Budgeting

Working Hard and Playing Hard as a Grad Student in NYC

November 26, 2018 by Emily Leave a Comment

On this episode, Emily interviews Nicholas Giangreco, a bioinformatics graduate student at the Columbia University Medical Center. Nick’s expenses in Manhattan are relatively high – such as spending over 50% of his net income on rent – but his stipend still allows him to spend on his priorities and still save money consistently. Nick lived very frugally while he was paying off his student loans prior to grad school, and now applies his thoughtful budgeting skills to enjoying life in Manhattan without breaking the bank or detracting from his research.

Links mentioned in episode

0:00 Introduction

1:15 Q1: Please Introduce Yourself

Nick Giangreco is a bioinformatics graduate research assistant at Columbia University Medical Center in New York City. He started his program in August 2016. His post-taxes pay is approximately $1,300 biweekly.

2:58 Q2: What are your five largest expenses each month?

Nick’s top expense categories are rent, health, transportation, and food. His miscellaneous and entertainment expenses are considerably low. He uses a spreadsheet to monitor his spending.

3:38 #1 Expense: Rent

Nick lives in a studio apartment located on-campus and managed by the university. He pays $1,200 for his studio, which is lower than nearby off campus studio apartments that are $1,500 to $1,600 rent. Nick recognizes that he could find housing options near campus for less than $1,200 monthly rent. He mentions his friends who share four bedroom apartments and each pay $600 for their room. Finding a place in New York City is challenging. If you don’t find somewhere on Craig’s List, you may need a broker and to pay the broker fee.

Nick says the majority of graduate students live on-campus. To accommodate the demand for on-campus housing, the university has three tiers of priority consideration for housing applicants. The first priority tier is international students, the second tier is students from outside the New York – New Jersey – Connecticut Tri-State area, and the third tier is students from within the Tri-State area.

According to Nick, living on-campus makes graduate student life easier. Nick has a 15 minute walk to work, and he avoids commuting on the subway. The university gives current residents the first priority to renew leases. Nick plans to renew his lease for his on-campus apartment.

11:38 #2 Expense: Health

Nick spends a few hundred dollars per month for pilates sessions. He sees a personal pilates trainer in the West Village and pays $100 per session. He goes to physical therapy and rehabilitation at the hospital at Columbia. The copay is $20, which adds up since he has an appointment every week.

Nick’s health insurance does not cover his pilates session, but he likes his personal trainer and gets value out of the sessions. He first tried going to pilates classes at the university’s gym for no charge, but he was dissatisfied with the generalized approach of group classes. He wanted something personalized for his needs, so it is his priority to budget for pilates classes.

14:23 #3 Expense: Transportation

Nick estimates that he spends $200 to $300 per month on transportation and travel, or as little as $100 in a month if he doesn’t leave New York City. He puts $20 on his subway card and adds as needed. Additionally, he takes taxis and Ubers to get around Manhattan. Though taking a taxi to the JFK airport can be expensive ($70), the subway takes two hours. He uses Amtrak to go to his hometown, but those tickets add up. He also looks for cheap tickets from Megabus.

18:55 #4 Expense: Food

Nick spends less than $200 per week on food. In his studio apartment, he has a kitchenette which has a stove but no oven. He doesn’t buy groceries that require baking. He buys non-perishables and items that keep well. Some of his go-to items are sweet potatoes, oatmeal, and popcorn. He takes out $20 per week in cash for use at the food trucks, which only accept cash. He buys gyros for $5 and coffee for $1 from the food trucks. He goes to restaurants or diners once or twice a week.

Nick looks for free food from graduate school events. He is part of a Slack group for graduate students in the department, where people share information about free food. He eats food at seminars, lectures when alumni are invited, and club events.

Nick’s kitchenette does change how he approaches his food budget. When he lived in Washington, DC, he lived in a house with a kitchen. He used to batch cook on the weekend and set aside portions of leftovers for the week. He would host friends for meals. In New York City, he doesn’t have room to host anyone and can’t cook very much. He microwaves sweet potatoes and makes rice and beans on the stove. He keeps leftovers from events. He doesn’t plan his food for the whole week, instead he plans by the day. Nick thinks he could plan better, but right now he needs to focus on his PhD work so he needs the convenience.

30:35 Low Entertainment Expenses

Nick says there is a lot to do in New York City. He doesn’t spend much money on entertainment because he does a few cheap activities. He goes to clubs and university events. He sees plays for $10 on the Columbia Medical Center campus. He saw Spongebob the Musical for $30. Though Nick has friends who go out for drinks every day, Nick doesn’t buy much alcohol.

33:30 Q3: What are you currently doing to further your financial goals?

Nick recently paid off all his student loans. Before starting his PhD, Nick lived in DC for two years. He lived a very frugal lifestyle, and took two and a half years to pay off his student loans. Now, Nick is working on his rainy day fund so he can create a financial cushion in his budget. He spends about $2,300 per month of his $2,600 monthly income, so he puts the rest to savings.

Nick keeps a budget in google sheets to log his expenses. He wants to become conscious of his spending habits. He is looking into passive investing approaches and learning about retirement. Columbia Medical Center provides graduate students the option to invest with Vanguard. Though there is no matching offer, he determine an amount to withhold out of his biweekly check. He called the financial office and asked explicitly about this retirement program applicability to graduate students, and he is considering it.

Nick tries to save $100 to $200 per month for his rainy day fund, and wants to increase this to $300 to $500 per month.

39:14 Q4: What don’t you spend money on that might surprise people?

Nick doesn’t spend much money on entertainment or alcohol. He takes it seriously that he is in New York City for graduate school, so he prioritizes his studies and his work. He doesn’t go to Brooklyn or the East Side, instead he goes to Central Park for free and finds cheap shows at comedy clubs. He uses the subway because this transit option is $20 to $30 less than taxis and Ubers. He will listen to podcasts while he’s on the subway.

43:07 Q5: What are you happy with in your spending and what would you like to change?

Nick is happy with his food spending and his entertainment spending. He has a social life and indulges in brunch with friends on the weekends. He wishes he could save more on rent, but he doesn’t want the responsibilities that come with living in a house. Landlord, roommates, and housing infrastructure problems add extra stress that he doesn’t want to deal with. He wants to concentrate on graduate school, and his studio apartment helps him focus. He also appreciates the security in his building, the community and the convenience. He lives on-campus and one block away from the subway. Ultimately, the convenience of the location is worth the high rent.

