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How to Eat Well on a Grad Student Budget

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In this episode, Emily interviews Jen from the Budget Epicurean (formerly College-Approved Food) about her experience as a grad student. Jen finished a master’s and spent several years in a PhD program, but decided to leave before completing her dissertation. They discuss her reasons for leaving and the career she built and what role finances played in the decision. In the second half of the interview, Jen gives her best tips for eating well on a grad student budget, including curating go-to meals and ingredients, where to shop, how to track prices, and what kitchen appliances are the best bang for your buck.

Links Mentioned in This Episode

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Teaser

00:00 Jen: I almost tripled my income within two years of leaving the program. It was very exciting to get those paychecks and say, oh wow, this is what real money feels like.

Introduction

00:17 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 9, Episode 4, and today my guest is Jen from Budget Epicurean. Jen finished a master’s and spent several years in a PhD program but decided to leave before completing her dissertation. We discuss her reasons for leaving and the career she built, plus what role finances played in the decision. In the second half of the interview, Jen gives her best tips for eating well on a grad student budget, including curating go-to meals and ingredients, where to shop, how to track prices, and what kitchen appliances are the best bang for your buck. I have found through facilitating my workshop Hack Your Budget that early-career PhDs are highly interested in food spending. I poll the attendees about what budget category they most want to discuss, and food always comes out on top, plus the vast majority of the frugal tips submitted are related to food. I think this is because grocery spending is typically the largest variable expense category in a grad student or postdoc budget. It’s quite gratifying to try out a new frugal strategy and immediately see the effects on your spending. In fact, Season 4 Episode 13 with Dr. Brielle Harbin was devoted to the subject of meal planning, and I almost always interrogate my budget breakdown guests on their cooking and food shopping habits.

01:51 Emily: Keep in mind, though, that your frugal journey should not end or even necessarily start with food spending. I am a firm believer that you should re-evaluate your large, fixed expenses, such as housing and transportation, before any other categories. It may take a long time, a lot of research, and even some money up front to reduce your spending in one of those areas, but once you do make a reduction, that lower spending level is locked in indefinitely and requires no conscious action by you to maintain. That is the big advantage of reducing fixed expenses first. However, I also love the idea of using frugal strategies in the kitchen to start what I call a frugal stack, which is when you use variable expense reductions to leverage yourself into fixed expense reductions. If you would like to learn more about strategic frugality and frugal stacking, check out the Personal Finance for PhDs Community at PFforPhDs.community. I taught these strategies as part of two monthly challenges held near the end of 2020. I also devoted a chapter of my ebook The Wealthy PhD to frugality; it discusses the philosophy of frugality and gets into really nitty-gritty strategies for each one of your budget categories. I hope you will join us this month inside the Personal Finance for PhDs Community PFforPhDs.community.

Book Giveaway Contest

03:30 Emily: Now onto the book giveaway contest! In June 2021 I’m giving away one copy of The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach, which is the Personal Finance for PhDs Community Book Club selection for August 2021. Everyone who enters the contest during June will have a chance to win a copy of this book. If you would like to enter the giveaway contest, please rate and review this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily at PFforPhDs dot com. I’ll choose a winner at the end of June from all the entries. You can find full instructions at PFforPhDs.com/podcast. The podcast received a review recently titled “Preparation and survival!” The review reads: “Excellent resource to get prepared for graduate education and to navigate it. I think the specifics of your personal situation and institution will always vary. So some things you take with a grain of salt, however, the biggest asset of the pod is the variety of people interviewed. People from different backgrounds and programs and the amount of topics covered. Most of these topics are discussed behind closed doors and in private, but this podcast makes you remember you’re not alone and there are way more people out there navigating difficult situations like you.” Thank you to this reviewer, and I fully agree that the strength of this podcast lies with the guests! I really appreciate my guests being transparent about this taboo topic. Without further ado, here’s my interview with Jen from Budget Epicurean.

Will You Please Introduce Yourself Further?

05:10 Emily: I have joining me on the podcast today Jen from Budget Epicurean. And we kind of ran into each other on Twitter. And I realized that Jen would have a lot to say to us on the podcast. So that’s why I invited her on. And she is both a former grad student and, as you can tell by the name of her blog, Budget Epicurean, has a lot of content to offer us on managing a budget with respect to groceries, with respect to cooking, food spending. So we’re going to learn about both these things. Why did Jen leave her graduate program, and then what are the food tips that she can give us for, you know, eating well on a budget? So I’m really excited for this interview. Jen, will you please introduce yourself to the audience a little bit further?

05:59 Jen: Sure. Thanks Emily. Yeah. I was a graduate student for a very long time. My mom’s a nurse, my dad’s a chemist, so I’ve always been interested in science and knew from a young age that I wanted to go to grad school, get a PhD, run a lab. So that was kind of my path. And I got my undergraduate degree in biology and then I pursued a master’s degree right after, also in biology, and then got into a PhD program in genetics which was wonderful. I loved being in school and learning, but I realized after about a year of talking with the other graduate students, the other postdocs, and even some of my advisors who said funding kept getting tighter and tighter. Tenure-track jobs were almost non-existent anymore. And it just seemed like a big struggle. So it took me about two and a half years to decide, it was a really hard decision, but I did not complete the PhD program. And we can get more into that later. But throughout all this time, I was also blogging because I love food and cooking. So it started out in undergrad as College Approved Food, that most of it you can make in like a dorm room. And it’s just kind of grown from there and morphed over time into the Budget Epicurean as my personal cooking skills and interests expanded.

What Were Your Career Aspirations at the Start of Grad School?

07:24 Emily: One thing I love about blogging, and I used to blog about personal finance, is that you have this wonderful record to look back on, you know, years later. When you can’t quite remember as well, you know, what was going on day-to-day, you have that blog. So it’s so fun that you were focused on food for all those many years and that you have the record of it. So I want to go back to, you know, when you started graduate school, you said you were basically going straight through, undergrad, master’s, into a PhD program. What were your career aspirations? Was it definitely to have a tenure-track job or, you know, was that the only thing you were there for, or what were you thinking when you started the PhD program?

08:00 Jen: So early on, I guess I just had this dream of having my own labs and writing papers and grants and, you know, like I’d cure cancer someday or some kind of fabulous scientific discovery. It just seemed so interesting and just a thing I wanted to do. And then the more I got into it, it’s kind of, they say, you know BS is bull crap, and then MS is more crap and then PhD is just piled higher and deeper. And the longer you go, the more narrow your focus gets on your field. So you know a lot about a little. And so my ideas of big discoveries kind of just became more like fixing this one little problem that we don’t know enough about. And I think that was the further I got, the more I saw people in the end goal as like a professor, as someone running a lab and saw what their lives were. They don’t actually do the science anymore. They’re lab managers and money managers and politicians almost to a point. So I think that’s where the kind of disillusionment started.

09:19 Emily: Yeah. I think, you know, I had a similar trajectory, I would say at the beginning of grad school, like came in wanting to run my own lab, not necessarily in academia, but just to be doing research. And I realized as you did that, once you’re at the top of that, you know, hierarchy of your own lab that you are not doing the day-to-day in the research. And so I then started thinking, oh my God, I actually sort of idealized a postdoc as like the perfect job. And of course there are, you know, staff scientists, those positions can exist, although they’re not super common in academia. So for me, it was never about like academia and like the tenure-track and so forth, but rather about doing research. That was until I got sick of doing research and decided never to do it again later on. But yeah, I’m just thinking about like, I’m sure you considered this because you took a lot of time for this decision, but what were the jobs that you maybe could have had without the PhD? And did you just still have that sense of like, no, I’m going to be overeducated by that point, according to what your interests were? Was that kind of how the decision was made? That even if you didn’t stay in academia, if you finished the PhD, you would still be pigeonholed so much?

10:30 Jen: Yes. I think that ultimately is why, because I did finish a master’s program before going into a PhD program, so not everybody does that. So I had the masters already, so I knew I was that like one level above a college degree, which was, you know, good financially-speaking and did lead to the career path I’m currently in. But not wanting to go the full PhD without wanting one of those “You need a PhD to do it” jobs. I was lucky we had a group that was called careers, alternate careers in science, something like that where once a month they brought in people. So I saw a couple of different options of people who, you know, were clinical scientists in pharma and they advise drug companies or clinical illustrators for textbooks and things like that. But none of those really spoke to me. So I kind of got into that thought process of, okay, well, if I finish the PhD, then there’s nothing really at the end of this tunnel, so I should stop now.

Role of Finances in the Decision to Leave Grad School

11:31 Emily: Yeah. Again, I see myself so much in this path because when I went through the same career exploration process, I did identify a career track that I was like, well, that sounds really cool, and I do need a PhD to do it. Or not need, but you know, it’s helpful. And so I decided to keep going kind of with that in mind. And of course after I finished my PhD, I started my business and it has nothing to do with that career track or anything. So it’s just so interesting, like that can make all the difference is really seeing a career that you’re interested in. Obviously, why would you finish it if you didn’t think there was a career on the other end that needed the degree and that, you know that you were super passionate about? So what role did finances play in this decision?

12:12 Jen: So, there are definitely pros and cons to going straight through. Sometimes I kind of wish I had just taken a few years off after undergrad or after the masters to try and get a career and see if I liked it and then go back. But I think it was also helpful that I had just come out of undergrad where, you know, you’re very used to living on a low income. So going into the master’s program, I think I made $12,500 per year. Which now seems completely absurd, but this was in Ohio and my rent was only $350 a month. So it was doable.

12:47 Emily: What year was that? Or years?

12:50 Jen: 2010 to 2012.

12:53 Emily: Okay.

12:54 Jen: I believe. And it was an attic. So I was literally just living in an uninsulated attic apartment in Ohio. So, you know, my electric bill was probably almost that. But then going into the PhD now I was making 20 something in Colorado. So this is circa 2012 to 2014, something like that. And it just was getting very difficult. I was starting to think about wanting a house someday. I met my future husband there. So we’re thinking about, you know, buying a house, having a family, getting married. And we were both graduate students at the time. So even combined, we were 40 ish. So it was just really difficult to save anything or feel like, you know, you could start doing those adult things as a grad student. So that’s one of the many things we discussed was, okay, if we want to buy a house, we need more income.

High Attrition Rate Amongst Grad School Cohort

13:53 Emily: And you mentioned to me when we were preparing for this interview, that most of your friends left grad school too. Was there a pretty high attrition rate from your cohort?

14:02 Jen: Yes. we had four start and, to my knowledge, only one is still in the program. And the year after us I believe they had the same, they had four people start and only one is still in the program. And now six, seven years later the one person who stayed is still not graduated and had switched labs twice already. So.

14:28 Emily: And do you think that finances are playing a role with those decisions as well? I mean $20K a year, you know, 6, 7, 8 years ago in Colorado, not a low cost of living area, by any means. It sounds quite difficult, even as you said, in a two low-income, two low-income household combined, I still think that would be quite difficult. I’ve just been thinking a lot recently about the strain that we put–“we,” academia–puts on our young, our trainees, of the financial strain that we put on them and the effect it can have on our mental health, our career outlooks. Obviously the financial directly affecting that, even physical health because, you know, food security can be an issue. Housing security. So, yeah. Did you talk about that sort of thing with your cohort mates?

15:21 Jen: We didn’t really, I mean, we weren’t close enough to talk about the numbers and the details, right. But I know I’m the only one who stayed, I think a large part had to do with, he had a lot of family support. Family lived in the area, so he lived with them. So even though he was married and had a kid with another on the way there was, you know, no costs for housing, he had support to help watch the children, to support, to get food and things. So I think that probably helped him a lot, that, that low-income didn’t matter as much. He had that social safety net. One of the other girls who dropped out it was because she got pregnant along the way and got lucky that her husband got a pretty high-paying job about halfway through her first year. So they were comfortable enough that, you know, they said the amount that she was making wasn’t worth the stress it was putting on her. So she left and didn’t come back. So I think that if you don’t have that type of support or other income, it’s really hard to make it as a grad student.

16:22 Emily: Absolutely. It sounds like you, and you know, these other friends, you mentioned like you’re starting to kind of lift your heads up and say, what do I want the rest of my life to look like outside of my career, and what finances are needed to support that? And is grad school currently, or in the future, going to take me to that financial place that I want to get to? And you know, I’ve had a previous interview actually, we’ll link it in the show notes, with Dr. Scott Kennedy, where he talked about, you know, his aspirations initially to become a faculty member, you know, tenure-track, and just realizing as he started his family that a postdoc and, you know, an assistant professor position was not going to cut it for him and his wife and three kids and so forth.

Improved Finances and Current Career Trajectory

17:06 Emily: And so, I mean, so he changed career tracks and he’s very satisfied with that and is paid very well. But yeah, sometimes, you know, the decisions you make when you’re 22, 23, 24 years old, you’re not thinking super far, like you might be thinking decades ahead in your career, but not necessarily about how things might change in your personal life. And they can change very quickly when you’re in your twenties. And a lot of people are, you know, forming families and so forth. So yeah, I just, I find that really interesting. So, you know, what career have you had after leaving your PhD program and how are your finances looking now?

17:39 Jen: Yeah. So once I had made the decision that, yes, I did need to leave. I didn’t want to just jump ship, right. I didn’t want to have zero income. So I started looking at other options and as I said earlier, having the master’s already really helped because that gave me a leg up and a lot more options beyond just, you know, being a research tech, cleaning beakers at a university somewhere. Not that that’s a bad thing. But I think it was actually through one of the people who came to talk to us. It was someone who worked for pharma as the medical monitor for clinical trials at a pharma company. And so I started looking into clinical trials, which prior to then I hadn’t really thought about. Every drug that’s approved, that’s what they have to go through. And so I looked into, you know, how does that happen?

18:27 Jen: What are the different careers you could do on the pharma side, on the site side? And I just had good timing. I found an opportunity with a research group, very close to where I was and interviewed. And even though I had no research experience, clinical research experience, I had the master’s degree. And so I convinced them that I could learn quickly and they decided to go ahead and take a chance and hire me as a research associate. And I loved it. It was the first time I ever had patient interaction with people in a clinical setting. And it was just so much fun and it was a very eye opening moment of like, this is like the thing. This is the thing I want to do.

19:08 Emily: Wow. And it sounds actually like, you know, based on, you mentioned your parents’ careers earlier, that it’s kind of an interesting melding of the two, like still doing research, but having patient interactions, like probably, yeah. They probably both do each side of those things, right?

19:21 Jen: Yes, yes. It was perfect. So I still get to read scientific papers. I still get to browse Google Scholar. It’s just, you know, looking at the background of my drugs and standard of care and being on the cutting edge of research is so much fun. So yeah, it was a very good fit. And having the masters, I think is the thing that really pushed me into it. And then once you’re in clinical research and you have years of experience, then the whole world opens up to you. So I’ve switched companies several times, moved up in the ranks and now I’m in essentially a clinical coordinator management position. And so I think doing that was an excellent choice. I don’t know that I could have done that right out of undergrad. So ultimately I’m glad it all worked out the way it did. But I almost tripled my income within two years of leaving the program. Because I mean working full-time, I think I started at like 40. So just by getting a job, a 40-hour-a-week research assistant job, I had doubled my income there. And then after I had a year of experience, I went to a different company and then I was at like 58 or something like that. So yeah, it was very exciting to get those paychecks and say, oh, wow, this is what real money feels like.

20:43 Emily: Yeah. Incredible. And that’s the thing that, you know, I often talk the income jumps that can come along the PhD process, but guess what, if you’ve been living on a grad student stipend, almost any job is going to pay you quite a bit better than that. So yeah, I’m sure that did feel incredible.

Commercial

21:02 Emily: Emily here for a brief interlude! This announcement is for prospective and first-year graduate students. My colleague, Dr. Toyin Alli of The Academic Society, offers a fantastic course just for you called Grad School Prep. The course teaches you Toyin’s 4-step Gradboss Method, which is to uncover grad school secrets, transform your mindset, uplevel your productivity, and master time management. I contributed a very comprehensive webinar to the course, titled “Set Yourself Up for Financial Success in Graduate School.” It explores the financial norms of grad school and the financial secrets of grad school. I also give you a plan for what to focus on in your finances in each season of the year that you apply to and into your first year of grad school. If this all sounds great to you, please register at theacademicsociety.com/emily for Toyin’s free masterclass on what to expect in your first semester of grad school and the three big mistakes that keep grad students stuck in a cycle of anxiety, overwhelm, and procrastination. You’ll also learn more about how to join Grad School Prep if you’d like to go a step further. Again, that’s the academic society dot com slash e m i l y for my affiliate link for the course. Now back to our interview.

Best Tips for Eating Well on a Budget

22:30 Emily: So let’s switch focuses now and talk about the food side of things, the subject of your blog. And so I’m going to kind of let you like drive this half of the conversation, but like, what are your best tips for us in terms of shopping, cooking, whatever it is, as I said earlier, eating well on a budget?

22:45 Jen: Yeah. So I’m also lucky there. My mom is a fantastic cook, and I grew up in a household that we were just very thrifty and frugal and creative. So I got to use all of those skills to feed myself, you know, better than ramen all throughout college. So my house was always the place to go for dinner parties and game nights. And I love hosting, so I had to find ways to, you know, feed six of my grad student friends without, you know, we can’t afford $60 worth of pizza every Friday. So I think one of my best tips is to just try new things. And eventually you will find some recipes that you like, and put those on repeat. So for your standard meals, I have tons of like cheap ingredient lists and less-than-five-ingredient meals on my blog. Things like stir-fried rice. That is just infinitely possible to mix it up. You can put beans in it, you can put whatever meats are on sale in it, and whatever vegetables. It’s good with canned or frozen seasonal produce. So find those couple of recipes that are very flexible, that you almost always like, it’s easy to cook, and that saves you tons of time and money. If you just say, okay, it’s Tuesday, I’m hungry. What can I make? And you just have these like three, five things that you just know you have on hand in the house.

24:10 Emily: One of the things that you just mentioned that I thought was really key was short ingredients lists. Because I know when I started cooking, and I did not have extensive cooking experience growing up or through college. I was always on like a meal plan, so I didn’t have to really cook outside of that much. So when I started with that, I was looking at whatever, I don’t know, standard recipe at that time books. And they would have like 10, 15 ingredients for like a recipe. And it would be cool and like taste good at the end, but the work that went into handling all those different ingredients, and also just the fact that I did not have a stocked kitchen and it would be like, oh, you know, three different spices for this one, you know, meal. And they’re like several dollars each and I had to pick them up and so forth.

24:55 Emily: I realized that it was the wrong approach, looking back at it, and now I cook much, much more simple meals, usually that have usually, you know, much shorter ingredients lists. And I think that’s really a key when you’re just starting out. And yeah, like I said, your pantry is not already stocked with, you know, the sort of esoteric like spices that some fancy recipe might call for. So I really love looking at yeah, five ingredients or less, like those kinds of recipes. And I also really like the idea of having some kind of generic base kind of meal that you can then tweak and alter with, depending on what you have on hand, or as you mentioned, what’s on sale. Something that’s flexible, like a stir fry. Do you have some other examples of that? I’m thinking like salad, you know, that works too.

25:39 Jen: Yeah, for sure. Salads are a great one. You can, you know, can a corn, can of black beans, suddenly it’s Tex-Mex. If you got, you know, walnuts, cranberries, some kind of cheese, salads are great to mix it up. Whatever proteins on sale. I love chickpeas or, you know, a little flank steak. You can get those for a couple bucks, slice it up. It makes a great salad. Soups are really great. If you’re a person who likes soups that’s always a good kitchen-sink meal. Like I don’t know that I could think of anything that you couldn’t throw in a soup and make it work. Casseroles are also great. Omelets, you would be surprised at the things you can put in an omelet and make it delicious. I’ve had like leftover French fries that normally taste terrible. Chop them up and throw them in an omelet. Now they’re basically hash browns. So yeah, I love meals like that. We still have them all the time.

Time Management Tips for Food Shopping and Cooking

26:30 Emily: And so what’s another kind of suggestion, maybe on the time management side of shopping and cooking, which I know can be a real challenge for graduate students?

