Money Mindset

The Tech Entrepreneuroscientist on Happiness and Financial Independence

October 25, 2021 by Meryem Ok

In this episode, Emily interviews Dr. Sharena Rice, who recently completed her PhD in neuroscience at the University of Michigan. At the start of grad school, Sharena defined what she considers “the good life” and made sure that she lived according to her values. She committed herself to simple living so that she could invest over half of her stipend and pursue adventures. One element of Sharena’s good life is fulfilling work, so she became involved with five start-ups during grad school to gain experience with entrepreneurship. Don’t miss this unique and insightful interview!

the tech entrepreneuroscientist on happiness and financial independence

Teaser

00:00 Sharena: If compound interest works in this way, and I can reasonably expect this amount if things perform averagely, then this is how my future will turn out if I save an extra $5 a day, for instance. And seeing how little tweaks could make a big difference.

Introduction

00:23 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 10, Episode 12, and today my guest is Dr. Sharena Rice, who recently completed her PhD in neuroscience at the University of Michigan. At the start of grad school, Sharena defined what she considers “the good life” and made sure that she lived according to her values. She committed herself to simple living so that she could invest over half of her stipend and pursue adventures. One element of Sharena’s good life is fulfilling work, so she became involved with five start-ups during grad school to gain experience with entrepreneurship. Don’t miss this unique and insightful interview! Without further ado, here’s my interview with Dr. Sharena Rice.

Will You Please Introduce Yourself Further?

01:19 Emily: I am delighted to have joining me on the podcast today, Dr. Sharena Rice. She recently defended her PhD in neuroscience at the University of Michigan. And she’s going to tell us a really exciting, big financial story about what she’s done with her finances during graduate school, and also what’s coming up next. She’s been involved with entrepreneurship, which is super exciting. So Sharena, thank you so much for volunteering to be on the podcast. And will you please tell the audience a little bit more about yourself?

01:43 Sharena: Thank you so much, Emily. I have recently defended my PhD in neuroscience from the University of Michigan. I like to refer to myself as a tech entrepreneuroscientist because I’m both a technology entrepreneur and a neuroscientist. I have roles in five different startups ranging from co-founder and a C-suite executive to advisor. And it’s been a rewarding journey.

02:10 Emily: Yeah. I’m excited to hear more about that a little bit later on. So give us an idea, like briefly, like where did you go to undergrad? Of course I mentioned University of Michigan for grad school. Like, what’s been your educational background?

02:23 Sharena: For undergrad, I studied biochemistry and molecular biology and minored in philosophy and psychology, and felt myself being pulled in these three seemingly completely different directions. But I realized that I could combine them all by being a neuroscientist. So I did a Post-baccalaureate Research Education Program, the PREP program at the University of Michigan and decided to stay for graduate school.

Money Mindset at the Start of Post-Bacc

02:51 Emily: That’s perfect. I did a post-bacc as well at the NIH before starting at Duke. And it was really, you know, during that post-bacc, I had just graduated from college, like you did, that I started learning about personal finance. Because it was for me the first time I’d had like a semi full-time income to deal with. Tell me a little bit about your money mindset, where you stood with respect to your finances, at the start of that post-bacc.

03:17 Sharena: Before my post-bacc, when I was an undergraduate, I was doing various tutoring gigs because I realized that I could make a lot more money by tutoring on my own, rather than through some kind of agency. So I started budgeting things and analyzing things and thinking through hours and how things would work out. I was wondering, okay, how do I want to make things of my life? How can I create more options for the future? Even as a person who is thinking of going into graduate school. So I read a bunch about personal finance. I got to learn about how wealth is created. Went to a lot of entrepreneurship events, went to many things about community leaders and engagement. So, one thing that I’ve realized there is that a lot of times, the smartest people, they’re not making the most money. And yet at the same time, some people who have been making a lot of money, they’re not the smartest people.

04:26 Sharena: So then, it seems like this different dimension to a lifestyle, and to the way that a person operates and carries themselves. So I had this experience as an undergrad, making these financial models in Excel spreadsheets, just for fun at first. I wanted to be able to predict the future by mathing stuff up. So I got to do that some more as a post-bacc, seeing, okay, if compound interest works in this way, and I can reasonably expect this amount, if things perform averagely, then this is how my future will turn out if I save an extra $5 a day, for instance. And seeing how little tweaks could make a big difference.

05:12 Emily: So, I love that you, you know, frame this around, like you wanting to understand how wealth was created, and I totally understand why you went down this entrepreneurial route after investigating that question. So I really want to hear how these journeys of like the PhD and entrepreneurship come together later on. I also noticed in your phrasing just there, are you a Millennial Revolution fan?

05:33 Sharena: Yes.

05:34 Emily: Okay. Yes. So for those not familiar, they have this catch phrase that’s like math stuff, I’m substituting a word, math stuff up. So, they have a very sort of unconventional approach, right? They don’t accept conventional wisdom. They reanalyze everything. Have you adopted that as well?

05:53 Sharena: Yeah. There are many things in the financial independence retire early community that I think of not as a person who necessarily wants to retire early, because if I did retire, then I would just be making more technology anyway, because this is fun for me. But as a person who wants to be doing what I’m doing because I want to do it. So that, okay, whatever job I’m in, I will be bringing my all to it because it is my choice. And wouldn’t it be great if everyone just kind of lived that way, where they’re going to work because they want to be there and they could be doing a zillion other things at that time, but it’s their choice to be working with these particular people in this particular company?

Money Mindset Growth in Grad School

06:45 Emily: I love how you phrase that. And that is such an ideal to be working toward, and certainly one that’s espoused by the financial independence community. So tell me, also, you know, we talked about your financial mindset at the start of your post-bacc. So how did that change over the course of graduate school, or hasn’t?

07:03 Sharena: It has sort of changed, to some extent. Alright. As a graduate student, I have lived in a Buddhist temple for 22 months. And during that time, I got the sense of alright, what does it really take to be happy? Because a lot of times people, they think, “Oh, if I have X amount of money up to a certain point, then I will be happier.” But if you think about it, some monastics are the happiest people in the world, despite having taken a vow of poverty. Alright. If that’s the case, then what if I just leveraged that idea where I could find joys in all kinds of things that don’t actually take money and then save a lot and it compounds over time, so that I’m just doing exactly what I want to do?

