Why Nurse Managers Should Help Educate Nurses about Personal Finances

By Rose O. Sherman, EdD, RN, FAAN

“Thoughtful financial planning can easily take a back seat to daily life.” Suze Orman

A number of years ago, I had a professional colleague who taught an RN to BSN leadership course. As part of this course, she included several classes on managing your personal finances. The topics ranged from how to evaluate an employment package to buying a home, investing in stocks and managing your credit. She told me that she had observed that few of her students really had ever been educated about managing their own financial future. Most lived paycheck to paycheck despite often earning relatively good salaries. If nurses are to be fully empowered, she reasoned then they must learn to be more financially independent. At the time many of her colleagues criticized her for spending class time on this topic but I always felt she was very wise in her thinking.

Many nurse managers may feel that this is not part of their role but there are several compelling reasons to make this topic part of your coaching repertoire. These include the following:

Nurses will sometimes leave organizations for pay increases without considering the whole benefit package.
Nurses often work too much overtime and risk fatigue because they are not doing a good job of managing their credit.
Nurses who do a poor job of retirement planning and don’t regularly contribute to a 401K or a similar investment plan may continue to work long after they had planned to retire (unhappily and disengaged).
Nurses often take out large student loans and don’t use the tuition reimbursement plans available from their employer.
Nurses who understand personal financial management are far more likely to understand the components involved in the business of healthcare.

These topics can be introduced for a few minutes at each staff meeting —- I like a “facts you may not know” format by either the nurse leader or an HR representative.

Other Tips

When a nurse comes to you and is considering another position, ask him or her how much due diligence they have done about the whole benefit package including paid leave, shift differentials, tuition reimbursement, 401K matching contributions and the cost of health/life insurance. Nurse managers often tell me that nurses rarely consider anything other than the hourly wage without recognizing that they may in fact be making more with their current benefits than they are being offered.

When a nurse is considering returning for his/her BSN or graduate degree – ask them how they plan to pay for it and have they evaluated the costs of various programs. I always ask this question in our graduate admission interviews and am often surprised when nurses tell me that they won’t accept tuition reimbursement from their current organization because they don’t want to reduce their options. I strongly advise them to reconsider because I find that most of my graduates do stay with their current employers. Section 127 of the tax code today allows employees to exclude from their income up to $5250 in employer-provided assistance for any type undergraduate or graduate program. Additionally, many nurses are unaware of just how stringent the laws are regarding any default on student loans (including their own death).

In a recent study that I did surveying perioperative directors, a number of directors commented that they had “very disengaged and unhappy older nurses” who had not saved for retirement and needed to continue to work. This is a very serious problem in general in the United States today but nurses are more fortunate in that they usually can continue to work. Better planning earlier in their careers will make retirement smoother and allow nurses who want to retire to do so. As leaders in nursing management, we can and should remind our nurses to contribute to their retirement plans and take full advantage of employer matches.

The more nurses know about the world of finance (including how to choose and manage investments) – the easier it is to explain the business of healthcare. Through their work, nurse managers often become very financially savvy in managing their own finances and these skills should be shared with staff.

Read to Lead

The Millionaire Nurse Blog

Orman, S. (2010). Women and Money: Owning the Power to Control your Destiny. New York: Spiegel and Grau Publishers

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