26:40 Jen: For sure. So again, I would start with what you like, and then branch out a little bit from there. So a list is very helpful if you’re the type of person who likes lists to keep you focused and not spend eternity at the store. Plus it’ll keep you from, you know, just being confused in front of the spice rack, like there are 7,000 things. What do I get? Like, you look at your list, you know, I need like salt, pepper, cinnamon, that’s it. So having that also keeps you from spending money because grocery stores, you know, want you to spend more money than you intended and having a list can help not do that, although I still do.

Process for Making a Grocery List

27:23 Emily: And what about when you’re making that list? Like, what’s your process for that? Like, are you looking at the circulars that are produced by, you know, I don’t know how many different grocery stores you kind of cycle through, but is that, is that another strategy that you use, like shopping multiple stores? Like, let me know how you’re doing in terms of making a list, how you do that with your budget in mind.

27:42 Jen: Yeah. So I have a number in mind that I’m trying to hit every week, right? So let’s say you only want to spend 50 to $70 a week for one person. So you should definitely look at the circulars because stores have what they call loss leaders. So it’s usually whatever’s in season or they can get a lot of, and they want to use that to get you in the store. So like it’s wintertime and cabbage is on sale and Brussels sprouts are on sale. So they’re super, super cheap per pound. So you start with those things and say, okay, what can I make with those things? I can make soup. I can roast them as a side dish. I can put them in a casserole, and just come up with some ideas for meals. And so I would then make a list of, okay, I want this thing, this thing, this thing, they’re all on sale.

28:33 Jen: Check your pantry as well. So like, you know, I have some pasta noodles still, so I’m going to make pasta one night. So I don’t need to buy that, but, oh, I don’t have any sauce. I’ll put a jar of that on the list. So between what you need that’s not in the house and what’s on sale, you can then kind of build your meal ideas around that. And then when you’re at the store, you can look around because, you know, sometimes I’ll find deals that weren’t advertised in the circular, but they have, you know, there’s like a markdown on pineapple because it didn’t sell well enough or whatever. So I’ll pick up some of that too. So I think the idea of flexible meal plans is what works best for me. I’m not like, okay, Monday I will have oatmeal and then sandwiches. And then a tuna noodle casserole. It’s more like, I’ll probably make tuna noodle casserole this week.

Using a Price Book

29:23 Emily: Another strategy that I use. So, my husband always makes fun of me. I do not know the prices of things. I don’t like look at price when I’m shopping, especially in something like a grocery store. So it’s really important for me to kind of study the prices because it’s not something that I like naturally will just absorb. Like he just naturally absorbs that. He knows the last time we bought this, we paid this. The price I see in front of me is lower or higher. That helps me know when to buy it or not, or to skip it. But I actually have to use a price book. So especially when I am, so we recently moved to a new state. And so we were kind of like, well, we don’t know what the prices here are. So we started using a price book again.

30:02 Emily: It’s not something I do all the time, but just to check out, okay, well, this is what we’re paying over here, studying the receipts, basically. This is what we paid for this food at this store. This is what we paid for this food at this store. Okay, that price is the same every week. Okay, sometimes that price is lower and sometimes it’s higher. We need to like pay attention to when it goes to this level and then we can buy it. So the price book to me is really helpful as someone who does not naturally incline to, you know, notice the prices of food to know when something is a good deal or something is not a good deal. Because for me, if it’s not going to appear on the circular, unless I have that price book, I’m not going to know if it is a good price or not a good price.

30:37 Jen: Mhm, that is an excellent point. Absolutely. And I think I’m like, I must be like your husband. I just know in my brain like, oh, last time I bought Italian dressing, it was about 1.50 and it’s, you know, 10 for 10 while on sale. That’s a dollar. So I’ll just get three of them. Should last for, you know, until the next sale comes around. But if that’s not a thing you notice then a price book is definitely a good idea. And I would suggest a price per unit as well. Because sometimes they do get you there. You assume, you know, the big package, cheaper per ounce, but maybe it’s not, maybe you should get two of the one-pound bags instead of one of the two-pound bags. And that’s one way to know for sure.

Finding Your Go-To Stores

31:17 Emily: And one strategy that I just mentioned with that was shopping multiple stores. And so I’m wondering, you’ve lived in multiple places now, someplace for your undergrad, master’s, PhD, maybe you’ve moved since then. How have you found like your go-to stores in those new areas?

31:34 Jen: So I think it’s a lot of the mental price book thing. So we did move around a lot. We’ve lived in Colorado, Connecticut, and now we’re in North Carolina. And so when I go to a new place, I usually do go to all of the grocery store options at least once just to see, you know, what’s the layout, what do the prices look like? How far is it from home? And then I kind of choose the best one based on prices and now a little convenience, because we have that wiggle room in our budget to sometimes pay a little bit more just because it’s closer. But yeah, so I would definitely recommend going to the stores, just checking things out, write down in your price book the things you commonly buy. So that’s another way that you’ll know your eating habits like, oh, I always buy chicken and spinach and milk and bread.

32:20 Jen: So those are the things you’re buying every week, even if you’re only saving 10 cents, 20 cents every week, that’s going to add up. So I usually go to our Harris Teeter because they have pretty good prices. They have regular rotating sales on things we use all the time. Then I supplement once a month, once every other month with Aldi, which is one of my favorite discount grocers. And they’re expanding, they’re in most of America by now. So they just have great super cheap prices on your common everyday staples, like canned tomatoes, canned beans. So those are my two I use most frequently.

33:01 Emily: I’m glad you mentioned that you were in North Carolina. I did not know that. I did grad school in North Carolina at Duke. And so actually when my husband and I first got married, the closest grocery store to where we lived was a Harris Teeter. So we were doing a hundred percent of our shopping at Harris Teeter, which I do not think was a good idea, especially because we were not, again, paying attention to the sales cycles and so forth. It was just, it was all about the convenience of that being like super, super close. So after we started paying attention, after I started paying attention a little bit more to the grocery prices, we mixed in Kroger in North Carolina and Costco and Aldi. And so we would not definitely hit up, you know, Kroger and Costco and Aldi every week, but it would maybe be kind of on a two-week rotation.

33:45 Emily: And yeah, another kind of vote for Aldi. I recently moved from Seattle to Southern California. There were not any Aldis in Seattle, I don’t think, that I was aware of, but there is one really close to where we live now. And so I’ve been, like, as soon as we got here and we were like, oh my gosh, there’s an Aldi again, like we are so excited to be able to go back to Aldi. So yeah, definitely that’s where we do, like, our kind of primary shopping, I would say. And then sort of supplement it with like a regular, you know, grocery supermarket kind of situation.

Tips for Meal Prepping

34:11 Emily: I asked earlier about time management and I was thinking about like, I don’t know, meal prep or like bulk cooking, batch cooking. Do you have any tips around that for someone who maybe is just cooking for themselves and has a busy schedule? I know when I was in graduate school, a big problem for me was staying on campus till, you know, post-six, post-7:00 PM and coming home hungry. And what do you do in that situation?

34:36 Jen: Yeah, absolutely. So I think as a grad student, if you don’t eat leftovers, you should start now. I think I only met one person who refused to eat leftovers and they spent way too much money on food. But that is the best way to just make sure you always have something ready. So I would say, seek out things that freeze well. Things like pasta bakes and soups and chilies, and even some casseroles, and you can make those things in bulk. And honestly for one person, that’s not very difficult. You make one pan of, you know, like a rotini bake or lasagna, and you can eat some then, have some for tomorrow, and then freeze the other half. And that’s 2, 3, 4 more meals for you. So you can start out with cheap Tupperware or even Ziploc bags. The way I do it now is not necessarily cooking whole meals, but I batch prep when I make ingredients.

35:33 Jen: So say I’m making rice for stir fry and burritos this week, and I need like a cup or two cups of rice. Well, I can cook like six or eight cups all at the same time and freeze it in Ziploc baggies. And then next time I need rice, I don’t have to cook it. It’s already made, I just pull it out of the freezer, stick it in the microwave. And that saves me 40 minutes of not having to boil rice next week. So if you’re making things like that, I would say definitely batch it and freeze it if you can.

Go-To Kitchen Appliances

36:05 Emily: And also with, you know, someone budget-conscious in mind, what are your go-to like kitchen tools or small appliances that you would say are good for facilitating the kind of things we’ve been talking about?

36:19 Jen: Yeah, for sure. It’s a little hard looking back now, now that I have the luxury of so many things in my kitchen. But I would say if you can only get one thing right now, probably a pressure cooker is my absolute favorite accessory right now. And the newer ones that are super fancy and have a million things that can do are great, but you don’t need a super fancy one. Like I have an ancient pressure cooker from my grandma and it gets the job done. But that will definitely save you time. You can cook something like a roast from frozen in 30, 40 minutes. It’s amazing. So that helps you maximize your freezer usage of foods like that, and it’ll save you money because you can make your own dried beans. My biggest problem with dried beans was that they take so long. You’ve got to soak it overnight, put it in a Crock-Pot for hours. You can take dry beans, stick it in the pressure cooker, and 40 minutes later, you’re good to go. So the price per pound of dried beans is way better than canned, and a pressure cooker makes them almost as convenient. So that would be my top one right there.

37:35 Emily: That’s a good tip. I’m like pulling out my Amazon like wishlist, like, oh, I need to add one. Because I don’t have a pressure cooker right now. Oh yeah. That sounds really. Because I have far too many times left, you know, some meat or something frozen until way too late and have to kind of scramble and remake the plan. So I mentioned, I don’t have a pressure cooker, but the appliance that I used most when I was in graduate school, and I think it was something like $40 when I received it, was a slow cooker. And I really liked that too, because it was so easy to cook in bulk, again for one person or two people. Like you can cook one meal in a slow cooker and it’s going to last you all week pretty much in terms of like taking it for lunches or whatever.

“Leftovers” Avoid the Takeout Trap

38:13 Emily: So that was my, like, when I started using that, it like completely changed my like cooking life. It made things so much easier. And I really, like we mentioned about like, you know, freezing meals and having things ready also, you know, leftovers. I don’t even like the word leftovers. I love eating leftovers, but I don’t like calling them leftovers. I feel like it’s really pejorative. Like they’re like an afterthought. No, you intentionally created food than you needed, you know, initially. And you had a plan to eat it like over time. I love that because yeah, I think a big sort of trap is being hungry and not having anything really easy to go to at that moment. Especially as I mentioned, like coming home from lab late, I remember when I was blogging at some point and I mentioned something about cooking.

38:56 Emily: Like, you know, not eating out, basically. Like not eating out for convenience. I remember I got a comment from a grad student like, well, what do you do? Because you know, when you get home from lab, like you have to be, it’s late. Like you’ve got to be hungry. And I was just like, oh, I realize I never cook at that time. I always had something already ready to go in the fridge and the freezer because yeah, I came upon that situation over and over again. And I would be tempted to grab takeout on my way home if I didn’t know that there was something there waiting for me that was appealing.

39:25 Jen: Yeah, absolutely. And, the Crock-Pot would be my second for sure. They probably are a little bit more affordable, but yeah, you can make a lasagna in a Crock-Pot. You can make a huge batch of chili or soup or casserole or cook a whole chicken and shred it up and save it for later. So yeah, just having a bag or a Tupperware you can pull out of the freezer, the refrigerator, whatever, you know, it’s eight 30 at night. You just need something before bed. That is definitely a huge time saver, huge money saver.

Find What’s Cheap Per Pound Near YOU

39:55 Emily: Do you have any other tips around budget, budget, cooking, shopping, eating?

40:00 Jen: I would say just look, I mean, there are so many resources on things that are generally cheap per pound. Take those lists, but compare them to what’s near you. Just because the internet says eggs are cheap, that might not be the case where you live. Just because, you know, carrots are supposed to be cheap, maybe they’re not in Canada, I don’t know. But find the things near you that actually are cheap per pound and just keep trying different ways to make them until you find one you like. Because if you can make your average cost per pound lower, that’s going to make your cost per meal lower. And that’s going to be much friendlier to your budget.

40:38 Emily: I have to say, I’ve been doing this recently with cabbage. I’ve been on the website, like Budget Bytes, a lot recently and noticing a lot of cabbage recipes coming up on there. So I was like, okay, I need to find a way, because I never ate cabbage earlier in my life, but yeah, that’s the one I’ve been experimenting with recently. Haven’t quite found the thing that we love yet that’s made of cabbage, but maybe I’ll try one or two more before I give up.

Best Financial Advice for Another Early-Career PhD

41:01 Emily: Okay. Well Jen, thank you so much for giving this wonderful interview. As I ask all my guests at the close of our interviews, what is your best financial advice for another early-career PhD?

41:13 Jen: I would say, learn all you can about investing, but then do it. I spent far too many years just reading, reading, reading, but never actually opened an IRA or a Roth. I had a savings account, you know, but it wasn’t much. And even if all you can do is $10 a month, you know, at least I would have had something building, because time is your biggest ally and don’t let it slip away. Just do it. Open it. That’s what I told my sister. She’s six years younger than me, and she probably already has more than me in her retirement account. So just do it.

41:51 Emily: Yeah, that is perfect advice. I see the same thing with many, many people who come to me, come to my material that they know kind of what they’re supposed to do. They’ve been reading about it, but that step of getting off the sidelines and doing it is really where they get kind of held up and tripped up. And I guess my message to like that same audience is like, you don’t have to be perfect from the start. You don’t have to have the perfect investing strategy figured out. It’s much better to get started imperfectly and figure it out as you go along than do everything perfect right from the start. However, the start is two, three years later than it could have been if you had just been willing to, you know, take the leap. So I’m really glad you mentioned that, it’s yeah, a very, very common problem.

42:35 Emily: I don’t know. Maybe it’s a PhD thing, like a grad student thing, like wanting to do the research and wanting to be right and wanting to not mess up. And I certainly understand that. I actually did mess up when I first opened my IRA and didn’t catch my mistake for like a year, but you know what, I’m glad I started when I did, even though I didn’t do it right at the start. And I’ll mention actually for anyone who’s, you know, hearing themselves in that situation. I have a challenge inside the Personal Finance for PhDs community that is specifically about opening an IRA. So if you join the Community, PFforPhDs.Community, you can go to that challenge and find a six, I think it might be seven, actually, seven-step process. This is exactly how you open an IRA. This is what you need to do, the decisions you need to make at these different points.

43:17 Emily: This is how you research it. It points to resources I’ve created that are inside the Community. So it just, for exactly that problem, people getting off the sidelines. And so it just provides a little bit of accountability, too. Like you kind of go in there and you call me and say, okay, I’m taking the challenge. I’m going to do it. And then by the end of the month, I’m going to be asking you, did you finish? Did you go through all the steps? So thank you so much. Thank you so much, Jen, for this interview. And it’s been great talking with you and hearing about your journey and hearing these great grocery budgeting tips. Thanks.

43:46 Jen: Yeah. Thanks so much, Emily!

Outro

43:48 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me! 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

University Policies to Better Support Grad Student Parents

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In this episode, Emily interviews Dr. Alaina Talboy, a PhD in cognition, neuroscience, and social psychology. Alaina had her son before starting grad school in 2011 and separated from her husband a couple of years before finishing her PhD in 2019. She describes what it took financially to complete her PhD on a small academic year stipend: multiple side jobs, the maximum possible federal student loan debt, and childcare negotiations with her co-parent. She did nothing in those years aside from researching, working, and parenting. Emily and Alaina discuss the university policies that would have made all the difference to her experience as a graduate student and parent, such as fee waivers, conference funding, and on-campus childcare.

Links Mentioned in this Episode

grad student parent

Teaser

00:00 Alaina: If those supports were in place, I can imagine this going a completely different direction. And I don’t know if I would have ended up where I am, but I can’t imagine it would have made things worse, it could only have made things easier. It would have relieved everything. That support would have completely changed my life and made my PhD something I could just focus on without worrying about all the other stuff.

Introduction

00:32 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode 11 and today my guest is Dr. Alaina Tallboy, a PhD in cognition, neuroscience, and social psychology. Alaina had her son before starting grad school in 2011 and separated from her husband a couple of years before finishing her PhD in 2019. She describes what it took financially to complete her PhD on a small academic year stipend, multiple side jobs, the maximum possible federal student loan debt and childcare negotiations with her co-parent. She did nothing in those years, aside from researching working and parenting. We discussed the university policies that would have made all the difference to her experience as a graduate student and parent, such as fee waivers, conference funding, and on-campus childcare.

01:30 Emily: As I’m recording this many people in the US are reflecting on what their life was like a year ago when the country started shutting down versus now, so I thought I’d do the same for a moment. My very last in-person speaking engagement was on March 5th, 2020. While I was waiting for my return flight in the airport, I started receiving emails that regular meetings and events in Seattle, where I was living at the time, were being canceled. That’s when I knew that we would be hunkering down at home for a couple of weeks and started mentally preparing for my husband and I to work from home without childcare. Of course, we all know how wrong that expectation turned out to be. I felt relieved at the time that I didn’t have any other speaking engagements on my calendar so I didn’t have to cancel any travel or switch seminars to webinars.

021:15 Emily: However, once May rolled around, I started getting quite concerned about my business, which did heavily rely on in-person speaking engagements at universities for its revenue. Not only was I unsure when I’d be able to travel again, but I had no idea whether university budgets would be slashed and unable to accommodate hiring an outside person like me.

02:37 Emily: Over the summer, I pivoted my business to focus more on serving individual graduate students and PhDs, and that has been successful, but I’m also delighted to report that believe it or not, the speaking side of my business is currently having its best year ever. I discounted my speaking fee for the webinar format, which has enabled me to work with more offices and groups than ever. In previous years, my clients were always graduate schools, postdoc offices, career centers, et cetera. But this year I’ve actually been hosted by single departments and small graduate student associations as well. It’s been so rewarding to reach more people than ever this year with my tailored financial education. This spring alone I have given, or I’m scheduled to give 19 webinars, and I’m still receiving inquiries for events in April and May. I don’t know whether or how long this trend will last, but I’m going to try to serve as many people as possible while it does.

03:32 Emily: If you would like to bring one of my webinars to your university schooled apartment association group, et cetera, please check out my website pfforphds.com/speaking. All you need to do to get the ball rolling is schedule a call with me through that page or email me emily@pfforphds.com. I hope to hear from you!

Book Giveaway

03:58 Emily: Now it’s time for the book giveaway contest. In March, 2021. I’m giving away one copy of, “I Will Teach You to Be Rich” by Ramit Sethi, which is the Personal Finance for PhDs Community book club selection for May, 2021. Everyone who enters the contest during March, will have a chance to win a copy of this book. If you would like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review and email it to me emily@pfforphds.com. I’ll choose a winner at the end of March from all the entries. You can find full instructions pfforphds.com/podcast.

04:38 Emily: The podcast received a review this week titled “Great Encouragement”. The review reads: “This podcast provides so much useful information while also encouraging me on days when I get worried about my limited funds. I’m not bringing in much money while working towards my PhD, but this makes it feel more possible to save a little for the future while working towards my degree.” Thank you so much to batty_in_AK for leaving this review! I am so glad that you find the podcast encouraging during a financially difficult time of life. Without further ado, here’s my interview with Dr. Alaina Talboy.

Will You Please Introduce Yourself Further?

05:21 Emily: I have joining me on the podcast today, Dr. Alaina Talboy. She has a really compelling story for us today about becoming a single parent while pursuing her PhD and what that was like financially to experience that. And then we’re really going to have a detailed discussion around what are the university-level policies that would have made her PhD go easier for her as a single parent, what policies would be helpful. I hope that this conversation will be, maybe yes, maybe no, applicable you as an individual, but it’ll give you some insight into the experience of PhD parents, especially PhD single parents, and what we can do as a community to support them better, Maybe at the university level. So Alaina, I’m really happy to have you here. Thank you so much for agreeing to the interview ad will you please tell the audience a little bit more about yourself?

06:05 Alaina: Absolutely. Thank you for having me today. I started graduate studies in 2011 and finished my PhD in 2019 in cognition, neuroscience, and social psychology from the University of South Florida. Ever since then, I’ve actually been a research scientist at Microsoft, looking at user experiences for the Edge browser.

06:26 Emily: Yeah. Sounds wonderful. We’re recording this in January, 2021 for the listeners context, so you’ve been there somewhat less than two years, between one and two.

06:33 Alaina: Just under.

06:33 Emily: Yes. And I believe that you got a master’s degree first and then moved on to your PhD. Is that right? Was that when you started in 2011, your masters?

