Raise your hand if you would like more money in your pocket every payday!
When you look at your paycheck closely, you may be shocked by all those little line items that lower the amount of money you actually get to take home each week. Maximizing your net pay (the amount that you are actually paid after withholdings and deductions) means more cash to pay down debt, invest, or save.
You spend long hours doing demanding work and deserve to make the most of your hard earned pay. At Lume, a bank built for nurses, we strive to make sure your money works for you!
1. Check Your Withholdings
The goal here is to have more money all year long. For some, a large tax return can feel like a bonus. However, this strategy really only helps the government! A large tax return means that you have given the government an interest-free loan throughout the year. Keep that money in your pocket!
When you begin a new job, you choose the amount of personal allowances on a W-4 form. Generally, the more allowances you claim, the lower the amount of taxes taken from each paycheck.
Avoid over-withholding by using the IRS’s Withholding Estimator. If needed, update your W-4 form with your employer.
2. Review Your Payroll Deductions
Benefits such as health, life, vision, and dental insurance are all part of most companies’ total compensation packages. These are voluntary deductions that are taken out of each paycheck.
Look through your deductions to see if you are able to remove any or switch to lower-cost options. Are you a healthy young nurse with no children? Maybe you can change to a less expensive medical plan or opt out of life insurance for the time being. Do you really use the gym membership that is being deducted from each paycheck, or would you be just as happy doing free online workouts?
A couple of tweaks could make a difference in how much you take home each paycheck.
3. Pay Yourself First
If your employer offers a 401K or 403b, depositing a portion of your paycheck to these accounts helps you grow wealth in more than one way. First of all, the amount that goes into the 401K is usually tax-free. This means you are paying less taxes to Uncle Sam by decreasing your taxable income. Many employers will also provide a retirement savings match. This is in addition to your regular pay and essentially serves as free money toward your future! If you are a travel or pool status nurse you also have other options such as an IRA.
While saving into a retirement account doesn’t lead to cash in hand now, this money is growing with compound interest and is always yours.
4. Ask For More Money
As uncomfortable as it may feel, asking for a raise (or negotiating a higher salary when starting a new job) is often a sure-fire method to maximize your pay.
According to a survey by Payscale, only 37 percent of workers ask for a raise in any given year. However, 70 percent of those who did ask received at least a portion of what they asked for. 70 percent!
Use Lume’s Salary Databank to determine if you are being underpaid or assess new job offers. This feature is only available to Lume Members so sign up for their waiting list here to access this tool. Nurses are in high demand right now, so it’s a great time to be brave and negotiate.
5. Work Overtime
While picking up overtime or side work is not the most glamorous or sexiest way to increase your take-home pay, the grind is sometimes necessary. Whether for good or bad, nurses have ample opportunities these days to pick up extra shifts or even work a second PRN (as needed) position. The ability to make more money is one of nursing’s perks!
Furthermore, some hospitals have such a high demand for nurses that they are offering impressive bonuses for picking up extra shifts on top of the base overtime pay. If you have specific financial goals that you are working toward, earning overtime can help you get there.
Whether your goal is to pay down debt, increase your savings rate, or make a home purchase, simply aligning your money habits with your life priorities can make your work feel more worthwhile. It’s also important to choose a bank that understands your values as a nurse.
Lume is here to help by focusing on the things that nurses actually need from a bank. Learn more at uselume.com and sign up for the waitlist. There is no cost to add your name!
Kim Carson is a registered nurse working in the Family Birth Center at Vail Health Hospital in Vail, CO. With over 17 years of experience, she holds specialty certifications in inpatient obstetrics and maternal-newborn nursing and is a board-certified lactation consultant (IBCLC).
After getting into a few sticky financial situations during her early years as a nurse, she now geeks out on personal finance. Kim believes that taking control of your money is key to living a life that meshes with your own values—both in and out of the workspace. When she is not caring for the moms and babies in her community, she is usually outside kayaking, snowboarding, or listening to music.
Connect with Kim on Linked In.