Focusing on Savings Rate instead of Only the Highest Pay as a Travel Therapist

February 2, 2022February 2, 2022 ~ Travel Therapy Mentor ~ 3 Comments

With rising student loan debt and stagnant or even declining reimbursement for therapy services, finances are often at the top of therapists’ minds. This is no different for travel therapists. Over the past few years while mentoring thousands of current and aspiring travel therapists, we’ve found that the primary reason most therapists choose to travel is to earn more money than they would at a permanent job. The therapists, especially new grads, who we have mentored are often able to earn twice as much, or even more, as the offers they received for permanent positions in their home areas. That extra money can go a long way toward paying down student debt or toward reaching a position of financial independence earlier than traditional retirement age. In fact, Whitney and I were able to leverage our higher pay as travel therapists to achieve what we refer to as semi-retirement in our 20s after only three years of working full time. As we dive deeper into this topic, if you’re unfamiliar with how pay works as a travel therapist, this article is a great place to start.

While therapists often focus on how much they can make as a travel therapist, what is often neglected in discussions about finances between travel therapists though is the expense side of the equation, which is very important as a traveler. After all, if your primary goal with travel therapy is to improve your financial situation, then earning a lot of money and subsequently spending almost all of it doesn’t really lead to the desired result. While all travel therapists want to earn as much as possible on each contract, we believe that a much more important metric is your savings rate while traveling, which takes into account both income and expenses. This is the primary metric that we focused on early in our careers as travel physical therapists and is the main reason why we were able to achieve so many of our financial goals in such a short period of time.

Savings Rate

Calculating your savings rate is pretty straightforward and easy. You simply subtract your expenses from your income, and then divide by your income for any desired time period (usually monthly). The equation looks like this:

(Income – expenses) / Income

If you aren’t keeping track of your exact spending every month and you want to keep it simple without having to track every single purchase, you can at least take a look at the big expenses that don’t change much, such as your rent/mortgage costs for your tax home, your cell phone bill and any other monthly utilities you pay, a car payment if you have one, health insurance, and your rent for your travel location (which will vary but you can look at for each individual contract). You will get the bulk of your expenses from these “big ticket items.” Then you can estimate about how much you’re spending each month on things like groceries, gas, activities, eating out, and miscellaneous purchases, to get a rough idea of your monthly expenses.

We always use after tax numbers when calculating savings rate, as we’ve found this to be more useful as travel therapists. For example: let’s say you’re a Travel PT making $1,800/week after taxes on a travel contract. All of your expenses, including your tax home costs, equal about $4,000/month. To determine your savings rate for the month, first you’d take your weekly take home pay of $1,800/week and multiply by 4.33 (the average number of weeks per month) to get your monthly income. Then you’d subtract your $4,000 in expenses. Finally you’d divide this by your monthly income calculated above and convert into a percentage. For this example the math would look like this:

((1,800*4.33)-4,000)/(1,800*4.33)= .487 = 48.7% savings rate

The higher your savings rate from month to month, the more quickly you can achieve your financial goals. A savings rate of 48.7% in the example above would be really good and nearly 7x higher than the normal US average. But with some optimization and by trying to keep our “big ticket item” expenses pretty low, Whitney and I were regularly able to reach a saving rate of 70% or higher while traveling full time. We funneled all of that savings into smart investments that have grown significantly over time, which has helped us achieve financial freedom.

Optimizing Savings Rate

A common mistake we see new travel therapists who are traveling to improve their financial position make is always chasing the highest pay packages, without paying attention to the cost of living in the area of those high paying jobs. In the search for high pay, many travelers will be enticed by a travel job paying $2,000/week after taxes on the west coast in a high cost of living city, over a job paying $1,800/week after taxes in a much lower cost of living area on the east coast or in the Midwest. The higher paying job in this situation will lead to about $900/month in additional income, but that extra income will often be more than negated by the higher expenses. Not only is housing more expensive in the higher cost of living areas, but so are food, gas, activities, and other small expenses like parking. We’ve talked to many travel therapists regularly paying $2,500/month or more just for short term housing in high paying, high cost of living areas, and we can only imagine what their total expenses look like after taking into account all of the additional costs besides just rent.

If optimizing your savings rate is the goal, then often taking moderately paying travel therapy contracts in lower cost of living areas is a very smart move. We took all of our contracts on the east coast for our first few years of travel therapy largely for this reason. Our pay packages back then averaged about $1,750/week after taxes, but we were able to keep our expenses low and subsequently save a much larger percentage of our income than we would have been able to making $2,000/week after taxes in high cost of living areas

Minimizing Expenses

Since keeping expenses relatively low is vital for having a high savings rate, for a traveler focused on finances, minimizing them should be a priority. Of course, taking travel jobs in lower cost of living areas is the primary way to do this, but another big way to decrease overall expenses is by looking at your tax home expenses. As a traveler spending most of your time in other areas for work, it’s often possible to get by with downsizing your place back home or even choosing to rent a room as your tax home, instead of an entire house or apartment. Some travelers have big, expensive houses back home with fixed costs, which significantly increases their expenses each month. Meanwhile, Whitney and I rented a room in a house at the beginning of our travel careers to cut down on our tax home expenses, and later on we bought our own townhouse but had a housemate move in to our place to split costs and reduce how much we had to pay out of pocket each month while traveling.

