*The photo above was taken in Montego Bay, Jamaica during an amazing all-inclusive vacation we took during this 1.5 year time period, paid for with credit card rewards.
A Common Trend
Being involved with many different Facebook groups full of therapists of all disciplines, one thing that I see that these groups all have in common is a plethora of posts regarding the desire for increasing pay and decreasing student debt. This seems to be particularly prevalent in Doctor of Physical Therapy (DPT) groups, where it seems that almost all of the new grads are coming out of school with six figure student debt, while salary numbers have not shown a significant increase in response to this higher student debt. There is a lot of resentment regarding student debt, with some even regretting the decision to go to PT school, which is very unfortunate for the profession.
Because I know this gap between student debt and pay is a major concern, I want to share my story in hopes that it may inspire many current students or recent graduates.
In less than 1.5 years after I graduated from PT school, I was able to save $100,000. Not just make $100k, but actually save this amount after expenses. And the crazy part is, others could do this too.
I graduated with my DPT at age 26 with about $92,000 in student debt, which was accumulated from grad school alone. At first that seemed like an insurmountable sum, but by being flexible and creative, as well as with a lot of hard work, as a new grad I was able to save enough that I could have completely eliminated that debt in a year and a half.
There was nothing very special about my situation coming out of school, but I did decide to make a couple of unconventional decisions which have really paid off.
- First, I decided to start my career as a travel PT. There were a few reasons why I decided to go this route, but increased pay was definitely in the top two.
- Second, I worked as many hours as possible for my first year out of school, including overtime and a PRN job.
- Third, I made extra income using credit card and bank account sign up bonuses, which I’ve written about many times in the past.
- Fourth, I chose to continue to live like I did during school, which meant no extravagant purchases (although we did go on many awesome weekend trips along the way) and sticking to a decent budget.
I don’t often talk about specific numbers regarding my pay or expenses on the blog, but in this post it only makes sense in order to give you guys the best understanding of how I was able to save as much as I did.
- Average travel pay over first 1.5 years as a new grad:
- $1,635/week after taxes average*
- Number of weeks worked:
- Total pay from regular hours:
- Total pay from overtime:
- Total pay from PRN job:
- Total pay from all work after taxes:
- Total earned from credit card and bank account sign up bonuses:
- $3,104 total after taxes***
- Credit card points cashed in and sold from bonuses:
- Total earned in first 1.5 years out of school after taxes:
* My actual average weekly “take home” pay was less than this due to taxes withheld. Due to maxing out my 401k in both 2015 and 2016, I had a significant tax refund both years, which I factored back into this weekly pay amount.
** You’ll notice that this means I only took 2 weeks off of work in my first 1.5 years of traveling. This may not make sense to some travelers, since in order to maintain a tax home you need to return to your tax home at least 30 days per year while traveling. The way I was able to achieve this way by us traveling within driving distance of our tax homes for most of that 1.5 years. We took frequent weekend trips home to spend time with family as well as to maintain our tax home throughout this time.
*** I also earned 725,000 credit card points/hotel points/frequent flyer miles and 4 free hotel nights. Some of these points were cashed in or sold for extra money, while we also used the points and free nights from our weekend trips to keep costs low.
- $1,615/month average****
- Total months: 18
- Total living expenses for first 1.5 years out of school:
**** This included the $400/month I pay to rent out a room in my hometown, which is considered my tax home while traveling. Subtracting out that $400/month means my total expenses if only maintaining one residence would be $1,215/month.
If you’re a regular reader of the blog, then you know there is one additional big cost that we had in our first year out of school. We bought our truck and fifth wheel camper to live in while traveling, after saving for our first five months out of school. In my opinion, the truck and fifth wheel are more of an asset than a real cost because they have allowed us to save on our monthly expenses while traveling. Based on some polls I did in travel therapy and nursing Facebook groups, I found that we likely save about $500-600/month on housing costs by living in the fifth wheel instead of finding short term housing. Over the past two and a half years this has saved us about $15,000, but of course this has already been accounted for in my lower month living expenses above. One thing we do need to consider though and add as an extra cost is how much we will likely lose in depreciation while we own the truck and camper.
We paid a total of $36,000, which included buying both the truck and camper used as well as a four year warranty on the camper, which seemed great at the time but actually hasn’t paid off at all. We estimate that we will be able to sell the truck and camper for around $25,000 +/- when we sell them which could be later this year. That means that we will have lost $11,000 to depreciation in the years that we owned them. This full amount shouldn’t be included in the expenses since we only used the truck and fifth wheel during 12 months of this time and we have used it for another 1.5 years afterward, but I’ll include the full amount to be conservative here. We have also had quite a few repairs over the years, but those have already been accounted for in my monthly expenses. I actually think that we did a poor job choosing our truck and fifth wheel due to being in a rush, and therefore these depreciation costs could be significantly lowered for others planning to follow in our footsteps.