06:43 Alaina: I did. I started my master’s at University of West Florida in 2011. That took two years to complete. And then I went straight from my masters to my PhD at USF in 2013 and was there until I completed in 2019.

06:57 Emily: Great. Okay. So we’ve got the professional highlights. Let’s hear about what was going on in your personal life at that time, the development of your family.

07:04 Alaina: Yeah, so I actually started my family before I started grad school. My son was born in 2010, and so he’s been with me every step of the way from my first graduate interview all the way until I had my diploma in hand. And he helped me hang it up on the wall and everything, right next to his picture. So he has been here through everything and has seen all that it takes to get a PhD.

07:32 Emily: And you were married for time as well. Is that right?

07:36 Alaina: I was married up until about a year and a half, two years before I finished my PhD. We had a very amicable split, but we had to figure out a lot of the co-parenting stuff that is not typically a concern for graduate students. So it took a while to really figure out how to balance making sure the family was taken care of, had a roof over our heads and then ensuring equitable time between each of us for parenting.

08:06 Emily: Yeah. And just for a little bit more context for us, what was the stipend that you were earning during that time and then what was your former husband earning as well?

08:15 Alaina: The stipend I had at that time was a nine month contract from USF that was $14,300 for nine months. That worked out to a little under $1,500 a month for my income. My husband was making about the same as I did, but at that point then we were supporting two different households, so I actually had to take on numerous side jobs to support myself and my son during those last two years of graduate studies.

Funding Situation During Grad School

08:46 Emily: Yeah. I want to get into sort of the tactics you were using that time in a moment, but I want to go back for a second to talk about the funding during your master’s degree because you mentioned your PhD funding. How was your master’s funded?

08:58 Alaina: The master’s degree was not funded. It’s interesting because I left undergraduate without any student loans, because I was able to get a lot of grants and things like that, but when I got into my master’s program, it was not a funded program. I actually had to take student loans out to support us at the time, because my husband’s job at the time was not enough to support our family. We use the student loans to support us through some really difficult financial times, and then eventually I did end up getting a 10 hour per week position my second year of my master’s program, but that was just barely enough to cover half of a week’s cost of my son’s daycare. I have had side jobs for a very long time to make sure the family was supported.

09:50 Emily: Yeah. Okay. When you finished your master’s, you’d worked for a variety of part-time positions during that time. What was the balance of student loan debt when you came out of your master’s?

10:04 Alaina: I had about, I believe it was $30,000 in student loan debt for my master’s degree, and in total with my PhD, I had borrowed just over $120,000, which was the maximum I was allowed to borrow. And the last two years of my PhD, I didn’t even have student loans. Now I am two years post PhD at $4,000, roughly, a month in payments. And my student loan balance is $198,000.

10:37 Emily: Wow. Maybe a conversation for another episode. Incredible. So you were taking out more student loan debt during your master’s and PhD. But in addition, working at your assistantship, you got during your master’s, as well as the one you had during your PhD. Let’s talk more about, okay, we got this stipend, which is not very generous, not a very generous stipend.

11:01 Alaina: And it’s only nine months. That’s something I don’t think people realize is that this does not include summer funding and summer funding is never guaranteed, so that’s three months you got to figure it out.

11:13 Emily: Yeah, and what kind of benefits came along with that? Like health insurance, was there more than that?

11:19 Alaina: There was health insurance for myself. There was the option to get dental, but the cost was insanely high. There was no way to get my son or my former husband on the health insurance because the co-pays would have been more than a paycheck, and it wasn’t financially responsible to do insurance that way. Unfortunately, during that time, my son was actually enrolled in Medicaid to make sure that he had health coverage and that he had dental coverage and things like that because we simply couldn’t afford to get health insurance for him and him.

11:58 Emily: Were there any other benefits available to you?

12:01 Alaina: They had the campus health and wellness centers that you could go get your physical checkups. You could get psychiatric services, therapy services. Really great, but of course there’s always the co-pay for that. If there were any other benefits available, I couldn’t tell you because I looked and it would just wasn’t clear.

12:25 Emily: Yeah. So probably none. And if not none, at least a lapse in communication about what benefits were available.

12:34 Alaina: Exactly.

Balancing Parenting, PhD Dissertation, and Side Work

12:34 Emily: I want to get an idea of how, especially your PhD went with these financial pressures of having the small stipend part year, of having the student loans that you were taking out, but then at some point couldn’t even take out any longer. And you’ve already mentioned side work. So tell me about how the balance was in your life between actually working towards your PhD on your dissertation, all the side work, if it was an assistantship that you had the work for that, the parenting. It sounds like a lot. What was your life like at that time?

13:08 Alaina: Looking back, I look at it and I have no idea how I did any of it. I look back and I think about doing that now, and it just blows my mind because I was teaching a class at USF, I was teaching a class at a local community college. I was doing another class at a private college, plus my dissertation plus parenting. I did dissertation editing services on the side just because that money had to come from somewhere. Looking back, I was either always working or parenting. There was never me time. There was never downtime. There was never just time to sit and relax. It’s either work or parents and you make do and you get through it, and hopefully on the other side end up with some sort of work-life balance.

14:04 Emily: Yeah. I hope you don’t mind me saying this, but it seems to me incredibly unfair that you would be in a funded PhD program and be striving so hard to work on the side and spending so many hours doing that. And still on top of that, be racking up more student loan debt. I think we all kind of get, yeah. PhDs are underpaid. Yeah, it’s a hard time of life. Well, you added parenting onto that too. Wow. Yeah, of course, you’re going to have some time constraints, but to do all of it with the energy that you had, which sounds inhuman, almost, and then to add the student loan debt on top of that is really kind of mind boggling to me, that that’s what it came to.

`4:47 Alaina: It is. And the advice that you get is that, try pay back your student loans while you’re in grad school. But in my mind, I’m just sitting there thinking, I’m taking these student loans to make sure we have a roof over our head. That we have food to eat. That we have the ability to go back and forth between buildings. How could you possibly pay back student loans while you’re in school? And particularly in my situation, where I’m supporting a family. It’s not a realistic expectation. And when my student loans ran out and I had to talk about possibly going and getting another side position, the conversation I had with some professors was just go take student loans. Like why can’t you just take student loans? And it’s an unfair conversation and it doesn’t address the realities and the limitations of what we can actually do during grad school, financially.

15:42 Emily: I do want you to explain a little bit more what happened, financially after you were no longer able to take out student loans. And of course that was also the time that you were separating from your husband and you have the two households and all of that. If you were only barely hanging on before that point with the student loan debt, what happened when that stopped?

16:03 Alaina: I cried a lot. I’ll be completely honest, the last two years of grad school had a lot of tears and a lot of stress. I was teaching six classes to make ends meet and I was trying to get my PhD done and I had to, because my former husband and I co-parent, and we’re really adamant about making sure our son spends equal amount of time with both of us, we had to actually work that around my adjunct schedule because as adjuncts, you don’t get to choose what time you teach. You’re just given a time slot. And so not only was I under the financial pressure of that, I had to move my time with my son to make sure I could keep those jobs to make sure that we could keep paying bills.

16:51 Emily: So you added more work essentially while you were trying to finish your dissertation. I’m actually very impressed that you finished. I think because a lot of people at that stage when they’re ABD and the financial pressure is there, they want to move on and they may not ever end up completing it. So how did you hang on to the end?

17:13 Alaina: I almost didn’t. I almost walked away. Um, there were several times where I just looked at my document that I was writing and just went, “why, why am I doing this?” But I’m stubborn. I am an incredibly stubborn person, and I have put eight years into this degree. I am finishing this degree. This is going to get done. And I just put my foot down and said, no, this is, this is going to end. There’s going to be a light at the other end of the tunnel. It’s going to be worth it.

17:40 Emily: Yeah. And we’re going to circle back to this at the end of the interview, that there has been a light at the end of the tunnel. I don’t want to say it’s all been doom and gloom. Okay, so we’ve got an idea of the financial pressure that you were under and what you were doing, basically pushing yourself to the human maximum to meet the responsibilities that you had, and finish your dissertation. You said earlier, okay, yes, there was health insurance for you. It was not practical to put anybody else in the policy. There weren’t really any benefits offered by a university in terms of you as a parent.

The Benefits That Would Have Been Helpful as a Single Parent

18:09 Emily: What policies, now that you’ve taken some time to reflect on this, what policies would have made a big difference in your life? What policies on the university or departmental level would have made a big difference in your life in terms of making sure you did complete the degree and maybe not in the fashion that you did?

Reducing or Eliminating Semester Fees

18:28 Alaina: There’s so many things I would go back and argue against and one of the first thing is semester fees. ‘m not sure if this is across all universities, but almost every graduate student I’ve talked to has had to pay roughly $800 a semester in fees, even though they are employed by the university. And so you imagine that’s one entire paycheck that’s just completely gone for the semester because those fees are required. Eliminating fees for graduate students would be the first and foremost thing on my list to go back to the university and say, “Hey, you want to help parents who are finishing their PhD, eliminate these fees.”

19:14 Emily: The fee itself, of course, $800 per term is quite it’s a lot of money and no, that’s not universal. Some places have figured it out that they don’t have to require that kind of fee. Was it due all at once or was it something that you were able to prorate?

19:30 Alaina: I don’t remember being able to prorate it. It was not something that could be taken out of paychecks. It was not something like your parking permit, your $200 a year parking permit — yeah, they could take that one out of your paycheck every other week and they could do it like $30 or $50 a paycheck. But your fees, no. They were due when they were due. You could make payments up until that due date, but once you hit that due date, if you missed it at all, it was an immediate hundred dollar fee stacked, right on top of it, with increasing fees the longer it took.

20:06 Emily: Okay. So punitive responses if you did miss it. Okay. Got it. Large fees had to pay all at once. High fines if you didn’t, if you didn’t make it. Okay. What was the next policy?

Policies Against Moonlighting

20:20 Alaina: The next policy I would say is looking back at my contracts at that time, it felt like moonlighting was completely unacceptable. The language that they used is, you’re given this stipend offer, you must let us know immediately if you have accepted work anywhere else. There’s the possibility that this stipend will go away if you have other funding. Looking at that language and the position that I was in, it felt like I was forced to hide the adjuncting work that I was doing and all the work I was doing on the side, because I was so scared that my stipend was going to be taken away from me, because even though it was minuscule and it is well close to that poverty level, it was absolutely necessary to make it through. I didn’t want to lose that stipend. The moonlighting restriction, I understand they want people to focus on their degree. I understand they want people to be all in headspace on their PhD and stuff, but it doesn’t allow for the reality of life that you have to be able to support your family and student loans don’t cut it. You have to be able to let people have a job outside of their department if they need to do that, to support their family.

21:29 Emily: Yeah. I mean, I’m in total agreement. Treat graduate students like they’re adults and they can manage their own time. And if a problem does come up with someone’s side job, because it actually is interfering with the dissertation progress or the coursework, or whatever’s going on, then address it when the problem comes up. But I think the language that you read that scares people off from moonlighting or hides the fact that they are doing it is really counterproductive. Of course the other part of that, which you just mentioned is you can also just pay people enough that they don’t feel the pressure to take on the side work. If you really want the students to be focused on their degrees, then pay them adequately to allow them the room in their lives for that focus. That makes the most sense to me.

22:22 Alaina: Exactly. The book that I’m working on right now, the whole first section of it is talking about treating your graduate studies like it’s your job, because that’s exactly what it is. You are going for a graduate degree, you are being paid to get that graduate degree, and in exchange, you’re teaching a course or you’re doing research, or you’re doing some kind of service to the university. You should be paid appropriately for that time.

22:48 Emily: Yes, absolutely.

Commercial

22:51 Emily: Emily here for a brief interlude. This coming Thursday, March 18th, 2021 at 7:00 PM. Eastern, I’m serving on a personal finance panel and you’re invited to attend and ask your money questions. The event is officially for people in their twenties and thirties, but it’s kind of secretly a PhD panel as I, another panelists, and the moderator all have PhDs. The remaining two panelists have a JD and an MBA. We are all card carrying personal finance nerds. All personal finance topics are on the table, including student loans, investing, couple’s finances, buying house, COVID economics. Anything you like the event is free to attend live, and you can purchase access to the recording for one year for $17, go to pfforphds.com/panel to find out more and your ticket through my affiliate link. I hope to see you there now back to our interview.

Accessible Childcare Options

23:53 Emily: What’s another policy on your list that was hurtful or would have been helpful?

23:58 Alaina: The other one that I was thinking of was the childcare facilities on campus, because there is a childcare facility. It was not subsidized. At that time in 2013, it was $220 a week for the age group my son was in, and that was their subsidized value. The problem with that though, is that of course faculty gets first pick and that completely fills up the entire program. There really was no daycare option available on campus that was even remotely viable. We ended up having to do a lot of off-campus shopping to find a daycare.

24:41 Emily: Yeah. I mean, of course adding another benefit, like a subsidized service, like daycare would be an incredible boon to the parents on campus. And actually I’ll link in the show notes because I did an interview back in season two with a single mother in graduate school, and she talked about the incredible childcare support that was available to her on campus. One of the things I remember from that is just in reflecting on it, I’m thinking, wow, to have your daycare option, your childcare option, like geographically, physically close to you, saves you so much time and commuting, and it actually gives you more flexibility in your time being on campus and so forth. It would be a benefit to all employees and of course, graduate students and undergraduates and everybody who has children to have more of those options. Expanding those programs would be fantastic.

25:31 Alaina: Absolutely.

25:32 Emily: And subsidizing it, if they can.

25:34 Alaina: And subsidizing, if they can. I understand they have to pay their workers. And I totally respect that, but you know, again, you’re an employee.

Conference Travel Assistance

25:43 Emily: Yeah. Were there any other benefits that you wanted to bring up?

25:46 Alaina: The last area I want to talk about is conference travel. And this is something that strikes me as so odd because I am in a STEM field or a STEAM field, depending on which acronym you prefer. Going to conferences is vital to your success in academia and also outside of academia. Being able to present your papers and your posters and giving talks and all those things. There’s something about the conference circuit that just really is invaluable and cannot be replaced. The problem is most of the program didn’t have funding for conference travel, let alone trying to figure out how to set up childcare, if my former husband wasn’t going to be able to watch my son during conference season. Luckily our lab had very small stipends. We got $500 stipends to go do conferences and there were four of us, so we split one hotel room and able to limit the cost of conferences by having four of us in one room. However, that’s another area that really is just lacking in support and really hits your finances hard, especially if you’re serious about trying to follow that academic route.

27:00 Emily: Yes. Thank you for bringing that up. There’s one other area that I thought of in terms of policies. Maybe this wasn’t on your list because you had your son before you started graduate school, but I’m thinking about parental leave and is it defined? Is it defined for graduate students? Does depend on whether your employee or a fellowship recipient non-employee? But just having, first of all, clear policies around what the parental leave is, is super helpful. Of course, if that leave can be paid or if it can be 12 weeks would be incredible here in the US. All those things can add on to that, but just having clear policies around that I think would be super, super helpful.

27:39 Alaina: Yeah. It’s interesting as you’re right, I had my son before graduate school, but I did run into some medical issues during graduate school and come to find out the grad students were not protected under FMLA. If you had to take any time off, you were literally at the mercy of your advisor. Now, thankfully I had a phenomenal advisor who let me do my work remotely and told me to stop replying to emails the day after I got out of the hospital, but there was a leave period that I had to take for medical reasons, and if my advisor wasn’t as understanding as she was, I could have been dropped from the program because there are no protections in place for that.

28:19 Emily: Yeah. Great, great point. I hadn’t really thought about FMLA, but ideally the university would be providing its own protections for its students. Wow, thank you for bringing that up.

How University Benefits Can Impact a Grad Student Parent

28:31 Emily: Okay. In thinking through this list of like, wow, what would have been like if I’d had subsidized childcare and so forth — what would it have meant to you, as a PhD, as a developing scholar to have had the kind of support that we were just talking about from your university?

28:48 Alaina: It would have been life-changing. I can’t quantify the stress that I felt those six years and what it has done, not only physically being under that much stress that long, but mentally being under that stress. And two years out still having some kind of anxiety about large purchases or the thought of going and getting the car repaired is still an anxiety, even though I have a really good job right now. There’s some almost side effects of living like that for so long that now have to be undone and have to be unlearned. If those supports were in place, I can imagine this going a completely different direction. And I don’t know if I would have ended up where I am, but I can’t imagine it would have made things worse. It could only have made things easier. It would have relieved everything that support would have completely changed my life and made my PhD something I could just focus on without worrying about all the other stuff.

30:01 Emily: Yeah. I’m so glad you phrased it that way, because if you had received additional financial support whether that’s in the form of a higher stipend or fees being waived, or some kind of subsidies, or maybe health insurance being a better option, a variety of ways that can play out, of course, that would made a difference to your finances. And of course you would have more savings in the bank or you’d have less student loan debt or something like that. But I’m really glad that you phrased that in terms of the stress that you were under, because I think that we don’t, we don’t really consider enough that affect — the cognitive, the emotional, the physical effect of that stress on our developing scholars, on our PhDs when they’re in training.

20:42 Emily: And like you just said, what that does, not only during that time and how does it affect your work — I mean, your work, as if the only that’s the only thing that matters — but your work, but also everything else during that time. But then also later, because as you just said, you have to unlearn all the things. You have to recover from that period of stress financially for years and potentially decades after your PhD. And that’s a lot of what my work is as well is how do you get out of the mindsets about money that you were forced into during that time. I’m really glad that you phrased it that way. Anything else you wanted to add to that?

31:18 Alaina: It also would have opened up just so much more time to spend with my son. I feel like I missed milestones because I was so busy trying to scrape together and make ends meet that I miss some of those important childhood things that I can’t get back.

The Light at the End of the Tunnel: Current Career

31:36 Emily: Yeah, absolutely. Now we said that there was a bright spot at the end of this, because you did get to the end of the journey. You did get to graduation, you got the PhD, and now you’ve mentioned that you have a really good job. So tell us what your career is now.

31:51 Alaina: Yes. I actually made the choice to leave academia after I was offered a tenure position, and instead I moved to Seattle to join Microsoft. Now I am a research scientist here at Microsoft, a user researcher, and I do work for the Edge browser. And I got to say, I love my current career. I don’t know if that’s too forward to say that, but I am in the best spot, not only financially, but also in terms of work-life balance than since I started grad school. That’s where I’m at right now.

32:31 Emily: It really seems like you came through the crucible in graduate school, financially, time-wise, so forth. I hope the rest of your life feels this good.

32:40 Alaina: I hope so.

32:40 Emily: It’s good to hear that you’re in a much better spot now, have a much better income. You’re making those student loan payments, as you mentioned earlier. I’m assuming that you’re glad that you finished the PhD, that you think it’s working out?

32:54 Alaina: I am, yeah. And I was thinking about this earlier today, preparing to talk to you about this, is if I had the choice to go back and do it again, would I change anything? And honestly, I don’t think I would. I know sometimes people regret going the PhD route, but I don’t regret it. I am so proud of the work I did during my PhD and all of the work that it’s enabled me to do after my PhD and the work I’m doing now is so personally validating to know I can use all of those skills I developed and I can just only go up from here.

39:31 Emily: Oh, well, that’s really great to hear. I’m really glad we could end this on a little more of a cheerful note. You mentioned earlier about a book. Can you tell us a little bit more about that?

33:39 Alaina: I’m currently writing a book. It’s going to be essentially a how-to guide for people who are just starting their graduate studies, but it’s trying to help people change their mindset about how they think through graduate school and doing things like research for the rest of their lives. It’s a book that will help you think about graduate stays not only as a student, but also as your job and as the start of your career. It provides the tools and tips and tricks and all the things you need to walk out, not only with your degree PhD in your hand, but also to try to land that real coveted academia job, but also how to leave academia on the other end, if that’s something that you want to do. It’s opening up the possibility of not staying in that smaller bubble of academia, but looking at the broader world of opportunities that exist just for PhDs.

34:33 Emily: Yeah. I love that reframing about yes, you’re a graduate student. Ye, you’re a student, but it is your job. It’s the start of your career. I love that reframing of it, and I wish that I had embraced it a little bit more at the start of my own PhD. Where can people go to learn about this, when it’ll be out and so forth?

34:52 Alaina: They can find updates on alainataloby.com and they can sign up for the newsletter there. I will happily post additional information on Twitter and LinkedIn as well. And I’ll ask to include those in the show notes.