Another great way to minimize your expenses on the “big ticket items” of your budget is to drive a slightly used car instead of a brand new one. Although we could certainly afford to get new cars regularly with our income as travel therapists, since our primary goal has always been to have enough saved and invested so that work is optional for us, we’ve never actually bought a new car. Both Whitney and I have always driven cars that are reliable but at least a few years old in order to avoid the massive depreciation that comes with buying new cars.

Focus on What Matters

Getting the absolute highest paying travel job as a travel therapist can be wonderful, but if it means actually saving less each month due to being in a very expensive area, then this is counterproductive to your financial goals. It’s important for travel therapists to focus on not only the income side of the equation, but also on the expenses, to maximize their savings rate while traveling– which is what really matters. When scouting out your next travel job, be sure to consider the costs of that area and not just the pay for the contract. After all, when it comes to your financial security, it’s not just what you earn, but what you’re able to save!

If you have any questions about traveling or finances as a travel therapist, feel free to send us a message. You can also check out additional financial related articles on our blog. If you’re considering getting started with travel therapy and need to get connected with trustworthy travel therapy recruiters, fill out our recruiter recommendations form and we’ll help you!

Jared is a Doctor of Physical Therapy who has been a Travel PT since 2015. He is also a finance enthusiast and has spent thousands of hours learning about personal finance. He used his career as a Travel PT combined with strategic financial choices to achieve financial independence by the age of 30.

8 Lessons Learned After 6 Years as a Travel Therapist

December 22, 2021December 21, 2021 ~ Travel Therapy Mentor ~ 2 Comments

Whitney and I began our careers as Traveling Physical Therapists in 2015 when we were new grads. Since then, we’ve taken over a dozen travel contracts each and mentored thousands of current and prospective travel therapists. We’ve also talked to and interviewed nearly 100 recruiters at over 15 different travel companies while in search for the best travel therapy companies and recruiters.

Over the last 6 years we’ve learned a lot about the travel therapy industry, from both the perspective of the travel therapist and the travel therapy company. In this article I hope to share some of the biggest lessons we’ve learned in order to help you become a more informed travel therapist.

1. It’s Not What You Make, But What You’re Able to Save

The vast majority of new travelers who contact us have decided to travel in order to improve their financial situations. This was also my main motivation for wanting to pursue Travel PT as a new grad. Many therapists assume that I was able to reach financial independence in such a short period of time as a traveler by taking only the highest paying contracts, but this actually isn’t true. Often, the highest paying contracts in the country are also in the highest cost of living areas. Unfortunately, traveling to high cost of living areas, even when the pay is higher, often doesn’t lead to the best outcome financially. I learned early on in my travel therapy career that taking moderately paying contracts in lower cost of living areas where housing and other expenses are more affordable was the way to make the most of my travel contracts to get ahead financially.

If reaching financial independence or improving your financial position is your primary goal with travel therapy, then keep in mind that the amount you’re able to save on each contract after taking into account your expenses is more important than just looking at the weekly take home pay alone.

2. The Recruiter You Choose is More Important than The Travel Company

New travelers are often in search of the best or highest paying travel therapy company, and I was no different. But Whitney and I quickly realized, after talking to recruiters from a few different companies, that each travel company has its pros and cons; but what will impact your experience as a traveler the most are the recruiters you choose to work with, not as much the travel companies themselves. This has only become more clear as we’ve mentored more and more travelers over the years.

For example, a travel company could have great job options, high pay, and great benefits; but if your recruiter there is not on top of communication, you may be late in getting submitted to jobs and never have the opportunity to get the contract you wanted. Since the recruiter is the main, and sometimes only, point of contact with the travel company, a traveler’s perception of a travel company is shaped almost entirely by the recruiter they choose.

Finding the best recruiters for you isn’t always easy though and can require some trial and error. In the past, Whitney and I have occasionally had awful experiences with recruiters that were highly recommended by others, and had great experiences with recruiters who we’d never heard anyone talk about or had heard less favorable things about. Recruiters aren’t one size fits all, and sometimes the personality and communication style of a recruiter that are great for another traveler, won’t fit you at all. Ideally you’ll find a recruiter and company that are both perfect for your wants and needs, but keep in mind that if you find yourself choosing between a great recruiter at a less desirable company and a bad recruiter at a more desirable company, your experience as traveler will almost certainly be more enjoyable working with a recruiter that you mesh well with and that has your best interest in mind.

