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When Jennifer S. clocked in on her first day of work as a nurse at a major hospital, she remembers thinking, “I’ve got this.” And she did. Nursing school had prepared her well for working in the emergency room.

She felt less confident about navigating her finances, however. Jennifer had to balance her living expenses and long-term goals with $40,000 in student loans while earning $25 an hour.

She cooked meals at home and kept her expenses low. Jennifer also created a monthly nursing budget to help organize her finances. “I saw that I should start saving a little more during the second half of the month, when I usually had leftover money, in case I needed it for the next month’s bills,” she says.

In addition, Jennifer discovered ways she could make extra money. Consider this nursing budget example: She switched to overnight shifts making an additional $7,000 a year. When a hurricane hit her state, she worked around the clock at the hospital for a week — and earned roughly $6,000, which she put toward a down payment on a home. And she routinely picked up per diem and travel assignments.

Why You Need a Nursing Budget

It’s an interesting time to be a nurse. On one hand, staffing shortages and burnout worsened during the pandemic, and the nursing shortage is expected to continue to grow until 2035. The rising cost of higher education, including how to pay for nursing school, has resulted in a growing number of students graduating with debt.

According to the latest figures from the American Association of Colleges of Nursing (AACN), roughly 70% of nurses take out nursing student loans to pay for school, and the median student loan debt is between $40,000 and $55,000.

On the plus side, nurses have some leverage. The profession is in such high demand right now that some hospitals are offering incentives like sign-on bonuses, shorter hours, and student loan repayment help.

And in general, nurses can earn a good salary. According to the latest data from the U.S. Bureau of Labor Statistics, the median income for a registered nurse in 2023 was $86,070. The median income for a licensed practical nurse or licensed vocational nurse was $59,730. The median income for a nurse anesthetist, nurse midwife, or nurse practitioner — fields that typically require a master’s degree — was $129,480 per year. Nurses who are willing and able to take on additional shifts, work overnight, or accept lucrative travel assignments stand to make even more.

If you’re a new nurse who is figuring out your finances, a nursing budget is a good place to start.

How to Budget as a Nurse

With tens of thousands of dollars’ worth of student loans to repay, it’s helpful for nurses to create a budget to manage their money, cover their living expenses, pay down the debt they owe, and plan for their financial future. Here’s how to do it.

•   Set financial goals. Think about your short-term and long-term aspirations. These might be things like saving $2,000 in your bank account, paying off your student loans, or investing for retirement. Knowing what you’re working toward will help give you the motivation to get there.

•   Calculate your income. Look at your pay stubs to see how much you’re bringing home each month. That’s the amount you have to work with.

•   Determine your expenses. Pull out all your bills and add up how much you’re spending each month for rent, food, utilities, loan and credit card payments, and so on. Be sure to include “fun” expenses such as dining out, entertainment, and self-care costs.

•   Find a budgeting method that works for you. There are different types of techniques, such as the 50/30/20 rule that divides your budget into different categories: 50% for essential expenses like rent, utilities, food, car payments, and debt payments; 30% for discretionary expenditures such as eating out, travel, and shopping; and 20% for goals like saving for a home, your child’s education, and retirement. There’s also the envelope budgeting system, which has you put cash monthly into envelopes for each spending category like housing and food. Once the money in an envelope is gone, you’ll need to wait until the next month to spend in that category again or take money from another envelope. Explore the different methods and choose the one that works best for your lifestyle.

•   Review your nurse budget regularly and update it as needed. Make adjustments as your situation changes. For instance, maybe your car breaks down and you need extra money for emergency repairs. Or perhaps you get a raise that increases your income. Tweak your budget accordingly.

Common Financial Challenges for Nurses

As a nurse, you’ll face some unique money-related challenges. For example, you may have work expenses, such as purchasing a uniform, comfortable shoes, and certain tools to do your job. Many hospitals and clinics require you to buy your own stethoscope, for instance. And working long shifts or irregular hours may leave you with less time for cooking so that you end up spending more money on takeout.

In addition, as a nurse, you may decide to pursue an advanced degree like a master’s to move up the ladder and earn more money. That could mean taking out new student loans to cover the cost of your continuing education, in addition to the loans you already have.

These financial challenges are all things to factor into your nurse budget so that you have a plan for paying them off.

Watch Your Spending

Even when you’re on a budget, it can be easy to fall into the habit of overspending because there are different ways to supplement your income as a nurse. “When I was doing travel assignments, I just kept working,” Jennifer says. “At the time, I didn’t realize it would stop, so I didn’t think to save as much as I could have.”

In fact, lifestyle creep can be a common pitfall, especially when you start earning more money, says Brian Walsh, CFP, senior manager, financial planning for SoFi. Spending more on nonessentials as your income rises can potentially wreak havoc on your savings goals and financial health. That’s why budgeting for nurses is so important.

While you’re starting to establish your spending habits, Walsh recommends using cash or a debit card for purchases. Automate your finances whenever possible by doing things like pre-scheduling bill payments.

