At some point, everyone will face complicated money-related decisions. Join us for a brand-new episode with personal finance topics to give you the clarity you want on your financial journey.
This podcast, hosted by Summit Wealth Group, is meant to provide practical advice to help the average person discover new financial strategies, including ideas on managing your budget better, paying down debt, retirement planning ideas, wealth-building, and tax minimization strategies.
Join host Jessica Magnuson and guests within Summit Wealth Group as they bring various perspectives to the discussion. If you have feelings of confusion and uncertainty about your financial future or want to learn more about personal finance, join us as we help you navigate the path to a better, more secure future.
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How do travel nurses achieve financial stability amidst constant relocations and diverse assignments? On this episode of Reach Your Summit, we address this pressing question with insights from expert guest Michael Shelton from our Memphis office. Michael draws from his extensive experience to discuss the unique financial challenges travel nurses face, from budgeting inconsistencies to saving for retirement. Learn practical steps for establishing a reliable budget and discover the key to spending less than you earn, no matter where you are. We also explore the adaptability required for financial advisors to effectively support this dynamic group.
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Welcome back to the Reach Your Summit podcast, where we are helping you navigate the path to a better, more secure future. I'm your host, Jessica Magnuson. This podcast is brought to you by Summit Wells Group and we are joined again for this episode from our Memphis office. Our advisor, Michael Shelton, is going to be talking with us again, so welcome back, Michael.
Michael:
Thank you, Jessica, glad to be here. Thanks for having me.
Jessica:
Yeah, of course. So this episode is actually going to be a little bit more specific because I want to pick your brain a little bit about a group of clients that you work with specifically that you have loved working with which are travel nurses. So and I think that's something that a lot of people may not think of initially if they're trying to become a travel nurse, or whether they know someone in their life is that there is a big opportunity for these nurses to work with a financial advisor, because of just the uniqueness of their career and a lot of places that you can come in and assist them with their financial journey. Would you agree with that? How's your experience?
Michael:
I do. Yes, absolutely. I agree that everybody needs professional help, specifically with travel nurses, I think, because they are so mobile in regards to the lifestyle that they live through work, traveling to different states for shorter periods of time and kind of always being on the move, there is this, maybe mental, roadblock to finding someone who can kind of travel with them as a professional, so to speak. And just now, with virtual meetings and the ability to really build a connection and a relationship with people online, I think we have a really great opportunity and I've seen this working with the travel nurse clients that I work with to really give people the care, the attention they need, but do it in a way that fits within their extremely unique lifestyle, and so I think that's why I enjoy working with travel nurses and why I would encourage them to consider finding somebody who can work with them, regardless of where they are in the country or what particular assignment they're on at that point in time.
Jessica:
Yeah, I remember when you first told me that this was a clientele that you worked with and you really enjoyed working with, and you mentioned that piece about like I'm an advisor that travels with them because they are going all these different cities, different state to work for however long at a time.
Jessica:
A lot of them don't have a home base necessarily. So you know, a lot of people might feel like they can't have someone who you know they have to be in a certain city to meet with and sit down with in person. And you just have always kind of taken this approach of like no, I'll travel with you, we can do everything virtual, I'll take care of whatever you need taken care of. I'll go along with you to each city, which I thought was a really, really cool concept.
Michael:
Absolutely yeah, I enjoyed that part of it.
Jessica:
So, just in general, we've mentioned how traveling nurses, they have a unique job. There's a lot of, I guess, behind the scenes stuff with finances and maybe benefits, things like that. That a normal job. It's not the same, you know. I say normal I mean more like a non-traveling job where you are in one location at one company you know for your career. Given that they travel to different states, live in different places potentially, are working in different departments, different hospitals, things like that, how do you recommend that they start with their like, creating budgets and saving for these variations in their career?
Michael:
Yeah, that's a great question. So one challenge I have seen with travel nurses is I'll give you a perfect example, since you just moved back from California, one of the most expensive states in the country right, I had a travel nurse client who was in California and then she moved to an assignment in Kentucky.