3. It’s Important to be Very Selective on Which Contracts You Take

When I started traveling, I was focused on working and savings as much as possible early on to reach a point of financial security quickly. This meant trying to take back to back contracts as often as possible and occasionally settling on the facilities that I went to in order to make that happen. While this undoubtedly allowed me to reach my financial goals more quickly, it also caused me more stress and hassle than it was worth. Some travel contracts are absolutely amazing, while others are terrible. The more selective you are on which contracts you take, the better your experience will be as a traveler, and that is often more important than working as much as possible or only taking the highest paying jobs. Knowing what I know now, I’d much rather take a travel job paying $1,600/week take home at a great facility where I’ll enjoy my time, than one paying $2,000/week take home with a stressful work environment with unrealistic productivity expectations.

4. Arranging Short Term Housing Can Be a Hassle

Finding affordable short term housing can be very difficult, especially recently with rent prices seemingly increasing all over the country. Mistakes with housing are also the most common way that travelers lose money. As a traveler it’s very important to avoid locking yourself into a lease any longer than month to month if at all possible, because if your contract happens to get cancelled then you’re in a bad position. It’s also important to watch out for scams where you’re asked to send money prior to ever seeing the property. These scams are becoming increasingly common, and the scammers often prey specifically travel healthcare workers. For therapists who travel with a family or with pets, which further limits housing options, sometimes buying an RV is a very good choice. When looking for housing, make sure to consider all options, and spend some time choosing the best fit for you.

5. You’ll Always Be Nervous When Starting a New Contract

When I started traveling, I can remember being very nervous about my first day at a new facility. I thought that after I did a few contracts and increased my confidence that I’d no longer be nervous. But now, 6 years later, I realize that was naïve. In this regard, my experience taking travel contracts has been similar to public speaking. The more I do it, the easier it becomes, but I still get nervous each time. This is only natural because each contract is brand new and no matter how good you are at asking the right questions in the interview, there’s always going to be some uncertainty prior to starting the job. It’s important to not let that nervousness deter you though! Realize that this is a normal part of the process.

6. Your First Week Likely Won’t be Perfect

No matter how experienced you are as a traveler, the first week at a new job is almost always pretty tough. Even at the best contracts, you’ll have to get used to all new patients, new coworkers, a new clinic setup, and a new documentation system. On top of that you’ll be familiarizing yourself with a brand new area of the country. We often hear from new travelers that they’re overwhelmed after their first few days at their first contract and worried that they made the wrong choice. Whitney and I have had this experience many times ourselves, and almost every time, once we give it some time and get comfortable at the clinic, we end up really enjoying it. So don’t worry if your first week doesn’t go as well as you hoped. Things should get much easier after the first week.

7. Thirteen Weeks Goes By Really Fast

When starting a new contract, 13 weeks can seem like a long time, but inevitably before you know it, you’re looking for your next contract and this contract is almost over. When we started traveling, we’d often get toward the end of a contract only to realize that there was going to be no way to fit in all the things we wanted to do and see in before we left.

To avoid this, in the first week at a new travel assignment, it’s a good idea to get some recommendations from coworkers and patients for things to do and see around the area. Then make a list of the things you really want to do before you leave and a rough plan on which weekends you’ll do each thing. If you don’t plan things out, it’s very easy to get to the end of the contract and have regrets about not doing everything you wanted to because the time goes by faster than you think it will.

8. Travel Therapy Can Really Improve Your Clinical Skills

Many new grads considering travel are worried that they won’t improve their clinical skills as a traveler. In my experience, this has not been the case at all. In my first couple of years as a traveler, I worked with dozens of PTs in many different clinics and made a point to ask questions and learn from each of them. I picked up wisdom, manual techniques, and exercises from a large variety of therapists with different treatment philosophies each place that I went. This was very valuable to me in my practice as I learned not only how I wanted to structure my own evaluations and treatments from great therapists, but also things I wanted to avoid doing as well. If you go into travel therapy with curiosity and a hunger to learn, you can significantly improve your clinical practice from all the therapists you meet along the way.

Summary

When starting out as a new travel therapist, there is a lot to learn. Over the years Whitney and I have learned a ton, and we do our best to share these lessons and experiences with you all in order to improve your travel therapy journey. The more time you can spend becoming educated on all the ins and outs of travel therapy prior to starting, the better your experience will be. If you’re brand new to travel therapy and looking for somewhere to start, our free Travel Therapy 101 Series is a great place to begin!

You can also message us with any questions you have, and get our recommendations for recruiters here!

Written by Jared Casazza, PT, DPT – Jared has been a Travel PT since 2015 and has mentored thousands of current and aspiring travel therapists.