Travel nursing is no joke. Between assignment gaps, canceled contracts, unexpected living costs, and the many expenses that arise from constant relocations, it’s clear that travel nursing is unpredictable when it comes to finances. This is one of the many reasons why it’s critical to practice building an emergency fund as a travel nurse.
Travel nursing provides great freedom, but at what cost? Getting to explore new cities and various ranges of pay are some of the perks of this amazing job. But travel nurses are also faced with unpredictable financial challenges that a traditional nurse may not ever encounter.
Having an emergency fund is not just a smart idea for travel nurses; it’s a necessity and an essential financial safety net. An emergency fund not only supports assignment gaps, but it can also help alleviate financial burdens that may spring up out of nowhere.
Whether you have strong savings goals or just want to have peace of mind on the road, building an emergency fund can help give you the confidence to combat the many uncertainties you may be faced with in the travel nursing profession.
What is an Emergency Fund?
Building an emergency fund is one of the simplest and easiest ways to give you financial security. In simple terms, an emergency fund is a savings strategy with the purpose of setting money aside for unexpected events or expenses.
This money can be set aside in your traditional checking or savings account, or a separate account at a different bank to prevent you from using it for regular expenses you see on a daily basis.
Determining Your Savings
For a typical emergency fund, savings should total around $2,000-$3,000, or be equivalent to around three to six months of living expenses. This reserved money is not used for everyday or essential living expenses, but rather for financial emergencies that spring on you out of nowhere.
Remember when your refrigerator gave out right before your annual picnic party? Or when your child dropped your cell phone into a puddle outside? Well, an emergency fund provides you with a financial safety net so you don’t have to pay those costs out of pocket.
It’s recommended to have between 3-9 months of pay depending on your employment type. Whether you’re self-employed, have a stable corporate job, or earn variable income as a travel nurse, building an emergency fund is essential.
Regardless of your profession or employment type, building an emergency fund is a crucial personal finance practice that can help you improve your financial well-being and cover unexpected expenses.
Types of Emergency Funds
There are various types of accounts you can use to build an emergency fund. Some include a traditional savings and checking account, money market account, certificates of deposit (CD), high-yield savings accounts, and even cash market accounts.
Because there are so many savings options with different benefits, it is important to understand what you are looking for in an account and what you need. Some key factors to consider are withdrawal rate or liquidity of the money in your account, safety of your account, penalties, and the earning potential or yield.
Some use an emergency fund as a dedicated savings account, while others may aim for a higher cash flow or return on their contributions.
Needless to say, there are plenty of options to choose from when starting your emergency fund. An emergency fund depends on your financial goals. Each choice truly depends on what you expect to receive or wish to have.
Why Bother Building?
You may be wondering, why is this so important? Building an emergency fund is not just about saving money; it’s about creating a financial cushion that supports you throughout your life.
If you are experiencing a job loss, irregular income, a large medical bill, or any unexpected costs, a strong emergency fund can help alleviate some of that financial hardship.
General Building
For the typical person, there are various reasons for growing an emergency fund. Examples of these uses and reasons could include home repairs, savings goals, unexpected bill increases, medical expenses, retirement accounts, and most commonly, unplanned expenses.
The typical non-traveling worker may not rely on their emergency fund as strongly as a traveling worker could. These emergency funds may mostly be used for true emergencies or financial goals only.
Building as a Traveler
As a travel nurse, there is a strong chance you could heavily rely on your emergency fund for various purposes. It is important for any person to build an emergency fund, but it is crucial for a job in the travel industry.
As a travel nurse, you experience frequent relocations, which can create an overwhelming feeling of instability. There is no guarantee you will be picked or chosen for a new assignment location directly after completing an assignment.
Because of this, it is important to have a savings fund set aside for those moments when life isn’t stable. Having a secure emergency fund can help ease these feelings of income and location instability.
Building a reliable emergency fund can help ensure you have enough money in a separate account to help you float from job to job. If you are a single-income household, you may be more inclined to save more money in an emergency account since you do not have a second reliable income source.
For a travel nurse earning a single income, it is encouraged to save at least three months of expenses. To put this into perspective, the total amount of expenses you have from one assignment (usually 12 weeks) should be saved in an emergency fund.
Boujee Budgeting
Although we’ve covered a lot of information so far, there is still one missing piece of the puzzle. Building an emergency fund starts with one simple concept: budgeting.
The best way to do this is to track your cash flow across each assignment to identify new saving opportunities. This could be monitoring credit card balances, recurring transfers, debt payments, automatic transfers, and traditional monthly expenses.
Budgeting for an emergency fund, specifically as a travel nurse, requires you to build a financial plan. This could include how many assignments you wish to have each year, an estimate of your yearly income, and the various expenses you will be responsible for versus those of your employer.
As a travel nurse, you may come across employers who offer different benefits. The biggest challenge with various employers is how much your income fluctuates. An emergency fund can be a great way to combat this issue if one assignment falls shorter than another.
Tips for Success: Building On The Go Made Fun
Okay, we’ve covered the basics of an emergency fund and why it is so important to have, especially as a travel nurse. We all know that saving is not the most glamorous activity in the world, but it is extremely important.
As a travel nurse seeing new locations frequently, it can be super easy to overlook the importance of an emergency fund and instead go spend your paycheck on sightseeing and activities.
As a travel nurse, we know you want to experience your assignment location. But it’s also important to make smart financial decisions. Keep reading for the best tips and tricks on how to build an emergency fund in a fun and exciting way.
Adventure Funds: Completion Bonus
Although they are not guaranteed, it is not uncommon for a travel nurse to get a completion bonus at the end of an assignment. Instead of viewing this extra cash as free spending money, consider depositing some or all of it into an emergency fund.
