Taking travel healthcare contracts can be high risk, high rewards in regards to financial compensation. While some contracts may pay very well, there is a lot of risk involved in traveling as a career. Many people go into travel to make money, but I highly recommend having money in reserve before you start your journey. And to build your emergency fund as you travel. An emergency fund is an amount of money set aside to cover necessary expenses in case of an emergency. It’s the minimum amount that you could live off of for a set amount of time. Generally three to six months.
While “treat yo-self” may be your motto after your first paycheck, remember that your bank account is calling. Also, there are expenses involved in being a traveler that do not occur in a permanent line of work. Here are some reason why you need to have an emergency fund as a traveler.
Down Payments & Moving Expenses
So you’re in Boston and accepted a job in Los Angeles. Now you have to move there, find housing, and get set up. All of that happens BEFORE your first paycheck as a traveler. While many companies will reimburse you for travel expenses, they reimburse after you provide them with receipts of travel, or have completed your journey. Therefore, you need to have money to move to your assignment and secure housing. Your short-term housing may require a security deposit and first month’s rent payment upon move in. Therefore, if your apartment is $1200/month, you may have to pay that before you start working. You also may have to pay a security deposit, which could be equivalent to another month’s rent. Bottom line is that moving can be expensive. You will need money in reserve to pay for your housing and moving costs.
If you don’t have the money up front, then you may consider taking company-provided housing. Keep in mind that company-provided housing takes A LOT away from your paycheck. I was recently quoted that if my company provided my housing, I would make $900 less weekly per paycheck. Meanwhile, I found my own housing for a total of $1200/month. Over the course of the three-month contract, I’m taking home $7,200 more because I found my own housing.
Contracts Can Get Cancelled
The dirty truth of travel is that you are disposable and contracts get cancelled. A facility can cancel you for any reason. They can give notice without reason and you can be ended, according to your cancellation policy. Because of this, you could be without work in as little as two-weeks during any given contract. Having money saved is critical to avoiding financial distress if this happens.
I also HIGHLY recommend never agreeing to more than a month-to-month short-term housing lease. Breaking a lease, even a three-month one, can be very costly.
You Could End Up In A Bad Contract
A facility isn’t the only party that can cancel a contract. You have the power to cancel a contract as well. I HIGHLY discourage anybody from cancelling a contract. As contractors, we are staffed in some of the worst buildings and not desired places. That being said, we agreed to work there and made a decision to accept the job. I only recommend to cancel a contract under serious circumstances such as fraudulent billing, bullying, violent workplace, etc. And of course, report all instances to the proper reporting agents.
If you do end up in a terrible contract and want to end it, it stinks to think that you don’t have the money to get out of Dodge. Being able to leave a contract, if needed, is a wonderful part of traveling.
Waiting For A New Contract
The stars and moon don’t always align for you every 13-weeks to have one contract right after another. As a traveler, you only get paid for time worked, and not time off in between contracts. Therefore, you may have involuntary non-paid time off in-between jobs. Depending on where you are licensed, you may have luck finding assignments back to back. However, others may have to wait weeks or more for a new assignment. You also may have to account for big moves. It may take you a week to drive cross-country from one job to another.
Taking Time For Yourself
While sometimes you may be forced to take involuntary time off in-between contracts, there are also those times where you may want to take voluntary time off. Traveling is hard and burnout is real. Many travelers continue this lifestyle through work/off cycles. E.g. Work for three months and take off for a month. If you are somebody who works like this, you probably are already saving money for your time off and have a good sense of your expenses.
Unexpected life events are the main reason why financial analysts recommend having a six-month emergency fund for perm-employees. The same pertains to us as travelers. Something can always happen that could take you away from work. While I hope it never happens to you, you have to consider that yourself or a loved one may be in a situation where you can’t work for a short-term or long-term amount of time. While some staffing agencies offer short-term disability insurance, I haven’t heard of any to offer long-term disability.
As a traveler, you only receive health insurance from your agency if you’re working. You may also be eligible for a short grace period in-between contracts. Bottom line is that if you’re not working, you don’t get health insurance. If you take long amounts of time off of work, for whatever reason, you’ll either have to buy your own health insurance or pay for COBRA. Either way, that can add up to a hefty expense month after month.
Now, the big question…
How Much Should The Emergency Fund Be?
How much is in your emergency fund depends on a variety of factors. Generally, financial analysts recommend that anybody with a full-time job has approximately three to nine months worth of living expenses saved in case of emergency. I’ve heard many people recommend on average six months worth of money saved. That is for somebody working FULL TIME with a low-risk job.
If you are just starting out, I definitely recommend enough money to travel to your assignment, put a downpayment on housing, and have money to spend until your first paycheck. On top of that, it would be helpful to have at least 2-3 months of living expenses saved in case something goes wrong. On your first assignment, make it a priority to save some money for the future.
Travelers are in high risk job settings where our contracts could be cancelled at any time. We also have the other factors, as mentioned above, that could damage our financial stability. Having an emergency fund, or any money saved, can help greatly in case of an emergency.