Develop Your Savings Strategy

A sound savings plan can help you make progress toward your short- and long-term goals and provide a sense of security. Walsh suggests nurses set aside 20% of their income for retirement and other savings, like building an emergency fund that can cover three to six months’ worth of your total living expenses. He recommends placing it in an easy-to-access vehicle, like money market funds, short-term bonds, CDs, or a high-yield savings account.

The remaining 80% of your income can go toward current living expenses, including monthly student loan payments.

Jennifer found success by adopting a set-it-and-forget-it approach to saving. “Whenever I worked a per diem shift, I got in the habit of putting $100 or $200 of every check into a savings account,” she says. Before long, she had a decent-sized nest egg and peace of mind.

Explore Different Investments

One simple way to build up savings is to contribute to your 401(k) or 403(b) retirement plan, if one is available to you, and tap into a matching funds program. There’s a limit to how much you can contribute annually to one of these plans. In 2024, the amount is $23,000; if you’re 50 or older, you can contribute up to an additional $7,500, for a total of $30,500. In 2025, you can contribute up to $23,500 to a 401(k), and if you’re 50 or older, you can contribute an extra $7,500, for a total contribution of $31,000.

If you don’t have access to an employer-sponsored retirement plan, there are other ways to save for the future. “Start by figuring out what your targeted savings goal is,” Walsh says. If you’re going to save a few thousand dollars, you can consider a traditional IRA or Roth IRA. Both can offer tax advantages.

Contributions made to a traditional IRA are tax-deductible, and no taxes are due until you withdraw the money. Contributions to a Roth IRA are made with after-tax dollars; your money grows tax-free and you don’t pay taxes when you withdraw the funds in retirement. However, there are limits on how much you can contribute each year and on your income. In 2024 and 2025, you can contribute up to $7,000 to an IRA annually with an additional $1,000 for individuals 50 and up.

Ideally, Walsh says, you’re saving more than a few thousand dollars for retirement. If that’s the case, then a Simplified Employee Pension IRA (SEP IRA) may be worth considering. “Depending on how your employment status is set up, a SEP IRA could be a very good vehicle because the total contributions can be just like they are with an employer-sponsored plan, but you control how much to contribute, up to a limit,” he says. What’s more, contributions are tax-deductible, and you won’t pay taxes on growth until you withdraw the money when you retire.

Another option is a health savings account (HSA), which may be available if you have a high deductible health plan. HSAs provide a triple tax benefit: Contributions reduce taxable income, earnings are tax-free, and money used for qualified medical expenses is also tax-free.

Depending on your financial goals, you may also want to consider after-tax brokerage accounts. They offer no tax benefits but give you the flexibility to withdraw money at any time without being taxed or penalized.

Take Control of Your Student Loans

You have different priorities competing for a piece of your paycheck, and nursing school loans are one of them. You may need to start repaying loans six months after graduation, and options vary based on the type of loan you have.

If you have federal loans and need extra help making payments, for example, you can look into a loan forgiveness program or an income-driven repayment (IDR) plan, which can lower monthly payments for eligible borrowers based on their income and household size.

If you’re struggling to make payments, you may qualify for a student loan deferment or forbearance. Both options temporarily suspend your payments, but interest will continue to accrue and add to your total balance.

You can also explore the option of student loan forgiveness. There are a number of student loan forgiveness programs for nurses, such as the NURSE Corps Loan Repayment Program. If you work for a government or nonprofit organization, you can look into the Public Service Loan Forgiveness Program to see if you qualify.

Chipping away at a student loan debt can feel overwhelming. And while there’s no one-size-fits-all solution, there are a couple of different debt pay-off approaches you may want to consider. With the avalanche approach, you prioritize debt repayment based on interest rate, from highest to lowest. With the snowball approach, you pay off the smallest balance first and then work your way up to the highest balance.

While both have their benefits, Walsh says he often sees greater success with the snowball approach. “Most people should start with paying off the smallest balance first because then they’ll see progress, and progress leads to persistence,” he explains. But, he adds, the right approach is the one you can stick with.

Consider Whether Student Loan Refinancing Is Right For You

When you choose refinancing, including medical professional refinancing, a private lender pays off your existing loans and issues you a new loan. This combines all of your loans into a single monthly bill, potentially reduces your monthly payments, and may give you a chance to lock in a lower interest rate than you’re currently paying. A quarter of a percentage point difference in an interest rate could translate into meaningful savings if you have a big loan balance, Walsh points out.

A student loan refinancing calculator can help you determine how much refinancing might save you.

Still, refinancing your student loans may not be right for everyone. By choosing to refinance federal student loans, you could lose access to benefits and protections, like the current pause on payment and interest or federal loan forgiveness plans. Be sure to weigh all the options and decide what makes sense for you.

Recommended: Student Loan Refinancing Guide

The Takeaway

Nursing can be a rewarding career, with flexibility and opportunities to add to your income. However, as a new nurse, you are likely trying to stretch your paycheck to cover student loan debt and everyday expenses. Fortunately, by using a few smart strategies, such as budgeting and saving, and exploring options like refinancing, you can start to pay down your loans—and reach your financial goals.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

Photo credit: iStock/FatCamera

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Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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