- Truck and fifth wheel depreciation: $11,000
Total earned in first 1.5 years out of school after taxes:
Total living expenses for first 1.5 years out of school:
Truck and fifth wheel depreciation:
Total saved in 1.5 years of traveling as a new grad:
As you can see from the calculations above, I was able to save well over $100,000 in my first year and a half out of PT school.
This is actually significantly more than my total student debt coming out of school, which means that I could have completely paid off my student loans in just a little over a year out of school, which is a great position to be in. However, as I wrote about in this post and in this post, I have chosen not to pay off my loans early.
In order to save this amount, I did my best to keep my monthly costs as low as possible while maximizing my income. The biggest opportunity cost of being a traveler is missing days of work since they are all unpaid. For most travelers, they have to miss at least 4 weeks of work per year in order to maintain their tax homes. We purposely chose to travel close to our tax homes to be able to go home some weekends so that we didn’t have to take any unpaid time off. This led to a significant amount of additional savings.
Taking advantage of my 401k to reduce my tax rate was very helpful, although if I could go back, I wouldn’t have maxed it out my first half year of work (June-December after graduation) since my taxable income was already very low for that year. The money that I invested in my first 1.5 years of traveling has grown very nicely due to the continued bull market in equities. But, in this post I’m specifically talking about how much I’ve been able to save and not accounting for investments in my calculations above. But, in reality, the total amount that I had after that first 1.5 years was quite a bit more than the $107,000 due to investment growth during that time.
I took advantage of working any overtime available to me in order to save additional money. PRN work is not easy to find as a traveler, otherwise I would have made a lot more money working on the evenings and weekends.
I got creative with “side hustle” income using bank account and credit card sign up bonuses, which can easily be done while on the road and has led to a significant amount of extra money.
We took well over a dozen weekend trips (check some of them out here and here with pictures!), as well as a week long trip to Jamaica where we stayed at beautiful all-inclusive resorts during this time as well. Most of the costs from those trips were negated with credit card rewards points, including the entire Jamaica trip. The credit card points are a major reason that we’ve been able to have so many wonderful experiences and trips while still keeping my monthly expenses relatively low.
I would also like to note that by traveling together, Whitney and I have kept our costs even lower since we split all expenses except for our tax home rent. Not every traveler would have this advantage, which should be taken into account. Keep in mind that we have had to accept some lower paying jobs in order to find two in the same area though as well, so it is highly likely that our weekly average pay would have been higher if traveling alone, which would have offset some of the difference.
Our average weekly take home pay increased after our first year or so of traveling, which means that I’ve been able to save even more over the last year to year and a half. We also plan to begin traveling on the west coast next year where pay is higher as well, which should mean even more savings per month and should be a consideration for any new grad trying to earn as much money as possible right out of school.
What Will Your Story Be?
Is travel therapy an option for you in the future in order to optimize your income to debt ratio? Living frugally and making extra income as a travel therapist could make it possible to completely eliminate student loans in a short period of time.
Feel free to reach out to me with questions or comments either in this post, in the “contact me” section above, or on Facebook!
Whitney and I have mentored dozens of new and prospective travel therapists so far and are always willing to help or answer questions!
17 thoughts on “How I Saved Over $100,000 in 1.5 years as a New Grad Physical Therapist”
Awesome post! Enjoy reading your blog articles as I approach graduation in May.
My one question is I will be permanently living in NJ and mostly for the salary (and also to experience different settings) is it possible to do travel therapy while still staying within say a 25-50-75 mile radius of my permanent location/Home to maximize at least the first couple years my salary to pay off loans? Any advice would be appreciated!
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Hey Dylan. Yes it’s possible to travel close to home but you won’t be eligible for tax free stipends. Check out the website TravelTax.com to learn more about the rules. But basically you need to meet certain standards including “duplicating expenses” to get untaxed stipends. But if you do local travel you’ll prob still come out slightly ahead of a regular perm job even with your whole paycheck being taxed.
Loved the post. I was wondering what you would have done differently in regards to choosing your truck and 5th wheel.
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Hey Christianne! Thanks for reading. We were in a bit of a rush to get ours and get started. We bought used so it’s a bit of luck of the draw. We should’ve done more research and I would’ve paid someone to inspect the camper before we bought it who was unbiased/independent. Bc we ended up buying one that had water damage and we didn’t know better. Also we ended up with a diesel truck that was a poor model year with engine problems but again we didn’t know better.