08:00 Emily: Yes. Amazing, amazing insight to receive, especially I would say, you know, early on in life to have that, because that’s something that a lot of people never come to, or it takes decades and decades of chasing after the wrong stuff to find happiness before they finally get around to the insight that you have. So that’s incredible. So you told me, when you volunteered for this interview that you saved at least 50% of your grad student stipend, on average. What? How?

Saving ~50% of Student Stipend

08:32 Sharena: I think it’s 53% at this point, and the way that I did that was, alright at the beginning, I was reading these personal finance books and doing these financial model things and thinking, okay, there are very small things that make a very large difference. So for example, I could have lived closer to my laboratory then I actually lived, and it would have cost more, but I could live slightly further. Let’s say that I need to walk an extra three minutes a day or something like that. Well, in that case, I could get a little bit of extra exercise just built into my lifestyle, but also I’m saving money by living a little bit further away. So things like that. Well, there’s the question of what do you value, and is the way that you’re spending your money reflecting those values? I have chosen to invest quite a bit in the future because that’s what I wanted to do.

09:40 Emily: I totally concur with what you’re saying. And I think that once you identify what you value, in your case, investing for the future, it makes you excited to be able to put money towards that. And it doesn’t seem like such a big sacrifice to be cutting back on your spending or choosing not to spend in some other areas of a budget. But I love the philosophical point of view, but I want to get like a little bit more practical. So for example, can we start with, do you mind sharing what your stipend was throughout graduate school?

10:08 Sharena: In my first year, the stipend was $29.6K and that eventually rose to $33K at the end.

10:19 Emily: So I think of that as like a very decent stipend. Nothing out of this world, but certainly in Ann Arbor, sort of a moderate cost of living city. It’s a decent amount of money to make, but still being able to invest and save half of that is kind of a big accomplishment. So you mentioned, you know, you were paying for housing, right, but you just chose strategically. So you were paying a little bit less for housing maybe than some of your other options. Let’s go through just like the big expenses for average Americans. So we touched on housing. What about transportation?

Biking and Cutting Food Costs

10:51 Sharena: I decided that when I was moving out to Michigan, that I wanted to have a simple life or at least simple in terms of material possessions. So my first year when I was here, as a post-bacc, I didn’t have a bed frame, for instance. I just had a mattress on the floor because I didn’t know exactly where I would be for grad school. And when it came to transportation, I just rode a bicycle around. I’ve lost a lot of weight as a grad student and also was able to get from place to place. People ask, “Oh, Michigan has snow. How do you deal with that?” The answer is, “I bike anyway, the roads are cleared. Salt happens. I just bike.”

11:36 Emily: I’m glad you headed off that question. Okay. So no car, cycling lifestyle. What about food? Do you have any particular kind of diet that you follow that happens to be low cost? Or what are your strategies around there?

11:49 Sharena: If you think about it, a lot of places in world where there aren’t that many health issues like cancer and diabetes, they have this really simple diet of, they just pretty much eat rice and vegetables and they don’t have that much meat to them or anything like that because that’s what is available to them. So then I’ve pretty much been eating like a peasant and being just happy with that. Learned to make a really good stir fry, learned to make really good lemon garlic pasta.

Investment Strategy

12:25 Emily: Yeah. So I think we can clearly see from those three big categories that you just sort of slotted yourself on the low-cost end of the spectrum that you could spend in each of those areas. So you mentioned this 50% savings rate, investing rate. What were you investing in? Was it like the stuff I talk about all the time, like index funds and Roth IRAs, or are you doing that plus other stuff? Let us know what your investment strategy is.

12:48 Sharena: At first, I just invested in some stocks from companies that I liked and thought had good leadership to them. So for example, Costco notoriously treats their employees well, and I liked that. So I invested in them. And the Home Depot, well, it seems to be quite a good company, too. So I invested in some individual stocks at first, and then learned that there was this thing called index investing and then switched mostly to that. I also own some real estate investment trusts and some worthy bonds and a tiniest amount of crypto. I just bought $20 worth of Bitcoin for fun, and then laughed as it went up and down and up and down.

13:38 Emily: Yeah. So I like that. So like bulk of your investments are tried and true index funds, hands-off approach, but you have these few other holdings that you’ve, you know, intentionally selected that are sometimes interesting to track. Okay, well, that’s awesome for your investment strategy.

Commercial

13:57 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, including my recent set of Wealthy PhD workshops. There is also a discussion forum, monthly live calls with me, and progress journaling for financial goals. Our next live discussion and Q&A call is on Wednesday, November 17th, 2021. 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.

Living the “Good Life”

15:09 Emily: You also told me when you volunteered that you have been focused on living the good life on, as we were just saying, less than 50% of your stipend. What does it mean to you to live the good life and how have you been doing that during grad school?

15:24 Sharena: I think that the good life, it is a life that I am doing fulfilling things in that I’m growing in and that I feel connected with other people in. So part of this is, alright. What does it mean to live life to the fullest? I think that it’s investments, not only in terms of money, but also investments in other things that compound interest such as health, and friends and family, and making connections. But also there’s the shenanigans. And that’s a lot of fun, too. I went to Puerto Rico with nothing but a backpack this one time, because people were telling me you need a vacation. I was working in lab on Thanksgiving this one time and thought, well, I have to see the world. I’ve never been out of the country before. So I’m going to book a trip to Rome. So that’s exactly what I did. And then eventually I went to Rome.

16:29 Sharena: But also, when it comes to the good life, there is work as a big part of it. I think a lot of us, a lot of our identity is in what we do for work. I was very lucky to be in a laboratory that was just starting up. So I could be at the forefront of bringing new processes to life. And I just loved that, even though it may have been frustrating to some people who just want to move on with their lives. And they want to get into a place where everything is already set up for them. But working with machines, that was a big part of it, too. I just love machines and the ways that they work and how animals and machines could create systems.

17:22 Emily: I think that those elements that you identified of a good life are ones that are probably to some degree shared by just about everybody. But I definitely encourage the listener, and I need to do this as well, just to periodically, like, think about what brings you joy, what brings you satisfaction, and then do that next step of connecting, “Well, how do these things that I want to pursue in my life, that I want to have in my life, how does having money or spending money help me fulfill those? Or are there ways to fulfill these without spending a lot of money?” Some of the things you mentioned are, you know, such intangibles like connections with friends and family, like sometimes money can help that, but it definitely isn’t required to do so. So I think all of these things are, you know, achievable at whatever level of income that you’re at. You just have to find a way to fit it in with your lifestyle at that time, which you clearly have done.

