BUDGETING

CREATE A BUDGET

A budget is a written plan for how you will spend and save your income each month. It is the essential first step to controlling your finances and freeing up money to save and invest. 

How to get started: 

  • Calculate your take-home pay. This is the amount of money you bring home after taxes and other deductions.
  • Track your expenses. List and total your monthly expenses, categorizing them as fixed (rent, insurance) or variable (groceries, entertainment).
  • Compare income and expenses. See how your spending compares to your income. If your expenses are higher, identify areas where you can cut back.
  • Set savings goals. Create specific, realistic financial goals for both the short and long term, such as building an emergency fund or saving for retirement.
  • Choose a budgeting method. Find a system that suits your spending habits.
    • 50/30/20 Rule: Allocate 50% of your income for needs, 30% for wants, and 20% for savings and debt repayment.
    • Zero-Based Budgeting: Give every dollar a purpose so that your income minus your expenses equals zero.
    • Pay-Yourself-First: Prioritize savings by setting up an automatic transfer to your savings account on payday before you spend on anything else.

BUDGETING FOR NURSES

Nursing incomes can fluctuate due to overtime, shift differentials, and bonuses, so a flexible budget is key. 

  • Create a baseline budget: Build your core budget around your guaranteed base pay. This ensures that your essential expenses, like housing, food, and bills, are covered consistently.
  • Use extra income strategically: Set aside your variable income from extra shifts or bonuses into a separate fund. You can use this for specific savings goals, investing, or making extra debt payments.
  • Apply the 50/30/20 rule: As a guideline, allocate your take-home pay with 50% for needs, 30% for wants, and 20% for savings and debt repayment. Adjust these percentages to fit your individual financial goals.
  • Track expenses: Use a budgeting app or a simple spreadsheet to track your spending. Knowing where your money goes is the first step toward making effective financial decisions.