46:42 Q6: What is your best advice for someone new to your city who is budget-conscious?

Nick recommends living on-campus. He thinks the Columbia Medical Center bioinformatics graduate program pays well. He says the initial payment for first years is nearly $20,000 as a lump sum, which needs to be budgeted carefully. The Columbia Marketplace Facebook group is useful to find free and cheap items. The Grad Talk list-serve helps you find out about free and cheap items as well.

Nick says to enjoy yourself without going crazy, and to be mindful. Anyone considering New York City for a PhD program should know that grad school can be intense, New York City can be intense, but this is a time to work really hard while making good friends and good memories. Nick coordinates a Meetup group and leads an NYC chapter of an international organization. New York gives you access to broader networks and opportunities.

51:38 How do you budget your biweekly pay? How does it compare to other pay structures?

Nick used to work at the National Institute of Health in DC, where he monthly check. The biweekly pay does not change how he budgets, instead he enters his income twice a month into a spreadsheet instead of once a month. He had enough cushion money in his account to manage expenses, and knows that he will get another paycheck in two weeks. His spreadsheet helps him keep track.

55:41 Q7: Would you like to make any other comments on what it takes to get by where you live on what you earn?

Nick says it’s a great time to be a graduate student in New York City. So many people like to visit New York City, so it’s great for spontaneous reunions with friends. It’s easy to get out of the city if you want. New York City offers many opportunities, and you’ll interact with people from multiple universities, companies, and form a broad network.

57:48 Conclusion

Solve Your Irregular Expenses Problem with Targeted Savings Accounts

November 5, 2018 by Emily 1 Comment

Imagine this: A spending opportunity arises (your friend’s destination wedding, a non-functioning car or computer, a conference, a tax bill) and as much as you scrimp that month and the next you just can’t cover the expense with cash. I ran into this problem during graduate school and found a workable solution: targeted savings accounts (or sinking funds). When I present this solution during my personal finance seminars, I find that it really excites the PhD students and postdocs in the audience because large irregular expenses are such a common problem with this population.

What Are Irregular Expenses?

Irregular expenses are expenses that occur infrequently. Typically their frequency is once per year or a few times per year; they definitely do not occur every budgeting period (month).

When you have a small irregular expense that can be easily absorbed by your ‘Miscellaneous’ budget line item or within the normal fluctuations of your monthly spending, they don’t pose a problem.

The irregular expenses that call for a solution are large ones that your typical monthly cash flow cannot absorb in stride.

For example, if you have a Miscellaneous line item in your budget of $25 and could find another $25 of wiggle room by cutting back if necessary, one irregular expense of up to $50 in a month does not on its own call for an involved solution. However, if you had an irregular expense of $500, how could you pay for it without wrecking your budget?

Certain categories of expenses tend to occur irregularly and in large amount, though the exact list of irregular expenses in your life is individual. Common irregular expense categories are:

Car (maintenance, repairs, parking permit, registration, taxes)
Clothing
Electronics
Entertainment
Household purchases
Insurance premiums (health, dental, vision, car, renter’s, life, disability)
Gifts
Medical copays, deductibles, and insurance
Moving
Personal care
Research and conference expenses
Taxes
Travel
Tuition and fees

Join the Mailing List to Receive Your Free Targeted Savings Worksheet

The one-page worksheet guides you in brainstorming and categorizing your irregular expenses, including three questions to ask yourself and a list of common irregular expense categories.

Why Are Irregular Expenses a Problem for PhDs?

Paying for irregular expenses becomes an issue for anyone with low discretionary cash flow; that is, anyone whose necessary expenses closely approach their total available income. Due to their limited incomes, graduate students and postdocs often have low discretionary cash flow, especially when their pay is not sufficiently indexed to the local cost of living.

That PhD trainees are strapped for cash is not news to anyone, but the irregular expense problem is exacerbated for graduate students due to the academic calendar.

There’s no rule that only one irregular expense is allowed to occur each month to permit maximum cash flow absorption. When it rains, it pours. Irregular expenses due to your university tend to cluster at the start of the academic year or perhaps the start of each term. For example, at the start of the academic year you might owe to your university lump sum payments for some tuition and/or fees, part or all of your health insurance premium, and your parking permit.

Graduate students and postdocs receiving fellowship stipends/salaries typically have an additional irregular expense: quarterly estimated tax payments. Instead of having income tax withheld from their paychecks, they receive their full gross income as their take-home pay and are expected to make quarterly estimated tax payments (or pay once per year in some cases). These payments are due four times per year, though not on the regular schedule of once every three months.

The Baseline Solution: Saving

There are several ways to handle irregular expenses: putting them on a credit card to pay off over time, cutting back in other areas of your spending to accommodate them, forgoing them, and saving for them in advance. Of those options, saving in advance is the most financially sound. Planning and saving ahead allows you to balance the irregular expenses with your regular expenditures and avoids paying interest.

For some people, setting aside an amount of money every month for whatever irregular expenses may arise could work, but again probably best for people with larger amounts of discretionary cash flow. For those on tighter budgets, like many PhDs in training, to plan ahead and optimize your use of money, you probably need a more specific plan. This is where targeted savings account come into play.

The Detailed Solution: Targeted Savings Accounts

The use of targeted savings accounts is essentially a method of detailed budgeting that extends to the year rather than just the month (or whatever shorter budgeting period you use). A year is a good amount of time over which to try to predict the irregular expenses in your life.

A targeted savings account is: 1) a savings account (or, alternatively, a designated fraction of a larger general savings account) and 2) targeted for one particular irregular expense or category of irregular expenses.

Every month, you automatically transfer a set amount of money from your checking account to your targeted savings account. Then, in the month when an irregular expense hits, you transfer the amount of money it cost back to your checking account to cover it.

You determine the saving rate you need into your targeted savings account by projecting the expenses you expect to occur in that category in the coming year and then dividing the total by 12 (or fewer months if the expense is closely upcoming).

For example, if you typically spend $600 on clothing, shoes, and accessories over the course of a year, your savings rate will be $50/month into an account dedicate for that purpose. All you need to do on the spending side is to not overbuy the available balance in your account in any given month. A targeted savings account lends itself well to this type of expense only if your shopping occurs less frequently than monthly and you spend a large (for your budget) amount of money each time, e.g., you shop once per year or seasonally.

