As a new grad nurse, I was living paycheck to paycheck with tons of debt but after learning how to invest and manage my money better, I was able to increase my net worth to $300k in just 3 years.
I graduated as a nurse making $60k/year 11 years ago. I was able to buy a nice car, a Infiniti G37, I was able to pay my bills. I even have money to spend on traveling. Because I wanted to advance in my career, I decided to attend a NP school while working per diem in 2015. In 2017, I graduated as a Nurse Practitioner and was $40K in student loan debt. As I was nearing my 30’s, the thought of retirement crossed my mind. I also started thinking about saving money. I was 28 at that time.
I didn’t know how much money I have in retirement. I even made a huge mistake of taking out retirement money from my first job as a nurse because I didn’t know better. I have only $10K in savings. I had negative net worth!
I spent so much money on material things that depreciated in value. I didn’t know anything about money.
So, I took the time to really LEARN ABOUT MONEY.
If you want to get in better physical shape, what do you do? You take proactive steps and carve out time to work out and eat better.
Improving your financial health is no different in the sense that it takes action to see results.
I bought books to read, invested in courses, I watched youtube videos ~ wrote down my goals and worked on them.
Average Net Worth in 30’s
According to the United States Census Bureau, the median net worth for adults younger than 35 years old is $6,676. That’s compared to the average net worth of adults age 55-64, which is $143,964.
What I did in the last 3 years to increase net worth as a nurse
1. Track your Expenses and Budget
Know how much you make each month and how much your expenses are. Budget accordingly. Initially, I really hated looking at my paycheck because of how much taxes is taken out every 2 weeks. But knowing how much your income is sets you up for success in budgeting your expenses. I know budgeting could sometimes feel restricting or limiting, but it’s so important to understand where your money goes.
My husband and I started tracking our expenses right after I graduated from NP school. We were only making less than $100k after taxes at that time. We really cut down on eating out, buying purses/shoes etc.
One of my favorite budgeting apps is You Need A Budget (YNAB)
Of course, our budget has revealed things we needed to change- that’s okay!
Many experts use the 50/30/20 rule as a starting point for new budgeters.
- 50% Fixed Costs- Rent, Cell Phone, Utilities, Car, Groceries, Minimum Debt Payments
- 30% Discretionary- Clothing, Donations, Restaurants, Travel
- 20% Savings- Emergency Fund, Extra Debt Payments, Retirement
The rule is a great place to start, or a fantastic goal to move towards. We personally used it for the 3-4 years that we got serious with financial freedom.
Related: How to Start a Budget
2. Increase Income
I switched jobs and Negotiated for my salary. I switched jobs every 2 years after graduating as a Nurse Practitioner and I saved all my sign-on bonuses for a house down payment. My husband and I knew we wanted to move back to our home town after getting married because of living costs and we just want to be closer to our families. It’s also more convenient for us as we settle down and start a family.
I was able to save up $20K from all the sign on bonuses.
I also started my side hustles as a nurse which generates me around $500-$1000 a month.
3. Improve Credit Score
Pull your Credit Score and Reports. Buying our First House. I didn’t care for my credit score before but establishing a strong credit score is among your highest financial priorities as a young adult. Your credit score is a specific number, generally between 300 and 850, that indicates your riskiness as a potential borrower. A higher score will make it simpler for you to secure loans with lower interest rate.
Because I got responsible with my spending habits (paying credit card bills on time, only utilizing 30-50% of credit limit), I had a really good credit score when we applied for a new house. We were also able to refinance so the current interest rate of our mortgage right now is 1.99%
The houses where we decided to live also has average of $300k-$400k price around 2018. We put down a 20% down payment for our house and still live in it at this time. Now our house has appreciated in value up to $430K and we currently have approx $150K in equity.
4. Pay off Debt
Pay off my Student Loans. I know it’s very intimidating and probably the last one in other people’s list (Oh, it will be paid off EVENTUALLY is what they say). But do you realize how much money you’re wasting by paying student loans every month (which all goes to interest btw)?! A lot. I calculated it and I would’ve paid over $11K in interests for a 10 year pay off period with 5.28% interest for a graduate student loan.
Here’s what I did to help with student loan debt:
- Pay it twice a month
- Refinance it.
Oct 2020, I was able to pay it all off because I got very serious with CUTTING MY SPENDING and just using my extra money to pay it off.
5. Start Investing As Early as You Can
Contributed to Retirement and Set money for investing. My husband and I max out on our 401k contributions and we also have ROTH IRAs. Our take home pay is really not a reflection of how much of career degrees should pay us but we decided to really LIVE BELOW OUR MEANS.
After learning about investing, I was able to set a portion of my income to all my investment accounts (retirement, 529 savings for my daughter, individual brokerages, crypto trading account).
Learn more about investing here.
My current investing portfolio is worth $118K (without my pension amount)
Updated amount of investment portfolio in 2023: $250k
Other things we did to increase our net worth:
- Increase income: started an online business, content creation
- Decrease liabilities: pay off credit card bills, student loans and mortgage
- Invest on assets: I invested heavily in the stock market
Related: How to get started with investing as a nurse
In conclusion,
It’s very possible to increase your net worth. There are many small, doable actions you can take to increase your net worth.
The great thing about this plan for increasing wealth is that you can customize it to fit your income and lifestyle.
Keep taking small steps that will eventually add up to large increases in your net worth. After all, a journey of a thousand miles begins with a single step, as the old saying goes.