Best Financial Advice for and Early-Career PhD

35:05 Emily: Yeah, absolutely. No problem. So last question before we conclude is what is your best financial advice for another early career PhD? And that could be something that we’ve touched on here, or it could be something completely else,

35:18 Alaina: Something completely else. So I’m going to say this is for right after your PhD, where you land that first job. With your first real paycheck, go get yourself the most delicious steak or whatever meal is your favorite and just sit down and it, because you earned it.

25:39 Emily: Wow. Yeah, thank you so much. Thank you so much for joining me today, Alaina. This is a great interview.

35:43 Alaina: Thank you for having me.

Listener Q&A: Emergency Fund Savings

Question

35:51 Emily: Now onto the listener question and answer segment. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this spring, so it is anonymous. Here’s the question:

36:03 Emily: “Where should I park my emergency fund savings?”

Answer

36:08 Emily: This straightforward question deserves a straightforward answer, and that answer is in a savings account. Ideally, you would use a “high yield savings account”, bit of a misnomer right now., You might be able to get half a percent in interest or so at the moment of this recording, but that’s really the best you’re going to do without taking some degree of risk with your money or moving it around to chase the highest yield.

36:34 Emily: I know this is a really tough answer because emergency funds feel like they are just sitting there doing nothing when interest rates are low, but the job of your emergency fund is not to earn a return for you. It’s to be available for you, in its full amount, in case of emergency when you need it, whenever that might come up. So your checking accoun,t savings account, money market account, these kinds of places are the most appropriate for emergency fund savings.

37:04 Emily: I like to keep my emergency fund in a separate savings account so that I don’t dip into it accidentally, but at the same bank as my checking account, so that in the case of an emergency, it would be very instantaneous to transfer money from the emergency fund into my checking account. So if you, the listener have any issues with accidentally or kind of on purpose using your emergency fund for purposes other than emergencies, then you might want a little bit more separation. So definitely the separate savings account, but maybe even keep it at a different bank than where you have your checking account, so that there’s the delay of a few days to get money between the two accounts that will discourage you from dipping into it.

37:46 Emily: Now, some people who also still can’t stomach the idea of the emergency van, not getting any kind of return might set up what is called a tiered emergency fund. So there may be some degree of emergency fund savings in cash equivalents, like in a savings account. There might be some degree in a conservative investment fund, like bonds, mostly bonds. Maybe they’ll even have some of what they call their emergency fund invested more aggressively, so that some of it can earn a return while it’s still available to you, in the form of taxable investment accounts.

38:22 Emily: And I’m not totally opposed to this strategy. This may be one that I implement at some point in my life, but I just want to point out it’s for people who have money. My typical audience, graduate students, they’re typically living a little closer to the edge than the people who set up those types of emergency funds. If you just have $1,000 or $5,000 or $10,000 in an emergency fund, I don’t think you should be looking at these tiered options. I think that should be an all cash equivalents kind of situation. The unfortunate truth is as you have more money, as you have more wealth, you can afford to take on more risk.

39:00 Emily: So there’s a straight forward answer. Keep it in a high yield savings account, possibly at your bank or at a different bank. Don’t try to invest the money until you have lots and lots of wealth and accessible money at your disposal. At that point, you can afford to take on more risk with this part of your portfolio.

39:19 Emily: If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

39:33 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.

How to Solve the Problem of Irregular Expenses

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In this episode, Emily tells the story of starting to use the strategy that completely revolutionized her budget when she was a grad student. She teaches this strategy in almost all of the seminars she gives for universities, and it never fails to generate a high level of interest and follow-up questions. The strategy is called targeted savings, and it is a solution to the problem of irregular expenses. Irregular expenses are any expenses that occur less frequently than monthly that are difficult to pay for in the moment, such as flights, car repairs, electronics, gifts, etc. Irregular expenses don’t pose a problem for every budget, but they commonly do for lower earners like grad students. Targeted savings is a particular method for predicting and saving up in advance for these irregular expenses. If you listen through this episode and are motivated to implement a system of targeted savings, you are invited to join the Personal Finance for PhDs Community to access a full course on targeted savings, including a custom spreadsheet, and the December 2020 Challenge to create or update their targeted savings for 2021.

Links Mentioned

irregular expenses targeted savings

Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts.

This is Season 7, Episode 15, and today I don’t have a guest but rather am going to tell you about the strategy that completely revolutionized my budget when I was a grad student. I teach this strategy in almost all of the seminars I give for universities, and it never fails to generate a high level of interest and follow-up questions.

The strategy is called targeted savings, and it is a solution to the problem of irregular expenses. Irregular expenses are any expenses that occur less frequently than monthly that are difficult to pay for in the moment, such as flights, car repairs, electronics, gifts, etc. Irregular expenses don’t pose a problem for every budget, but they commonly do for lower earners like grad students. Targeted savings is a particular method for predicting and saving up in advance for these irregular expenses.

If you listen through this episode and are motivated to implement a system of targeted savings, I invite you to join the Personal Finance for PhDs Community.

I recently added a full course on targeted savings, including a custom spreadsheet, and in December 2020 I’m running a Challenge for the Community for all participants to create or update their targeted savings for 2021. If you want to take the course and/or participate in the Challenge, join the Community at PFforPhDs.com/targeted/.

Without further ado, here’s my episode, on how to solve the problem of irregular expenses.

Definition of Irregular Expense

I’d like to first expand on the definition of irregular expenses and explain why they are such a problem for early-career PhDs in particular.

Irregular expenses are expenses that occur less frequently than monthly, so they don’t really have a spot in a traditional monthly budget the way rent, utilities, groceries, etc. do. Yet, these expenses are predictable, at least in a general sense. You probably have some irregular expenses that occur in a fixed amount at a reliable point in the year, such as an insurance premium or a fee for your university. Other irregular expenses might not have a precise amount or date assigned to them, but it’s fairly certain they’ll crop up sometime, such as purchasing clothes or shoes.

I believe that irregular expenses cause more trouble for early-career PhDs than for our peers who have Real Jobs in their 20s and 30s for two reasons.

First, graduate students and sometimes postdocs have relatively low incomes. For someone whose income far exceeds their fixed expenses, irregular expenses don’t pose much of an issue. They can pay for the expense in the month it arises by cutting back slightly in some variable spending areas of the budget or deferring some spending. Maybe they save a little less or aren’t able to pay off as much debt as usual. But what if the irregular expense rivals or exceeds the portion of your income that doesn’t have to go to fixed expenses? That is fairly common situation for graduate students.

Second, graduate students and sometimes postdocs have more irregular expenses because they are graduate students or postdocs. PhDs often move away from loved ones and therefore incur travel expenses to visit them. Universities often charge fees that have to be paid once per year or term instead of being prorated to be taken out of each paycheck. If income tax on fellowships is not withheld by the university, that creates another irregular expense for the fellow. Research and conference expenses, whether reimbursed or not, are another type of irregular expense. These are all in addition to the irregular expenses that anyone might have.

Common Solutions for Irregular Expenses

Now that we’ve established what irregular expenses are, let’s discuss the various ways people handle them.

I mentioned one solution already, which is simply to cut back in other spending areas or savings goals in the short term so that you can pay for the irregular expense fully in the month that it arises. This solution pairs really well with keeping what I call a unique monthly budget, which is to write a unique budget for every single month that accounts for one-off expenses. However, this is not a viable solution, like I just outlined, if your income does not far exceed your monthly necessary and/or fixed expenses.

Probably the most common solution is to put the expense on a credit card to buy some time. By floating the charge on a credit card until the due date, you can spread the expense out over about two months and therefore have a better chance of paying for it using the prior strategy. For a larger expense, you might even end up carrying a balance for several months to spread out the repayment even more. Using credit cards in this way is not ideal, because you are obligating your future income to past purchases that should be paid for with past income, plus if you do carry a balance you’ll be charged interest.

The final common solution for irregular expenses is to have some cash savings available that you can draw from when an irregular expense arises. Then, you can replace the savings over time. One of the subtle advantages to this solution is that you will almost certainly consider the irregular expense more carefully and look for alternatives if you are spending cash vs. using debt. You might end up choosing not to incur the irregular expense at that time or shopping around for a better value. Plus, of course, there are no interest charges, and you can handle larger expenses than if you were only using the first strategy.

Targeted savings, the strategy I’m teaching you in this episode, is a more detailed version of this third strategy that involves advance planning as well as advance saving.

How I Started Using Targeted Savings

I first noticed my need for an intentional solution to this problem of irregular expenses about two years into my PhD.
Prior to that point, I had used all three of the solutions I just mentioned to handle irregular expenses.

When I was living paycheck to paycheck with no cash savings and an irregular expense came up, I would cut back as much as I could in my discretionary variable spending in that month to pay for it.
On an occasion or two, I still wasn’t able to swing the expense, so I put the expense on a credit card to float it into the next month, meaning the frantic cutting back on expenses lasted even longer. This was super difficult and unpleasant because on a stipend there’s not exactly a lot of fat in the first place.

Later, I did have a small general savings account, which I could dip into and then refill to pay for the irregular expense.

What happened after my second year of grad school is that I got married to another grad student, Kyle. We burned through almost all of our cash savings paying for our rings, honeymoon, and our portion of the wedding expenses. When we got back from our honeymoon and started combining our finances and setting up a joint budget, we realized that we only had $1,200 remaining in cash savings, which I felt obligated to call our emergency fund. So paying for irregular expenses out of existing savings was no longer an option.

It turned out that the summer we got married was a wedding boom among our friends. In fact, and I’m sure this will sound familiar to many of you, that summer kicked off a period of several years in our mid-twenties in which we were invited to about half a dozen weddings each year, most of them requiring us to travel.

Now, I love attending weddings. I very much wanted to share the joy of every couple who invited us to their wedding as we had so recently shared our joy. But we had no savings to help make that happen, and I had become savvy enough about personal finance to know I shouldn’t use a credit card if I couldn’t pay off the charge right away.

In that particular summer, we ended up declining a couple of the wedding invitations and cash flowing the irregular expenses associated with the weddings we did attend. We took a hard look at our new joint budget and found ways to reduce our spending on a monthly basis so we could handle the irregular expenses that we did incur.

As we financially caught our breath at the end of that summer, I resolved that I did not want to go through that again. I assumed—correctly—that we would have another big wedding season the next summer, and I didn’t want to have to scramble to pay for the travel and gifts and attire and everything, and I didn’t want to have to turn down invitations for financial reasons.
I had heard of this strategy known as targeted savings or sinking funds, so Kyle and I agreed to start saving up right then for the wedding guest-related expenses we assumed would come our way in fewer than 12 months. We didn’t know all the details at that moment of what the expenses would be and when they would occur, but it was a reasonable assumption that they would occur. We opened a new savings account, called it “Travel and Wedding Gifts,” and set up an autodraft to contribute money to it every month. The frugal measures we had put in place over the past few months helped us to establish that savings rate. The next year, when we did incur those expenses, we drew from that account to pay for them, and we didn’t have any of the stress and scramble associated with that spending that we did the year before.

General Solution

This is the basic concept of targeted savings. You anticipate an irregular expense, and you do your best to predict the amount and timing of that expense. Then, you establish a savings rate into a dedicated account that will sum to that amount by that time. It’s a really simple idea, though it can be tricky to implement, especially when you endeavor to capture and prepare for all of your irregular expenses, as I soon did.

Expanding the Solution

We didn’t stop with just wedding guest-related expenses. Over the course of the next few months, other types of irregular expenses arose. In September, Kyle and I paid up front for our two yearly university parking permits. In October, we purchased a season ticket to the Duke men’s basketball home games—Go Devils!—and two season tickets to the Broadway musicals series at our local theater. In November, we purchased cross-country flights to see our family over winter break.

We decided to apply our new system to these other expense categories, plus even more. Each time we cash flowed one of these irregular expenses by cutting back our other spending, we set up a new savings account and autodraft to fund that purchase for the following year.

It was not trivial to both pay for these irregular expenses out of cash flow and start saving up for the next year, but we managed it through putting in place frugal strategies that we hadn’t tried before. We canceled cable TV, stopped eating out for convenience, switched where we shopped for groceries, line dried our clothes, pursued credit card rewards, and more.
By the time a full year had passed, we had encountered or thought of every irregular expense in our lives at that time. We had set up separate savings accounts with our bank, and each one had a monthly autodraft to fund it.
Here are the names of our six targeted savings accounts and their savings rates from that time:

  • Appearance $35/mo
  • Cars $185/mo
  • Community Supported Agriculture $35/mo
  • Entertainment $60/mo
  • Medical/Dental/Vision $70/mo
  • Travel and Gifts $390/mo

Key Insight

This system worked very, very well for us, and it works well for many people I’ve spoken with about it. Targeted savings turns large, irregular expenses into small, fixed expenses that are easier to write into a budget. An effective monthly budget is a cornerstone personal finance strategy and is instrumental in helping you reach just about any financial goal, but a budget cannot be effective if it is continually derailed by irregular expenses.
Predicting and preparing for irregular expenses, whether through savings or a cash flow plan, is so important that I made it its own step in the Financial Framework I developed for PhDs, right after paying off high-priority debt and before investing for retirement.

The value of the strategy is not only in predicting and preparing for irregular expenses, although that alone would be reason enough to use it. What I’ve learned from using this strategy is that it helps you compare regular and irregular expenses head-to-head, which is really difficult to do otherwise.

In the absence of a system for predicting and preparing for irregular expenses, you’re flying by the seat of your pants with every irregular expense or spending opportunity that arises. You have to make a quick decision about whether or not you will spend and how your budget will accommodate that spending. In that moment, there is nearly always intense pressure to spend, either internal or external.

Implementing targeted savings has you take a bird’s-eye view of your spending over the course of a year, both regular and irregular. By considering spending decisions well before they actually arise, you take a lot of the pressure off the decision. By converting one-time expenses to expenses that you save for every month, you can more easily answer the question, “Would I rather spend $120 on this irregular expense or $10 per month on this regular expense?”

The trade-off was always there, but targeted savings makes it easier to make an optimal decision. Sometimes, you really rather would spend the $10 per month on a regular expense, so you can make a clear-headed decision to decline the $120 irregular expense. Targeted savings help you organize your spending so that it brings you the maximum possible satisfaction over the course of a year.

Our Targeted Savings Accounts Today

Kyle and I used targeted savings throughout the rest of grad school, and it helped us to spend on travel, car repairs, a DSLR camera, Christmas gifts for Kyle’s huge extended family, fellowship tax bills, dental checkups, business formal clothes, spontaneous charitable gifts, and much more—without anywhere near as much financial stress as we had experienced before using the system.

In fact, we kept using targeted savings even after we finished grad school and our household income increased. Even though we could cash flow pretty much any irregular expense now, I prefer to try to predict them and weigh how much we should spend in one budget category vs. another. In fact, we stopped using the system for the first year after we moved from Durham to Seattle because that was a major upheaval, but we started up again after that year because it was psychologically much preferable.
Targeted savings is not static, and you should iterate it every year at least to keep up with your shifting priorities and spending opportunities. Wedding guest-related expenses are no longer a big driver in our targeted savings system, and spending on our children now holds a place.

Our targeted savings categories as of early 2020 were:

  • Appearance
  • Cars
  • Childcare
  • Electronics
  • Entertainment
  • Gifts
  • Housewares
  • Life Insurance Premiums
  • Medical/Dental/Vision Copays and Coinsurance
  • Miscellaneous Kid Expenses
  • Travel

Course on Targeted Savings

I’ve thoroughly explored targeted savings through reflecting on my practice, talking with other PhDs about theirs, and reading how other personal finance experts use it. I’ve distilled the insights I’ve gained into my new course, Targeted Savings: The Solution for Irregular Expenses.
The course delves deeply into how to design and implement a system of targeted savings so that it captures all your problematic irregular expenses.
The course answers or helps you find your own answers to:

  • What kind of account or accounts should I keep my targeted savings in?
  • Do I need to switch banks to facilitate this practice?
  • How do I predict my expenses for the upcoming year?
  • Should I prepare for my irregular expenses individually or as groups?
  • Should I dedicate existing general savings to targeted savings and if so how?
  • How do I calculate the savings rates?
  • What do I do if an expense pops up that I didn’t predict?
  • Should my emergency fund be separate from my targeted savings?
  • How do I tell if an expense should be covered by my emergency fund or targeted savings?

and, the one that I have to answer for myself every single time I update my system:

  • What should I do if my calculated targeted savings rates are too high to fit into my monthly budget?

If you’re excited by the idea of targeted savings but not sure how to really get it going, please consider joining the Personal Finance for PhDs Community to access the course and December 2020’s Community Challenge. The Challenge is to create or update your system of targeted savings to be ready to go in January 2021. I know I personally need this update as our 2020 spending did not go at all as we had expected. As you go through the course and work on your system, you can report your progress and/or ask for help from me and the other Community members in the forum threads dedicated to the Challenge. The Challenge exists to keep you accountable to your goal of creating targeted savings and to assist you in overcoming any speed bumps you encounter. Even if you’re listening to this later on, as a Community member you’re always welcome to participate in past Challenges, and I’ll still provide support.

You can learn more about Targeted Savings: The Solution for Irregular Expenses and join the Personal Finance for PhDs Community at PFforPhDs.com/targeted/. I actually have made available on that page the first module of the course to give you a flavor of the content, and that module includes a list of two dozen common categories of irregular expenses for early-career PhDs.

Thank you so much for joining me for this episode! I highly recommend you test out the strategy of targeted savings in your own budget. It is a game-changer.

This PhD Student’s Intricate Budgeting System Uses Cash Symbolically

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In this episode, Emily interviews Alicia Jones, a PhD student at the University of Illinois at Urbana-Champaign and the creator of the YouTube channel Alicia Does Adulting. Alicia explains in detail her intricate budgeting system, which involves creating a zero-based budget every two weeks, allocating cold hard cash into envelopes, contributing to her debt avalanche, and funding her targeted savings accounts. She uses this budget to keep her intimately connected with her spending decisions and accountable to her financial goals. Alicia and her husband have paid off $70,000 of debt in the past year and a half and now have a positive net worth.

Links Mentioned in this Episode

Teaser

00:00 Alicia: I try to turn whatever I can into a game. And finance has become a game for me. I do the little colored charts. I want to see exactly how much money I can put towards savings or debt each month and that continues to motivate me.

Introduction

00:18 Emily: Welcome to the Personal Finance for PhDs Podcast, a higher education In personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode six. And today my guest is Alicia Jones, a PhD student at the University of Illinois at Urbana-Champaign and the creator of the YouTube channel, Alicia Does Adulting. Alicia explains, in detail, her intricate budgeting system, which involves creating a zero based budget every two weeks, allocating cold, hard cash into envelopes, contributing to her debt, avalanche and funding her targeted savings accounts. She uses this budget to keep her intimately connected with her spending decisions and accountable to her financial goals. So far Alicia, and her husband has paid off $70,000 of debt in a year and a half and now have a positive net worth.

01:12 Emily: You’ll hear an exciting new addition to the interview today, which is a couple of questions contributed live by members of the Personal Finance for PhDs community. Going forward, members of the community are invited to attend my podcast recording sessions and ask their own questions of my guests. If you would like to participate in the interviews as well, all you have to do is join the community at pfforphds.community. If you’d like to check out my schedule of upcoming podcast recording sessions, you can find that pfforphds.com/podcast. Joining the community is an excellent way to support the podcast. Plus, you’ll receive myriad other benefits. Without further ado, here’s my interview with Alicia Jones from Alicia Does Adulting.

Will You Please Introduce Yourself Further?

01:58 Emily: I have joining me on the podcast today Alicia Jones from Alicia Does Adulting, which is the name of her YouTube channel. And Alicia has really fantastic story to tell us, but really primarily, she’s here to teach us her budgeting system, which is quite intricate. And I highly recommend that you go check out her YouTube channel. It’s actually really fascinating. You’ll be hearing more about it as we go forward. Ao Alicia, please introduce yourself a little bit further for our audience.