Entrepreneurship Journey

18:13 Emily: So let’s talk next about your entrepreneurship experience. You know, there’s been a theme of that already through this interview of finding fulfilling work and, “Hey, even if you had infinite choices because of your finances, you know, because you’re financially independent, you would still choose to work in some capacity.” Tell us, you know, how you got involved with these like five companies that you mentioned earlier and just what’s your entrepreneurship journey been during grad school?

18:35 Sharena: I received a message out of the blue on LinkedIn this one time from the founder of a computer vision company for pedestrian behavior prediction. He wanted to meet up with me. He was in Ann Arbor. I was in an Ann Arbor. So we met up and we talked. And he showed me what he currently had in terms of the pedestrian behavior software. On the spot, I came up with several ways that it could be improved. And to me it just made a lot of sense. So then he offered me the opportunity to be his co-founder. And from then on, we continued co-founding this company and building it up more and more and more. We have been a fantastic team, where he goes out and he gives a lot of pitches and manages a lot of the day-to-day stuff while I have been a grad student who has had to mostly work on lab things. But this worked out because a lot of the things that I did were about ideation and about intellectual property and things that were not bound to a certain time of the day.

20:00 Emily: So that’s one of the companies that you co-founded, then. Can you just tell us briefly, maybe a couple other examples of how you got involved with some of these other companies, especially for someone who’s thinking, wow, I’d love to get involved with entrepreneurship as a grad student, how that happened?

20:14 Sharena: The second company that I co-founded, that was a vertical spinoff for devops and for freelancers. So, the second company came out of the first company. As for the rest of them, the first company that I started advising, that actually came about because I saw that they had a product, I signed up to be a tester for it, and I wrote in the comments box, “Would be interested in helping the founders.” We had a wonderful conversation, and I became their advisor. Then, I started talking with people on the Clubhouse App, eventually, about technology. Got into lots and lots of conversations, which eventually evolved into Zoom conversations, which eventually, at the end of those conversations, often led to offers of, “Wait, I’m starting a company soon. Would you be interested in working with us on some sort of development.” Usually a development, of something between a machine and a human in the loop, which is exactly what I love. So then I said yes to them.

Funding Structure in Grad School

21:28 Emily: So I would just very broadly sum that up as like networking, and just like being open to conversations, offering help. I mean, it sounds like you offered help initially in at least two of these scenarios without yet any expectation of a return, but just putting value out there and some good things came back from it. So I understand that you were not able to be paid by any of these companies because of something about your funding structure. Would you tell us a little bit more about that?

21:59 Sharena: Yeah. My graduate program does not allow anyone to receive money or equity in exchange for work for a company outside of the university while they’re still a student. So there’s the question of, okay, given that this is the case, then how do I set things up so that things will work out. And the answer is, work with legal documentation, and just create a vesting structure so that right after you graduate, then that’s when a cliff happens and then you will receive your funding, your equity, your compensation, at that point.

22:40 Emily: I mean this as a complete compliment, but that seems like such a loophole, right? Because like you’re clearly putting in the time, the work, adding your expertise during the time of your graduate program. In your case, you still finished, it’s all good, right? Like it didn’t detract from that PhD journey. But you just arranged for the payment to happen later. And I give this to you as a compliment because I think it’s a great creative solution to this problem in case anybody else is running into it, but also want to voice that I completely disagree with your program. My basic philosophy around this is like, if you’re doing well in your program and you’re advancing and you’re doing the work that needs to be done, and your advisor’s happy with you, the university should keep its nose out of the rest of your business. In terms of whether you’re earning money or not, or equity or not, or whatever you want to do with the rest of your time should be yours. That’s my position. Do you know if this has any motivation in terms of like the university can then claim ownership over like the company? Is that the reason why they have that kind of verbiage?

Consider Grad Programs that Encourage Direct Experiences

23:39 Sharena: I think that they have it because of the way that academia used to work and how academics or people who are in PhD programs used to be thought of. It used to be thought of that a person has to just work, work, work on their thesis, and that that is enough. But if you actually want to make it as an entrepreneur, how do you do that without having actual experience? My experience makes me very rare. There aren’t very many PhDs who are just graduating from their program with this much experience, as an entrepreneur. A person can take classes. I was encouraged to take classes when I said that I wanted to be an entrepreneur. But no, they didn’t want me to actually do anything in a company. But I wanted to be an entrepreneur, partly because I wanted to do change the world in a positive way to promote road safety, for instance, with my pedestrian behavior prediction company.

24:47 Emily: Yeah. I am so glad that you shared this experience with us because I think it’s really instructive. Like if anybody else like you, and I’m not criticizing you by saying this, but if anybody else like you knows that they’re quite interested in pursuing entrepreneurship during the graduate program, once you’re going around and interviewing and talking to various advisors or whatever, like that’s something to bring up. Does your program have a prohibition on me starting a company or me having equity in a company that I advise during the course of this program. And, you know, maybe use that to help you make a decision about where you should end up in terms of a graduate program. I am a little bit surprised to hear about that from Michigan.

What’s Next for You?

25:23 Emily: Let’s talk about what’s next, then. You just said that you’re a unique kind of PhD with this sort of experience. What is the next step in your career, having just defended?

25:33 Sharena: Given that I have positions in five different companies, I think that I need to create a portfolio that I will call Yellow Pill Ventures. There’s this narrative sometimes that you can either make a profit or you can make a positive difference in the world. But I think that the two can really come together, and that can be by premise of my portfolio. Aside from Yellow Pill Ventures, I will also be pursuing a career in big tech. And the reason why big tech is because they already have the infrastructures place to bring ideas to life quickly. It’s not like we have to wait to hire software developers, for instance, but that they are already within the company. They’re ready to receive work. So between the two, I think of it as Nassim Nicholas Taleb’s Barbell Strategy of you put 80 to 90% of your time into something that’s completely stable, and you put 10 to 20% of your time into moonshot things, but that there’s not very much in the middle in terms of risk. That way, if the moonshots just do not pan out, then you are perfectly fine. If your perfectly fine thing, well, it’s not enough for you because you still have ideas that just are not relevant to your so-called real job. Then, well, they’re still manifested in the world with this possibility of actually taking off.