The tricky thing to get right with targeted savings accounts is to accurately project all the expenses that qualify as problematic irregular expenses in your life. You need to figure out the expense, the amount, and the timing so you can categorize the expense and calculate the savings rate.

However, the savings that is transferred into your targeted savings account is not created out of thin air. If you were struggling with paying for irregular expenses prior to implementing this system, that struggle is not going to be immediately alleviated.

Delineating your irregular expenses in this way helps with planning and budgeting, but it isn’t magic. It simply enables you to predict your expenses well and decide whether to allocate money to them (in advance) or your other priorities. This helps you more optimally use your money because you can give your plan forethought instead of making reactionary decisions following an irregular expense occurrence. But because it doesn’t create money out of thin air, you still have to make sacrifices in your spending to get the budget to balance.

Join the Mailing List to Receive Your Free Targeted Savings Worksheet

The one-page worksheet guides you in brainstorming and categorizing your irregular expenses, including three questions to ask yourself and a list of common irregular expense categories.

How to Get Started with Targeted Savings Accounts

When you first implement targeted savings accounts, you have a choice between an immediate or gradual (likely over a year) implementation. However, in either case you are going to have to cut your regular spending a little deeper than is typical to find some extra cash in the first few months.

Slow Method

The gradual approach to targeted savings is to set up and fund your various accounts over a year as the irregular expenses pop up.

If in your first month an irregular expense arises, pay for it fully out of cash flow as you would have done previously. Then, determine how frequently and in what amount that expense will recur and calculate an appropriate savings rate to fully fund it over the course of the next year.

For example, it is common to pay car insurance premiums once every six months. When that expense arises, you would pay for the insurance from cash flow, and then in the subsequent six months save one-sixth of the cost of the insurance each month into a dedicated account (“Cars,” “Insurance,” or “Car Insurance,” depending on what you want to combine it with). The next time you need to pay car insurance, pull the money from the targeted savings account, and then continue with your savings plan.

If you follow this method for every problematic irregular expense throughout the year, by the end of the year you’ll have a fully funded and functioning set of targeted savings accounts.

The challenge with this method is to keep fully paying for irregular expenses in their first occurrence throughout the year when more and more of your cash flow has been redirected to targeted savings accounts for future irregular expenses. Until you build up the entire year’s targeted savings, you’ll be making deeper cuts to your regular spending. But the gradual method allows you to find those ways to cut back slowly over time.

Fast Method

To get your targeted savings plan in place right away, you have to do much more up-front thinking.

Instead of waiting for irregular expenses to pop up over the course of a year as in the slow method, in the fast method you attempt to predict all of them for the year up front. Using tracked spending data from the previous year is very helpful in this stage, so if you are new to tracking spending or new to your city the fast method may not be a good fit.

For each expense, you need to predict as best as possible when and in what amount(s) it will occur. If it’s a discretionary expense with no fixed timing (e.g., clothes shopping), you can simply use the amount of spending you expect to do over the course of a year.

To calculate your savings rates with the fast method, you must take into account that you don’t have a year to save up what you need to in each category, so some of your savings rates might be quite high to fully fund an expense that is not too far in the future.

For example, for Travel, you may have a pattern of traveling at certain times of the year such as holidays, school breaks, or over the summer. You may need to save at a higher rate to fully fund one of those trips if it is only a few months away. The rate will be able to drop some once the proximal event has been paid for.

Because you have to front-load so much of your savings, using this method requires you to have the ability and willingness to make deep cuts to your spending in the first month you implement it.

Conclusion

Targeted savings accounts are at base a way of extrapolating your budgeting over a year instead of just a month to account for your irregular expenses. By turning large, irregular expenses into small, fixed expenses, you can easily write them into your budget and weigh them against your regular monthly expenses. Often, a monthly expense will become less appealing with directly compared with a contribution to an irregular expense, e.g., you become motivated to limit yourself to one drink per outing because you can see the money going to savings for a concert. Early-career PhDs will do well to adopt a system of targeted savings accounts as irregular expenses are a common and difficult problem.

Even in NYC, This Graduate Student Maintains a Super Frugal Lifestyle

September 24, 2018 by Emily Leave a Comment

In this episode, Emily interviews Athena Pierquet, a rising second-year graduate student at New York University in English. In her first year as a PhD student, Athena lived on her $28,000 per year fellowship and save all of her smaller income sources, but her finances are facing a new challenge as she transitions out of subsidized university housing. Despite living in Manhattan, Athena maintains a very frugal lifestyle, minimizing her spending on groceries, transportation, entertainment, and recreation.

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0:00 Introduction

1:15 Q1: Please Introduce Yourself

Athena is a rising second year PhD student in the Department of English at New York University. She lives in the Manhattan neighborhood Stuyvesant, or Stuy Town. Her overall income was $38,000 from several university sources. Most of her income comes from the MacCracken Fellowship, provided for all NYU PhD students, which was $27,526 this past year. She received a housing stipend of $5,500. Several scholarships and grants made up $4,000 of her income, and short term research contracts made up $1,000 to $2,000.

2:20 How is your income reported for taxes?

For taxes, Athena has to self report the MacCracken Fellowship and her other scholarships to the federal government. The university provides her a 1098-T form for taxes. Her short term research contracts are reported on W-2, but these are a minor part of her income.

4:08 Q2: What are your five largest expenses each month?

Athena’s five largest expenses are rent, food, books and supplies, incidentals, and going out for fun.

4:28 #1 Expense: Rent

Athena pays $1,100 per month for rent. This cost includes all utilities, except for internet. She shares a two-bedroom apartment in Stuy Town with another first year NYU PhD student. The market rate for her apartment is $3,500 per month, but since the apartment is in a university housing complex, the cost is subsidized by the university. However, university housing is only available to first year PhD students, so Athena is searching for new housing in Manhattan.

For her new housing search, Athena’s budget is $1,200 to $1,300 for a room in a three or four bedroom apartment. NYU will continue to provide a housing stipend of $5,500 during her second year, but in subsequent years the housing stipend will be replaced with income from teaching classes. In general, her income does not increase to cover the new housing costs.

Athena saved much of her income from her first year in anticipation of her move into the cut throat Manhattan housing market. To get an apartment in Manhattan, she needs $3,000 to $5,000 available. Securing an apartment requires payment deposits for first month’s rent and last month’s rent.