02:26 Alicia: Well, thank you so much for having me. This is super exciting. My name is Alicia. I’m a third year doctoral student and I go to the University of Illinois at Urbana-Champaige. I am studying kinesiology. I actually got my masters from U of I in kinesiology as well. And my research interests are kind of varied. I’ve not had the most traditional grad student experience. I am running on average three studies at once, just because of the way my program is. Overall, my research is how behavioral changes impact the overall wellbeing of people with and without disabilities. I also work in MS work. I work in breast cancer work. I kind of do a little bit of everything, but it’s nice being in kinesiology because you get to wear leggings to class sometimes. If you’re looking for a major or concentration, highly recommend exercise science for that.

03:20 Emily: All right. That’s really fun. Well, thank you so much for sharing that. And along the way of your grad school journey, or maybe before, I don’t know, you developed an interest in personal finance, and in particular, you started your YouTube channel, Alicia Does Adulting. The channel name is quite general, but I think that you mostly talk about personal finance stuff, is that right?

03:39 Alicia: Yeah. The way that I introduced the channel is that I’m attempting to get my life together and I’m focusing on finances first. Eventually I would like to fully adult with all the aspects of adulting, but I’m not there yet. I’m still working on the money part.

03:55 Emily: Yeah. Well, the money part is going to, it takes a lifetime to work all this stuff out.

Alicia’s Budgeting System

The Basics

03:59 Emily: Really excited to get to the topic of our conversation today, which is on your budgeting system, which of course, when I saw your YouTube videos, I was absolutely fascinated by this. Please, I know it’s going to take a little while to explain, but just kind of walk us through all the different elements that you use for your budgeting.

04:14 Alicia: Definitely. I will start off with, I’m not saying that this budgeting system is for everyone. Everyone has their own way of making this work for them. I actually originally started doing a monthly budget and it failed horribly and I started playing around with it from there. The way that I will describe my budgeting system is that it is a zero-based, paycheck-to-paycheck budget.

04:41 Alicia: What does that mean? Zero-based means that I take any remaining penny after my bills, expenses, free spending money, any of that, and it gets given a specific job. So before the pandemic, that was pretty much exclusively going towards debt. When the pandemic hit, I switched my goals and I wanted to save some money, so it all went there. So I have $0 left after my paychecks are all cleared. I do keep a little bit of money in my checking account just because math is not always my friend and sometimes I forget something. I leave about a hundred dollars cushion. So you don’t have to worry about overdraft fees this way.

05:23 Alicia: Then I do paycheck to paycheck. Between my husband and I, we have anywhere between four and eight or nine jobs at once. The paycheck to paycheck system worked well for me because every other Friday we each had a steady income coming in on those days. All of the bills that come up during that pay period, I take care of all of that during that paycheck. Then if I’m saving up for something, I can kind of devote that. It comes down to a lot of planning and a little bit of strategy, I guess.

05:56 Emily: Yeah. Let me make sure understand exactly what’s going on here, because this is definitely different from how I budget and probably how most people do it, which is one of the reasons why I wanted to have you on. When you say that you have the zero based budget, is what you mean that when you receive your pay or at least every second Friday, when you’re settling up, you are at that point, allocating all of the money for the upcoming two weeks, is that right?

06:20 Alicia: I do it within the week. Anything that was due on that Friday, I account it starting there up until the next Thursday. Whenever the bill is hit, for the most part, I tend to pay my bills about two weeks in advance, just because I’d never want to miss it. That just tends to be my system, but if you look at a true paycheck to paycheck, it would be within that Friday to the following Thursday.

Dealing with Variable Expenses

06:46 Emily: Okay. And then I understand that the bills that have come in, that’s a fixed amount, you know what it is. What about money that’s sort of up to you, like your grocery spending or some discretionary money. Are you allocating a maximum that you’re going to put towards that? Or how do you handle variable expenses?

07:05 Alicia: This is where my system probably gets more complicated to people, but it’s what works for me. I use a cash envelope system on top of it. For groceries, for example, for our household, every paycheck, I set aside $300 for household, so groceries and whatever else might come about, but then I put everything on credit cards. If you watch my channel, you’ll see I will do an expense tracker where I go through every single penny that I spent, then I actually will take the money out of the cash envelopes. The reason why I like this system is I am a chronic spender. I actually managed to get myself into $15,000 of debt in my early twenties and I never want to be in credit card debt like that again. This is kind of like a checks and balance system. If I didn’t have that check for me personally, if I say I’m only spending $50 on clothing, and then I find a $75 outfit that I really want, in my brain, I still want credit card. I want to put it on a credit card. I want it now, that kind of thing.

Alicia: What I can do with my system is, “okay, I bought the $75 outfit, I have to make a sacrifice somewhere else because I don’t have any flexibility.” That $25 could come out of my household to make up the difference, but then I can’t spend all of my money on household. It kind of becomes a checks and balance system. And for me, I’m flexible with it. Some people, with the envelope system, it’s very much like when you hit the end of your envelope, you cannot spend any more. And I just give myself a little bit more leeway. Things come up, or sometimes you just need to de-stress a little bit and maybe you go out and have a drink with a friend or something. As long as I’m making sacrifices and none of it stays on my credit card, then I’m happy with it.

09:01 Emily: So the cash aspect is actually a stand in for just, this is the limit. The important part is not literally that you’re using cash because ultimately when you make the purchases, you are not using cash, you are using credit cards. But the cash is just sort of a visual and physical reminder that, okay, that’s the end of the envelope, you’ve reached the end, now you must reallocate if you need to go beyond that. I definitely like this aspect of it because I am not that strict with my budget anymore. I used to be quite strict in a similar way, like, okay, I overspent here, I’ll have to transfer from somewhere else now. I sort of let it go, but I definitely find it attractive to, at the end of the day, make sure everything’s added up to zero to account for the entire paycheck.

How Alicia Keeps Her System Flexible

09:43 Emily: Okay, we’ve talked about it being a paycheck to paycheck budget, a zero based budget. You’re allocating every single dollar that’s coming in. We talked about the cash envelopes. Are there any other elements to your budget that you’d like to share?

09:56 Alicia: I think the big thing for me, and it’s one of the things that I think some people don’t understand if you’ve watched the channel for a little bit. It’s strict and slightly complicated, but it also allows for a lot of flexibility, and that was something that was really important to me. Everyone that’s listening to this is either in grad school or wants to go to grad school or has experienced grad school and we know how stressful it is. And I try to add as little extra stressors to my life as I can, but I have a bunch of student loan debt that I really want to pay off. I have a bunch of financial goals, like I’m working towards technically retiring early. I want to have that kind of cushion in my bank account. So I want to start working towards those goals, but I also just don’t want to stress myself any more. It is a little bit time consuming, which is why I’ll say it’s probably not for everyone, but it is something to potentially give it a try. It’s been really fun on the YouTube channel in particular, because I get to hear people trying my system and it was never really meant for other people to try it, it’s just what worked for me, so it’s been really cool to hear success stories about how it works. If you’re interested in it, definitely give it a shot.

11:11 Emily: There was one more thing that I wanted to ask you about, which is, I believe that you also use sinking funds or, I use the term targeted savings accounts for that. Is that the same as your envelopes or is that a separate sort of variation on that?

11:25 Alicia: It’s very similar, but I leave my sinking funds online because they’re usually bigger purchases and I just don’t want to have that cash on me, personally. I put all of my sinking funds into one checking account and then I have an online tracker for everything. It’s a similar kind of grace system of, I actually have three sinking funds that are negative right now, and it’s because I’ve borrowed from other places. We do an annual trip to Canada, but we didn’t this year because the borders were closed. So I have some money set aside in that account that I can borrow from. I do highly recommend sinking funds or targeted savings. They have been a massive game changer for me because that was one of the ways that when I originally started to budget without much guidance, those types of things like needing new tires, I logically knew that those that was going to happen, but I never planned for it. And then the month would come and it would be a disaster and it would go on a credit card and then I’d carry on. And that’s how I got $15,000 of credit card debt.

12:31 Emily: Yeah. Can you actually, for the listener, explain a little bit further what a sinking fund or a targeted savings account is, and actually give a few maybe examples or your list of which ones you have named.

12:41 Alicia: Definitely. Sinking funds and targeted savings accounts are things that you’re saving up for that you know will eventually happen. For me and my family, we celebrate Christmas. Christmas happens same time every single year, and I know approximately how much I want to spend. So instead of in December pulling $600 out of my budget, every single month, I put $50 into a Christmas sinking fund account. I have some for the Canada trip that I mentioned, which is usually about a $2,000 expense, so I save a couple hundred dollars every single month, so it doesn’t feel super overwhelming to me.

13:19 Alicia: I actually did some research into sinking funds because they were such a game changer and I’m a grad student nerd, so I wanted to know what the literature said, and it’s actually a concept of being able to allocate money with a name. I don’t know if any listener or if you might have this experience, but I’ve actually always been a semi-decent saver. I always had money and usually several thousand dollars, at least in my savings account, but then my tires would blow up and I would need new ones and I’d put it on a credit card because to me in my brain that wasn’t an emergency. I shouldn’t take that out of my emergency savings. That money always has to be there. So by allocating this little bit of money that just sits to the side that has a name, it makes the rational jump of, “Oh, I need new tires. I have a car maintenance fund. It comes from the car maintenance.” That is probably one thing I will keep the rest of my life, no matter what. It is a massive game changer for me.

14:19 Emily: Yeah. I absolutely love sinking funds and targeted savings accounts as well. I started using them in grad school as well, when, similar to you, I had some expenses come up and in our case we didn’t go into credit card debt, but we just had to say no to a bunch of stuff that we didn’t want to say no to. And it kind of helped us realize, okay, well we do need to do some advanced planning for these sort of large expenses that come up every so often. So I started using them in grad school as well. And I did have a year when I didn’t use them, which was the year from when we left Durham, where we were living during graduate school and moved to Seattle. And so for that first year in Seattle, everything was an upheaval and we had no idea, it was a lot harder to predict your expenses once you moved to new place, et cetera, et cetera. But after that year, I was like, “Nope, I’m tired of living this way. I need to go back to having the targeted savings accounts in place.” So they’re back in place and still in play, which has been wonderful. Of course, 2020 has thrown things off quite a bit. Like you didn’t end up using your Canada trip money and certainly we’ve had spending opportunities that we anticipated that didn’t happen, so there’s definitely been some reallocation, but you kind of have to roll with it.

Using a Combination of Cash and Credit

15:25 Emily: Actually we have a question that just came in from one of my Personal Finance for PhD community members. I invite my community members to listen in on my podcast recordings. So if you are listening to this podcast and you want to be in on these recording sessions and ask your own questions, I invite you to join the community. You can find it at pfforphds.community. The question that just came in is: why or how did you decide to use both cash and a credit card and not just cash? What do you do with the cash since you’re not actually spending it? And this is exactly the question that I was gonna ask too, so please go ahead.

16:00 Alicia: Yeah. This is one of the biggest questions that I get. The big reason why I didn’t want to use just cash is because I’m on campus very late at night. And so I didn’t feel comfortable. I have a very relatively safe campus, but I just didn’t want to have any extra money on me that I didn’t need to have. I’m also not a purse or bag carrier, so I have just like a little wallet that has my keys. So having the credit cards was more convenient for me and some places on my campus actually don’t take cash, they only take cards. So the few times I’d like go to pay for something. I would have had to put it on a card anyway. But there are a few benefits for me personally, at least I guess, not just me, but you do get a little bit of extra security. If something goes wrong, if it’s a payment that you didn’t actually make or something like that, there’s security systems built into credit cards, which is beneficial. I have a little bit of extra leeway. If something massive happens, so for a real life example, last night, I had to take my cat to an emergency vet and that is $2,000 and that was not in the budget. That will go on a credit card, which now gives me 30 days to pay it off before any interest hits. That’s a nice benefit. And you also get cash back. Eventually I do want to get into travel hacking, but right now I just use the cash back to help pay off random bills that come up that I wasn’t expecting or kind of like treat yourself things. And on average, I make about a hundred dollars a month on my cash back credit cards, so I’ll take that.

17:42 Emily: Yeah, that definitely helps with the budget as well, to give you a little bit more wiggle room. And then the other part of that question was, so you literally have cash in your home, and it just gets recycled paycheck to paycheck period? What exactly is happening with that cash?

17:56 Alicia: It kind of depends. Before COVID, I was very good at taking that money, putting it into the deposit envelope and taking it right back to the bank. Since I’ve been limiting my trips, it has been getting recycled. So the people at my bank know me very well and they know I have very specific denominations that I asked for. They were very used to me doing it, but it is just kind of like a cycle of cash. So I end my week on a Thursday and usually on Friday is when I will go through all of my expenses and pull out all the cash. If it’s convenient for me to go to the bank, that money just goes back and then goes directly to credit cards. If not, since COVID that money kind of just sits there, and then the next time I need to take out cash, I just don’t take it. So the cash that got left in the bank account that never came out, goes towards the credit cards.

Commercial

18:49 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at pfforphds.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, which I add to every month. There is also a discussion forum, monthly live calls with me, book club and progress journaling for financial goals. Basically, the community exists to help you reach your financial goals, whatever they are go to pfforphds.community to find out more. I can’t wait to help propel you to financial success. Now back to the interview.

Debt Repayment Under Alicia’s Budgeting System

19:53 Emily: You mentioned earlier that you’re working on student loan debt repayments, some other debt repayment — how does your debt repayment process figure into the budget?

20:02 Alicia: That’s one of the reasons why I like the zero based budget. I do a debt avalanche. I target one debt at a time and I specifically targeted the highest interest debt to save the most amount of money that I could in interest. I have an allotted amount of all of the previous debt that I’ve paid off. Each month $1,600 actually goes towards debt pretty much no matter what. Maybe in a massive emergency I wouldn’t, but I pretty much do that every month. Then whatever excess money I have goes towards debt. I pay all of my bills, I do all of my cash envelopes and sinking funds, and then every other penny gets thrown towards debt.

20:47 Emily: I see.

20:48 Alicia: It becomes a big part of my budget.

20:50 Emily: Just to clarify, I think when you said all the debt you’ve paid off in the past, what you’re talking about is the minimum payments of each one of the debts that you’ve made in the past that have now been cleared. You’re still quote unquote making that minimum payment. You’re just making it to the next debt and you you’re in your list, the top debt in your list. So it used to be that you had minimum payments of $1,600 and now some portion of that is you just throwing additional money at your current top loan, is that right?

21:18 Alicia: Yep. And so the way it ended up working with the debt avalanche method in particular, pretty much all of my big minimum payments were first. I did, after about five months of starting budgeting, get a $20,000 medical bill, so I put that onto a credit card and I had one year to pay that off and I made the decision to have that as part of my minimum payments and my debt snowball too. It got a lot bigger because of that.

21:44 Emily: Yeah. Wow. I’m so glad to have these examples of real life coming at you. Not that it’s pleasant or happy, but just as instructive as it is for the listeners to learn how you’re dealing with that, because I’m sure a lot of them have had similar experiences or are having similar experiences.

22:00 Emily: One comment about that debt repayment method — I think I made this name up, so I don’t know if anyone else uses it, but I call what you just explained saving first and last. In the personal finance community, we talk a lot about pay yourself first. So as soon as you get paid, you do your debt snowball, you put money towards that, all of your financial goals, you put money there, then you spend whatever remains. But I also used your system of, okay, I have my financial goals, that’s happening right after I get paid, and then whatever money I have left over because I came in under budget in X, Y, Z categories, that also gets saved or thrown into a debt snowball or debt avalanche process. I call that saving first and last because saving last is like not a good idea, but saving first and last to me that was like motivational to come in under budget in these various categories so I would have more money to throw towards the financial goals. Does that work same for you?

22:54 Alicia: Yeah. And I don’t know if you’ve read any of like the gamify literature, but that’s kind of what I do with everything is I try to turn whatever I can into a game. And finance has become a game for me. I do the little color charts. I want to see exactly how much money I can put towards savings or debt each month. And that continues to motivate me. I hadn’t thought about that it was first and last, but it definitely is.

Why This Budgeting Method Works For Alicia

23:19 Emily: Yeah. So you mentioned earlier, your system is complex, it’s intricate. That may not be for everyone, but why have you made it so complex to yourself? Why do you think that this is working well for you?

23:32 Alicia: I think a big part of it is that I am very numbers driven and I wanted to take this journey to learn as much as I could about myself and about my finances, particularly since I’m the spender of my family. I wanted to know every little piece of data and I don’t really show it too much on the channel, but I do run the numbers for myself. I like to see exactly how much I’ve increased in household spending from this time, this year versus last time. It’s complicated, but part of it just feels like I’m learning lessons every single week. And particularly with using cash and credit, I’m having to constantly remind myself that you can have certain things, but you have to make sacrifices. You don’t just get the easy win all the time. You have to balance it out.

24:24 Emily: Yeah. When I talk with people about budgeting, sometimes I talk about the merits of using an app versus like maybe creating your own spreadsheet, or at least doing manual tracking in some manner, even if it is in an app or something. And what I say about that is that, doing these things manually keeps you very intimate with your numbers. It keeps you very closely connected to facing up to the decisions that you’re making and reconciling them. It sounds like that’s why you’re doing that. In terms of recommending the system to anyone else, who do you think the system would work well for?

24:56 Alicia: It has to be someone that’s pretty motivated, I think, because it does take more time than just tracking it within an app. But I think this is someone who, if you’re very motivated by learning, I think that’s probably the biggest thing. I’m constantly diving back into my own spending habits and I really like self help type things. I love working on self-improvement and that’s, I think why I was really drawn to this method of constantly having to learn and adapt and that to me is exciting.

25:30 Emily: Yeah, that sounds wonderful. What motivates you to stick with this now intricate and somewhat time consuming system?

25:40 Alicia: Honestly, one of the biggest thing is accountability. One of the reasons why I first started this channel is I’ve found that the more that I talk about things that I experienced in my life, the more people I find to have experienced similar things, or can relate and give advice. I started talking about money with my friends and family. I started talking about it on my YouTube channel, and if you follow it, you see just about everything that I spend and do and whatnot. Unless I forget something, you see it. Knowing that that’s always there, that my friends are now tracking my progress in some ways, on the times that I’ve just really wanted to go and do something, maybe not super crazy, but a little bit frivolous I don’t because I know someone’s holding me accountable to it. And unfortunately I’m not the type of person that can just hold myself accountable. Having other people has really, really helped me in this journey.

26:39 Emily: Yeah. I’ll say another vote for that as well. My current website, my home on the web is pfforphds.com but during graduate school, I was actually blogging for under a different website, which was evolvingpf.com, Evolving Personal Finance. And I similarly, not as frequently as you, but I would do at least monthly reports of this was everything I spent and this was a very popular thing to do on the internet at that time. And I’m sure it’s still maybe on YouTube as well. And it was really, really great accountability for us, helping us to stick to our goals. We use that during the time that we were in graduate school when we really had a tight budget and we had high, lofty goals for our money. It seems less necessary in my life now, post PhD, so I’ve kind of moved on from it, but it was a really, really useful tool for that time. And just actually to mention the community again, this is something that any listener can do through the PFforPhDs Community, if you choose to use it that way. It can be great for accountability, and you’re welcome to report all your spending inside that community as well, if you want. It’ll be private. It won’t be open for everyone to see, but you will have the other community members there to at least in theory, hold you accountable.

How Alicia Uses Her Budgeting Method for Achieving Financial Goals

27:48 Emily: I was also thinking about your debt repayment journey, and now you said earlier that you’ve also started saving up more since the pandemic. Maybe your priorities are a little bit different. Can you talk about using this budgeting system and how you’re motivated to use it towards your financial goals?

28:03 Alicia: Yeah. So I started this journey with $120,000 of debt and actually just this month, I’m under the $50,000 mark, so we’re making some pretty good progress. But it comes back to the idea of kind of gamifying everything. I turn as much as I can of my life into a game to keep it fun and interesting. Each month being able to see my savings account get higher, and then you get additional interest, which is also a nice little boost because it feels like free money. And then seeing my interest amounts go down when I pay off debt or just seeing the numbers go down. Each and every month I track that I track both of those and then I also track my net worth. And so each of those has become a game to me, and again, I try to not have too much stress in my life, so if my net worth goes down, I don’t beat myself up over it. I know it’s part of the journey. When the pandemic hit, I was working really hard to pay off all of my debt by May of 2021 beause that’s when I turned 30 and I wanted to be debt free by 30. That didn’t happen and that’s not going to happen because pandemic, but now I’ve been able to see my investments grow a little bit. I’ve been able to see my savings grow. Having constant check-ins, or at least regular check-ins really helps keep me motivated.

