra payments on a debt.
Stick with the plan
Nurses struggling to pay off debt should know that help and solutions are available to them. Paying off debt can be a long and challenging process but staying on track with realistic milestones and a well thought out financial plan is essential. There may be setbacks along the way, but scheduling periodic check-ins, celebrating milestones achieved, and prioritizing extra payments when extra funds are available can help nurses stay committed to becoming debt-free.
Name: Michael Bertini
Job Title: Consultant