27:11 Emily: I love that idea. I love that you shared that analogy, and I think it pairs so well with FIRE, right? You have your job, like you had your stipend, you know, during graduate school. You’re doing all the great things to put yourself on the track for financial independence. And at the same time, you’re taking, well maybe not taking risks, but you have those possibilities of moonshots, like you were just saying. So I love that approach. Where can people find you in case they’re thinking, “Oh gosh, Sharena would be perfect for my company”?

27:41 Sharena: You can find me on LinkedIn. I am Sharena Rice. S H A R E N A and then space, R I C E. And I am @SharenaRice on Twitter as well. And on Clubhouse.

27:56 Emily: Absolutely. Perfect. I will note that we’re recording this in August, 2021. So possibly by the time it’s come out, someone might go to your LinkedIn profile and find that you’re already on to your next big job, your next big position. But in case you are still looking, they should check you out.

Best Financial Advice for Another Early-Career PhD

28:10 Emily: Okay. Well, let’s conclude with the question that I ask of all of my guests. What is your best financial advice for another early-career PhD?

28:19 Sharena: The answer to that is just start. A person does not need to know everything. They don’t really need to know, “Okay. What are absolutely all of the investment options? What is the exact risk of everything.” But rather, “Okay, what is something that’s reasonable, that I feel comfortable with?” That’s a good place to start. There’s a narrative in academia, it seems, that grad students, they shouldn’t care about money. Or that that’s kind of a problem for their future self to think about rather than their current self. But habits, they compound over time. Mindsets, they compound over time and spread. So, it’s good to just start where you are and to just learn where you can. And actually start conversations with the people in your life who may know something or not know anything about finances, just to make it more of a conversation rather than something that people are just hushed about.

29:36 Emily: I love that advice. I love how we saw in this part of your story that you shared today, we saw that advice reflected. And this has been a really thought-provoking interview for me. So thank you so much, Sharena, for joining me.

29:48 Sharena: Thank you so much, Emily!

Outtro

29:55 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. 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. 2. Share an episode you found particularly valuable on social media, with a 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 by Lourdes Bobbio and show notes creation by Meryem Ok.

How This JD/PhD Overcame Money Terror and Avoidance

July 26, 2021 by Lourdes Bobbio

In this episode, Emily interviews Dr. Michelle Thompson, who has had multiple careers as a lawyer, an adjunct, and now a coach and business owner. Michelle observed her mother’s terror and her father’s avoidance regarding money and combined the two in her own adulthood. Emily and Michelle discuss the financial struggle of earning a low stipend as a graduate student in NYC and taking on student debt for summer research and daycare/preschool. It wasn’t until Michelle started her business that she proactively changed her relationship with money through a book and coaching. Michelle speaks to the merits of facing the dark side of your relationship with money; she is now in the best financial shape of her life.

Links Mentioned in this Episode

Find Dr. Michelle Thompson on her website, Twitter, LinkedIn, and Instagram
Related Episodes
- Season 5, Episode 3: How to Combat the Negative Financial Attitudes We Learned in Academia and in Childhood
- Season 8, Episode 11: University Policies to Better Support Grad Student Parents
Books mentioned
- Overcoming Underearning by Barbara Stanny
- You Are a Badass with Money by Jen Cincero
The Academic Society: Grad School Prep
Personal Finance for PhDs: Community
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Subscribe to the mailing list

Teaser

00:00 Michelle: Whatever bedevils you about money, you have to look at because whatever bedevils you will sabotage your relationship with money. Take time to do that work and I promise you whatever is screwing with you with money will screw with you about actually getting the doctorate done.

Introduction

00:23 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts.

00:32 Emily: This is Season 9, Episode 6, and today my guest is Dr. Michelle Thompson, who has had multiple careers as a lawyer, an adjunct, and now a coach and business owner. Michelle observed her mother’s terror and her father’s avoidance regarding money and combined the two in her own adulthood. Michelle and I discuss the financial struggle of earning a low stipend as a graduate student in New York City and taking on student debt for summer research and daycare and preschool. It wasn’t until Michelle started her business that she proactively changed her relationship with money through a book and coaching. Michelle speaks to the merits of facing the dark side of your relationship with money; she is now in the best financial shape of her life. Quick content warning. There is a brief mention of suicidal ideation in the interview.

01:24 Emily: It’s the end of July, and I know that taxes are probably the furthest thing from your mind at the moment. However, I do have a special request for every one of you who is going to be on fellowship in the upcoming academic year, whether as a new fellow or continuing fellow. If your university does not offer automatic income tax withholding on non-W-2 fellowship income: Would you please request that my workshop, Quarterly Estimated Tax for Fellowship Recipients, be purchased on behalf of those who want to take it? You could make this request of your graduate school, postdoc office, department, graduate student association, etc.

01:57 Emily: The workshop assists graduate student and postdoc fellowship recipients who are not having income tax withheld from their stipends or salaries figure out whether they are required to pay estimated tax and if so how much and when. The workshop consists of numerous short videos, a spreadsheet, and a live Q&A call just prior to the next quarterly deadline. You can find more details at PF for PhDs dot com slash q e tax. That’s q for quarterly e for estimated T A X.

02:28 Emily: I’ve been enrolling individuals in this workshop for several years, and in the last year have branched out to bulk purchases for university offices and groups. Purchasing this workshop on behalf of students and postdocs is incredibly helpful because it can reach people who aren’t even clued in about the possibility of having to pay quarterly estimated tax or who are unable to pay for the workshop.

02:51 Emily: I’m making this request now because the next quarterly deadline is September 15, 2021, and the office or group you approach may need some time to arrange the purchase. If they are interested, they can get in touch with me at emily at PF for PhDs dot com. The start of the academic year is the perfect time to learn about estimated tax because you can start saving for your eventual payment from your very first fellowship paycheck.

03:18 Emily: Thank you for helping me spread the word about this workshop and prevent financial hardship next tax season!

Book Giveaway

03:31 Emily: Now onto the book giveaway contest!

03:36 Emily: In July 2021 I’m giving away one copy of Get Good with Money: Ten Simple Steps to Becoming Financially Whole by Tiffany ‘The Budgetnista’ Aliche, which is the Personal Finance for PhDs Community Book Club selection for September 2021. Everyone who enters the contest during July will have a chance to win a copy of this book.

03:56 Emily: Not only will Get Good with Money be our Book Club selection for September, but we will also devote our monthly Challenge to assessing and working through the ten aspects of financial wholeness as individuals.