29:21 Emily: Yeah. Thank you for telling us about that. How do you think being a PhD student interacts with this journey? I know you’re married, so presumably your husband is not a graduate student as well. Do you think that being a PhD student plays into your budgeting or your financial goals at all?

29:39 Alicia: I think in some ways. I think possibly the reason why it’s so complicated is because I do like data as much as I do, and I like being able to see those numbers. Tracking absolutely every single thing, maybe a PhD thing, but I think also being a PhD student and looking at things from more of a logical point of view has also really helped me. Being able to sit down and like logically look at the debt versus how much money I could have in retirement has really helped me on the journey. It’s helped me take some of the emotions out of finance when finance is a very emotional thing. It can be your entire life. I think that’s kind of where the PhD-ness comes out

30:23 Emily: More of like the personality of a PhD student or PhD. Will you please recommend a video or two, if people want to check out your channel, Alicia Does Adulting. So you count cash on your channel, which I had never watched a video of before, but now that I’ve seen on your channel, wow it’s actually pretty riveting. Would you recommend a video or two for people to kind of get an intro to you?

30:46 Alicia: It sounds really odd when you tell people the first time I’m a former bank teller, so the sound of cash is very soothing to me. That’s how I actually found personal finance YouTube, was cash counting. Any of the “budget with me”, you can see in detail how I do my budgets and then see the cash counting, which is very fun. I actually have a video coming out this next week, which is really exciting, so before October 1st and it’s the science of cyclical savings. I’ve kind of evolved my channel a little bit into at least two educational videos per month-ish, when I can.I dug into financial literature and I started to find different savings strategies, investment strategies. Different things that my population for the most part is not PhD students they’re not going to go to academic literature, so I kind of break it down into more lay terms for people, because I genuinely just want everyone to have a good financial standing and for it to not be stressful for them. That will be out next week and I’m really excited to talk about that, and how you can save 80% each month more than if you didn’t have a plan.

31:59 Emily: Oh, wow. Yeah. I’ll definitely watch that video and will, and get from the show notes as well beause it should be out by the time this episode comes out. That sounds fabulous.

Questions from the Personal Finance for PhDs Community

32:06 Emily: I want to take a pause here and invite any members of the Personal Finance for PhDs Community who have a question at this point. This is your opportunity to follow up with Alicia and maybe get some more specifics for your situation.

32:18 Emily: Okay, so we do have one question that came in from a community member. Would you say that using cash is symbolic for you more than anything?

32:27 Alicia: I think symbolic is a really good word for it. I just need one extra thing of accountability and I’m the type of person if I hand over $20 that actually wasn’t as painful for me as having to budget it at the end, so using just cash envelopes, didn’t really work for me in that sense, but physically going through and having to pull money out of my personal spending for an unexpected thing is very symbolic and just kind of helps visualize that process for me.

33:00 Emily: Yeah. I really liked that aspect of it as well. Thank you so much for sharing that with us. I actually didn’t really catch on to that just from watching a few of your videos, that the cash was really being recycled, at this point, not before, but at this point.

Best Financial Advice for an Early Career PhD

33:10 Emily: We’ll wrap up with our final question, Alicia, which is what is your best financial advice for another early career PhD?

33:17 Alicia: My biggest advice is it’s never too early to start and it is never too late to start. Every little bit that I’ve done along the way has helped. Every step you take really does help you and if you have never really thought about looking at your finances, today’s the day to start because you never know when one of these unexpected massive things are going to hit. Since I started my journey, I’ve had a lot of massive financial things happen and because I understood my money and I understood where I was at, I could face $20,000 of medical debt with relative calmness, which I can guarantee you, Alicia from five years ago would have been a sobbing mess over all of it and I was actually pretty calm. My biggest advice is just start. Even if it’s small, even if it’s $5, it really does add up.

34:13 Emily: Yeah, I totally totally agree. And actually just to give people some scope, you said you’ve paid off, I think it’s over $70,000 worth of debt right now. Over what time period did you do that?

34:22 Alicia: It’s been about a year and a half.

34:25 Emily: Oh wow!

34:26 Alicia: Yeah! Our first year was really good and then everything kind of hit the fan. This year has not been great, but we actually went from a negative $56,000 net worth and we’re now in the positives. We’re about to hit $10,000, which might not sound like a big net worth to a lot of people, but it was a big deal for me to be positive.

34:46 Emily: Yeah. You’re now at a $10,000-aire, right? Every order of magnitude we can celebrate. Well, this has been such a wonderful conversation, Alicia, and thank you so much for joining me and sharing your experience and your wisdom with my listeners.

35:00 Alicia: Well, thank you so much for having me. This has been super fun!

Outtro

35:04 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

How This PhD Student’s Budgeting Practice Enabled a Hawaiian Vacation

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In this episode, Emily interviews Sean from Authentically Average, a fourth-year PhD student at a university in Houston, TX. Sean and his wife have very intentionally set up their budget to reflect their values, and now live and die by their budget. Their top three budget priorities are retirement savings, tithing, and travel. Sean’s budget helps him say “no” to certain areas of spending or opportunities for spending so that he can say “yes” to his travel aspirations. Sean describes a wellness vacation he and his wife took to Hawaii and why travel is such a high priority right now.

Links Mentioned

budgeting for travel on a grad student stipend

Teaser

00:00 Sean: If you aren’t budgeting yet, try to get there as soon as possible. Tracking expenses is great and it’s helpful to get you in the right mindset. But until you are, I think, front end saying this is the money I will have coming in, here are the places it’s going to go, you can’t really capture your values fully and where to invest unless you’re doing it upfront.

Introduction

00:26 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 12. And today my guest is Sean from Authentically Average, a fourth year PhD student at a university in Houston, Texas. Sean, and his wife live and die by their budget. And they have put a lot of effort into making sure that their budget reflects their values. Their top three budget priorities are retirement savings, timing, and travel. Sean describes a vacation they took to Hawaii and the ways they minimize spending in lower priority areas of their life so that they can spend more on vacations and other types of experiential living. By the way, we recorded this interview in September, 2019. Without further ado, here’s my interview with Sean from authentically average.

Will You Please Introduce Yourself Further?

01:18 Emily: I am delighted to have joined me on the podcast day Sean, from Authentically Average. Authentically Average is the name of his blog. And Sean, I’ll just let you introduce yourself to the listeners.

01:28 Sean: Sure. Thanks Emily for having me. My name is Sean. I run the authentically average blog. I characterize myself as a PhD student, husband, chef, pretty much all of the above kind of general life stuff, and that’s the focus of the blogs, every day kind of living. I’m a PhD student in the 3D printing space. I just started my fourth year, so I’m hopefully approaching the light at the end of the tunnel. I live in Houston with my wife, Allie. We have nine children, and by children, I mean plants and most of them are still alive. I’m doing a PhD in 3D printing space. I got my bachelor’s in chemical engineering before that, went directly to grad school, and still trying to figure out what I’m looking for afterwards. I’m thinking like medical device route. That’s a really interesting space for me and the community in Houston is really kind of exploding right now, so I’m really passionate about trying to see that grow.

02:36 Emily: Yeah. Sounds really good. And I understand that your wife is a graduate student as well.

02:41 Sean: She is. My wife is getting her MBA currently. She’s super woman. She’s working full time and getting her MBA on the weekends. A lot of school at our house.

02:50 Emily: Yeah, that’s a full plate. I guess you might not be the busiest one in the household.

02:57 Sean: I think it goes both ways. The nicety of being a PhD student, sometimes, is depending on your advisor, the work schedule is not necessarily lighter, but more flexible. I tend to do a lot more of the, I talked about this briefly on my blog, but like, I tend to do a lot more of the household activities, like the cleaning and cooking and stuff, just because I’m the one that has the time for it. It’s like not always super sexy to talk about sometimes, but if I don’t cook, we don’t eat. Somebody’s got to do it. But we like to share. I mean, she’s got a lot on her plate right now from a professional capacity, so I’m happy to take on those other roles.

Translating Life Values to Your Budget

03:45 Emily: Yeah. And I guess that’s one of those things that you can talk about on a blog that is named Authentically Average. You can talk about your everyday experiences. And money of course, is among those. You recently published a post that was kind of talking about your financial values, which is something that I love to talk about. It’s the foundational concept in personal finance, yet not one that gets a lot of airtime, I feel like, unfortunately, so why don’t you go ahead and tell us about how your values inform how you use your money.

04:20 Sean: Sure. Thank you for that. A couple of weeks ago, the focus of that post was, and we can talk about this in a little bit, but I had gone on a vacation and some people were like, “Oh wow, this is great” and some people were kind of like, “okay, great, you went on this really nice vacation, but your blog is authentically average, how do you reconcile those?” I started thinking about it. I said, okay, I should probably take a step back. The value focus, like you said, is I think central to personal finance and making “smart” decisions with money, but not one that’s talked about a lot. Primarily the goal for that was “here are my values, here’s what I try to invest my money in, and by extension a little bit my time.”

Retirement Savings

05:10 Sean: For me and my wife, we have three top tier values, and then beyond that, everything kind of falls into place. The first one is financial security, so saving for retirement, making sure that we are doing the things we need to do now so that we can live comfortably later. I think that sometimes people get really caught up in this concept of like, I’m doing what I gotta do right now, and that’s fine. And sometimes they are not saving for retirement because they feel like they can’t and that there’s a lot there to kind of go through. And sometimes because they simply don’t think about it. The first time that I kind of understood the concept of like retirement savings and compounding interest and all of that, I started to notice, Oh, wow, there’s a lot of ground that I can make up here in my late twenties and set the stage for how my thirties and forties are going to go. That’s the first piece. The second piece is —

06:14 Emily: Actually, I want to make one offshoot comment to that because of course, saving for retirement is something that I love to talk about. One point that I really like to make when I’m speaking with graduate students or other sort of people on the younger side, younger and lower income side of things, is that if you look at those compound interest calculators, the time is what matters. I mean the time and the amount of money you save, of course they both matter, but the time — you wouldn’t believe what a little bit of extra time will get you in terms of increased returns. And so I always say, whatever amount…like if you feel like you can’t save anything okay, maybe that’s true, but if you can even find like $10, $50 a month that you can start putting away for that purpose, it’s unbelievable what a huge difference that makes on the back end of things, just to have those few extra years. Don’t be discouraged if you can’t save like a thousand dollars a month. That is a very large and unreasonable amount of money for a graduate student level of income, but a smaller amount of money makes a really, really big difference too.

07:18 Sean: Yeah, definitely. And just to kind of keep going on that thread, the stereotypical thing that people give of why you should start investing as early as possible is they talk about if you invest for 10 years from 20 to 30, the amount of money that you make during that time, by the time you retire, will outpace starting from 30 and moving forward. You can’t possibly catch up. Just like you said, sometimes I think people get like, Oh no, I can’t do that much., and that’s okay, but if you can do something, that’s great.

07:55 Emily: Yeah. I think one of the really difficult things that people run into early on is that they’re dealing with debt loads and they might have to clear those first before they can even touch the investing for retirement side of things. But since you’re already starting to invest retirement, I take it you’re either debt-free or you have debt that does not concern you.

08:14 Sean: We are debt free. I would say that my wife and I are very blessed, lucky, strategic, however you want to look at it, I guess. We paid our last debt off last year. I had an outstanding car note that I paid off. We again are very fortunate, I think, to be able to cash flow her MBA. That’s something that I think is a challenge, especially in higher education. I know that the finances for PhDs vary pretty drastically depending on field. In my PhD program, it’s tuition free, and we collect a stipend for working here. When I think about my PhD, I think about it more as job than I think an education of being a student. And I think collecting a paycheck helps me keep that association clear. So yeah, we are debt free. We are investing some. I’d like to be investing more, but also, you know, like you just said, there are different things that we’re trying to take care of and trying to keep all the balls in the air at the same time.

09:23 Sean: Yeah, definitely. Okay. So that is one of your top priorities, is saving for retirement. What’s the next one?

Experiential Living

09:30 Sean: So there’s two more. The second one would be, we have a really big focus on, I call it experiential living, but in the current case it’s travel. I joked about having plant children. Allie and I don’t have any kids yet. We have plans to have kids, but we just don’t have them right now. We have this focus on like, if there are things that would either be impossible or significantly more difficult to do when we have kids and when we’re older, we’d love to do them now. That post that you mentioned earlier about our travel, we went to Maui for a week over the summer. That was born out of like, “Hey, this is a great time to just go and spend a week in Hawaii and just, you know, live it up.” I mean, responsibly, but this is great. After saving for retirement, our next focus is, Hey, we want to have a good time, and for us having a good time looks like going out and exploring.

10:33 Emily: So I was really curious about this term, you just used — experiential living. Right now you said it looks like travel. What are the other things that might fall under that category for you?

10:42 Sean: I guess one thing is I know that some people, their focus is they want this nice X or Y. I think Allie and I, we would much rather save up money for a few pay periods and go to a nice concert or go see a play or a musical or something than buy a new TV or buy something else for the house. We do live in a nice apartment and we’ve decorated and all of that, but we would much rather do something that’s I think a little bit more like out and active. There’s not anything good or bad about that, or any other way. That’s just our preference.

11:24 Emily: Okay. So is this basically boiling down to the personal finance experiences versus stuff debate where everyone has kind of come down to the side of experiences? Is that what I’m hearing

11:36 Sean: Somewhat, yeah. I think that the stuff thing, depending on what the stuff is, is very valuable, in terms of having stuff and, and that’s all fine. But also I know just from, we did the like whole KonMari thing a couple months ago and realized, Oh, I have a lot of stuff. It was nice at the time, but in hindsight I would rather, I think have spent the money that I spent on that stuff on doing something.

12:06 Emily: Yeah. I actually heard this really great thing on a podcast recently. It was on the ChooseFI podcast and the, one of the people that they were interviewing, I can’t remember who the guest was said, something like he strives to have one memorable moment per month, some new thing that he’s never tried before. Travel would certainly fall under that, but it could be like a cooking class or like just doing something different out of your routine, once per month, he has that goal to make a memory, basically, with his wife. And actually it can be the same moment or they can have two different moments, one that each one prefers more per month, but that was his goal. And I thought that was amazing, and I really want to implement it in my life now, because I do feel like months can go by where it’s like, yeah, what happened that was great or notable or important, I’m not even sure.

12:59 Emily: Okay. So experiences, concerts, travel, that kind of stuff. And so right now your focus is doing the things that you would have a harder time doing once you have children. And I will have to say that when I read your post about your vacation, I was like, how do I get rid of my kids for a week, so I can do this. It sounds awesome. What is your third top priority?

Tithing

13:20 Sean: Again, so saving for retirement, travel and experiential living. The third one, honestly, is giving back and tithing. My wife and I tithe every pay period. I know sometimes as graduate students that can seem like a tumultous topic. We already do not make all that much money —

13:45 Emily: Actually, Sean, let’s pause there because some of the listeners might not be familiar with the term “tithe”, could you define that?

13:51 Sean: Sure. In a traditional tithe you would be giving, donating a 10th or some amounts. I mean, tithe literally is “10th”, but giving some amount back to your church family. My wife and I are Catholic. We give back to, we split between the church that we currently go to and then we also support a couple of students through the FOCUS program. They do ministry on college campuses throughout the United States. Good clarification. We give back to our church. For us, we do a traditional 10% tithe. That’s just, I think how we have decided that that’s where we want to put that value at. Does that kind of answer that?

14:39 Emily: Yeah. It’s not something that’s come up on the podcast hardly at all, but we also tithe and have for throughout graduate school, a long time. And it definitely, while I knew other graduate students from our church who also did that practice, it wasn’t something that I felt like was really widespread or something that graduate students could really get a handle on that large percentage. The 10% is a very, very large chunk of your income, but, I feel like tithing for me in terms of like the budget actually pushed us towards what I call percentage-based budgeting. If a 10th of your gross income is going towards that, we also did a certain percentage, it changed over time, starting at 10%, for like saving for retirement and then now we’re up to like 20%, so we’ve increased that over time. And I’m trying to remember, well, taxes are also sort of, not exactly a percentage, but you can convert them to a percentage of your income, so for us, it was like these different goals scale with the amount of money that we make, which I really liked that there was like this flexible percentage. The percentage is fixed, but the amount of money is changes depending on what your income is.

15:51 Emily: I really liked that way of thinking about budgeting, that you should have percentages going towards different things. And it actually goes pretty well with the balanced money formula. I don’t know if you’re familiar with this at all. It basically says that you should keep your necessary expenses below half of your take home pay. And I really liked that as well because, I think for graduate students, there’s this phrase that Dave Ramsey uses that I really like, not for graduate schools, but for people in general, which is something like “act your wage”, something along those lines. I think this percentage-based budgeting, I think, is really appropriate for people who have incomes that they expect to change a lot, like graduate school. Hopefully it’ll be going up alive later on, but if you have those percentages it can keep you really grounded and something can be consistent through those fluctuations in income basically.

16:44 Sean: Right. Definitely. Yeah. We do a similar thing in terms of trying to make sure that we’re doing a percentage breakdown on our budget. One small detail, we do typically everything on net pay, and then also when we get a tax return, I mean, ideally our tax return is zero, right. But if we do get a tax return, then we’ll do the same thing on whatever the return is. But I think it basically shakes out to be the same thing. I have found that to be really helpful. I feel like it helps us recognize where are we essentially overspending in our lives, and conversely, where could we be giving more attention, certainly.

Living and Dying By Your Budget

17:32 Emily: A phrase that I read in your recent post was we live and die by our budget, and that really stuck out because you talked about, I guess, that your budget is a plan for how you’re going to spend your money. And if opportunities arise after you’ve made the, you oftentimes say no to those opportunities, you stick with your original plan. I just wanted to ask you about that. How did you guys put together your budget, and how do you find the fortitude to stick with it?

18:02 Sean: I mentioned this very briefly before, disclaimer, this is not an ad, wish it was an ad, but it’s not, my wife and I use it’s called YNAB, or You Need A Budget. It’s a budgeting tool online that you use, to keep everything in order. One of the, I think, nice things about living and dying by your budget is it tells you how much money you’ve budgeted and allocated to every, whatever category you want to put it in. And if you overspend, the color of the money bar goes from a nice, pretty green to a very angry red color. And that’s just like, I think, maybe potentially a little bit of an immature way, but it’s really reinforcing for me of like, Hey, you made your money angry because you spent more than you allocated.

18:56 Sean: I joke about that sometimes living and dying by our budget. Really, it’s taken a lot of discipline to get to the point that we are now and give yourself grace and patience to get there as you’re working through things and things come up, of course. But we’re in a space right now where we have a set of goals, like I talked about, and a set of values. Sometimes things come up that don’t align with those, or potentially detract a little bit from them and we have to make a mature decision on like, Hey, is it worth us to do this? So one of the things I talk about in that post is, a friend of ours came to us and said, Hey, we want to go to this football game, last minute. Allie and I are huge college football fans, I went to a big football school for undergrad. Great, right, in terms of an interest standpoint, I think that’s great.

19:55 Sean: We started to look at the finances and said man, this is going to be like a thousand dollar trip just out of the blue. And I think at the beginning of the year, had we started the year and said, Hey, we want this to come up and we want to plan for this — great, okay, we’ll budget for it. But a few weeks out, we had to say, no. I mean, first of all, based on our budget, we literally did not have the money to do it without taking money from other standpoints. I really struggle with the idea of pulling money that we had saved for retirement out of retirement to go to a football game. But more than that, I think it’s sometimes difficult when you…This is always a challenge when you have very diverse friend groups is like, everybody has their own different set of values. And I want those people to understand, like friends of mine, that sometimes I to turn things down. Like, hey, I love you guys. You’re great, I appreciate everything about you, and I appreciate our relationship, but just understand that me not wanting to come out, or me not wanting to do this last minute, isn’t a reflection on like our relationship and is a reflection on I just don’t have the money for it according to what my wife and I decided it was important to us.

21:11 Emily: Yeah. There’s another blogger, content creator in the personal finance space, Paula and her brand is Afford Anything. And so her tagline is kind of like, “you can afford anything, but you can’t afford everything.” She’s really, like you were just saying, you have to get really clear about what’s important to you because you want to be able to say yes to the things that are at the top of your list. And that does mean saying no to the things that fall further down and that’s hard. But you can’t say yes to everything. If you say yes to everything, you’ll end up saying no to the things that are most important to you, if you accept every opportunity that comes your way.