Jessica:
Okay, yeah.
Michael:
Totally different cost of living, totally different cultures, way different, and so it's the hard part is kind of adjusting to that. I'd say, at a very foundational level, it starts with lifestyle. It starts with habits, regardless of what state you're currently in, regardless of what inflation looks like at that moment in time or what the cost of living is where you're currently residing in, I think it's understanding the importance of trying to spend less than you make.
Jessica:
Yeah.
Michael:
In regards to budgeting. This doesn't always work as seamlessly as possible with the travel nurse, but I always recommend budgeting in general, that people most people use credit cards. Most people don't use cash as much anymore in the younger generations, including myself. I'm not that young, but I would say I always recommend people, if they want to get a feel for how much they're spending on a consistent basis, go into their bank account, look at the last three months and just average out all of the money that's gone out over the past three months and come up with a monthly dollar figure. And once you have that dollar figure in writing, it's very powerful to be able to understand hey, am I spending more than that? Am I spending less than that? Really, looking back at the last several months of what your lifestyle has looked at and using that as a kind of good determinant moving forward, always coming back to, though, are you spending less than you're making? Because, no matter where you live, that's the kind of principle that we use to make sure that we're budgeting correctly.
Jessica:
I mean that's a great starting point. I think when I first started budgeting I was so nervous about like, oh well, I set this in paper. But maybe it was the first budget I made and I'm like, well, maybe that number needs to be adjusted a little bit over time to really hone in how much you should be spending and not overspending. So I think that's a great tip to start to just have your launching point. In general, I feel like I would never have thought of this. You mentioned I just moved back to Colorado from California. So over the last couple of years I have had, when I come around to tax time, realizing, oh, you have to do different stuff if you're working in different states for part of the year. So for something like a travel nurse who's moving maybe three or four times a year to different states, what would you recommend they just keep an eye on? In regards to that?
Michael:
Yeah, great question. So I live in Memphis, tennessee. Tennessee does not have any state income tax, and so different states have different tax laws, and so it's possible that they've received some portion of compensation that year in a state that doesn't have state income tax and that they've received income from a portion of a year that does, and so on that full disclosure, I'm a financial advisor, I'm not a CPA. I don't give people recommendations on taxes. However, what I do recommend people do just like hiring a financial planner.
Michael:
What I do recommend people do just like hiring a financial planner is, as they are dealing with these more complex issues, not trying to do it on their own, and so I think if you are dealing with multiple tax laws in multiple states, that's a point in time where I think it makes sense to hire a CPA or, at the very least, if you are using a self-service online, seeing if there is some type of paid upgrade where you can work with an actual, real person to navigate those more complex issues. It really does come down to what I've found in my life is that value a lot of times comes from services that you have to compensate for, and so I do recommend people if the taxes are a little bit more complex. On that end, paying a little bit of money to make sure that they're getting the right advice.
Jessica:
I could not agree more with just letting someone who knows the ins and outs of these things help you with it, because, especially something like taxes, you don't want to mess it up. You IRS will come for their money.
Michael:
They will get it, and so it's a good time to start keeping that in mind. About delegating You're already busy. One of the reasons I like working with travel nurses is I came from over six years in the healthcare environment. I understand that nurses are. They're very spread thin. They work really long hours. A lot of times it's hard to have the energy after working a 12 hour shift to find a financial advisor or find a CPA, and so I really get fulfillment out of trying to make that simple for travel nurses and trying to make sure that they're getting the care they need after working very long, stressful, overworked shifts.
Jessica:
Yeah, sure, the more that you can kind of take off their plate and just handle for them, the better. I agree. What do you feel like could be the best retirement options, maybe for a traveling nurse who doesn't have that through their employer?