04:09 Emily: 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 July from all the entries. You can find full instructions at PFforPhDs.com/podcast.

04:31 Emily: Without further ado, here’s my interview with Dr. Michelle Thompson.

Will You Please Introduce Yourself Further?

04:41 Emily: I’m delighted to have joining me on the podcast today, Dr. Michelle Thompson. She’s had quite a career. She is a JD and a PhD, actually. She’s now self-employed, although she’s had many other jobs in the meantime, and what we’re going to talk through today is kind of her life in stages and also what she’s learned at each stage, the kind of money mindset that she developed at each stage. She has some very interesting things to say to us about academia. I’m really looking forward to this conversation. Michelle, thank you so much for joining me and would you please introduce yourself to the audience a little bit further?

05:14 Michelle: Absolutely! It’s my pleasure to be here. Thank you for having me. I am the founder of a boutique coaching firm called Michelle Dionne Thompson Coaching and Consulting. I work with clients to marry their purpose with their expertise in communities. In addition to that, I do teach part time. I love to teach. I love being with college students. I teach in the black studies department at City College of New York. And I am currently a publishing scholar as well. I’m turning my dissertation into a monograph. It’s called Resistant Vision: The post-emancipation realities of Jamaican’s Accompong Maroons from 1842 to 1901. Because I’m a glutton for punishment, my first career rodeo was as a lawyer. I was a member of the inaugural class of what is now Equal Justice Works fellows. And I used that fellowship to deliver legal services to people living with AIDS in Anacostia, in Washington, DC. And after that, I negotiated collective bargaining agreements with service employees international union district 1199, EDC in Baltimore, Maryland, and Washington DC.

06:20 Emily: Wow. I wish that we were going to talk more about your career specifically today. It sounds fascinating. But where you are going to focus on the finances through a few of those stages.

Money Mindset Developed in Early Childhood

06:30 Emily: Let’s start where all good therapy sessions do in your childhood. What money mindsets did you observe in your parents and also develop during your childhood?

06:43 Michelle: My parents were raised poor people from Jamaica and my mom immigrated from Jamaica to England to become a nurse. It was her goal in life and it probably opened up more than she ever thought. She was shrewd about money, but she was absolutely terrified about handling money. My mom died of dementia and at the one of the few last times that she could really comprehend her money, this I use lightly because dementia, her money situation, she actually had an estate worth over a million dollars, way more than she ever, ever thought she would ever, ever have in her natural life.

07:38 Michelle: But to get there, she was shrewd. She knew how to save. For a girl who didn’t have much food, she was blown away with how much food she could acquire with so little money in the United States. And every single time she got paid, she was absolutely terrified — “I have to pay the bills!” She’d take out her checkbook. She would balance her checkbook. She would make sure all of the transactions were recorded in the check register. She was flawless about it, but she was absolutely terrified every single time it happened. She worked at University of Chicago, hospitals and clinics for many, many years, and that allowed her to send my sister and I to those schools for many years, because we got half off of the tuition. Every single time the tuition bill came, she would be like, “Oh my gosh, I have to pay the tuition!” She would work overtime. It’s a hard life in some ways. She would have to work overtime for a few shifts and the money was there. If you think about it in the more woo-woo world, she could manifest money. That wasn’t the problem, but the energy of fear, always behind that. And I think that actually very much shaped my relationship with money as a young person and actually shaped this as a new thought. It shaped an attitude of avoidance of money.

09:10 Emily: Yeah. Wow. Thank you so much for that. That really, it passed down to you. It rubbed off on you in a way that you were treating money, thinking about money similarly. It wasn’t like you went the opposite direction. You were sort of more a little bit in line with what your mom was thinking.

09:25 Michelle: Well, the fear was totally intact. I think as an adult, that’s what I grappled with the fear of not having money. But instead of being on top of it, I would avoid handling it. And my dad apparently was more of the avoidance end of things. My mom would get mad because they would get the mail and he would just set them aside. She’s like, you have to open that. She would move towards it, he would move away from it. I took his move away from it and the fear.

09:56 Emily: I see, I see. Actually I’m remembering there are these there’s this framework, I’ve actually talked about it on the podcast before — we’ll link the episode in the show notes — but there’s a framework around it’s called money scripts. There’s four personality types around money and I remember one of them is money vigilance. So sort of what your mom was doing, being really on top of it. And then another one is money avoidance.

10:18 Michelle: I didn’t know these scripts, but here we go.

10:21 Emily: You’re falling very neatly into those boxes sound like, but in both cases it’s motivated by fear, which is very interesting.

10:26 Michelle: Absolutely, absolutely.

10:27 Emily: Did that actually, this fear part of it, did that play into your first career choice as a lawyer? Was that like a stable thing for you financially or that you perceived it would be?

10:38 Michelle: I remember being 12 and writing down in a journal, I want to be a lawyer. And I think I wanted to be a lawyer because I knew it was a way to make sure I earned the money I needed and not have to worry about it. Earned enough money so I could avoid it, now that I think about it. Right. I do think that because I was doing public interest work, I wasn’t making that kind of money. It didn’t manifest that way, but I think that was part of the intentionality behind becoming a lawyer.

11:11 Emily: Yeah and that’s part of the public perception of lawyers, maybe, especially at that time. I think now we have maybe a better understanding, post-recession, what law careers are, but before then it’s like, oh, you know, doctor, lawyer engineer, like great salary.

Money Mindset During Law School

11:27 Emily: Let’s talk about your money mindset, money situation during law school and then as you were working as a lawyer.

11:33 Michelle: With my fellowship came up a component that was loan forgiveness, but it wasn’t mashed in the same check. They would give me two separate payments, so I would get my paycheck and then I would get the loan forgiveness. And it was the first time I’d been held that accountable for money, so every single time I got that check — again, everything was about fear — I couldn’t figure out how to save money really during that time. I think if I had the tools I have now, then I probably could have, but I couldn’t actually figure it out at the time. I was really scared of handling checking accounts. There was all of this stuff. I had actually lost a checking account. And so I was unable to open one. I can have a savings account. I was paying everything cash and I was holding onto things through a savings account or cash. My whole money systems were really very, very janky and it was spending money to pay bills. I was good about making sure I paid the rent, generally about paying my student loans, paying the utilities, but again, every single pay period, I was absolutely terrified of doing it.