9:57 #2 Expense: Food

Athena’s food budget is $100 per week. This category broadly covers anything she purchases to eat. She includes groceries, coffee shops, restaurants, and take-out in her weekly food budget. She plans out her meals and makes grocery shopping a priority. She makes almost all of her food at home and describes some of her meals, such as fully loaded oatmeal and hearty, entree salads. Athena eats at restaurants only two or three times each semester. She has several frugal tips for going to restaurants in Manhattan and getting free food from NYU events.

20:30 #3 Expense: Books and Course Supplies

Athena’s spending on books and course supplies is about $300 per semester. Her expenses for books and course supplies are considered non-taxable income. As a literature student, she needs many books for her work. She estimates that if she bought every book she needed or wanted, she would be spending thousands of dollars. She frequently borrows from the library, gets used books, and finds resources online. Nonetheless, this was tricky to budget for because of different needs for different courses.

24:29 #4 Expense: Incidentals

Athena budgeted for unexpected expenses, which she describes as the impulsive book purchase, miscellaneous fees, and spontaneous entertainment. Since she set her budget week by week, she intentionally put $45 each week for incidentals. Typically, she only had one or two unexpected expenses each month. The miscellaneous category is a place to lose money if you’re not careful, in Athena’s opinion.

27:29 Problems budgeting for taxes while on a fellowship

Athena later learned that the $45 per week that she budgeted for incidentals was really what she needed for taxes. When Athena began first year of graduate school, she didn’t know how much to set aside for taxes. NYU does not withhold taxes for U.S. citizens in their PhD programs, so it was Athena’s responsibility to estimate how much she might owe in taxes and plan for tax season. This is a challenge faced by many PhD students receiving fellowship funding.

Further reading: The Complete Guide to Quarterly Estimated Tax for Fellowship Recipients

30:47 #5 Expense: Going Out for Fun

Athena budgeted $20 per week for going out, and spent $280 over one semester on happy hours and other social events. She went to bars with friends about once or twice a month for happy hour, where she would socialize for two or three hours. In her budget, Athena distinguishes drinks at a bar or restaurant from purchasing a bottle of wine or six pack from the store. She notes that at NYU, she has plenty of opportunities to enjoy free drinks and free food at events sponsored by the institution.

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34:36 Q3: What are you currently doing to further your financial goals?

Athena tries her best to live within her means. She only lives off of the MacCracken fellowship, about $28,000, which is her only guaranteed income source for 5 years. She puts her other fluctuating funding sources into savings and does not create her budget from it. Athena has a healthy cash savings account, and every now and then she moves it into an investment account with Vanguard for retirement and index funds that could be used for major purchases in 20 to 40 years. She needs her cash savings for her new apartment, new furniture, and irregular expenses.

38:19 Q4: What don’t you spend money on that might surprise people?

Athena doesn’t spend money on transportation. If it’s less than an hour walk, she will walk to the distance. The $2.75 to take the subway or bus is better spend on coffee, in her opinion. She won’t take cabs or ride share unless she absolutely has to.

She makes use of public spaces with internet access and working spaces, like the New York Public Library. Some people pay memberships to writers’ rooms and co-working spaces, or even a desk at home, but Athena has a list of go-to public spaces to work remotely.

Additionally, Athena doesn’t have a gym membership, and she won’t go to exercise classes. She avoids shopping and costly activities. Though she’s surrounded by high income earners in Manhattan, she reminds herself that she has more important priorities than the high expense lifestyle.

43:56 Q5: What are you happy with in your spending and what would you like to change?

Athena would like to change how she tracks her cash spending. Since some places are cash only, and some only take cards, Athena finds it tricky to document all of her expenditures.

She’s happy with how little she spends on exercise activities. Athena is a long distance runner, so she makes use of the long trails and paths throughout New York City. She has a deeply discounted New York Roadrunners membership, and recommends that others look into student discounts.

47:36 Q6: What is your best financial advice for a new PhD student at NYU who is budget-conscious?

First, Athena says that budgeting and spending conservatively is absolutely a must. Many daily necessities, like laundry and groceries, are more expensive than you might expect.

Second, she says do not buy in bulk! Buying only what you need will save money in the long term, as well as save space in small apartments.

51:17 Find out your summer funding situation

Athena recommends being aware of how you will be funded through the summer. In some cases, you will receive payments for only the nine months of the academic year. Some refer to the first summer after graduate school as the “summer of poverty,” so think about this when you get your offer letter. You may need to save during the academic year to get through the summer, or find summer work. Make plans at the beginning of the academic year.

Further reading: How to Financially Navigate an Summer

52:49 Q7: Would you like to make any other comments on what it takes to get by where you live on what you earn?

Athena says you need to be honest about your financial situation. Seeing wealth around you in NYC does not mean you need to spend like that too, or emulate what you see people doing around you. Athena takes the initiative to suggest more frugal activities, like going to coffee or happy hour instead of more costly brunches and dinners.

Athena does an end of the semester assessment of her budget that she finds highly valuable. She evaluates how she spent her money and considers how she can do better the next semester. It can be difficult to anticipate how expensive things will be ahead of time, so she has gone through a process to try things out and reassess her expenses.

58:00 Conclusion

This Grad Student in DC Prioritizes Living Alone and Investing in Mental Health

August 27, 2018 by Emily Leave a Comment

In this episode, Emily interviews Christina Padilla, a PhD candidate at Georgetown University in human development and public policy earning $38,000 per year. Christina shares her top five expenses as a DC resident: rent, groceries, eating and drinking out, regular monthly expenses (i.e., phone, internet), and the copay for her therapist. They discuss Christina’s tips on leveling up her housing, meal planning, living car-free, and finding frugal fun in the city.

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Links Mentioned in Episode

0:00 Introduction

1:18 Q1: Please Introduce Yourself

Christina Padilla is a PhD candidate at Georgetown University in Washington, D.C. She is in the psychology department, and specifically in the human development and public policy program. Her research focuses on early childhood, parenting, and early education.

Christina completed her undergraduate studies in Baltimore before taking a 2-year research position at the National Institute of Health (NIH) in the D.C. area, and then stayed for graduate school.

3:11 Q2: What are the top expenses that you have, either in a typical month or in the last month?

Christina’s top five expenses per month are rent, groceries, eating and drinking out, other regularly occurring monthly expenses like phone and internet access, and a copay for therapy, which she started in the fall.

