By Steve Seals
The commitment and care nurses provide is priceless. But student loans and living expenses can lead to feeling overwhelmed by debt. There’s good news, though: effective debt management for nurses doesn’t need to be an impossible task.
In this article, I dive deep into three effective debt management strategies specifically designed to help nurses like you regain control of finances and pursue financial independence. As a registered investor advisor representative at Seals Financial Planning & Investments, I’ve helped countless nursing clients eliminate their debt faster.
So, grab a cup of coffee and learn three ways you can conquer debt forever.
1. Pay More Than the Minimum Due
When you only make the minimum payment due on an outstanding debt, it might seem like you’re using a teaspoon to chip away at a mountain.
If you can, pay more than the minimum, even if it’s only slightly over the required payment amount. Every dollar you pay over the minimum due reduces your actual debt, and not just the interest and fees that have accrued since last month’s balance. You’ll be surprised how using this strategy can reduce your debt faster, save money on interest charges, and keep a healthy credit score.
Here’s how it works.
Every minimum payment you submit goes toward two things: 1) interest and fees due on your outstanding balance, and 2) a very small payment toward the actual amount you borrowed (your principal). But you can increase the payment that goes toward your principal by paying more than the minimum.
As a result, reducing your principal lowers the amount of interest you pay every month. And the less interest you pay, the more money you save in the long run.
So, get rid of the minimum-payment mentality and pay off your debt faster.
2. Use the Snowball Debt Payment Strategy
Here’s another tried-and-true strategy for shrinking your debt. Use these easy and effective snowball method steps:
- Make a list of your debts: Start by creating a list of your debts and organize them from smallest to largest. Listing your debts from smallest to largest creates psychological motivation for yourself to wipe out your debt altogether by starting with the easiest one.
- Pay off the smallest debt first: Concentrate on funneling extra payments (anything beyond the minimum payment due) toward the lowest debt on your list. Once you pay off your lowest debt in full, the money you were contributing to it gets “snowballed” onto the next smallest debt, and the cycle continues.
Repeat this strategy until all your debt is eliminated. Every time you pay off a debt on your list, you’ll feel a sense of accomplishment, which, in turn, motivates you to tackle the next debt.
As the snowball grows, you can apply more money to each remaining debt, expediting your overall payoff journey. The psychological boost of seeing your debts disappear one by one can make a huge difference in your motivation.
3. Set Up a Reward System
Here’s another mind trick that provides effective debt management for nurses. Again, staying motivated plays a huge part in this strategy. By rewarding yourself every time you pay off a debt, you’ll be integrating a sense of accomplishment into your debt-elimination journey.
Follow these steps to set up a well-designed reward system:
- Break it down: Divide your debt repayment objectives into small, doable milestones. For example, your milestones could be things like reaching a specific amount paid off, eliminating a certain debt completely, or maintaining consistent payments for a specific time period.
- Personalize your rewards: Make sure you pick (reasonably priced) rewards that are exciting and meaningful to you. Maybe it’s a night out with friends, a soothing spa treatment, or a new book you’ve been wanting to read. The key is to reward your progress without risking your financial mission.
By combining positive reinforcement with your debt-management goals, you’re building a personalized motivation system for yourself. These small “wins” help you stay motivated to pursue your big-picture goal of saying goodbye to debt for good.
We’re Here to Help
Whether you’re a healthcare professional struggling with debt management or you need guidance on another financial planning service, my firm can help.
As a fee-only professional financial advisor at Seals Financial Planning & Investments, I have the knowledge and experience to help you pursue your financial dreams.
Please give us a call at (859) 230-3476 if you would like to schedule a time to meet.
About Richard Stephen (Steve) Seals
Steve Seals is owner and independent Registered Investment Advisor Representative at Seals Financial Planning & Investments VI, LLC, a financial planning services firm based in Lexington, KY. As an independent Registered Investment Advisor Representative with about two decades of experience in the investment and insurance industries, Steve’s firm is founded on getting to know each client personally, allowing him to provide sound financial advice throughout their career and into retirement. With the mission of guiding clients on the path of success, Steve is fueled by his commitment to excellence and goes the extra mile to make sure clients are fully satisfied. He believes in maintaining a positive mindset, creating partnerships with a purpose, and always striving for significant outcomes.
Born in Jenkins, Kentucky, Steve grew up with a love for basketball and serving his community. After high school, he served nine years in the United States Marine Corps, then earned a bachelor’s degree in accounting. He was eventually able to put his degree and desire to help others to work as a fiduciary financial planner. Prior to founding his own firm in 2014, Steve learned from working with Edward Jones, US Bank, University of Kentucky Federal Credit Union, and CUSO Financial. He also received his Security Series 63 and 65/66 through Keystone Financial Group, LLC, and holds various life, health, and variable insurance licenses.
Steve and his wife, Angie, have three daughters (Lauren, Peyton, and Ashton) and two grandsons (Kenyon and Kai). Steve holds a private pilot’s license, and the family enjoys sports, spending time at the lake, and traveling. To learn more about Steve, connect with him on LinkedIn.