Michael:
Great question. So, again, I would encourage people to go back and listen to the retirement episode that we did. That talks about the different types of retirement plans out there. But if someone doesn't have access to a plan through work, I would recommend that they work with someone to ensure that they're either maxing out a traditional IRA or, if they make below the IRS income limit. I always recommend maxing out a Roth IRA because you're building that tax-free bucket in retirement. Another reason why it can be beneficial to work with an advisor is if a travel nurse is 1099 income versus W-2, then there could be a scenario where they have the ability to potentially save into a SEP IRA, which would allow them to save more than they would be allowed to in a traditional or a Roth. So if you don't have a plan at work, I would recommend working with someone to figure out what are the most efficient options outside of not having the ability to work with a plan administrator through your employer.
Jessica:
Yeah, no, I think you bring up a great point there in the value of having a financial advisor if you're in one of these positions, because if you don't have like an HR department or a plan administrator that's telling you this is what you should be doing, this is what you should be putting your money for your workplace retirement plan, then there's so many, so much information, so much stuff out there to weed through to figure out what you need to be doing. So I mean that's a huge opportunity to have a financial advisor who's just going to say this is what you should be doing, here's what I can help you set up, so that you can just kind of set it and forget it with your busy schedule and know that you're contributing and going to be good down the road. Absolutely Huge point there.
Michael:
Can I mention one more thing too, Jessica?
Michael:
So I do want to encourage listeners to go back and listen to the retirement episode as well when we talked about figuring out how much to save for retirement.
Michael:
Because one thing that I thought of when you mentioned trying to figure out the budget and adjusting to that is that it's really important if you can lock down exactly how much you need to save each month to be able to retire at a specific age and not run out of money in retirement, then it's a lot easier when you have a fluctuating budget, because if you can identify what that number that you need to save is each month, we almost have a natural ability to adjust our lifestyle to be able to continue saving for that number. And so clients feel a lot of peace, they feel a lot of clarity when they know, no matter what, I have to save X amount of dollars each month and then, regardless of where the budget goes, if I stick within that I'm going to be on track, and so that brings a lot of clarity to the fluctuating costs and kind of how budgets change. So I did want to encourage people to go back and listen to that retirement episode just to listen and kind of how we think about that.
Jessica:
That's great. Yes, thank you for mentioning that. That's a great point of if you know exactly what you need to do to be on track, then the rest of the budget is a little easier to adapt to wherever you need to change things. Given that traveling nurses travel and are in different locations, do you ever get the question of should I buy a place in a certain location that maybe they consider the place they're going to come back to when they're done traveling, or anything like that? Or do you maybe lean more towards like, just rent wherever you are?
Michael:
currently? Yeah, you know that's a great question and I think with all financial planning it comes down to what is the client or what is the travel nurse's unique situation? What phase of their life are they in right now? So if a travel nurse is, they're in their twenties, they're single, they love the kind of active, mobile lifestyle of a travel nurse. It probably doesn't make sense to buy a home and have a primary residence in a state.
Michael:
However, if a travel nurse is starting a family or maybe they're trying to slowly ease out of the travel nurse business, still working that opportunity, but still want to kind of work more full-time at a hospital in a different location, it might make sense to potentially buy a home. But I think that you know, as we've talked about, renting is always a really good option when you're on the move. I think it's a great option when you're younger, especially in the current interest rate environment. And there are and the travel nurses out there will know this better than me there are Airbnb type services that are tailored specific to travel nurses, where they can kind of hop around pre-furnished locations for specific amounts of time. And to me, the travel nurses I work with feel the most freedom from being able to kind of jump around and not have to worry about owning a home in a specific location. But it all comes back to their unique goals and where are they at in their current life.
Jessica:
That makes a lot of sense. Life. That makes a lot of sense Kind of getting back to benefits and maybe lack of, given the nature of their job or who they're working for at a current time. When it comes to, like, health insurance, a health savings account, what is that, and would that maybe be a good option if that's something they can choose?
Michael:
Absolutely so if they have the ability to save into a health savings account the acronym is HSA, so they've probably seen that as well. Those are really really good options that I think a lot of people underutilize, and so we think of it as an additional tax strategy. And so we think of it as an additional tax strategy so you can put, just like into a 401k, you can put money that has not been taxed yet into an HSA account and then you can use it for medical expenses, for qualifying medical expenses, and it's tax-free. So it's a really easy way to be super, super tax efficient on healthcare costs that we know you're going to have anyways. And what's great about an HSA is, if you don't spend the money in any given year, that money rolls over to the next year, so it's not a use it or lose it type of option.