4:15 Expense #1: Rent

Her first year at the NIH, Christina lived in Maryland because it was closer to her lab and her rent was only $600-$700 plus utilities, but she hated being so far outside the city. In her second year at the NIH, she moved to a group house and paid $800 a month. However, it was a very old house and required Christina to have four roommates. She lived there for three years, including her first two years of graduate school, and then decided it was worth it to live by herself. She had saved money to be able to live in a studio.

Now, Christina is budgeting with an income of $38,000 for the fall 2017 through the summer; after that, her funding situation is uncertain. She allocates $2,700 per month, and of that, rent is $1,350. For a place in D.C., that is not very expensive. Christina lives alone in a rent-controlled studio apartment in a very desirable area outside of Dupont Circle.

Transportation was once one of Christina’s top expenses, and she would spend $150 a month to get to and from campus. She does not own a car: all the costs were for public transportation. At present, she is able to walk to campus, and now spends about $40 every other month on Metro costs. Georgetown also has a free shuttle between the area she lives and the university campus.

9:13 Is the building that you’re living in popular with students?

Another graduate student living in the building recommended it to Christina when she moved out, but Christina took a different unit because the cost was significantly less due to rent control factors. A number of other Georgetown students do live in the building; there are quite a lot of young people and quite a lot of long-term residents, but very few people in between.

11:43 Expense #2: Groceries

Christina spends about $200 per month on groceries on average. Unless she is going to a social event, she tries to cook all of her meals at home instead of ordering out. Christina has a small kitchen, which it is in a separate room from the rest of the apartment. She does not have a dishwasher or garbage disposal, but all other major appliances are included.

13:11 Have you always tried to cook at home, or is that something you decided to do along the way?

Cooking dinner at home is a habit Christina has always had; eating out was only for special occasions, rather than a casual habit. Even when she was at the NIH, she would cook every day. Her savings enabled her to take a lengthy trip to Europe before starting graduate school—Christina and another woman compared their spending and found that a major factor in Christina’s savings for the trip was that she was not ordering out, and the other woman was ordering food almost every day.

16:17 Do you have any comments on how you keep food costs down in a high cost of living area?

Christina also allocates $200 per month for eating out, but her ability to stay within both budgets was enhanced when she started meal planning. Planning meals for a week and only buying what’s necessary for that week has helped her stay within her budget. Christina enjoys cooking, and so cooking food and freezing it is both relaxing and budget-friendly.

On Sundays, Christina will make breakfast and lunch for at least Monday through Wednesday, and cook again on Wednesdays. Previously, she would try to prepare meals one day ahead of time but would often find that she was too tired or busy to do so, and ended up having to cook in the morning or buy meals. By planning meals ahead and cooking in bulk, Christina saves herself money and time.

19:13 Expense #3: Eating and Drinking Out

Christina sometimes feels that $200 per month for eating and drinking out may be high, but acknowledges that D.C. is an expensive city to eat in—one brunch could cost $50 or $60. Brunch and happy hours are both popular in the city, and the costs of each can add up. The $200 also includes going out for celebrations and other social events. Christina avoids going out to eat unless it is with other people so that it stays a treat instead of becoming an expensive habit.

21:21 Expense #4: Other Regular Monthly Expenses

Other regular monthly expenses make up the fourth largest category for Christina, which amount to about $100 per month. She pays $35 each month for her phone, $43 for internet access, $13 for dental insurance, and $5 for Spotify, which is cheaper with a student membership. The cell phone price is for the cost of the actual phone; the one thing Christina’s parents still pay for is Verizon service.

22:12 Expense #5: Therapy Co-Pays

In the fall, Christina was having a difficult time with her dissertation. The $200 per month she now spends on co-pays were originally going into savings and have transitioned into payment for counseling. Christina mentions that all graduate students need support but sometimes struggle with talking about it or feeling justified in seeking out help, and enjoys talking about counseling to help de-stigmatize it. She considers it an investment in herself and getting through graduate school in one piece.

23:24 Will you be finishing grad school soon?

Christina has an external fellowship for $30,000 for two years, and her department gave her an extra $8,000 to match everyone else’s stipends. She will continue to receive the $30,000 stipend but does not know whether her department will award the $8,000 again. She hopes to finish in January of 2019. She may drop her counseling sessions to once or twice a month instead of each week.

25:33 Q3: What financial goals are you working on?

In addition to the five categories and other spending, Christina saves at least $200 per month. $100 goes into a mutual fund with Schwab and $100 goes into a Roth IRA that she set up last year.

Christina does not get a very good interest rate on her savings account and chose to invest in a mutual fund because of an episode of the John Oliver Show “Last Week Tonight,” from which she learned it would be a good option for her savings goals. She has not decided whether to use it for a mid-life expense or for long-term savings, such as a down payment on a house or for retirement.

28:03 Q4: What don’t you spend that much money on that might surprise people?

People are often surprised by how little Christina goes out to eat. Many people in graduate school tend to order in a lot for convenience. However, many people bring lunch to campus, so Christina regularly eats lunch with other people in her lab, and bringing food has not been an isolating experience.

29:24 Q5: What are you happy with in your current spending and what would you like to change?

Christina is overall happy that she is staying afloat and able to save money even though she lives in an expensive city. Many of her friends have “real” jobs where they make more money, and it is hard to compare herself to them, but she is pleased with being able to save at all. She tries to think positively about being paid to get a degree and be happy that a stipend is available, that tuition is covered, and that she has no student loan debt.

31:43 What advice would you have for someone who is starting in their first year at Georgetown?

Christina’s number one piece of advice is to be honest and reflective with yourself about your priorities in terms of housing. It’s not always possible to live in a luxury building in a great location without roommates and have low rent. There are housing options for all priorities, but you have to be honest about what you want and to be ready to make sacrifices in terms of money, location, or roommates. A lot of people live outside D.C. in Virginia or in Maryland, but many of those areas have become as expensive as D.C., so comparing prices is important.

Georgetown does not offer much graduate student housing, and what’s available is about equally expensive as other housing options if not more. Georgetown does provide shuttles, however, because the campus is not connected to the Metro line.

35:30 Any closing thoughts or other comments about living in D.C. on $38,000 per year?

D.C. has a lot of free activities, especially in the summer. There are many free outdoor concerts, and all of the D.C. museums and monuments are free to visit.

No matter where you live, setting a budget and sticking to it is immensely helpful. Christina uses the free version an app called Good Budget, which allows you to create spending categories and record your transactions. The app will show a green bar decreasing as you spend throughout the month. Christina found that Mint was not helpful for her in curbing her spending and now uses Good Budget instead.

