Depending on the data you look at, locum tenens physicians tend to earn between 30% and 50% more than permanently placed physicians. They tend to have some additional expenses that need to be covered as well, so some of that extra compensation goes toward the cost of doing business as an independent contractor. But when all expenses are paid, locums still tend to earn more.
If you are new to the locum lifestyle, avoid the temptation of living right on the edge of your financial means. Make the most of your pay by learning to be both a responsible consumer and a wise medical practitioner. Below are five strategies to get you pointed in the right direction.
1. Pay Off Those Student Loans
Your average doctor graduates from school with hundreds of thousands of dollars in debt. That's no way to start a career, is it? You can put those loans behind you more quickly and start saving for the future by using the excess income to pay off your student loans first. Save the luxury sports car and the big house for another time. For now, getting your loans paid off should be your top priority.
Remember that student loans come with interest. The longer it takes you to pay your loans, the more interest you will ultimately pay. Paying the loans off first, and early if you can, reduces the total cost of borrowing by reducing your total interest payments.
2. Learn to Manage Your Money
Next to paying off student loans, nothing else is as important for the locum tenens physician than learning how to manage his or her money. Good money management includes establishing a reasonable budget, living on that budget, reducing tax liabilities, etc. If you are the kind of person who has no interest in money management, you can always hire an accountant who can both handle your books and offer sound financial advice.
3. Work Full-Time
The fact that locum tenens physicians earn more should make it clear that working as a full-time locum maximizes the extra compensation. Even if you want to settle down into a permanent placement position in the future, at least work your first few years as a full-time locum. You'll maximize your pay and get a good head-start on those student loans.
4. Learn to Be a Negotiator
Locum tenens clinicians are self-employed contractors who may or may not work through staffing agencies. Regardless of how you find work, don't be afraid to negotiate the pay you believe you deserve. Negotiations are an integral part of maximizing compensation on every single contract. And if you don't know how to be a good negotiator, learn how. There are plenty of online resources devoted to this topic.
5. Be Choosy About Your Locations
Physician pay is different in various parts of the country. Moreover, some specialties demand higher pay rates than others. What's the lesson here? Be choosy about where you work. Research those parts of the country where your particular specialty earns more, then focus on contracts in those regions. You may have to settle for a few lower paying contracts from time to time, but don't just accept those contracts without looking at more lucrative opportunities elsewhere.
Maximizing your pay as a locum tenens clinician is not something that's going to happen by accident. It requires a purposeful, thoughtful approach to managing your money and leveraging your strengths as a locum. Do things the right way and you'll enjoy all of the financial benefits that come with being a doctor.