How to Budget as a Nurse
Learning how to budget as a nurse is a crucial life skill that you acquire in the line of duty. A budget is a projection or estimate of what your income and expenses are going to be for a specific period. It is a way of planning what your money is going to do and the typical time frame is usually one month at a time.
Things to consider when planning a budget.
- Your sources of income.
- Your total income.
- Your expenses.
- Your income comparison to your household costs.
- How to improve your budget to accomplish your goals.
Importance of Budgeting and Learning How to Budget as a Nurse
Budgeting is important because it allows you to keep track of your income and your expenses. A proper budget allows you to make sure you have the money to be able to pay your bills and purchase your needs and wants without going into unnecessary debt. When you have a planned and detailed budget for one month, you have a clear idea of where every penny is going. It helps you to avoid making guesses and wondering how to sustain something like electricity because you already bought something else like a TV.
Goals of Making a Budget.
- Avoid expenses that can put you at the risk of not being able to sort your bills. When you are spending money without keeping records, you might not have enough in reserve for emergencies.
- Avoid Debt. Poor money management can put you at the risk of going into debt.
- Decrease stress. Having money or a budget plan lowers stress because if your finances run short you will have enough time to figure out how to get the money.
- Vacations. The majority of the nurses look at budgets as restricting what they can or cannot buy instead of looking at a budget as a way of helping you achieve your goals and dreams.
- Retire with dignity. Most nurses think retirement is much far into the future but it comes in just a blink of an eye.
Steps into Making a Budget.
Step 1. Calculate your income: Find out what your income is for the month by counting all forms of income that you receive. This is inclusive of investments, side hustles, and businesses.
Step 2. Calculate your expenses: You need to figure out what your expenses are. List down all your expenses and put them into major categories.
You can break them down into detailed categories but to begin with, break them up into major categories until you get more used to doing a budget.
Step 3. Order your expenses: arrange those major categories based on priority.
Step 4. Assign Value: Once you have those expenses listed out in order, assign values to each expense. That is by assigning each category an amount of money you believe will be your expected bill.
Step 5. Add up your income and expenses: sum up the numbers in your income category and add up the numbers in your expense category.
Step 6. Set your goals based on your budget: This step is all about setting your goals based on how your budget initially appears. If your expenses are greater than your income one of your goals might be trying to lower your costs or trying to increase your income.
Step 7. Analyze your expenses: include a category for savings and retirement. Identify short-term and long-term goals. Based on those things you might have to revisit your expense category to see if you can lower any of your expenses to make some of those goals possible.
If your expenses are greater than your total income, you need to go back through your expenses. Going back through your expense column is going to be one of the most difficult parts of making a budget by getting rid of things that you don’t need that are costing you.