Why It's Important for Travel Nurses to Have a Savings Account

Health Carousel Travel Nursing
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Whether you’re embarking on your first travel nursing job or your 30th, as a Super Nurse, it’s important to be prepared.

As you likely know, travel nurses typically take short contracts (usually 13 weeks long) at facilities across the country. While travelers generally make more money than staff nurses and most contracts go smoothly, it’s important to have a cushion built up for life’s unexpected turns. With a healthy savings account travel nurses can focus on providing the best care to their patients, their families, and themselves without financial worries weighing them down.


Importance of Saving for Retirement

On rare occasions, some travel nurse jobs can be canceled by the healthcare facility for various reasons, such as an unexpectedly low census. While there are many top travel nursing jobs out there to choose from, it may take some time to find another travel nurse assignment. Usually, your travel nurse company or your Health Carousel Travel Nursing (HCTN) recruiter will help with this. While waiting for that travel nursing assignment, it’s important to have enough savings for you to be comfortable.

In the event that you’re unable to fill a position and need to cancel due to unavoidable circumstances, your cash cushion can support you until you’re able to work again. It’s important to be able to care for yourself if such a situation arises!

We all know that it's important to have a retirement savings account, but it's also just as important to diversify your savings. Meaning, don't put all of your savings into one investment area, such as your travel nursing 401k or savings account. Some additional places to potentially invest your travel nursing salary are bond interest payments, dividend-paying stocks, or other 401k rollover accounts. This way, you can earn money from the money you are already saving.

Challenges with Saving as a Travel Nurse

You will incur some expenses depending on where you’re traveling, your travel nurse company, and how far away you are from home. These expenses may include fuel for your car, plane tickets, housing, the cost of travel nurse health insurance, and so on. While some travel nursing companies offer mileage reimbursement, it’s important that you are able to cover these costs as they occur.

Let's review some other challenges that travel nurses face when trying to save and that can affect your travel nursing pay.

While many of the top travel nursing jobs initially look appealing because of the high travel nurse pay, don't fall into the trap. There are plenty of RN nursing specialties out there, but some have higher travel nursing pay than others. Sometimes, depending on the assignment, your expenses may outweigh your take-home travel nursing salary. For example, travel nurse housing costs may exceed your travel nurse housing stipend.

To prevent this, research the area and cost of living before accepting any assignment. Additionally, sometimes your base travel nurse pay will look very appealing, but the tax-free stipends may be lower. This means most likely that your net pay will be lower, and you will have a large income tax burden.

Another challenge that a travel nurse may face is a small gap in your assignment, which means no travel nursing pay for those few weeks. Given enough time to prepare, it’s possible to find a travel nursing assignment that begins shortly after your previous contract ends so that you don’t have long gaps between travel assignments. However, if you plan on taking time off between contracts to visit family, vacation, or simply enjoy time to yourself, it’s even more important to have a cash cushion in your bank account.

What Is a Good Savings ‘Cushion' for a Travel Nurse?

A good rule of thumb is to have enough money saved to cover at least three months' worth of expenses upfront. Keep in mind that rent and travel costs vary by location, so it’s always wise to have a little more saved than you think you’ll need. If there is a location you have in mind that you’d like to travel to, it’s wise to do some research about rent and the cost of living ahead of time. This will give you some extra time to prepare.

As we mentioned before, it's also important to diversify your savings. Diversifying means that instead of putting all of your travel nursing pay into a savings account that earns little to no interest, try other savings options where you can earn more money on interest, dividends, etc. However, keep in mind that all savings options aren't equal, and some come with the risk of losing money instead of earning.

There are many low, middle, and high-risk savings options out there, you just need to do your research and find what you are most comfortable with. One of the more popular and low-risk options right now is to purchase bonds and earn bond interest payments. Bond interest payments are interest that you earn from purchasing a bond for a set amount of time (also known as the bond maturity date). Purchasing index funds are another investment option, but also holds greater risk than bonds. This is because index funds fluctuate with stock market prices.

How Do Travel Nurses Save Money?

