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  • Shelby Green

The truth about student debt

The vast majority of nurses and NPs have enormous amounts of student debt. It’s a source of stress and anxiety that, truth be told, is largely unnecessary. 


There’s a lot that people are unaware of when it comes to student debt. In this article, I’m going to share with you some little known secrets to help you breathe a little easier, and feel more confident about addressing your student debts.




Little known truths about student debt

It's not as urgent as you think, and here are 4 reasons why.


  1. You have a lifetime (literally) to pay off your student debts. As long as you pay it off by the time you retire, you’re good.

  2. Student debt is one of the only kinds of debt that will not be transferred to your family in the case of your passing. So it goes with you, no one will be left holding the burden of your student debt if something happens to you.

  3. For most people, and especially on a nurse’s salary it’s a bill you can afford. The key is consistency, even if the amount is just the minimum.

  4. Student debt falls in the category of “good debt”. More on this below.

So in the land of debts, you have “good debt” and “bad debt”. Here are the distinctions:


GOOD DEBT

Good debt is something that could potentially bring you a financial gain of some sort.

Typically, with “good debts”, you have a longer period of time to pay them off. And most importantly, there is financial gain attached. They also usually come with lower interest rates.


Here are some examples of good debt (not limited to this list):


  • Student loans 

  • Mortgages

  • Business loans 

  • Lines of credit 

Each of these provide opportunities for you to build your wealth. 


With student loans, you can earn gains professionally. Meaning, going to school can increase your skills and knowledge base and therefore your employability. This is why we go to school right? A nurse has to go to college in order to be a Registered Nurse, or to become an NP you have to get a masters degree. Also, student loan interest is usually a lot lower than other kinds of debt (usually around 4-6%).


In terms of mortgages, homes can build equity, and you can rent it out. It also usually comes with a low interest rate. 


Business loans and lines of credit can provide you with start up cash to invest in a business venture that can bring you financial abundance. 


You see the pattern? Good debts help you to make gains financially. Bad debts do not.


BAD DEBT

Bad debt is caused by spending money on something that depreciates in value, and doesn’t bring you financial gain. It’s usually something materialistic that you didn’t really need to buy. (E.g. going on a shopping spree to buy clothes on Black Friday). 


It didn’t really need to be there, and there’s no financial benefit to you. And, it usually comes with a high interest rate.


Here are some examples of bad debt


  • Credit cards

  • Personal loans

  • Car debt

  • Medical debt

All of these types of debt come with high interest rates. In the case of credit cards it’s usually over 20%. The things purchased in exchange for debt depreciate in value over time, i.e. they don’t increase in value, where as good debt does.


When people go into serious debt, it usually comes from an emergency or unexpected circumstance. Which by the way, likely could have been prevented if you had a savings or sufficient insurance. A lot of people are unaware that if they even are insured, that it may not be enough. For example, you should have your own health insurance whether your employer provides it or not!


Some of these things can get pretty complicated, especially when it comes to insurance and managing your various debts and expenses at the same time. This is why it’s so important for you to get support around this stuff.


In the meantime, I’ve listed some simple tips to help you in the strategy section below.


Key strategies for crushing student debt to improve your overall financial health


*** remember that these are general tips. Each individual nurse or NP’s is different. So it’s important that you consult with a financial professional to get the best strategies tailored for your context! ***


1. Create a plan and stick to it. The most important thing with debt is about making consistent payments. Create a budget that best suits your context, and don’t miss any payments. If you do this, your credit score won’t be affected, and you’ll be in the clear eventually. Slow and steady wins the race!


2. Remember, to save. Just because you have student debt doesn’t mean you need to pay it off right away, It’s important to save at the same time. As in don’t put all of your cash into paying off your debts. Instead, distribute your money and build your savings at the same time. If you don’t have a savings, the only option you have if something unexpected comes up is you go into more debt, or have to resort to begging to people in your life. 


3. Don’t stress it! Keep in mind everything I’ve shared with you above. Follow the instructions, and breathe easy. If you get wound up about stress, this affects all areas of your health, including your financial health. When people are stressed, they tend to spend more money unnecessarily to try and cope. Relax, it’s going to be ok :)


✦ ✦ ✦


So there you have it! I hope this article has been useful, and helped to ease some of your anxiety around your student debt. 


If you have any questions, please reach out! Remember that I provide FREE consultations for nurses to help them improve their financial health. I would be happy to speak with you to see how I can help.


Book a Free consultation with me at this link. We can start with a 15 minute introductory conversation and take it from there. 

Wish you all the best on your journey in improving your finances and living your best life!


*** Listen to a Podcast I did on this topic with NP Hub here: https://youtu.be/3q0mkbIdv1A


You can also connect with me via:

Instagram: https://www.instagram.com/sag_wealthishealth/

Facebook: https://www.facebook.com/SAGFinancialGroup/

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