21:52 Emily: I have to say though, your story reminded me of when I was in graduate school. I went to Duke and Duke won two championships while I was there 2010 and 2015. 2015 was technically after I defended, but I was still enrolled as a student and I still had tickets to games and stuff. So anyway, in 2010, of course you never know, going in to the tournament, how it’s going to turn out. And at the last second, we had an opportunity to go to the Final Four. Duke went, and my husband and I had the opportunity to attend. They were giving away tickets for students. It was actually free. The tickets were free. All you had to do was get there and stay there. And we really deliberated, and I don’t know that it came down to mostly a financial decision. There were other time reasons why we decided not to go. We had already traveled actually the previous year to see them play and they hadn’t advanced, and so we already had like, kind of that disappointment. So we decided against going, and of course in 2010, they ended up winning, same story in 2015. That’s just one of my major regrets from when I was in graduate school, because I was a fan, that I let anything stand in the way of like attending those events. So I do think that my main regrets from graduate school, in terms of my personal life were things that I didn’t do that money played into why I didn’t do it. It probably wasn’t the whole situation, but yeah, there’s two times I can point to an opportunity came my way and I said no to it, a very reasoned decision, and I really think that was the wrong way to go.

23:27 Sean: Yeah. And sometimes I think that that’s a struggle because we’ve done a couple of things too, where it’s like, Oh, this is such a good opportunity to do this thing. Sometimes, and I say this with a mountain of salt, occasionally we will not live and die by the budget. And the only way that that works is to have intentionally over allocated somewhere else, so that the total amount of money is still there, like the money to cover a different decision is still there. It’s not like we’re living outside of our means, but we do give ourselves a little bit of grace. Sometimes I’m like, this is a really big deal. That trip to Hawaii was pretty much entirely planned for, but there were a couple of things once we got there, that was like, you know what, we’re here, I think we’ll regret this thing if we don’t do it, let’s do it and we’ll figure it out.

24:27 Emily: Yeah. I think that strategy of over saving or just saving for things that you don’t know quite what you’re saving for — at some point a friend will invite you to do something, at some point you’ll have an opportunity to come your way that you’ll want to say yes to at the last second. And I think the way that most people who are not on top of their finances would handle it would just say, okay, I’m going to put it on a credit card, I’ll worry about how to pay for it later, which is not a great strategy. But if you save in advance and you’re just not totally sure what that money is going to go for, but you’re pretty sure something’s going to pique your fancy along the way then you can be able to say yes again to those opportunities, knowing that it’s still within everything you’ve allocated for an advance,

25:08 Sean: Just a small insight, we have a category in our budget called “stuff we forgot to budget for”, and we put a small amount, however much, in there every pay period just because inevitably something comes up. Now, if it’s an emergency, we have separate money set aside. You mentioned Dave Ramsey earlier — we have a separate emergency fund set aside for that kind of thing. This is more like your friend asked you to do something, you have an opportunity to go watch Duke win a championship, whatever.

25:44 Emily: Yeah, exactly.

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25:48 Emily: Hey, social distancers, Emily here. I hope you’re doing okay. It took a few weeks, but I think I have my bearings about me in my new normal. There is a lot of uncertainty and fear right now about our public and personal health and our economy. I would like to help you feel more secure in your personal finances and plan and prepare for whatever financial future may come. You can schedule a free 15 minute call with me at PFforPhDs.com/coaching to determine if financial coaching with me is right for you at this time, I hope you will reach out, if only to speak with someone new for a few minutes. Take care. Now back to our interview.

Frugal Tips for Experiential Living

26:34 Emily: So I’m wondering if you have any ways, any sort of frugal things that you’ve done in your life that help you have these experiences that you want have. Either minimizing the money that it takes to do those things or minimizing other areas in your budget so that you can free up more money for your top priority. Are there any like really good strategies you use in that vein?

26:58 Sean: I think the stereotypical student might fight this a little bit. I’ll start with the like ways of like daily life first. We cook 99% of our meals. That’s just the way it is. For me that’s two reasons. That post that I wrote is primarily about investing your money in what you value, but there’s also a small segment on investing your time in what you value and no question about it, cooking for yourself takes it takes time. It costs money to go buy groceries and it takes time to cook those meals. I think it’s easier to go out to eat, from a time perspective or pick up quick ready meals and that kind of thing, but from a time perspective, like at that point, I’m investing in my health. It’s almost exclusively healthier for you to cook for yourself than it is to go out to eat, and it’s almost exclusively less expensive to cook for yourself too. In that post I talk about, Allie and I have been discussing potentially giving ourselves a little bit more room on this and kind of grace on this for when we want to go out. We don’t go out to eat ever. Like once every couple of weeks and the reasoning for that is, whatever amount of money I would spend on going out to eat a couple nights a week is better suited towards saving for Hawaii, or, we’ve been married for just over a year, for our honeymoon we went to Italy. We spent two weeks there. That’s not an inconsequential trip size, and the only way that that works is you’re making cuts, so to speak, elsewhere in your life.

28:37 Sean: The other thing for us has been we’re busy people. She’s in school part time, well, no she’s in school full time and working full time, and I’m working full time and doing things at home. And so it’s really important for us to invest in our marriage. Regular date nights are important, but it doesn’t always have to be this five star restaurant. Those types of things are nicem, but I think I also get 90 plus percent of the relationship building component from that type of date from going to somewhere kind of casual, hole-in-the-wall, or going on an experience. We talked about this this morning, actually. It’s been a couple weeks since we had a formal date, and one thing that we’re going to do next week is we’re going clothes shopping and we’re going to Marshall’s-hop. There’s like seven of them within a 10 mile radius of us and we’re just gonna — we found that when we hit, we really hit there, but they’re very hit and miss, but there’s a lot of them, so we can kind of hop between and see. I think that that might sound somewhat silly to some people, but for us, we like investing in clothes that makes us feel good and feel professional, but also not breaking the bank and this “adventuring”, so to speak, and helping each other try things on — that I think is a fun relationship building activity that literally the travel aspect only costs the gas, and then we would have budgeted for the clothes. There’s that aspect on like life-hacking.

30:11 Sean: From a travel hacking standpoint, honestly, it’s just time. You have to decide how much your time is worth, but we always look for great deals on hotels and flights. Google has a flight tracker that you can use. It’ll send you alerts when your flights fall. I do the same thing for a lot of the hotels. A lot of third party websites are great. For Italy, actually this, this is a great story. For Italy, the flights were going to be like, I don’t remember like $1800 a piece or something, like a lot of money. We went in May, so like the beginning of high season, I get it. Then, the day before I was going to buy, because they weren’t falling, I said, “Oh, let me just look on another website.” I went on, I think it was Priceline or one of the third party website and it was like half that, together. I was like, “Yes, I’m absolutely doing this. We’ll take a weird layover to save half the cost. You could write a book about that, but that’s the things that I think of.

31:15 Emily: Yeah. I think when your goal is to have experiences and make memories and so forth, I guess there’s been research on this that like the anticipation of the experience is a big component of your satisfaction with it. And so taking the time to plan, and do whatever travel hacking and price comparisons and all of that, it actually enhances like your ultimate experience when you put a lot of effort into it upfront. I don’t know, to me it’s a little bit counter-intuitive, but yeah. So pursuing these travel hacking strategies, um, in addition to saving money can actually make you feel better about the whole thing. I guess what I was thinking about when you’re talking, especially about like the food and not spending so much money on eating out and so forth. That was a strategy that we used also. We cut out basically all kinds of convenience food, in favor of cooking for ourselves. And that is like a little bit of a sacrifice because yeah, you have to plan it a little bit more and all that, that goes into cooking. But for us, like for you, the money that we were not spending on convenience eating went towards our travel fund. And so when we knew exactly where the money that we would’ve spent on one thing was going to go, if we didn’t actually carry through with the eating out or whatever it was, that makes the whole thing a lot more palatable. It makes the whole thing go down easier if you know, okay, yeah, I’m sacrificing a little bit in this moment right here, but that is going to enable something really fantastic later on.

32:43 Sean: Right, right, right, right.

32:45 Emily: Any other frugal strategies around those things, either minimizing expenses on things you really want to do or cutting expenses and things that are not such a high priority?

32:54 Sean: I think the only additional thing that I’ll add is — it’s especially common, I think because like I, as a PhD understand or PhD student, rather, my time is limited. I think that my time is a little bit larger than some other people’s because I just try to make a point of, I’m only working X hours this week. Like this is my job and I’m putting this much into it. And that sometimes works for people and sometimes doesn’t. But I see a lot of, because we have such little free time, convenience buying and convenience spending somewhat to kind of what you, you mentioned earlier. And I think in some ways you do have to give yourself a little bit of that because the amount that you stress over not making convenient spend is also a use of resources, maybe not for the best. Just watch it. I always go back to “live and die by the budget”. Until I had a budget that I like actually did religiously every week and every pay period, I didn’t have a clue. And I started to look at my spending habits and said, man, I didn’t realize I was spending this much on snacks, or this much on cable and this other thing that I don’t even use. It just, it never occurred to me because I was always tracking my spending after the fact that never really looking forward any further than the next couple of weeks.

34:20 Emily: Yeah. I mean, tracking your spending is an amazing thing to do as like a first step. It actually does start to change your behavior in many cases. But if you’re just tracking it as a passive activity and it’s not actually balancing, okay, well, where do I want my money to go? And do I prefer it here? Or do I prefer it there? That’s what you have to do with your budgeting. They’re both really useful, um, activities, but I guess once the shock of the tracking wears off and you make whatever sort of subconscious changes you’re going to want to make from that, you need to start budgeting to get that further of value add from the activity.

When Budgeting Pays Off: Sean’s Trip to Hawaii

34:54 Emily: So we’ve teased this enough. Tell us about your trip to Hawaii, that made me so jealous.

35:01 Sean: We went to Maui specifically. We went to Hana, which is a very small town on the East coast of Maui. Allie was really into this idea of like a wellness retreat. And I did, I think the stereotypical husband thing that I hate and I was like, what are you talking about? No. And then I started to look into it. I was like, Oh, this actually sounds pretty awesome. So I was like, okay, yeah, let’s go for it, sure. There was a resort there called the Travaasa, just right in the town. Hana is not really the type of place that you go to and stay at unless you go to this hotel. There’s not a city center. It’s people that live there and this hotel and that’s it.

35:45 Sean: So we went and we said, okay, you know, let’s do it. This sounds great, let’s go. The only thing I’ll say about traveling to Hana is getting to the airports, great, but there’s a very famous road there called the road to Hana and it’s like 90 degree turns the whole way. It’s 40 or 50 miles and it took us three hours. You’re crawling and it’s crazy. But scenery is amazing and beautiful. The little food stops on the way are great. And then once we actually got there, it was just like paradise. It’s still the States, so there is cell service, but there’s no wifi available. The cell service is kind of shaky, we turned our work phones off, and just lived, and it was awesome.

36:34 Sean: There’s there was a lot to do there. They have a spa on site. I’m not a huge massage/spa person, but I was the most relaxed I’ve ever been in my whole life that week. The food was awesome. There was waterfront yoga and like paddle boarding and horseback riding and just like all of this stuff that we don’t ever do in our daily lives. It was really awesome to just for once I think go and just exist. My wife and I, in particular, but I think more generally PhD students and other graduate students, you’re just going nonstop all the time, and there’s not really any moment where you kind of just sit back and you’re like, “Hey, I’m not thinking about anything about tomorrow, except whether I want to do this cool thing or that cool thing.” I don’t know, I think that was a nice refresher for us.

37:34 Sean: Everything about it was super chill. The only not super chill thing about it is, there was actually a wildfire on the West side of the island while we were there. We went back to catch our flight and all the planes are delayed because they’re trying to get people that live there, like out of danger. Things are, I don’t want to say fine because you know, wildfires are extremely dangerous and there was a lot of damage there. People are generally fine. There were a lot of people that got helped. Everybody was safe. I don’t recall seeing any reports of fatalities, which is incredible. But for us, we’re literally there with our bags in a very small airport on Maui and we’re just like, “all right, guess we’ll chill.” I think a small price to pay, obviously relative to potentially losing your home in a fire, of course. But for us, nobody told us anything. Our airline didn’t give us any updates. We just got there and they were like, we’ll see what happens. Like I said, there’s a much longer post about it with pictures that are describing it way better than I can tell it, but highly recommend. Would definitely do it again. It was great.

38:54 Emily: What really struck me about the, your description of this vacation was that I didn’t do anything like that when I was in graduate school, except for my honeymoon. The honeymoon was relaxing. I mentioned that we saved a lot for travel before, but it was all obligation travel, all of it. We were usually traveling domestically to either see our families, or go to weddings, or attend reunions. Other stuff where somebody else was dictating the schedule, the timing, the place, all of that. I’m not trying to say that was a…We wanted to do it. We wanted to do all that obligation travel. Going to weddings is really important to us. That’s a high value for us, but it just kind of squeezed out any other possibility of taking a vacation that was just for us and just for the purposes of recuperation. There were always other purposes for the trips — seeing certain people, or witnessing certain events. Looking back on it, I did not give myself a proper amount of rest, throughout that process. And it’s still something that I struggle with, so I’m really glad that you guys, made it a priority, made the time for it. Hopefully you’ll do it a few more, maybe not the same vacation, but something similar, a few more times during graduate school so you guys can finish strong and finish healthy. So that sounds amazing, and yeah, we can point people to the post from the show notes.

Financial Advice for Early Career PhDs

40:23 Emily: As we finish up here Sean standard question that I ask all my guests — what is your best financial advice for another early career PhD? And that could be something related to what we’ve talked about today, or it could be something entirely different.

40:36 Sean: Sure. Just because we’re towards the end, I’ll give two quick ones, because I think they’re both very important. The first one we’ve touched about a few times is if you aren’t budgeting yet, try to get there as soon as possible. Like you said, tracking expenses is great and it’s helpful to get you in the right mindset. But until you are, I think front end, saying this is the money I will have coming in, here are the places it’s going to go, you can’t really capture your values fully in like where to invest unless you’re doing it on the front end. So that’s the first thing that I recommend.

41:12 Sean: The other thing is, depending on your program, especially for PhD students on grants and fellowships, so kind of take that with a very specific niche market in mind, sometimes you will be allowed to pursue other things outside of your degree and have side jobs and side hustles. I know, recently talked to another student, here in Houston who, I think was baby-sitting or dog-sitting. Am I remembering that right?

41:39 Emily: Pet-sitting.

41:39 Sean: Pet-sitting, right. And like, okay, great. So she had a side hustle and that’s awesome. Sometimes you can and look around for what things are available because the extra cash is really useful. Sometimes you can’t, on paper. They expect you to be in the lab, and if you have time that you could be giving to another job, you should be spending it in the lab. And I think my recommendation for that is more of a career-related one. You’re a graduate student and you’re contributing to the academic space. That’s beneficial to the field. It should also be beneficial to you, and so I think that I always recommend that students take opportunities that they find, when they become available, in stride, because it may be a value add to their career or to their finances, that isn’t necessarily a value add to their academic education. And that’s okay. I think sometimes we get this feeling of guilt of like, I’m not working hard enough in the lab. And if that’s true, okay, work harder in the lab, but if it’s not true and you can be doing other things that are beneficial for you, it’s okay to do things outside of lab. And I really struggled with that when I first got to graduate school, and I see that as a common struggle now.

42:55 Emily: Yeah, I guess, so I’ve been reading a lot about like time management, recently, to work on my own time management practices, and I guess one thing I’ve learned, I’ve been reading and listening to a lot of Laura Vanderkam’s stuff, and so she references research that’s on…First of all, that people don’t work as much as they say they do. Like people who are reporting that they work 80 hour weeks, almost always are never working more than like 55 hours a week. They may be at work for 80 hours a week, and that’s not a good return on your investment of time, is just to be around more. You should be resting or doing other things instead of that. But another part of that is that there’s sort of an optimal amount of work that you can put into something in a given week, and once you start going beyond that, your returns for the amount of time you’re putting in decrease and decrease and decrease. After 40 or 45 hours, you may be putting in more time, but you’re not necessarily getting that much more of it. It’s kind of this like 80/20 principle.

43:51 Sean: Yup, definitely.

43:52 Emily: Yeah. So I’ll just say like on that time management component, that it can really be beneficial for you if you don’t consider research to be like a black hole, you just throw more and more and more and more time into, that’s not necessarily the best way to approach it, but rather more like managing your energy and managing your time as well. And if that gives you time to pivot to a side hustle or hobby or, you know, exercise or whatever it is you want to do, that’s probably going to end up giving you more energy rather than taking away from your work. Do you know what I mean?

44:22 Sean: Right, definitely.

44:22 Emily: Just like taking vacations, you don’t do it necessarily for the reason of being more productive, but you probably are more productive when you come back from it.

44:29 Sean: Absolutely.

Where to Find Sean Online

44:33 Emily: Where can people find you if they want to read your blog or follow up with you elsewhere?

44:37 Sean: Sure. I’ll send these over so you can put them on the show notes as well. The name of the blog is Authentically Average. It’s authenticallyaverage.com. No hyphens or spaces. On Instagram and Pinterest I’m @AuthenticallyAverage, one word. Twitter was a little weird and I have @AuthenticAvg. That’s where you can find all of the different ways to connect with me. The two posts that we talked about today are up as pins on Pinterest. I can send those over and people can look at them if they want to. I love using Pinterest, just as a side note, I think it’s been really fun. If you are in the 3D-printing space and see me at an academic conference, come and say hey. I’m not shy. If you happen to recognize me, I’m happy to talk and all of that.

43:33 Emily: Yeah. Well, thank you so much for coming on the podcast and having this great discussion with me, Sean.

45:37 Sean: Yeah. Thank you for having me

Outtro

45:39 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

How This Grad Student Navigated a Broken Engagement in a High Cost-of-Living City

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In this episode, Emily interviews Tina Del Carpio, a third-year PhD student at the University of California at Los Angeles in ecology and evolutionary biology. Tina chose their PhD program in Los Angeles in no small part because their fiance’s career was tied to the city. However, when they moved in with him and started planning the wedding, cracks began to form in the relationship. When they broke up, Tina had to figure out how to extricate themself from their shared apartment and yours-mine-and-ours financial system. Fortunately, Tina landed on their feet with the help of their NSF Graduate Research Fellowship, understanding advisor, and network of supportive friends. At the beginning and end of the episode, Tina and Emily also discuss the power of self-advocacy in graduate school.

Links Mentioned

grad student breakup

Teaser

00:00 Tina: Thankfully, we also talked about what would happen if we broke up, even before I moved out here. I was very adamant about having my own support network and knowing that I’d be able to survive without, if things just didn’t work or we’d gotten divorced or something.

Introduction

00:21 Emily: Welcome to the Personal Finance for PhDs podcast to higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode ten, and today my guest is Tina Del Carpio a third year PhD student at UCLA in ecology and environmental biology. Tina chose their PhD program in Los Angeles in no small part because their fiance’s career was tied to the city. However, when they moved in with him and started planning, the wedding, cracks began to form in the relationship. When they broke up, Tina had to figure out how to extricate themself from their shared apartment and “yours, mine and ours” financial system. Listen through the end of the interview to hear how Tina handles their finances these days, and they’re excellent advice for other early career PhDs on advocating for yourself. By the way we recorded this interview in September, 2019. Without further ado, here’s my interview with Tina Del Carpio.

Will You Please Introduce Yourself Further

01:19 Emily: I have joining me on the podcast today. Tina Del Carpio, who is a graduate student at UCLA, and we’re discussing a little bit of a tough topic today, which is Tina’s breakup from about a year and a half ago. They had a little bit of financial commingling before the breakup and had to disentangle themselves from one another afterwards, which was a challenging thing to do in the midst of graduate school. Tina, I’m so delighted to have you on the podcast. Thank you so much for joining me. And will you please tell us a little bit more about yourself?

01:47 Tina: Of course. Thanks for having me on Emily. My name’s Tina Del Carpio, my preferred pronouns are they/them or she/her. I’m a second year PhD student at UCLA, or I guess about to be a third year PhD student at UCLA. My focus is on genetics and epigenetics of canids, specifically dogs and foxes.

