Saving for your dream home? Financial strategies for locum doctors

Locuming offers doctors a unique financial pathway that can significantly accelerate the journey towards homeownership. One of the most notable benefits of locuming is the potential for higher earnings. Locum doctors often command more competitive hourly rates compared to their full-time counterparts, especially in high-demand specialties or remote areas. This increased income helps accumulating savings for a down payment on a home more rapidly.

"With the income from my locuming I bought a new car and paid the down payment for my first apartment. On top of these, I’ve had three overseas holidays this year alone—all thanks to my locuming income," Dr Kevin Wu told us of his experience.

The flexible nature of locum work allows you to take on additional shifts or contracts as your schedule permits, further boosting your earning capacity. This flexibility isn't just about working more; it's also about the ability to take time off when needed, which can be beneficial for maintaining a healthy work-life balance while saving for a home.

"The amount of work I actually have to do to pay the bills is a lot less than what I was having to do. So pretty much I moved straight to Wānaka and have been locuming in mostly rural emergency departments," Dr Penzy Dinsdale told us.

Locum positions often come with certain expenses paid, such as travel and accommodation, when working away from home. This can reduce personal living expenses, allowing you to allocate a greater portion of your income towards savings.

"A "working holiday" is when my family comes along, and I do a bit of locum work, and then we get some nice time off together," Dr Alf Phillips said of his experience.

The diversity of locum roles can lead to opportunities in different locations, potentially enabling you to explore less expensive housing markets. By working in various regions, you can identify areas with more affordable real estate, making the dream of homeownership more attainable.

"My placement became my lifestyle over the past 9 years; I loved being a part of this amazing community," said Dr Christine l' Anson of her time locuming at Broken Hill.

Locuming provides you with an effective strategy to enhance your savings capacity, offering both higher earning potential and flexible working conditions that can be leveraged towards saving for a home.

For locum doctors, the journey to buying a dream home can be unique. With fluctuating income and non-traditional working patterns, traditional saving strategies might not always apply. However, the flexibility and potential earning power of locum work provide distinct advantages for savvy financial planning. Here's how you can work as a locum doctor and strategically approach saving for your dream home.

1. Understand your earning potential: Locum doctors often command higher hourly rates compared to their full-time counterparts, especially in high-demand specialties or remote locations. Understanding and maximising your earning potential is the first step. Keep track of your assignments and income, and plan for periods of less work.

2. Budgeting and expense management: Develop a budget that accommodates the irregularities of locum income. Prioritise essential expenses and set realistic savings goals. Utilise budgeting apps or financial software to monitor spending patterns and identify areas for savings.

3. Build a robust emergency fund: Before channeling earnings into a home savings fund, ensure you have a robust emergency fund. This fund should cover at least 3-6 months of living expenses, considering the potentially inconsistent nature of locum work.

4. Smart investment strategies: Invest a portion of your earnings. Consider diversifying your investment portfolio with a mix of stocks, bonds, and mutual funds. For those less familiar with investments, consulting a financial advisor can be beneficial.

5. Take advantage of tax deductions: Being a locum doctor often means you're eligible for various tax deductions related to your work, such as travel expenses, accommodation, and professional fees depending on whether you've expensed these items yourself. Properly accounting for these can significantly increase your savings. Enlisting an accountant can be very beneficial when it comes to understanding what can be deducted.

6. Explore high-interest savings accounts or fixed deposits: Place your savings in high-interest accounts or fixed deposits to earn more from your savings. Research the best rates and terms that suit your financial goals and timeline for buying a home.

7. Plan for down payments and mortgages: Research the housing market to understand how much you need for a down payment. Consult with mortgage advisors to understand how your locum status may affect mortgage applications and what documentation you'll need.

8. Stay flexible and patient: The path to buying a home as a locum doctor requires patience and flexibility. Market conditions and personal circumstances can change, so be prepared to adapt your saving strategies accordingly.

"Locuming helped me save for our first house and made my income look good enough for the bank loan. With the interest rates going up, it definitely is a big help," Dr Euphemia Floresca told us.

Saving for a dream home as a locum doctor is certainly achievable with the right approach. By understanding your unique financial situation, effectively managing your budget, making smart investments, and planning for the future, you can make your dream of homeownership a reality.

"Locuming has been instrumental in achieving my financial goals. The flexibility to take on placements in high-demand areas during the days/weekends that I am only available in was crucial, so I was able to maximise every opportunity that was provided to me, whilst having a healthy balance!" Dr Adarsh Das

Remember, each locum doctor's financial journey is unique, so tailor these strategies to fit your personal and professional situation. With careful planning and disciplined saving, the goal of your dream home is well within reach.