As a travel nurse in the Dallas-Fort Worth area, it's important to start planning your financial future now. Due to the high cost of living in this area, and the fact that inflation is on the rise, you need to be proactive about saving money and investing for your retirement.
The cost of living in DFW is high compared to other parts of the country. In a list published by 24/7 Wall St, Dallas-Fort Worth-Arlington is the most expensive metropolitan city in Texas. Housing costs are a major factor in this ranking, with the estimated monthly rent for a one-bedroom apartment costing over $1,000 per month. And that doesn't include utilities.
In addition to housing costs, groceries and transportation can also be expensive in DFW. A recent study by WalletHub shows that DFW sits fifth among the top cities where inflation is rising the most. From August 2021 to August 2022, the inflation rate in the DFW metro area jumped to 9.4%.
Luckily, there are ways that you can manage these high costs.
6Financial Planning Tips for Dallas Traveling Nurses
Financial planning may seem challenging, especially for a travel nurse, but it doesn't have to be. Here are seven financial tips for the traveling DFW medical professional planning retirement.
- Start Saving Now
For travel nurses, having a savings “nest egg” is vital, both for long-term financial security and for any unforeseen emergencies that may pop up. One simple way to get started is to set up an automatic savings plan from your paycheck. This way, you can ensure that a portion of your income goes straight into savings without having to think about it or relying on willpower alone. You can start by setting aside a minimum of 5% to 10% of your paycheck to build up your savings.
- Consult With a Financial Planner
As a travel nurse, you have unique financial needs that require special attention. From saving for retirement to managing your taxes, it can be difficult to keep track of everything. That's where an expert financial planner can help.
Working with an experienced financial planner can help you develop a customized financial plan that will address your specific needs and goals. A financial advisor can help you with everything from investment management to retirement planning to estate conservation.
- Take Advantage of All Available Tax Breaks
While a travel nurse’s pay is higher than that of a traditional nurse, it’s important to be aware that taxes can eat away at your income if you’re not careful. By understanding the various tax deductions available to travel nurses, you can minimize the amount of taxes you have to pay and take advantage of the deductions you qualify for. These can include:
Tax Home Expenses
A tax home is generally considered to be your permanent residence or the place where you maintain your personal belongings and vote. As long as you return home between travel nurse assignments within 12 months, you can deduct your tax home expenses that go into paying for that residence, including rent or mortgage payments, property taxes, insurance premiums, and utilities.
You can qualify for a travel expense tax break by establishing what is known as your tax home. When you're traveling from your tax home to your travel nursing assignment, you can deduct all job-related expenses including airfare, lodging, car rentals, and even meals. Keep in mind that you can only deduct these expenses if they were necessary for you to perform your travel nurse duties.
These are expenses required for your travel nurse job. They include costs related to job searches, continuing education, malpractice insurance, and trade literature.
Filing taxes can be complicated, but working with a tax advisor can help make the process much simpler. A tax accountant can also help you take advantage of any deductions or credits to which you may be entitled.
- Invest Your Money Wisely and Diversify Your Portfolio
Investing goes beyond “buy low and sell high”. A big key to success is consistent investments over a long period of time. An advisor will help you allocate your investment portfolio appropriately. Diversification is important and the investments need to match your individual situation.
- Create a Monthly Budget Report
As a travel nurse, creating a budget and expense report is one of your first moves towards financial literacy. Creating this monthly report can help you keep track of all the expenses which are qualified for the tax deductions mentioned above.
You can create a simple spreadsheet that you fill out regularly from your computer or use a free app to record expenses directly from your mobile phone.
- Set Clear Short- and Long-Term Financial Goals
It's especially important for travel nurses to set financial goals, as they often have unpredictable income streams. This, coupled with rising housing costs and record-setting inflation, makes it challenging to stick to a budget.
Be realistic when setting financial goals. Incremental goals are often more achievable and help keep you motivated along the way. If you're not sure where to start, it's helpful to consult with an expert who offers financial planning for Dallas traveling nurses.
Take the First Step
Retirement is attainable for those who make the right financial choices, even amidst rising costs and a faltering economy. By following these financial tips, you're well on your way to keeping your financial future secure. Take control of your finances and start making smart decisions towards pursuing your goals today by contacting an experienced financial advisor.