12:51 Michelle: By the time I got to working at the union, it was enough time that I could reopen a checking account. And I needed a car. That was the first like huge purchase I had to make. And, oh my gosh! I did research. I’m like, okay, this is the car I want. What really, really scared me was car insurance. I started to do it and I was in my early thirties and I was like, I can’t afford to have a car. And I just stopped the process. Avoidance. I just stopped the process. I can’t do this. When I worked for a couple more months, I’m like, okay, this clearly is not going to work. I need a car. And so it was like, okay, you have to look into other insurance companies. Then I finally found All State. I’ll say it actually gave me a rate that I was like, “okay, that I can do.” But I was absolutely terrified to actually make that purchase. I was terrified to do the insurance. I would shake is I handed them the check to actually do the down payment on the car. Complete the fear that my parents brought to handling money.

14:02 Emily: So that terror was specifically that you could not actually afford the car, that you would not be able to make the payments on the loan and the payments on the insurance?

14:12 Michelle: I think going into it, that was certainly the fear. Although, clearly I had budgeted and saw, “oh, I could do this,” but I was scared about it anyway, the way that my mom was scared about tuition.

14:28 Emily: Yeah. And I guess her solution was working more with that also a solution for you, or was earning more through overtime not a possibility?

14:37 Michelle: That wasn’t a possibility but I budgeted it. I could see the budget and how it would work. I don’t think, I believed the budget, which is funny, right? But I don’t think I believed the budget. And then shortly after that, there was an opportunity. I was thinking about buying a piece of real estate and I could do it because my employer had a 401k set aside for me that I could actually use to apply to a first-time home purchase. I saw cute place. I was like, oh, wow, this would be good. Actually, it wasn’t that expensive, especially given Washington DC. I was too scared to do it. I’m like, I can’t afford this responsibility. Oh my gosh, I’d have to tear up the floors. You know what I mean? The whole, “I can’t afford it. I can’t do it. I can’t afford it. I can’t do it.” That was the recording, if you will. That was the greatest hits that I played and I backed out of it until later.

Money Mindset During the PhD

15:31 Emily: Wow. Yeah. Let’s talk about you moving towards your PhD then. Maybe a little bit about why you did that.

15:39 Michelle: Sure. So a couple of things. On my mother’s side, we’re the descendants of a community of runaway slaves called Maroons. And those were some of the earliest historical narratives I heard. I had met my partner, my current partner in Washington, DC, when I was practicing law, who was a full professor at a major public institution in the Midwest and had gotten an offer to come to a school in New York city. And she said, you could get a doctorate. And I was like, what? Because I assumed that that process was only open to people who like went from undergrad and they got like A’s and whatever. She’s like, “no, no, no, you could totally do it.” And that’s what inspired me to do it. But also having a partner who earned a lot more than I did actually provided me with a level of financial security that actually made this easier. Like it made it look like a possibility. I didn’t have to be in New York city, paying York rents, trying to cobble a life together for myself. There’s a different kind of security for the first time in my life. And as a feminist, it’s like really, really hard for me to say that, but to be real about my money story, actually being partnered did provide a level of financial security that I had never experienced before.

17:02 Emily: Yeah. I mean, of course your finances naturally always change in some degree when you partner up, but I’m wondering, were you still feeling terror? Were you still feeling avoidance? Did you ask your partner to take over not only some of the financial, like literal paying for things, but also maybe the management? How did that work out?

17:25 Michelle: I did the management, she did the paying. We actually had split it up so we would pay for things according to percentage. Like if we put our income together, if we added it all up together, my income would come to a percentage of her income, so I was responsible for that percentage of what we were doing in the household. And that’s how we set it up. I found that I was a lot less scared to handle money with a partner. There’s something about being on your own and handling it that was far more terrifying to me than doing it with somebody else.

18:01 Emily: Yeah, I think along those lines of like your relationship with money, I think does change a bit when you, when you are partnered. I really enjoyed the, um, having like sort of the team aspect, like we are working together towards these goals and I had someone to bounce ideas off of and sort of talk over decisions. And when you’re the only one responsible for your money, it’s all on you. Because it is such a taboo topic, most people don’t have an accountability partner, they talk to, or like a friend that they’re comfortable talking to about this. It’s really like you just finally have someone who you can really share and be open about these things.

18:34 Michelle: I wouldn’t go that crazy with it. I don’t feel like we ever did that. But at least I knew that, I mean, for me, it was important to know that I wasn’t going to be homeless and that I would be able to eat, which is very tight again, it’s very tied to my parents own fears because they were raised poor. So I knew that part would be covered.

18:57 Emily: And this is specifically during your PhD program, right? Salary as a lawyer, you’re doing okay. But as a PhD student, it’s a very different situation. Can you talk about what your stipend was? And you mentioned you were living in New York, can you tell us about what the finances on your side of things were?

19:13 Michelle: Sure. I was earning, I want to say $20,000 a year and nothing over the summer.

19:19 Emily: And what year was that in?

19:23 Michelle: This was 2001. I started my doctorate in 2003. I did a master’s in 2001. Yeah, I think it was something like that. Then I gave birth to my son in 2004. So I actually borrowed because you can’t have a little, little one and write anything. Like you can’t, you can’t be doing the full-time childcare. The first year I worked, I didn’t really borrow. I was a teaching assistant and that actually worked for that year, but the following year I needed to do research in Jamaica. I actually think things worked out. There was a fellowship I got, um, that was part of New York university, so that worked out that year. But the following year, when we returned to the states, that’s when I needed him to be a preschool. It’s the years between when they’re three and five, when they’re — New York city now has public preschool, but there was very little of that at the time. I couldn’t afford in terms of getting my work done to have an hour and a half of childcare. That was useless. By the time you get to an hour and a half, you could write for 15 minutes and then you’re up and you have to get the child’s again. I actually borrowed a lot to make sure that he was in preschool. That’s what I assumed on my end during graduate school and I would also borrow to get through the summers because I never could get summer funding, which is, I think that’s a really hard part of being a doctoral student, summer funding. I never could get summer funding, so I borrowed, so I could go into the field in Jamaica. Although it was cheaper to live in Jamaica, I would borrow it to go there. And, I would borrow to do my research and I would borrow to do childcare so I could do my research.