Since you were not expecting this extra income, it makes it easier to save! To make this more enticing, you can treat this as a “cash gift” or “adventure fund.”
We can all agree that an adventure fund sounds way cooler than an emergency fund. A fun name for this savings account alone may encourage you to start contributing more. After all, it sounds much more exciting to add to your adventure fund instead of your emergency fund!
New City, New Goals
A fun way to start or replenish an emergency fund account is to create a new savings challenge for each new assignment city you travel to. For this specifically, you could create various mini challenges for yourself that revolve around small ways to save in your assigned city.
Examples of ideas for this may be to save $150 by cooking in instead of dining out, or save $100 by walking instead of paying transportation costs. Even a goal to save $75 by making your own coffee at home rather than buying from a shop every day could dramatically increase your savings!
The key principle with this activity is to still do things you enjoy, but for a fraction of the cost. At the end of the year, you can go back and compare how much you saved across each of your assignment locations!
Just One More Shift
Another way to help rack up some funds is to occasionally pick up an extra shift. One extra shift could help offset the cost of something fun you want to do in the future, or simply be helpful to rebuild your funds. With this option, you can directly deposit the cash you earn into your savings account.
This small act of picking up an extra shift here and there may not sound glamorous, but it could set you ahead hundreds or even thousands of dollars a year.
Savings From Expenses
Okay, we’ve been talking about many different things that you, as a travel nurse, have to pay for. Let’s switch gears and talk about expenses you may not have to pay for.
One of the biggest expenses, housing, is usually covered by your employer through a stipend. It is not uncommon for those stipends to exceed your actual housing costs. So, instead of viewing this as extra spending money, you could deposit it into your checking or savings account for emergencies.
Now, you don’t have to deposit all of the extra cash flow you receive into your emergency fund. The key idea is that, over time, setting small savings goals will help build consistent contributions.
Those small saving habits can help you replenish your emergency fund after use, build financial stability, and even cover the cost of something fun every now and then!
Travel Memory Jar
Let’s jump back to the fun tips. One creative way to keep building your savings on the road is to have a “travel memory jar”. For each activity, experience, or adventure you go on at your assignment location, you write down a dollar amount you’d like to set aside for your jar.
For example, you could set aside $5 for an outdoor attraction you visit. That five dollars then gets put into your travel memory jar. The best part is that you can set any dollar amount that is best suited for your budget.
Not only is this a fun way to remember the experiences you do, but it is a super flexible way to save some extra cash. It never hurts to have more than less savings built up, so why not try it in a fun way?
No-Spend Adventure Day, No Problem!
Having your work on the go is an amazing experience that allows you to see so many different places in the world. As a travel nurse, your extra funds are limited. If you want to see and do all of the different attractions and activities, we have to be boujee on a budget.
A fun and engaging way to apply this principle would be a “No-Spend Adventure Day”! The goal of this adventure day is to go out and explore a given location, but you try to do it for free or at a very low cost.
This is a great way to be creative with your travel costs. Many cities offer free activities that are still fun, engaging, and allow you to explore the history and city of your assigned location.
Some examples of these free low-cost adventures are visiting national parks, a walk through historic downtown, beaches, hiking trails, or even a date with a book at a cozy public library.
The opportunities are endless for this idea! No-spend adventure days can also allow you to unexpectedly meet new people, which can help grow your social circle and make you feel more acclimated to your assignment location.
A Shift in Mindset is a Shift in Money
One of the biggest tips out there for being proactive in saving money is a shift in your mindset. Instead of viewing saving as something you have to do, think of it as something positive and beneficial you should do.
An emergency fund is not just for medical expenses or appliances breaking. It can give you opportunities and options for how you want to live your life. Having a positive outlook on savings can be looked at as a “future freedom” fund. Meaning, there are so many extra activities you can do in your life if you build adequate savings over time.
This freedom fund can be used in so many more ways than just money sitting in your traditional savings account. It can provide you with enough money to cover essential expenses between assignment gaps, housing emergencies, high credit card bills, unexpected emergency room visits, vehicle repairs, and even to build your retirement fund.
Reframing savings as a tool used to give you more freedom can make those recurring contributions much more motivating. The act of saving and having money set aside can provide you with a relieving feeling when those financial troubles arise.
Game Mode
One of the final tips to share with you combines a lot of the tips we’ve already covered. To have the best savings experience as a travel nurse on the road, combine all of the tips we previously mentioned and turn them into a game!
Turning savings into a game not only challenges you to meet your savings goals, but it also adds an exciting component to a rather boring but necessary practice. The more excited and engaged you are with saving, the better financial position you will be in throughout your travel assignments.
By using a travel memory jar, no-spend adventure day, or even picking up an extra shift, you can continue to enjoy those unique experiences that make travel nursing so rewarding while building a strong financial safety net at the same time.
Give In and Save the Stylish Way
Okay, there’s been a lot of information thrown at you. There is one final concept to leave you with. One of the biggest advantages of being a travel nurse is getting to experience a variety of new opportunities while exploring a new place.
The one central idea is to develop your own savings goals and practice meeting them in a fun way. Saving does not have to be this gruesome practice that makes you miserable. It should give you motivation and build you up as a strong individual.
Through intentional and consistent activities, you can build quite a strong emergency fund without missing out or sacrificing the things you enjoy. As a travel nurse, consistently saving and making a conscious effort to build your emergency fund, your future self will thank you!
Hopefully, with these tips, you not only understand what an emergency fund is, but the importance of building one as a travel nurse and the several ways to save in a fun way. Always remember, anything is better than nothing!