I liked this breakdown of the numbers. While I haven’t at all been in travel PT since graduating in 2015, and earned significantly less in my first 1.5 years in a permanent position, I kept my costs quite low (walking to work, cooking at home, etc.) and saved roughly $55k in my first 1.5 years after graduation. This was enough to significantly reduce my student loan debt while contributing to retirement accounts along the way. The potential is there for PT new grads to significantly improve their financial situation, and as you’ve proven, perhaps the fastest way is to jump with both feet into travel PT. If travel PT isn’t their plan though, reducing expenses might be a critical and necessary step for the profession’s new grads with ever-increasingly education costs. I continue to be impressed and inspired by your efficiency in progressing so far in such a short time!
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Adam, thanks for reading! $55,000 at a permanent job is very impressive and I’m sure that helped a lot with paying down your loans. I definitely agree that reducing expenses is vital to get ahead, whether traveling or not. The actual amount that I saved was a little more than I outlined here due to some income from the blog, referral bonuses to travel companies and credit cards, gift card reselling, manufactured spending, cashback from everyday spending on credit cards, less depreciation than listed in the calculations, and various other ways I earned income with AMEX offers and such. I wanted to be conservative in my number and make things as reproducible for others as possible in this post so that I didn’t give any unrealistic exceptions for those planning to follow in my footsteps.
Hi Jared, out of curiosity – where did you park your RV during your contracts, RV park or BLM land? I loved this post and my husband and I are thinking that this might be a great option for us after I graduate from OT school. We’re just trying to get a better idea of logistics!
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Definitely a good option as a new grad as long as you feel comfortable in the setting you choose, Caitlin. It’s hard to beat travel for saving money! We always stay at campgrounds that offer monthly rates. They are usually affordable and not too far of a commute from job locations.
Great information and very inspiring! I recently had a conversation about how to determine what a “fair” take home pay per week would be. This website was very helpful and I will be using it in future contract negotiations https://www.gsa.gov/travel/plan-book/per-diem-rates. Out in the SF Bay Area travelers can expect to make anywhere from $1700-2600/wk depending on the housing and meal stipend allotment. That’s a serious chunk of change, especially if you keep your expenses low (as low as possible in California).
Also, we should know the bill rate when getting into a contract!!
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Hey Nathan, thanks for reading. I have used that website before as well to double check and make sure I’m getting the most out of the untaxed per diems as possible while still keeping the taxes hourly reasonable. I can’t wait to get out west and take advantage of some of those higher paying contracts!
Hi, thank you for sharing your experience! In your post, you mentioned that you must be present in your tax home for at least 30 days of the year while traveling. However, I haven’t found that information mentioned on any of the websites that I’ve looked at. Is that information that you received from an accountant or tax attorney? I just want to make sure I understand the tax home piece correctly. Thank you!
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Hey, Amena! That is info I got from reading Joseph Smith’s website, TravelTax. Check out this link for some great info on tax homes! http://traveltax.com/traveler
Thank you for sharing all of this information!! I’ve been a traveling PT since graduating in May 2018! I don’t have an RV because I didn’t know how long I was going to be traveling for and didn’t want to deal the the maintenance! I also have a dog – both of which increase my monthly expenses! I have about 130K of student loan debt from undergrad and grad school. I am curious which company you worked for that allowed you to work overtime? Everyone I’ve worked for so far forbids any overtime since travellers are already so expensive. I’m also curious how you set up and maxed out your 401k, I’ve worked for about 3 different travel companies so far and when I stopped working for them they made me transfer my money out of the 401k which required a fee. When you’re not working do you keep the money in the 401k? Also let me know if you have any other suggestions for paying off the loans and reaching FI! I feel like I’m struggling with it all right now!
Thank you for any/all info!
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Hey, Marianne. How’s your experience been with travel so far?
Overtime is very dependent on the facility you’re working for. We’ve only been to a few over the past 4.5 years that allowed overtime so it’s not exceptionally common but when they allow it, I take full advantage of it! I worked almost 400 hours over overtime between 2 facilities. One SNF and one acute care. The facility usually has to be pretty desperate for therapists in order to consider it since it’s so expensive for them.
When you leave a company with a 401k, it’s always best to roll the money into a traditional IRA instead of having it paid out to you and paying the fee and taxes on it! Check out this article for more info on how I handle this. https://traveltherapymentor.com/2018/12/10/is-contributing-to-a-company-401k-worth-it-as-a-travel-therapist/
For paying down debt, I encourage you to find little ways to make extra money on the side to apply to the debt. For me this included credit card and bank account bonuses which gave me an extra few hundred dollars per month on average with not a ton of work. This is in addition to living as frugally as feasible of course 🙂