21:30 Emily: Yeah, absolutely. This is bringing another element to the conversation, which is being the parent of a child who needs full-time attention, and how to balance that with doing your dissertation. I have talked to some people who try to work and do the childcare and trade off with their partners and such, and that’s often motivated by a philosophy around like what child-rearing should be and they try to make it work. I know it’s challenging, but it’s also on the other challenging —

21:58 Michelle: I found that the person who earns the most money will do the least childcare. That’s how it worked out in my relationship. And I’m not going to negotiate about whether I need the childcare, the childcare has to happen. So that was the deal with the devil I made. Fine.

22:17 Emily: Yeah. I have another episode that I don’t know if it’ll be published before or after this one, so this might be a preview of coming events for the listener, about another story of a parent who actually became a single parent at some point during graduate school and the same kind of thing of how much student debt had to be taken out to finance the daycare and so forth for the child. And it’s another huge layer of financial pressure that can happen for PhD students who parents during that time, or already were parents before starting graduate school.

22:46 Michelle: Exactly.

Commercial

22:49 Emily: Emily here for a brief interlude!

Emily: This announcement is for prospective and first-year graduate students.

Emily: 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.

Emily: 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.

Emily: 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.

Emily: Now back to our interview.

Financial Stress during the PhD

24:16 Emily: So what does it do to a developing scholar to be under financial stress, like $20K per year in New York City, kind of financial stress?

24:26 Michelle: You know, again like this is where my spouse or partner at the time really provided. I can’t imagine what it’s like having to come up with rent in New York City on $20,000 a year. I just can’t. Actually, if I had to do that, I think I definitely would’ve practiced law part-time. I would’ve by hook or crook figured out how to do it and it would have taken me a lot more time to finish my doctorate. It’s just because they’re two huge things. I didn’t have to do that. My partner, we were in university housing, so we were paying far less rent. It was actually embarrassing. I had colleagues who lived in my building who were doctoral students. They paid more for rent than we did. We had a lot more space in our apartment. That was actually something that was in place. For me, you house me, you feed me, I’m good. I could cover the food, the housing was covered and it was okay for me.

Michelle: What was stressful was how am I going to fund the summers? It was always like, I guess I’m going to borrow. That was what was hard for me. For me, I just have to know there’s a pot of money I can go to, to make it work. I actually did a good job of saying, I have this much for the summer, this is how I’m going to handle that. Or, okay, good. This is the, this is the pot of money for childcare. Got it. I think at another point in my life, because I felt less secure, I might’ve dipped into that for other things and then would always be scrambling to make it up. That actually didn’t happen. Childcare always got paid. I could always make my summer bills. I could always pay for the flights. That actually worked out. And so I think in some ways I wasn’t as pressed, but I was borrowing out of my ears to actually make it happen.

26:19 Emily: And did financing your PhD feel different than financing your JD?

26:24 Michelle: No. Because I borrowed to get my JD. But for the JD, I went to a state school and they actually gave me, I wasn’t an Iowa resident, but they actually gave me in-state tuition, so it was so little money. It was ridiculous.

26:40 Emily: I guess I’m just thinking about like the norms in fields, like it’s normal to borrow for your JD. It’s fantastic if you get a discount or get a scholarship or whatever. For the PhD, it’s much more, well, it’s kind of field dependent, whether or not it’s normal to borrow. And I’m sure it’s city dependent. I mean, in places like New York, it’s gonna be more likely.

27:00 Michelle: I find in the humanities it also depends on where your advisor’s willing to go to bat for you. And my advisor, wasn’t super thrilled to go to bat for me. If they’re willing to go to bat for you, they’ll find money, they’ll help you find money, but that wasn’t the case for me. And I’m determined. I’m like, “oh, I’m here, I’m gonna finish this, I see this through to its completion.” For me, it’s just raw determination that has me doing things. I’ll just do what it takes.

Finances as Gatekeeper for Academia

27:42 Emily: How do finances serve as a gatekeeper for academia? I mean, you’re obviously tenacious, but maybe to someone else, would it have been more of an impediment or even maybe for you at a different time of life, if you weren’t partnered, like you said, you may have been doing it part time. What’s the gatekeeping aspect of this?

27:59 Michelle: There’s so many things. If you don’t come from a family who has an academic background in this particular way. Okay, it’s great. Like it’s a fully funded program, they’re covering your tuition and they’ve given you a stipend. That’s what I received. And that is great, I’m not knocking that. And there are things that you don’t know about. The cost of research is high. There’s a reason why faculty have research accounts. Just saying. If you have to travel to do any of your research and most of us have to travel to do our research, even if it’s domestic or international, you don’t have a handle on…I think what really turns the screws on people, if you’re not clear about it, is that you really have to pay to do the research to make this happen. And that’s where the the rubber hits the road. We act like we don’t have to talk about people having families in academia, but people have families in academia and you can’t raise a child full-time and do any meaningful research and write up that research. You can’t square, you can’t square the circle. It doesn’t work.

29:33 Emily: Yeah, academia might be flexible, but that doesn’t mean it’s not hours and hours and hours of work that have to be done with a degree of concentration.

29:41 Michelle: Exactly. If you’re going to sleep at any rate. I’m a fan of sleep. I think that’s the gatekeeping part of it. If you’re male and you’re married to a female, it’s expected that that spouse is going to pick that up for you. It’s expected that you’re doing the thing that’s going to make you the breadwinner of the family. That’s not expected the other way around. Programs don’t feel any obligation to make that happen for you. And then again, who’s going to bat for you to actually find funding for summers, etc. That’s a whole other whole other.

30:15 Emily: Yeah, and I think we’ve seen this thrown into super sharp relief during COVID. It’s a recession that’s largely women are losing or leaving their jobs at much higher rates than men are. Lot of that has to do with caregiving responsibility.

30:29 Michelle: Exactly. Women are publishing substantially less during COVID. For academic women it’s just dropped precipitously because Junior’s on zoom over here.

30:39 Emily: Yeah. These stresses have been there for many, many decades, but they’re much more obvious in the current crisis and things have sped up and become much more acute right now.

Finances and Money Mindset Post-PhD

30:50 Emily: Let’s talk about your story a little bit more. Once you did finish the PhD, where did your career go after that and where did your relationship with your finances go after that?