Trying to keep up with people who have “real” jobs and salaries is impossible, but it is possible to politely take charge of social situations. For example, Christina recommends offering to choose the restaurant where friends will gather and selecting a lower-cost option. Other people may not recognize that their budget constraints might be looser than a graduate student’s.

Christina opts for casually steering events with friends towards more affordable activities, and will occasionally decline to go to things if they are too expensive. She has found that most people are fairly sensitive to graduate student budgets and have no problem with less expensive activities and options.

40:13 Conclusion

Dual PhD Couple in Seattle Spending $20k/Year on Rent

July 23, 2018 by Emily Leave a Comment

In this episode, I break down my own budget from 2017. My husband and I earn about $100,000 per year and live in Seattle, WA with our two small children. I detail our top five expenses (rent, groceries, travel, kid spending, and transportation) as well as the financial goals that we’re currently working toward. I give some advice for a budget-conscious person moving to Seattle. Finally, I share what it’s like to be a renter in Seattle’s rapidly inflating housing market, spending nearly $20,000 per year on rent and feeling shut out of the housing market.

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Links mentioned in episode

1:05 Q1: Where do you live and what is your income?

My husband, Kyle, and I live in Seattle, WA, with our two daughters, a 2-year-old and a newborn. We moved here in 2015 for Kyle to take a job at a biotech start-up. I am self-employed; Personal Finance for PhDs is my main business, and I also have a side hustle. Our household income in 2017 was around $100,000.

Further reading:

1:40 Budgeting Background Info

Kyle and I practice percentage-based budgeting, which means that from our gross income we:
- Pay income and FICA tax
  - through payroll deductions on Kyle’s income.
  - through quarterly estimated tax on my self-employment income.
- Tithe (donate 10% to our church).
- Save into retirement accounts (20% in 2018, 18% in 2017).
We live on one income. Kyle earns most of household income and has a regular salary, so we base our budget entirely off of his income after the percentage-based allocations. All of my income after the percentage-based allocations goes to savings. This helped a lot when my self-employment income was irregular, although now I pay myself a salary.
We budget for our regular (monthly) and irregular (yearly) expenses. More details about this system can be found in Season 1 Episode 1.

Further reading: How to Pay Tax on Your PhD Side Hustle

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4:19 Q2: What are your five largest expenses each month?

Our total spending in 2017 was approximately $47,500 (excluding the above percentage-based allocations and health insurance premium paid as a payroll deduction).

5:09 #1 Expense: Rent

In 2017, we spent $18,870 on rent, which is a monthly average $1,570 and 40% of our total spending.

Our rent went from $1495 per month to $1645 per month.

We live inside Seattle city limits. Our apartment in older building with no amenities. The apartment is approximately 850 square feet and has two bedrooms and one bathroom. We chose the apartment based almost solely on location and price.

When we next move, we definitely want to get a place with a dishwasher! Our kitchen is pretty small. We cook and eat in a lot and with two little kids so we wash a lot of dishes every day.

6:38 #2 Expense: Groceries and Household Consumables

In 2017, we spent $7,733.54 on groceries and household consumables, which is a monthly average of $644.46 and 16% of our total spending.

This amount of spending feels high to me, and this is a category that I keep a close eye on.

We meal plan, eat virtually every meal out of our own kitchen, and usually buy food on the less processed side of the spectrum. We shop mostly at Costco and Fred Meyer and also a little at QFC. We don’t seek out organic or similar food except when we buy directly from the from farmer’s market.

Most likely the reason we spend a lot in this category is simply that we eat a lot, and the food we eat is on the more expensive side of the spectrum. These days, we alternate between eating low carb/Whole30-ish and eating the standard American diet, which means we are consistently eating meat and often dairy, which are both more expensive categories.

Our typical meals are:

Breakfast: Egg casserole with sausage, sweet potato, onion, and spinach.
Lunch: Chicken yellow curry, chili, sausage and eggplant hash, fish plus sautéed spinach or zucchini.
Dinner: Meat with vegetable, e.g., balsamic vinegar chicken and roasted asparagus. Kyle’s favorite meal: Brussels sprouts bowls. One of my favorite meals: Mexican breakfast bowls.
Snack: PB and almonds

Our toddler is a very good eater. We followed the baby led weaning technique, and now she eats the food we do plus more milk, fruit, and cheese.

9:57 #3 Expense: Travel

In 2017, we spent $3,482.47 on travel, which is a monthly average of $290.21 and 7% of our total spending.

I was surprised that travel ended up in our top 5 because I perceive that we travel much less than before we had children.

In 2017 we traveled on five occasions: two weddings, our 10-year college reunion, a memorial service, and to one of our parents’ homes for Christmas.

In addition to the flights, on various of these trips we paid for hotels, rental cars, meals, entertainment, and registration.

We definitely spend more per trip than when we were in grad school. Flying with a baby has spurred us to take direct flights at convenient times of day instead of purchasing the lowest fare available.

Our current frugal practice regarding travel is to rewards credit cards; we currently have the Alaska Airlines credit card and the Chase Sapphire Reserve credit card.

12:10 #4 Expense: Miscellaneous Kid Spending

In 2017, we spent $2,688.66 on miscellaneous expenses for our oldest daughter, which is a monthly average of $224.06 and 6% of our total income.

This is the category I have the least handle on as it is so unpredictable.

Our one regular expense included in this category was preschool tuition, but that only applied for a few months

Our spending out of this category was all over the place

Medical copays, occupational therapy copays, breastfeeding medicine.
Travel car seat and travel stroller (in addition to the ones we use at home).
Bookcase, mattresses for grandparents’ houses, jacket, and teether.
Toddler class at the local community center and zoo membership

This is a fly-by-the-seat-of-your-pants category.

I was surprised these miscellaneous kid expenses as a category cracked top 5 because our first-time-parent start-up expenses hit in 2016.

14:30 #5: Transportation

In 2017, we spent $2385.77, which is a monthly average of $197.98 and 5% of our total spending.

I really thought transportation expenses wouldn’t be in our top five; low transportation spending is a point of pride for me!

It turns out that 30% of the spending was from our regular monthly budget, and 70% was from our irregular expenses budget. Our regular expenses included gas and parking, whereas our irregular expenses included car insurance, registration, and maintentance.

We own one older car and don’t use it for commuting. Kyle has a sub-10 minute bike commute and I work from home. We generally just use the car for errands, activities with the kids, church, grocery shopping, etc.

