10 May Budgeting Tips for Locum Tenens Physicians
Before heading on a locum tenens assignment, there are some important things a physician needs to consider. Things that will not only enhance the experience – but potentially keep you financially sound during your contract.
The following list will help you enjoy your assignment while helping you to be fiscally responsible*:
1. Decide On Your Travel Home Ahead of Time
Finding your home during your travel assignment is likely one of the most important decisions you’ll make, and your staffing firm can help you every step of the way. Your first move should be to do some research with your recruiter ahead of your assignment. You’ll want to weigh the cost of the various types of housing such as long-term stay hotels, rooms for rent, etc., against your travel stipend.
2. Create a Realistic Budget
A typical budget will break down spending into categories of essential and fixed expenses (housing costs, utilities) which are added up with other categories such as non-essentials (gym memberships, entertainment). While your locum tenens budget may be a bit different than a typical budget, it’s important to factor in all other bills you have back home to ensure you are saving your earnings.
3. Set Aside Money for Taxes
As independent contractors, locum tenens professionals are neither employees of the staffing agency or the healthcare facility. This means you’re responsible for paying applicable taxes. It’s important to set aside a portion from each paycheck to account for this requirement, so you don’t have a hefty tax bill on April 15th.
4. Set Up Estimated Quarterly Taxes
The IRS and most state tax agencies encourage independent contractors to make estimated payments on a quarterly basis—in April, June, September and January of the following year. It’s also important to know that locum tenens are required to pay self-employment tax, which covers Social Security and Medicare. This typically happens when filing your annual tax return.
5. Categorize Your Bank Accounts
It’s a good idea for locums to have a checking account for personal expenses and a separate account for work-related expenses. This will help identify legitimate work expenses in case there’s an audit. It will also help to track expenses for reimbursement.
6. Track Expenses
In order to be reimbursed for expenses or claim deductions, locums physicians need receipts. Save all paper receipts in a file. An online program or mobile application can track digital expenses. The important thing is that the information is organized and accessible when you need it.
7. Consider working with a financial advisor.
If you’re struggling to manage your finances or need help creating a financial plan, consider working with a financial advisor. They can help you create a budget, set financial goals, and develop a plan to achieve those goals.
8. Contribute to a Retirement Account
Each time you send a check to cover estimated quarterly taxes, be sure to pay yourself by investing in a retirement account.
Not only are you saving for the future, but most of these contributions are tax-free. Therefore, it lowers your overall taxable income.
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At Annashae we’re dedicated to the placement of highly-skilled clinical practitioners in short and long-term positions. As a nationwide medical staffing and consulting firm, we provide a range of services that enable our candidates to quickly find the career opportunity that fits their needs. For information on how you can further your clinical career, contact us today.
*Note: This blog is for informational purposes only. It does not include financial planning or guarantee any investment results. Please consult a financial professional for specific guidance.