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By Honza Hroch – CreativeNurse

January 27, 2018

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Debt Management for Travel Nurses

Debt management can be a very difficult to handle properly and having debt can be stressful and if managed in the wrong way it can be devastating to your finances. Not only can debt cut in to your cash flow today but it can also hurt your future spending power.

As a nurse, a lot of your time is spent helping others get back on their feet and helping others get through tough times but could it be that you have neglected taking care of yourself.  You went through school and many of you had to borrow money to pay for your education.

Short term debt

In regards to having debt we often see a lot of short term debt such as credit cards and student loans being handled without much thought behind and planning behind it. These debts may have come from either good or bad decisions. Student loan debt has helped you get secure a well-paid job whereas credit card debt often is from overspending, traveling, and too much shopping.

So, if you have outstanding debt and you feel frustrated about paying for it and feel like your overall finances are at standstill due to this debt then read below for a couple of new ideas and options on how to treat your debt.

1: Beware of accelerating those debt payments

 You must understand the right order of handling your finances and understand that even though paying off your debt as fast as possible would feel great it may not always be smart.  Before making extra payments toward your credit card balance or student loan debt make sure that you have your emergency fund built up. We always recommend having at least 6 months of living expenses put aside before you start paying extra towards your outstanding loans. 

Now there are many ways to get those short-term savings built up.  You can start by not making extra debt payments or extend the terms on your student loan.  Very often your student loan payoff schedule will allow you to stretch out the payments.  This will lower your monthly payment and will allow you to put that cash towards your emergency fund.  You can also look at your retirement accounts that you are funding.  If you are putting 10% into a 401(k) you can stop that or lower that contribution for one year and use the extra cash flow to put towards your short-term savings.  The main reason why we want to emergency money bucket filled up is that if some life event occurs and there are no savings in place new credit card debt or new personal loan debt most likely will occur.

2:  Utilize your existing assets

If you already have your emergency money account in place and you have outstanding credit card debt, there are a couple of ways to attack the issue.  The number one thing that must occur is to look at what has caused this credit card debt to show up. We understand that having fun and enjoying life is important but those extra shopping sprees and dinner at nice restaurants can be devastating to your finances. If your debt is growing due to overspending, you have to start by building your budget and get a good understanding of where the money is flowing and get that under control.

Once a budget has been put in place look at ways that you can free up money to pay off your credit cards. Some sources that are potentially viable are:

  • Savings accounts (the balance above your 6 months’ emergency level)
  • 401(k) loan (you may be able to borrow and pay back yourself). Make sure you understand the cost of borrowing money from a retirement account and make a comparison between paying your cc vs a loan)
  • Consolidation loan. Talk to a bank or a credit union and see what they will do for you in regards to consolidating your credit card debt into a personal loan with most likely a much lower interest rate.
  • Look at the equity in your house and see if there are option to get a line of credit and use that money to pay of high interest debt.

Written By: Honza Hroch Co-Founder of CreativeNurse
This material contains the current opinions of the CreativeNurse® but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice.

2017-39243  Exp. 4/19

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