Suze Orman, the reigning high priestess of financial planning, has two pieces of advice for nurses in these troubled economic times: First, count your blessings. You are employed in the one industry that is still growing.
Second, count your money. And then take charge of it.
Mind Your Wallet
I think nurses have a very realistic take on life. Every day, they see life, they see death, says Orman. But what Im hearing from nurses who call in to our show is that many of them get themselves in financial trouble because, by nature, they are nurturers, they are caregivers. … They usually make good salaries, but they have very little to show for it because there is always somebody else who needs their money more than they do.
Although the healthcare industry as a whole is relatively stable, she cautions nurses are not immune to the effects of an ailing economy. Individual nursing jobs may get cut, as hospitals and other facilities feel the pangs of the national recession. As in any job, a nurse could become injured and unable to work.
The stories Orman says she hears most often from nurses go something like this: Their spouses or life partners lose jobs. The nurses must support the family on a single salary.
But their money isnt enough to support the family, and the spouses do not want to take just any job, Orman says. In their jobs, nurses think twice before they do anything. They need to give that exact same care to every financial move they make. They need to involve themselves with their patients otherwise known as Bill, Buck, and Penny to live a healthy financial lifestyle later on.
But in a troubled economy, nursing remains a bright spot, Orman says, whether in hospitals or in private care for elderly patients, which Orman says will be a growing industry as baby boomers and their parents age. Orman and her life partner KT (Kathy Travis) have hired two nurses to care for Ormans 94-year-old mother, and another to oversee care for Traviss mother, who is in a skilled nursing facility.
Heres the bottom line nurses: You have a healthy outlook, she says in the commanding tone she often uses with TV audiences. No. 1, youre in demand. No. 2, youre in the one industry that is stable. No. 3, you can take your education and your training and use them in many different situations. This world is in a sorry financial state, and we are barely holding on by our teeth. You should be happy youre in the one industry that is still there. People, youre sitting on top of the world right now.
During the interview, Orman offered some nurse-specific takes on the money-managing philosophies she extols in her numerous books and on CNBCs Suze Orman Show.
What advice would you give a nurse in his or her late 40s or early 50s, with children who are nearing college age, a spouse with a job in the auto industry, and a 401k that has taken a big hit? Should he or she keep contributing to a college fund? Should he or she increase 401k contributions to try to build it back up before retirement, reduce it and put more into an emergency savings fund, or leave it as is and hope for the best?
If you are in your late 40s or early 50s, you have at least 10 years or longer before you retire. You have time to rebuild your savings. If you have a 401k with a match, I would continue to contribute at least up to the point of the match.
If you do not have a match, you should see if you qualify for a Roth IRA, which is a 10-times-better way to save for retirement than a 401k.
You also need to ask, Do I have at least an eight-month emergency fund? I would want to know I had a financial fallback if I were injured or lost my job. Do you have credit card debt? Your first priority should be to pay down credit card debt, then an emergency savings fund, and then the 401k, if you dont have a match.
I would be very careful before I put money in for college savings. Before saving for college, I would get out of debt, make sure my mortgage is up-to-date, my car is paid for, my retirement contribution is funded to the match, and I have an emergency fund. Then, and only then, would I be putting money toward a college education for my child.
What about a nurse who is in his or her late 50s or early 60s and would like to retire soon? Because of the economy, the nurse is worried about reduced retirement funds. He or she thinks the plan to retire at 62 may have to be postponed even though he or she believes retirement would be mentally and physically beneficial. What are some options?
You may have to either postpone retirement, take in roommates, or invite your children (who may not be able to pay their own mortgages) back into your home to help with expenses. Or rent out your home for extra income and move into a little apartment.
You also need to put things in perspective. Lets say you had $100,000 in your 401k and thats now worth $60,000. You lost $40,000. What does the loss of $40,000 take away from you?
Forty thousand dollars at a 4% interest rate gives $1,600 a year before taxes, or about $1,000 a year, or $80 to $90 a month. So, youre saying you cant afford to retire because you dont have an extra $80 or $90 a month? If thats the case, you never had the money to retire anyway.
As a nurse, you can do many, many things and make a serious living. You could do private nursing. You could take an older person into your home and take care of them. There are all kinds of jobs. For instance, I have a friend who was a nurse, but who didnt want to be a nurse anymore. She got a job writing ad copy for a medical company and is now making good money.
What advice would you give to a young nurse, fresh out of nursing school with student loans to repay, who is considering two job offers? One has a starting salary of $50,000 in an upscale, urban area and the other is in a more remote, rural area with a lower salary, but also a lower cost of living?
You should never choose for the money. You should choose for where you will be happy. Because if youre not happy, you will end up going out and buying more things, creating more financial sadness thats going to make you want to go out and spend more.
In one place, you will earn more and your expenses will be higher. In the other you will not earn as much and expenses will be lower. It comes out most likely equal. I would never do something just for the money. What kind of job do you want? Where can you live?
‘People first, then money …’
In dispensing financial advice to millions of viewers and readers, Orman sounds a bit like a nurse talking to patients. She speaks in a language they understand, emphasizing prevention (avoid credit card debt, keep an eight-month emergency fund, live within your means), education (for nurses, she recommends her most popular book, Women & Money, and offers a long list of resources on her Web site), and a holistic viewpoint (her personal mantra: People first, then money, then things).
Her latest book, Suze Ormans 2009 Action Plan, addresses the current economic crisis, which she finds appalling in no uncertain terms.
We did it to ourselves, she says. Its as if you took a person who was a tri-athlete, strong, vital, vibrant, able to carry everybody, and little by little they were given pills that were poisoning them and they fell apart. They were told the pills would make them happy. The drug companies made money off the pills. Thats what we did. We fed everybody fiscal poison. It was a financial acid trip.
The economy will be put together again, Orman believes. But it will take a few years, she adds, predicting people may not feel very hopeful again until 2015.Barbara Gedaka
Local On-the-Job Help Crucial During $$ Crunch
Weathering the economic typhoon can take creativity, flexibility, and a little help. Although nursing shows relative stability and growth, RNs still might struggle with financial concerns.
We asked area hospital human resources personnel what services their facilities offer to help nurses until the storm passes.
Heres how they responded.
We recognize many of our nurses are impacted by the economy. We want to empower employees with tools to wisely manage their finances and prepare for the future. We offer workshops (on personal finance) and decreasing debt.
For RNs needing free, confidential counseling, including financial and legal help, we offer access to an employee assistance program.
George Washington University Hospital
We are always looking to support our staff at home and at work. Our employee assistance program provides free financial counseling.
If an associate is concerned or depressed about his or her financial situation, the EAP offers free psychiatric counseling services.
These services help ensure our associates home life stability so they come to work ready to provide our patients with the best care possible.
Amy Foy, RN, BSN, PHR
The goal is to keep our nurses and all employees informed about how to manage their personal finances.
The HR department and NIH Federal Credit Union offered a financial seminar for employees that recently was developed because of the current state of our economy. Our 403(b) retirement plan will conduct seminars on how employees should invest their retirement savings contributions.
Emily Surman, RN, BS
Manager of Nurse Recruitment