Those irregular expenses hit in only 3 months of the entire year, which is why I sort of forgot about them. We pay our car insurance once every 6 months, and it’s inexpensive. We spent over $1000 in car repairs/maintenance in 2017, which was unusually high and not a yearly occurrence.

All of our top 5 expense categories together accounted for 74% of total yearly spending.

17:20 Q3: What are you currently doing to further your financial goals?

1: Retirement Savings

We save a fixed 20% of our gross income into our retirement accounts.

We actually don’t use Kyle’s 401(k) through work at all because of high fees. Instead, we put our retirement savings into our two Roth IRAs and my individual 401(k), which we had total control over. Kyle’s 401(k) is the account of last resort because there is no match.

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2: Down Payment Savings

In 2017, we saved 21.7% of my income and all of our self-tax refund for a down payment on a home.

Further reading: Creating Our Self-Tax Refund

In early 2018, paused our down payment savings to save into a fund to help with expenses and lost income associated with the birth of our 2nd daughter’s.

Once those expenses have settled, we’ll resume saving for our down payment. In the remainder of 2018, we plan to save a fixed rate from Kyle’s income plus 22.7% of my income.

Our initial down payment goal was $60,000, but now that we’re getting close to that number, we want to keep saving and perhaps make $100,000 our next goal. We’re not necessarily shooting for a 20% down payment, but having a lot of money available for the down payment, other fees and expenses, and moving costs will be good.

3: Kids’ College

We save a nominal amount of money toward our children’s college expenses. We plan to hit this goal harder after we buy our first home.

4: Paying Down Student Loan Debt

We are currently making only the minimum payments on a standard 10-year repayment plan on my student loans. Episode 1 explains why we have not yet paid off these loans. However, as of the day of the recording, we received an update on the loans and decided to pay them off completely.

20:47 Q4: What don’t you spend money on that might surprise people?

1: Kid Expenses

A: Childcare

We don’t spend much money on childcare because of the way we have structured our life. Kyle has a regular job, and I’m self- employed. I’m also our children’s primary daytime caregiver. I work when Kyle is home with the kids and when they are sleeping. In 2017, I worked around 20 hours per week with this system. When I travel for speaking engagements, we hire sitters through a service we subscribe to, but this is irregular. We don’t have any regular childcare as of now. We are considering hiring a part-time nanny this fall since we now have two kids to help keep my work hours up.

B: Diapering and Clothing

We cloth diaper, which means we paid a bunch of money for diapers in 2016 but not in 2017. We use disposable diapers when we travel and disposable wipes sometimes.

Further reading: Cloth Diapering in an Apartment

We didn’t have to spend any money on clothes in 2017. The communities we’re plugged into gave us lots of gifts, hand-me-downs, and borrowed clothes.

Further reading: Outfitting Our Baby with Hand-Me-Down, Borrowed, and Used Stuff

When we buy stuff for our kids, we often look to the secondhand market first.

2: Eating Out

We only spent $254.38 on eating out in 2017, which is an average of $21.20 per month. This is a shockingly low figure to me. Since having our first child, we basically don’t go out to eat or get take-out any more!

We don’t drink coffee, which many people pay for out of the house.

Kyle does buy a beer at occasional happy hours with his coworkers, which probably accounts for a good fraction of the spending in this category. I’m in a non-drinking phase of life due to breastfeeding and pregnancy.

3: Entertainment

Our only recurring entertainment expense is Netflix. We are still avid Duke basketball fans, but as we’re not attending games anymore that is an inexpensive hobby.

This low spending is a big change from before we had kids. We used to have season tickets to the Broadway musicals series our local theater, which is not something we’re doing now.

Most of our entertainment now revolves around our toddler: going out doing activities or playing with friends and even at home. We attend lots of free activities around Seattle: parks, toddler rooms and gyms at community centers, and libraries. We also hang out with her toddler friends and our kids tag along to game nights with our friends.

I’m chalking this low spending up to this being a unique phase of life! We expect to spend more in this category again later.

26:31 Q5: What are you happy with in your spending and what would you like to change?

Overall I am quite happy with our spending and progress toward our financial goals.

I don’t love that we spend almost $20,000 per year on rent, but it is reasonable for this city.

I’m not so happy with the grocery and kid expenses.

I feel like we’re spending a lot on groceries. I have some frugal practices, but could do more. During the Frugal Blitz this coming September, I will focus on frugalizing my groceries.

I don’t mind spending what we do on the children, I just want it to be more predictable! Perhaps we will institute a monthly cap on spending or try to anticipate the larger expenses as they grow.

28:11 Q6: What is your best advice for someone new to your city who is budget-conscious?

Focus on housing and transportation: Do your research in advance about where to live and what your commute will be like.

Renting and buying in Seattle is on a quick timeline. Places listed for rent are available immediately or like one week out, and little notice is required when you move out of a place. In 2015 when we moved to Seattle, the rental market was quite competitive. We had to make quick decisions on where to apply and compete with others.

We handled this market by researching the prices in the neighborhoods of interest before we started our moving trip, even though we were not expecting that any of those same rentals would be available when we arrived. This gave us the ability to spot a good deal.

Further reading: Apartment Search in Seattle

You should factor in your commute if you know where you’ll be working. A lot of people avoid the higher housing prices by living outside of Seattle, but that usually increases their commute time. We chose to eliminate the commute and pay the higher housing cost so that we could have more time together.

Don’t assume you’ll commute by car. Over 50% of people in Seattle commute by other methods: bus, biking, walking.

30:52: Q7: Would you like to make any other comments on what it takes to get by where you live on what you earn?

In Seattle, the high tech industry is quite dominant. Those positions are very well paid, and housing costs are being driven up quickly.

In 2017 and the first half of 2018, Seattle had the fastest-appreciating housing market.

Housing prices are heading up quickly, and it’s very discouraging for renters/first-time buyers.

Purchasing a home in our current neighborhood (maintaining that short commute) would be very difficult for us. Even earning $100,000 per year, the most we could afford in our neighborhood is the lowest priced condo possible. The median home value in our neighborhood is almost $1,000,000. The median condo price in Seattle is nearly $550,000. It’s also very hard to not get swept up in the hype of the market.

We are leaning against ever buying in Seattle. Housing is quite a struggle for first-time home buyers.

I’d love to hear from other PhDs (in training) who make less than what we do on how you manage your expenses!

