Nurses are the backbone of the healthcare system but often put their well-being aside to care for patients. It’s a selfless career, however, it’s crucial for nurses and all healthcare professionals to prioritize their own wellness.
Most people hear “wellness” and think about physical or mental wellness, but financial wellness can intertwine into both and shouldn’t be overlooked. You might wonder, “What does financial wellness for nurses and other healthcare professionals look like?” We talked with Financial Specialist Justin Phillips with Allstate Financial Services to uncover the nuances of economic wellness for healthcare professionals. With 8+ years of experience, he gave us helpful advice specific to those who work in healthcare.
The Components of Financial Wellness
Each person’s journey of financial wellness is going to look different. A staff nurse might have different priorities from a surgeon or even a travel nurse. In Justin’s work, he focuses on each client’s mission, values, and goals for themselves and/or their family. He works backward to understand a person’s 5-, 10-, and 20-year vision and then puts together a plan for his client to get there.
The best plans usually consist of four categories:
- Risk mitigation (life insurance and long-term disability),
- Debt reduction,
- Cash management,
- And investments.
There are intricacies to each category that Justin helps clients navigate, guiding them through strategic instead of emotional decisions. Any healthcare professional going after financial wellness should know that their strategy will change over time.
“The strategy that we build is a living, breathing document,” he explains “It’s going to change. They might have kids or switch jobs. Life happens and we want the strategy to change with their vision and their mission.”
Risk Mitigation
One of the most important parts of financial wellness is protecting your income and your family’s future through risk mitigation. Within the medical field, you might earn an income based on specific skills, like having steady hands as a surgeon. This is something unique to the healthcare industry.
Justin works with his clients to ensure they are all set for long-term disability planning if a disability occurs. Disability planning is often a piece of financial wellness that people overlook, but Justin says it can result in a 20% loss of income or time.
“You’re more likely to have a disability than you are to pass away prematurely,” he says. “If your income stops, everything else stops.”
When laying out your financial wellness plan, look at the risk mitigation strategies you can implement to protect your income and specialization, which you invested in through years of training and school. This might include investing in health insurance and disability insurance to safeguard against medical expenses and any loss of income due to illness or injury.
Managing Student Loan Debt
One category of financial wellness that might be on your mind as a healthcare professional is student loan debt. According to Nurse.org’s “The 2024 Nurse Salary and Work-Life Report,” 37% of nurses plan to go after a higher degree, and 40% of nurses who earned certifications say it helped them get pay increases.
Justin works to help clients strike a balance between debts and long-term financial goals as they sit down together to understand each loan’s terms, interest rates, and repayment options. From there, they’ll create two plans. There’s the “feel good” plan that might include paying off a smaller loan with a smaller interest rate first just to get one loan finished, and there’s an economical plan that might pay off a bigger loan with a higher interest rate first or put money in investments that have a better growth return. Each plan will include loan repayments, living expenses, savings, and discretionary spending, and everything is set up intentionally and strategically.
“We’ll put the strategy together for everything. Maybe the client has some extra money each month, and I’ll show them how we allocate those dollars to do everything efficiently,” Justin explains. “We use math to make those decisions because if we’re paying 3 percent on a student loan and have a potential for much higher growth in the market, we’ll focus on putting that extra money in the market so that we’re building an asset and not paying off a debt.”
Healthcare professionals also have additional avenues they can seek when it comes to paying off student loans, such as loan forgiveness or tuition reimbursement programs.
Cash Management
Once you’ve mapped out your risk mitigation and debt strategies, it’s time to think about cash management. You’ll want to develop a plan to build an emergency fund to cover unexpected expenses, like medical emergencies. Aim to save at least 3-6 months’ worth of living expenses.
You’ll also want to evaluate your goals and ways to balance your expenses. For instance, if traveling abroad is important to you, you’ll want to make plans to save for those expenses while also keeping a steady cash flow for everyday costs.
Investments
The thought of investments might make you feel excited or overwhelmed. With a financial planner by your side, you’ll be guided in the right direction to create an investment strategy aligned with your goals.
Part of that will likely include taking advantage of a retirement plan offered by your employer, such as 401(k) or 403(b) plans. If your employer matches your contributions, it’s wise to invest in your company’s retirement plan and rake in the extra cash that can contribute to your financial wellness in the future.
A Prosperous Financial Future
Achieving financial wellness as a nurse or healthcare professional requires proactive planning and disciplined financial habits. The first step is having the drive to get started.
“The biggest thing I see is people want to put together a financial strategy and never take a first step,” Justin says. “I say just start somewhere and build on it. Because in 10-20 years, you’ll look back and say, ‘Man, I wish I would have started sooner.’”
By protecting your assets, managing loans and cash flow efficiently, investing wisely, and adopting sound financial practices, you can pave the way toward a prosperous financial future. And if you’re unsure about financial matters, don’t hesitate to seek guidance from a financial expert who can create a customized plan fit to your life’s goals.