Getting Engaged, Starting Grad School and Moving to LA

02:10 Emily: Okay, so we need to take this story back to when you started graduate school. How did you make the decision to go to UCLA? What factors were you?

02:19 Tina: Yeah, so this is actually really entangled with my relationship because at the time, my partner and I had been long distance for about five years and he was working in the film industry, so his life and his job were very tied out to LA. I geographically restricted my search to universities near Los Angeles, or ideally in Los Angeles. I was very fortunate to make a connection with a postdoc from the lab that I currently I’m a student in. I talked to her about her experience in the lab and the project that she was sort of leaving behind as she was graduating. I got really interested in that project and was looking to pick it up and met with her and the advisor, my now advisor, Bob Wayne, and we talked about the project and they helped me put together an application for the NSF GRFP. I ended up being awarded that fellowship. This all happened kind of very quickly. We actually had this conversation, decided for me to apply for the NSF, like a week before it was due. I actually only applied to UCLA in that case and figured “oh it’s a crap shoot. I probably won’t get in, and I’ll just stay on track with my other plan to just apply to a bunch of schools the following year.” But it worked out, I got funding and it was in my ideal city, and with an advisor was happy to work with.

03:49 Emily: That is an incredible story, not even the one that we’re focused on today, but I love hearing about sort of non-traditional ways of finding your way into a PhD lab. You networked your way basically into this, right? You said you first connected with a postdoc who was leaving the lab, then that connection led you to the advisor and put together this NSF application, which by the way in a week, that was successful. That is incredible! Good job on that. How did you first make that connection with that postdoc?

04:22 Tina: Yeah, so it’s funny. I literally was thinking about, okay, I changed jobs, I was working as a lab tech gaining more research experience to apply to grad school, and I had just sort of wistfully bookmarked a bunch of labs that I was interested in applying to in about a year. Then my boss announced that we’re getting a new postdoc. It happened that she was coming from one of the labs that I had bookmarkedm and when she came out to look for housing and to make some plans to settle in, in North Carolina, I kind of cornered her and was like, “Hey, so I’m interested in applying to the Wayne lab, can you tell me about the Wayne lab.” Also, it happened to line up with, I was about to be in LA visiting my ex, and so I was like, “Hey, I’m going to be there next week, can we meet up in person, and can you give me a face to face introduction with Bob?”

05:15 Emily: That is incredible. I mean, this is how networking works. It’s not like you were in some unrelated lab, right? You were already on the course to be studying something related to what you would ultimately do in graduate school. Of course there are related labs and people know each other and you run into people. That’s a wonderful story. It’s actually not that dissimilar from how I got into my graduate school, which is that my husband started — we graduate from college at the same time, but he started graduate school at Duke immediately, whereas I did a postbac year. And so, because I was regularly visiting him in Durham, I was especially interested in getting into Duke, and I basically used one of my visits to see him as like, “Hey, various professors that I’m interested in, why don’t I set up my own interview with you?” all prior to admission season even starting and made a few connections there. Ultimately applied to Duke and various other places and went through kind of the normal admissions route after that point, but then ultimately circle back around, and one of the people who I had created my own interview with ultimately, you know, offered me a position and he was my advisor during graduate school. These things, if you have the motivation, sometimes they do work out. I’m really glad that we have that story upfront.

06:28 Emily: Okay, so you were awarded the NSF GRF, that’s awesome, and you’re starting at UCLA and you’re finally living in the same city as your partner. What was going on with you guys like logistically and financially at that time?

06:40 Tina: Yeah. Things are getting a little bit more commingled and complicated at that point. When I actually got the NSF and got accepted to UCLA, because actually I initially wasn’t accepted and wasn’t even invited on the official interview weekend, but suddenly having your own funding for three years opens doors.

07:01 Emily: No kidding.

07:02 Tina: Yeah. So I got the NSF award and then shortly afterwards we got engaged, and then planned a wedding, made a lot of wedding deposits, and then I moved out into LA. Part of the navigating how to do our finances together, we basically decided we’d each keeps some of our money separate, but we opened together a checking account, a savings account, and a credit card, so we could both funnel some money into that and use that to build up a little bit of shared savings and also to pay off any expenses, groceries, rent, things related to the wedding, et cetera.

07:43 Emily: I want to ask a little bit more about that because this is becoming a very popular model, whereas maybe a few decades ago, a vast majority of couples were using fully joint finances. Some minority were using fully separate finances. Now this “yours, mine and ours” model is becoming very, very popular. As you said, most people use it for shared expenses like rent, like you were just saying, you had the wedding that you were putting down deposits for all that kind of thing. How did you decide on the split? Were you guys contributing equal amounts of money to your joint accounts? Or was it maybe by a percentage of income or how did you navigate that?

08:23 Tina: Yeah, so I guess the tricky part we were navigating was housing costs because my ex made about double what I was making, even on an NSF salary or stipend. We ended up deciding for housing that we would pay housing proportional, so he paid two thirds of our rent and I paid one third, especially moving from Durham, my rent went from $400 for my half of a two bed, two bath to we had a like $2,400, one bed, one and a half bathroom apartment. So my rent was changing significantly and also I was eating up a bunch of moving costs. So housing, we decided to do proportionately, but everything else we decided to just split 50/50.

09:10 Emily: At least it was the conversation that you had. That is a great point that you’re at least coming to a firm decision and have a strategy for addressing it. So the place that you were living, which was out of your price range, it sounds like, or I guess was it actually, so like, would you have made a different housing decision had you been moving there as a single person or maybe looking to find a roommate or like what would have been different and how much do you think you would have been paying?

09:35 Tina: Yeah, so I would have definitely looked for something different because it was…well, there was also a lot of uncertainty for me of like, what are my housing costs going to be? Even coming to LA my car insurance went up significantly and that’s actually a thing that I also commingled with my ex. He had USAA, which has a great insurance discount. I added my car onto his, onto his insurance, and so it took me a little while to navigate that and figure that out. But initially the budget I had set for myself was $800 for my rent. And then eventually, you know, I had to reconcile that when we were breaking up.

10:16 Tina: Thankfully we also talked about what would happen if we broke up, even before I moved out here, because my mom got divorced after like 20 years of marriage and I saw the financial struggles my mom went through because she had stopped working to take care of her three kids and the house and things. Then my dad lost his job and all these other problems. And of course, issues between my parents that led to them being divorced. I just watched my mom struggle a lot with her finances without my father to help support her anymore, so I was very adamant about having my own support network and knowing that I’d be able to survive without, if things just didn’t work out or if we’d gotten divorced or something. I feel like I I kinda lost the thread there, what were we talking about?

11:06 Emily: What different housing decisions might you have made? This rolls into what housing decision did you make once you guys decided to split up. Have we concluded talking about all the intermingling that was going on prior to the breakup? Is that about what the full picture was?

11:24 Tina: Yeah, I think so. I think the point I was trying to get to earlier that I lost was we talked about if we broke up and especially when we actually did break up, there was like a couple of months of us discussing it before it actually happened. But we reaffirmed that if we broke up, we would continue paying for the apartment that same way. That I would still just be paying a third and that he would continue paying two thirds, and he ended up moving out since he had family and places to go here, and my nearest family members are in Florida. I stayed living in the apartment for a couple of months until the lease was resolved and he continued to pay that two thirds of the apartment. Thankfully that was something we had discussed and agreed upon long before the breakup.

Financial Ramifications of Breaking of The Engagement

12:08 Emily: Yeah. I think we can move into kind of talking about that second phase now. It sounds like it was a long conversation. You guys had a long relationship, you were on the track to getting married, this is not something to be undertaken lightly. So you were having these conversations over a relatively long period of time. And of course, one of your concerns was how do I provide for myself in this transition to not being in this partnership any longer? So one of the things that you discussed and agreed on was the rent split. What else did you have to do once you guys decided that this breakup is official, the engagement is off? What other things had to happen to fully separate from one another?

12:46 Tina: I think the housing was the biggest thing because we broke up before our lease expired. It was like this big burden and I talked to the landlord and he told us that if we could rent the apartment to somebody else, he’d be willing to terminate our lease. Actually, I got into like kind of a sticky situation that I didn’t have the emotional energy to deal with, but where he was like, okay, I’ll advertise the apartment, but I need you guys to show the apartment. Even after we had actually moved our stuff out and we’re no longer living there, he was still like, no, you guys have to show it, I’m not gonna drive over and show it. I was still devoting time and energy to that, and it ended up still being worth it. It took a couple months to rent the apartment to somebody else, but we managed to end the lease at least a month early. For me getting back that $800 was huge.

13:43 Emily: Yeah. So the housing situation was the main one. It sounds like your ex was pretty generous, or maybe you would say reasonable, right? He was okay with continuing to pay your agreed upon portions of the rent for the amount of time necessary, but you were still doing what you needed to do to get out of it as soon as possible.

Commercial

14:03 Emily: Emily here for a brief interlude, the deadline for filing your federal tax return and making your quarters one and two estimated tax payments was extended to July 15th, 2020. I never expected to still be talking about taxes into the summer, but here we are. Post-bac fellows, funded grad students, and postdoc fellows still need major help in this area because of their unique situation. I provide tons of support to PhD trainees preparing their tax returns and calculating their estimated tax. Go to PFforPhDs.com/tax to read my free articles and find out if one of my tax workshops is right for you. I have one workshop on how to prepare your annual tax return and one how to determine if you owe quarterly estimated tax. Both workshops include videos, supplemental documents, and live Q&A calls with me go to P F F O R P H D S.com/T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now back to the interview.

Making Budget Adjustments

15:19 Emily: So where did you move to and how did you find that next housing situation?

15:24 Tina: Yeah. So for me, I like living with other people. Actually I describe myself as painfully extroverted, so the first move was to find another roommate or find a roommate, I guess. A person in my cohort I had been spending some time with and was taking a class with and felt comfortable discussing some of my relationship stuff with, I mentioned to her like, yeah, I might be moving and looking for a new roommate soon. She was also in a housing situation, in grad student housing housing, which is really expensive here. I know Adriana, you interviewed awhile ago was living in like the family housing that’s highly subsidized, but my roommate was in the regular housing that’s like $1,300 per person per month, so not nearly as subsidized. Anyways, I found the person to live with, and then I was sort of waiting for her to finish up her paperwork to get released from her housing contract. And based on the new information I had of how much it was actually costing me to live in LA, I set a new budget of $1,100 a month for rent, and we found a two bedroom, two bathroom near campus, but far enough away that it was in our price range, and most importantly, for us, it had to be near a bus stop, so it was easy to get to campus.

16:44 Emily: Yeah. A couple of points I want to follow up within that. One is yes, I had that interview with Adriana and she was living in family housing for UCLA. I have another interview that’s been recorded, but not released as of the moment that we’re doing this interview, with Dr. Travis Seifman, and he is specifically talking about grad student housing. He’s lived in like a couple of different of the UC grad student housing, different universities. And then he’s also lived in graduate student housing at some other universities, including overseas. We have an extensive discussion around this, and one of the things that we talk about is his consternation around the price difference between family housing and single but roommates housing, and why is it that there’s such a price difference there. And so anyway, for any listeners who are particularly interested in that discussion, I’ll recommend that other interview. TBD when it will actually be published. Thanks for bringing that up.

17:39 Emily: One of the things I really like about the story is that, once you had been in LA, at UCLA for a year, you were able to, well, one, probably be more realistic about the amount of money you were able to pay in rent. Your budget went from $800 up to $1,100 per month. And then also, you found a person you wanted to live with and you guys probably had more at that point familiarity with the area and were able to do a housing search a little bit better than you could have from a distance. Of course that’s the case. My message, what I want to emphasize to listeners is that it’s a really good idea to reevaluate your housing, maybe after your first year of graduate school, whenever you’re thinking about housing in that second year, because you probably know a lot more about the area that you’ve moved to in that second iteration of the housing search. So how did that new higher rent fit in with your budget? What adjustments did you make to make that happen?

18:03 Tina: Yeah, I mean, I think I actually just had room for it. I had over budgeted other items. It took us a while to figure out the car insurance, and initially I was planning for my car insurance to double and instead it only gone up $30 and even then, it went up again when I had to separate my car insurance from my ex’s, but not as much as I was anticipating, so that was helpful. I think I ended up having to put a little bit less into savings, I think that’s where most of the difference came from. A couple of things that I have over head over budgeted initially, before I knew anything out here and then also pulling a little bit out of what I was contributing to my savings.

19:15 Emily: Another thing you did really well, there is to be sort of conservative in your estimates of your spending, in that you think you’re going to spend more than maybe you actually do, so you have that wiggle room for later adjustments within your budget.

Financial Life after the Break-up

19:27 Emily: Okay, we’ve gone through the breakup process and the separation from your ex, how are things looking in your finances today?

19:35 Tina: They’re looking okay. I just made a big purchase recently. I had a car that was a lease and I recently bought out my lease, and so that took a big chunk of my money. Basically, my car to buy out was like $12,000 with taxes and fees, and if I had been buying it from a used car dealership would have been closer to like $16,000, so it seemed like a pretty good deal. Especially since I could buy it out right, I’m not paying any interest on it. And the way I did that, is I had a considerable savings, just like paying out of my savings account. And so I paid for a third of the car, my father was able to contribute a third, and then another family member was able to lend me a third. So I did still take out a loan for my car, but from a family member who is lending it to me without any interest, of course.

20:27 Emily: Yeah. So that was a big chunk out of your funding, but that’s nice to not have that monthly expense. I mean, it’s still a monthly expense because you’re repaying the loan, but a much, much smaller one.

20:36 Tina: Yeah.

20:37 Emily: That is a great reduction in the rest of your spending. That’s great. It sounds like you and your ex were really thoughtful in this process. You had seen your parents get divorced and so you were keeping in your mind, this is a possibility. You’re going to move to LA, you’re going to live together, start commingling your finances. Maybe things won’t work out, you’re not married yet, and even after that, it still could not work out. It sounds like you did things pretty intelligently and carefully through this process, and so I think that you have like a positive example here of how this can happen, but is there anything that you, looking back, wish that you had done differently?

21:14 Tina: I think most of it was pretty settled. I wish I’d been a little bit more thoughtful about how we divided up and dealt with paying the wedding deposits, because that was a little bit of a thorn in my side when we were splitting up. And arguably my ex paid significantly more in the wedding deposits than I did, but he essentially, at the end of the day was the one who asked to call the wedding off, and so I requested that he pay me back for the wedding deposits that I had paid, which amounted to about a thousand dollars, which, again on a grad student income is a pretty significant chunk of money. And the message I got was, well, let’s see how long it takes you to move out of the apartment, and how much money is spent on the apartment, and then we can make this decision.

22:11 Tina: Then even though we saved more than that by moving out of the apartment early, then there was like some thorny issues about the engagement ring. So the engagement ring had been less than $2,000 and under the law in California, if the giver breaks off the engagement, the receiver legally owns the ring. Also my ex had told me, “oh, the ring is yours, it’s a gift to keep no matter what” and basically when I brought up the issue of my lost money on the wedding deposits, was told, “well, I let you keep the engagement ring, you should be able to sell that and recoup some of this money.” Then it turned out that he had super overpaid for the engagement ring and the money I can recoup from that is very little. I wish I had been a little bit more thoughtful about that sort of spending before we like commingled and talked a little bit more about what we would do in the situation where things broke off, but at the end of the day, I decided it wasn’t worth the emotional turmoil to be like, “well, this ring doesn’t actually cover my expenses, why don’t you take it back and you sell it and do this emotional labor and just give me my thousand dollars back.”

Navigating the Emotional Aspect of the Break-up

23:25 Emily: Yeah. I do want to come back to that point in a moment about the emotions of all of this, but I guess this is just kind of a point around splitting up in general is like, once you’re married, as you were just saying, there’s, there’s state laws that govern how relationships, how marriages separate, in terms of what’s done with the property. Sometimes it has to be figured out in court ultimately, and a lot of money can be spent on lawyers, but the really tricky thing is once you, if you’re not having that legal contract of marriage in place, and you guys were moving towards that, but not quite there yet, breaking out becomes a lot more murky. It’s something that becomes very individual and hard to navigate and something that takes a lot of energy. I just wanted to ask you, how did you manage to continue moving forward in your graduate program? Or did you? Obviously, you have ultimately, but did things stall a little bit as you’re going through this enormous personal upheaval?

24:22 Tina: I think there were two major things that helped me. There definitely was a little bit of a stalling point, but most directly related to grad school was talking to my advisor and telling him, “Hey, this is what’s going on. I’ve been a little mentally checked out because I’m trying to see whether or not my engagement is going to fall apart,” and thankfully, my advisor was very supportive of that. Around that time, actually, I had to turn in a 10 to 15 page written proposal as part of my first year requirements to slowly move towards eventually advancing to candidacy. So I talked to my advisor about it and basically just requested from my committee and extension and said, “Hey, here’s, what’s going on, can I have an extra month to turn this in?” And everybody on my committee was very supportive of that. That was number one.

25:13 Tina: Then number two was also just reaching out to friends and it took me a while to feel comfortable telling some of my lab mates and other people in grad school and just other friends I had met in the city, because at the time I had only been living here for about six months, so I didn’t have any real long-standing, deep relationships with anybody yet because I just didn’t have the time to establish them. But once I shared that information, everybody was super supportive. I actually learned that one of my grad school friends went through the same thing of also had an engagement end during her first year of grad school. They were super helpful. And then my longterm friends were unbelievably helpful. One actually flew out from Canada, where he was doing his PhD to come help me move.

26:02 Emily: Very, very sweet. Very, very wonderful to have that both new and old connections supporting you through that time. Plus, for me, this part of your story, when you were talking with your advisor and committee hearkens back to when you entered graduate school. You didn’t have to conform to the standard procedures in place for applying to graduate school. You realize, “Hey, yeah, this is a requirement in the first year, but maybe they can be flexible with me, and I’m just going to ask about it because what’s the harm in asking?” I mean, your advisor’s probably noticing that you’re not totally engaged anyway. It just comes back to that point that you are doing a great job kind of advocating for yourself and making things happen for you, and people can be accommodating if you ask them in the right way.

Best Financial Advice for Other PhDs

26:45 Emily: Tina, with the end of this interview, I’m going to ask you a question that I ask of all of my interviewees, which is what is your best financial advice for another early career PhD? And that could be related to the conversation that we’ve had today or could be completely something else.

27:01 Tina: I think actually it kind of ties into our last point of just like asking for help, of just reaching out to people and saying, “Hey, I don’t know what I’m doing, please help me.” I realized in the last couple months that investing has been a big hole for me, and I’ve been talking to one, actually one of my closest friends of over a decade and only recently learned that investing as a hobby of his. And then also like friends who are very good cooks. I never really learned how to cook as a kid growing up, so now I’m saving money by cooking at home a lot more. Just reach out to friends or coworkers or whatever and say, “Hey, I think you’re really great at this thing. I’ve noticed you seem to be really good with your money, or you’re really great at cooking, or you’re really great at this thing — how did you learn that? I’d really love to learn from you.

27:51 Emily: Nobody’s going to say no to a request phrase that way, absolutely. Wonderful, wonderful tip. And actually I know from Twitter that you are starting investing yourself and that you are listening to a podcast that really pushed you to do that — you want to mention that podcast and what you like about it?

28:08 Tina: Oh, sure. Yeah, you and I have been corresponding a little bit over Twitter and another podcast I had discovered that’s really helpful is called “Bad with Money” with Gaby Dunn. Part of what I really like about it is that I grew up with not knowing a whole lot about money and feeling like a little bit ashamed of that and just kind of feeling the differences in class, especially having gone to a private university for undergrad and my family had lost their house and lost our cars right before I went to undergrad. I just felt very distant and ashamed and all these bad emotions about money. Listening to Gaby’s podcast and being like,” Oh, it’s not just me, there are other people who feel very left out of the system,” made me feel a lot more comfortable talking about it.

28:57 Emily: That’s fantastic. Thank you so much for that recommendation. And Tina, thank you so much for this conversation today. I am sure that it is helping people in the audience who are maybe considering a breakup, or trying to navigate one, or trying to recover financially from having been through one recently, so I really appreciate your willingness to talk about this.

29:15 Tina: Great. Thanks so much for having me on Emily.

Outtro

43:30 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.