A 401k savings account is a great way for nurses to save money because it's tax-deferred. Tax-deferred means you pay taxes on the money when you withdraw it, not upfront. However, travel nurses can save money through several others avenues than just a travel nursing 401k account. Some options include dividend-paying stocks, bond interest payments, or certificates of deposit. If you have a 401k from a former employer that needs to be closed, consider opening a 401k rollover account. With a 401k rollover account, you take money out of your prior 401k retirement savings account and move it into another 401k or an individual retirement account (IRA) to save yourself tax penalties.

As we mentioned before, it's also important to budget and plan as a travel nurse. Before you receive your travel nursing contract, research your assignment location and estimate your total expenses. This includes housing, meals, travel (to, from, and during your assignment), and activities. If you have monthly ongoing payments, such as a home mortgage or a car payment, include these as well. You may find that these cut into your budget and you may need to look for a higher-paying area or one with a lower cost of living. Click here for more savings tips.

More Quick Money-Saving Tips

To help build your savings cushion, let's review some quick money-saving tips for travel nurses. As we mentioned before, research your assignment and location before signing your contract. Know what your budget is and how much you want to save. This way, before signing your contract, you know how the minimum amount you will need to earn.

In addition, many travel nursing agencies offer their travel nurses benefits. Instead of searching for third-party health insurance plans, which can be costly, sign up for health insurance through your agency. Most of the time, their health insurance premiums are little to no cost to you!

While on assignment, another great tip to save money is to cook your own meals. Even though you will receive a meal stipend, that doesn't mean you have to spend it eating at restaurants or stopping at the fast food drive-thru for every meal. It's more cost-effective to cook your own meals. If you are staying at a hotel while on assignment, this may be a little trickier. However, you could still buy quick and easy items for breakfast, such as instant oatmeal, granola bars, or fruit. Sometimes hotels or extended stay hotels offer free continental breakfasts with your stay. Or, if you're a coffee lover, consider purchasing a small coffee maker to make your own instead of driving to the local coffee shop every morning.

As a travel nurse, there are many options for you to save money and invest in your retirement. Whether it be through a 401k, retirement account, or other avenues, it's important to have a savings cushion. Read more savings tips on our travel nursing blog.

At Health Carousel Travel Nursing, we recognize Super Nurses for the heroes they are. We want you to have the best experience possible, and having a good savings cushion is one way to give yourself some extra peace of mind while carrying out your life-changing work.

Learn More with Health Carousel Travel Nursing

Search our job board for the many travel nursing assignments we have available. There are many RN nursing specialties to choose from! With our new On Demand app, you can search, compare, and apply for jobs easily. If you want to read more about travel nursing, check out our travel nursing blog. HCTN has lots more to offer its travel nurses compared to other travel nursing companies, including great benefits, travel nurse health insurance, and a full circle of support.

Frequently Asked Questions

Next, let's review some frequently asked questions of travel nurses.

How do I pay less taxes as a travel nurse?

There are several ways for a traveler to cut back on a large income tax burden. While high travel nursing pay for an assignment may look appealing, it's not always the best to lower your taxes. Sometimes assignments have great travel nursing pay but have lower tax-free stipends for housing, travel, and meals. This means that your income tax will be higher. Conversely, you may find that an assignment has a lower base travel nursing pay, but higher tax-free stipend amounts. So before signing any contract, it's crucial to calculate your net travel nursing pay.

Can travel nurses have a solo 401K?

Many travel nursing agencies offer their travel nurses 401k plans. This is where you can contribute a portion of your travel nursing pay, which is tax-deferred. Again, tax-deferred means that you won't pay taxes until you withdraw the money.

How much should I save before travel nursing?

Before becoming a travel nurse, consider having at least three to six months of expenses in savings. Expenses should include, housing, meals, insurance, car insurance, ongoing payments (such as credit card or car), etc. You never know when you might need this money for an emergency or if you want to take extended time off between assignments.


Land your dream job faster when you travel with us. Get started with top local and national travel nurse jobs in On Demand.


Land your dream job faster when you travel with us. Get started with top local and national travel nurse jobs in On Demand.


Land your dream job faster when you travel with us. Get started with top local and national travel nurse jobs in On Demand.

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Land your dream job faster when you travel with us. Get started with top local and national travel nurse jobs in On Demand.

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