Michael:
Yeah, it's very huge and a lot of people get the FSA, which is the flexible spending account, mixed up because that is a use it or lose it. So I always recommend people look into the HSA. Now, this is further down the line, but a lot of HSAs will allow people to invest in the stock market within the HSA and if they can not spend the money in the HSA and actually hold it until retirement, it can become a qualified IRA in retirement as well. So it's a real short-term strategy for reducing taxes on costs that you're going to in any ways for medical expenses and also creating an additional kind of tax qualified IRA bucket in retirement as well. So that's one thing I recommend people at least look into.
Jessica:
That, I mean, sounds like there's a lot of benefits to choosing that. If that's an option for you, absolutely Sure. One last thing that I was thinking about with travel nurses is there any sort of like estate planning things that could be different for them, given that they may not have as many workplace accounts or workplace options, benefits, things like that, as other professions do? Does that affect estate planning at all for them, or do they just kind of do the normal things that everybody else would do?
Michael:
Again, kind of like the tax law, estate planning is a kind of a separate designation that I don't implement as an attorney, but I work with estate planners and I connect my clients to estate planners when they need the work and really just advising them on kind of what are the things they should be paying attention to, high level, I'd say. Regardless of their age, everybody needs a power of attorney, and you can get these things done quickly and easily online as well. I also recommend that there's a medical power of attorney. So if something were to happen to someone and they needed someone to step in and make medical decisions for them, we want them to designate who that person is. And then financial power of attorney as well. So if someone needs to have financial decisions made on their behalf, we need to have those in place too. And then the last thing I'd also recommend, just in regards to estate planning A lot of times we see this with a lot of clients, with older clients.
Michael:
They might have certain people named in a will or a trust and they have a different person that's, a beneficiary of a life insurance contract or a different person on the bank account, and a lot of times the life insurance or the bank will actually trump what's in the will, and so we want to make sure that that verbiage is aligned together. So one thing I recommend people do and they can start this today is make sure if they have someone on their bank account as a beneficiary or as a co-owner, or if they have a beneficiary for a life insurance contract, just make sure you revisit that and that that person is up to date and make sure that, whoever that person is, if you do an estate plan or will, that it matches what's in that writing, because we've seen scenarios where they don't match and it creates a blindsided environment for the client.
Jessica:
That sounds like it could be a huge, huge mess, and I didn't realize, actually, that a beneficiary listed on something is preferred or is defaulted to, I guess versus having a will. So that's, I think, a huge thing for everyone to look out for for sure, absolutely Well. That finishes our episode on travel nursing. Obviously, there are a ton more questions that we could get into. Those were kind of just the basics, high-level stuff that Michael kind of sees most often or gets questions on most often. But if you have something specific that you are wondering about as a travel nurse and feel like Michael could be a resource for you, he is again in our Memphis office of Summit. He can be found on our website, www. summitwealthgroup. com, and he would be happy to meet with you and be able to try to answer any questions or learn more about what your specific situation is. As always, hope you found this informative and that you got a lot of out of it, even if you're not a travel nurse or maybe you don't know one, but it sure is an interesting discussion and an interesting profession that I definitely didn't know anything about and have come to learn a lot from Michael, so that's been really, really cool.
Jessica:
Again, you can find us on all the socials at Summit Wealth Group. If you have any questions or suggestions for the podcast, you can email us at info@ summitwealthgroup. com. Thanks so much for listening. Thanks for listening to the Reach, your Summit podcast, brought to you by Summit Wealth Group. If you enjoyed this episode and would like to help support the podcast, please share it with others and subscribe so you don't miss an episode. If you have any questions or topics that you'd like us to cover, please email us at info@ summitwealthgroup. com.
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