How I Saved Over $100,000 in 1.5 years as a New Grad Physical Therapist

*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.

My Journey

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.

1. 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.
2. Second, I worked as many hours as possible for my first year out of school, including overtime and a PRN job.
3. Third, I made extra income using credit card and bank account sign up bonuses, which I’ve written about many times in the past.
4. 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.

The Numbers

Earnings:

• Average travel pay over first 1.5 years as a new grad:
  • $1,635/week after taxes average*
• Number of weeks worked:
  • 77**
• Total pay from regular hours:
  • $125,895
• Total pay from overtime:
  • $7,076
• Total pay from PRN job:
  • $3,880

• Total pay from all work after taxes:
  • $136,851

• 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:
  • $4,200***

• Total earned in first 1.5 years out of school after taxes:
  • $144,155

* 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.

Expenses:

• $1,615/month average****
• Total months: 18
• Total living expenses for first 1.5 years out of school:
  • $29,070

**** 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.

Additional Expenses:

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

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Total earned in first 1.5 years out of school after taxes:

$144,155

Total living expenses for first 1.5 years out of school:

-$29,070

Truck and fifth wheel depreciation:

-$11,000

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Total saved in 1.5 years of traveling as a new grad:

=$104,085

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Takeaway Points

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!