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A Graduate Student’s Balanced Money Formula

June 18, 2018 by Emily Leave a Comment

Grad students frequently wonder how much they should spend on various expenses or even how much they should be saving. The Balanced Money Formula (BMF) answers this question for the average American, but how applicable is it to a grad student’s budget?

Further reading: The Power of Percentage-Based Budgeting for a Career-Building PhD

A version of this post originally appeared on GradHacker.

What Is the Balanced Money Formula?

The BMF, as defined in All Your Worth: The Ultimate Lifetime Money Plan by Elizabeth Warren and Amelia Warren Tyagi, is a high-level allocation of your net (after tax) pay to three areas: needs, wants, and savings. The idea is that if you conform to this ratio throughout your life, you will have a great chance of feeling satisfied with your current spending while saving enough for your future. The trap that many people fall into is letting the needs component of their spending take up too much of their income, which crowds out saving and inhibits spending your money in areas that bring you a lot of comfort and satisfaction (your wants).

The magic ratio of the BMF is 50% to needs, 30% to wants, and 20% to savings. The definitions of these three categories are a little different than what you might intuitively think. Needs are defined as all expenses that must be paid on a regular basis, such as rent/mortgage, minimum debt payments, insurance, contracts, groceries, transportation, and utilities. Wants are defined as discretionary purchases such as restaurant eating, entertainment, shopping (beyond basics), and travel. Savings is broken up into a few stages and categories. When you have debt other than for your mortgage, savings means accelerated debt repayment (the minimum payments are in the needs category). Once you are out of all debt except your mortgage, the 20% to savings becomes 10% for retirement, 5% for extra mortgage payments, and 5% for your “dream” goal.

Keep in mind that the BMF was not designed for a Millennial audience. I’m particularly concerned about the advice to save only 10% of net income for retirement (and only after you’re out of non-mortgage debt). Millennials will likely only have one-and-a-half legs of the older generations’ three-legged stool available to them – personal retirements savings and a reduced Social Security benefit (no pensions). That personal retirement savings leg is going to be doing most of the heavy lifting, and 10% of net after you’re debt-free probably isn’t going to cut it.

What I think is valuable about the BMF is the emphasis that there is a place for each of needs, wants, and savings throughout your life, the stern warning against letting the needs category inflate, and the suggested 5:3 ratio between spending on needs and wants.

Can and Should Every Graduate Student’s Financial Management Conform to the BMF?

Absolutely not.

1. The BMF may be right for a lot of people, but ultimately it is just an opinion. You can create your own BMF with a different ideal ratio among needs, wants, and savings that works best for your life. The point is to find a ratio that keeps you on track to accomplish your financial goals without feeling too restricted.

2. Even if you do agree with the BMF, All Your Worth acknowledges that an individual might not stick to the BMF during special life circumstances. Living on a low stipend for a limited period of time while you’re receiving training can qualify as special life circumstances if you need it to. You can find another ratio to keep during grad school and set up your post-grad life to fit the BMF.

Given these caveats, the BMF is still a good starting point for planning how to allocate your stipend pay.

How Can a Graduate Student Create a Balanced Money Formula for Herself?

First, categorize your spending according to the BMF’s needs/wants/savings definition and see how it compares to the suggested 50:30:20 ratio. When I did this during grad school, I was pleasantly surprised that my financial allocation aligned within 1% of the BMF (though my full 20% to savings was going into retirement savings). This told me that my gut feeling that my spending and saving was in balance and sustainable was probably correct.

The danger for graduate students is the same as for the population at large: the needs category ballooning and edging out what makes your life stable (savings) and fun (wants). Even for graduate students, the percentage of your post-tax income that is spent on needs rising above 50% should give you pause and compel you to consider ways to reduce your spending. You may not get it under 50%, but the better you do with minimizing that category the more ‘in balance’ you will probably feel.

In some high cost-of-living areas, close to 50% of a graduate student’s stipend might be spent on rent alone and of course in those cases the BMF cannot be achieved. But if you are over 50%, you should be doing as much as you reasonably can to minimize that category of expenses overall. For example, perhaps your rent is high, but you live with a roommate to get it as low as possible, and the location allows you to live car-free, which minimizes your overall needs spending. Consider capping the percentage of your pay that you are willing to spend on needs at your absolutely maximum (e.g., 70%) to trigger yourself to reduce one of your large fixed expenses, even if it requires moving, should your needs ever rise to that level.

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Some graduate students with more generous stipends and/or a manageable cost of living may spend significantly less than 50% of their stipends on needs. In the case, the best course of action is not to intentionally spend more on needs (though you have the leeway if you would like to), but rather to increase the amount you save and/or spend on wants.

If you have asked yourself if you are spending a reasonable amount of money on your wants and needs and saving enough, the BMF is a great formula to use as a starting point for your budget. However, over time you will likely want to adapt how you allocate your money to best match your values and goals.

Savings in Graduate School

If you want and are able to follow the BMF, the 20% of your money that is saved during graduate school could go toward building an emergency fund, investing for the future, and/or paying down debt. You should start with at least a baby emergency fund of $1,000, if not a few months of expenses. According to All Your Worth, your next step should be to pay off all non-mortgage debt, but if (some of) your debt is at a low interest rate and doesn’t bother you, investing for retirement is a great choice as well. Let both the math of the situation (interest rates on debt vs. expected rates of return on investments) as well as your personal disposition toward the options lead you to the correct choice in your life.

While I am a proponent of adding money each month to targeted savings accounts to help you pay for irregular expenses, I think this type of saving should come from your needs or wants categories. Saving with respect to the BMF should be only for mid- or long-term goals, whereas saving for irregular expenses is a short-term goal.

It is enormously worthwhile to start building the habit of saving during graduate school, even if you can’t reach the 20% target from the BMF. Applying compound interest in the form of investing or debt repayment to even a small percentage of your pay is amazingly powerful.

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For Stipends that Are Just Too Low

Not having room for needs, wants, and savings to some degree in your grad student budget is an indicator that your pay is too low or your spending is askew. If you are earning too little from your role as a graduate student, your options are to develop a side income or take out student loans. You must carefully weigh the consequences of your choices. Student loans will hold you back from building wealth post-grad school. A side income might benefit you if it furthers your career goals, or it might distract from your degree progress, which should be your top priority.

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What percentages of your net pay do you spend on needs, wants, and savings? Have you ever successfully reduced the amount of money you were spending on needs?