30:58 Michelle: I finished and it was like number one, “Oh, I’m not, I’m not getting institutional support from New York University anymore.” I was an adjunct at three different schools. I live in Manhattan. I was commuting to New Jersey and I was commuting to Staten island, which can take just as long as commuting to New Jersey. I was working these jobs, exhausted and I couldn’t make my credit card bills. I put my loans on forbearance but I couldn’t make my credit card bills. All of that fear about money was popping up again. And actually got to a point where I was getting suicidal and I would look at my eight year old and I go, you can’t do that to him.

31:52 Michelle: I think if I give my mind a solution for a problem, I can focus on the solution and not the problem. I decided I’m not going to pay the credit card bills for now, which is actually probably a good decision. It wasn’t great for my credit history, but it was a good decision. I was like, okay, maybe I could do journalism. Turns out journalism is in the same free fall that academia is in, pro-tip. I had been part of this peer counseling organization for years, and I knew that I had skills of listening to people and helping them shift their lives. I was thinking, I wish I could make money doing that. I come to my computer and there’s an email that says giving away scholarships to learn how to become a coach and I was like, that would be, thank you. I applied for the scholarship and I got it and I hadn’t looked back, but it turns out, just because there’s a possibility of how you could like build something so that you can support yourself doesn’t mean that you don’t have all the same money dredge that you had. And actually it’s been being a business owner that has put in sharp relief that I cannot carry this abject terror about handling my money with me the rest of my life, because I’m going to be handling a business side of finances and my own personal finances.

33:14 Emily: Yeah, I hadn’t thought about that, but you really… being an employee is vastly different financially from being a business owner and I can see how that would really bleed over and affect your entire relationship with money and not just handling the business finances.

A Shift in Money Mindset

33:28 Michelle: Exactly, exactly. I noticed that once clients paid me, it would be this absolute fear. Like, “oh my gosh, they paid me.” I’m here to be paid by clients! I mean, I’m here to help people, I’m here to serve, but people pay me to serve them. That’s the arrangement. This is not, this is not an energetic moment here. I hired a coach in part to help me sort this out. There’s a book that I use to actually help me deal with this constant worry about finances and to actually look at the emotional bedrocks connected to me and my money story. I actually started to incorporate a series of tools to help me manage the money and it got me to a point where I could call the credit card company to go, “okay, look, I know I owe you money, what’s the arrangement we’re going to make? Money wasn’t doing things to me. I was starting to shape the narrative I wanted to about money.

34:37 Emily: Wow what a shift, what an incredible shift!

34:37 Michelle: That’s been a huge, huge shift.

34:42 Emily: I’m going to get that title from you after the interview and I’ll put it in the shownotes.

34:47 Michelle: That’s what it is, Overcoming Underearning by Barbara Stanny.

34:52 Emily: Yes! I have read a different one of her books, but yes, I’m familiar with that author.

34:55 Michelle: This is the foundational book that actually helped me turn things around with money.

35:03 Emily: Wow what a recommendation!

35:03 Michelle: Again, it was all of the overcome your money fears and earn what you deserve. That was what I needed to do. Amazing.

35:12 Emily: That you still have this at your fingertips. Literally did not have to get up out of your chair to get it.

35:16 Michelle: I know, it’s like right there. I’ve worked through it twice. And if I find I’m up against another something, I’m going to pull it back out again and I’m going to work the exercises again. This book has been absolutely foundational for me. Working with a coach about my business and part of why — my coach was Britt Bolnick with In Arms Coaching is so amazing is that she understands that to run a business, you have to tackle all of these inner demons that like show up and try to sabotage you, otherwise you can’t build a business, you can’t serve people. That’s really the bottom line — you can’t serve people if you’re afraid of the money.

35:57 Michelle: She brought in other people who helped you think about what is your personality with money? I’m an investor, apparently. Who knew? I got to assess that. This man ran a workshop that we did. It was like, oh, I could save. You know, it’s not a lot, but for the first time in my life, I actually have saved in a regular savings account, a little over a thousand dollars. It’s not much, but considering that I could not figure this out at all, it’s huge! I paid off a line of credit. I paid down, I finally had room on my credit card. If I needed to rent a car, I could do it. These things have changed. A friend of mine told me about You Need A Budget. Game changer. This is a work in progress, but it’s actually been a point where it’s like, oh, I need to set up regular times with my money and we need to have hot and heavy dates. It’s set up a set of habits that I don’t worry about having money.

37:06 Michelle: Last year my mother died. God bless her. She did enough work with her estate that there was actually, after actually her care for having dementia, there was an estate. Not the biggest estate in the world. I don’t need the biggest estate. It’s a modest estate. I already got some of that. I got the apartment in DC. I sold it some years ago and I got the profit from it and I just handed half of it to my partner because I was afraid of what I was going to do with the money. This time, I was like, hmm, excellent. I’m a member of business networking international. There was someone in my chapter who does financial advising. I was like, hi, I’m on the phone with you. I need you to help me handle this money. I didn’t blink. I wasn’t freaked out by it. I replaced my hardware. This is a very different…I don’t have to be an abject fear every single time I’m dealing with money. That it’s like, wow. That has been a big shift.

38:04 Emily: Yeah! This is an incredible, incredible shift. And especially because your initial relationship with your money, the avoidance and the fear and so forth was in place for decades. Starting your childhood, for decades in your adulthood as well, and this leveling up. Well, I don’t know if it’s up, but getting to the level of being a business owner forced you to totally work on this and really master it. I’m so glad to hear those examples. I think during our initial phone call, you mentioned You Need A Budget, but you said that you couldn’t have used it prior to this transformation. It’s a great tool, but you have to be ready to use the tool.

38:45 Michelle: If you’re terrified of looking at your money and I’m not saying I’ve conquered it. You don’t like, it shows up in different ways. But if I don’t understand that, oh right, I can be really scared when I handle my money, I would have just avoided using the tools. Like that’s great. And not use it. But now I’m like, okay, do you know you’re scared. Let’s just get into it. Let’s get into it and do it.

39:12 Emily: Yeah. Wow. What a fantastic shift!

Money Mindset as a Business Owner

39:13 Emily: Is there anything else that you’d like to tell us about your money mindset now, or your relationship with money as a business owner?

39:22 Michelle: I really firmly believe that…I’m a big follower of Carolyn L. Elliott who wrote the book, Existential Kink. One of my coach for coaches, her approach to coaching is about looking at shadow sides. It’s the very Yung-ian and approach both of them have very Yung-ian approaches to the world. And I really firmly believe that if you do not turn and face the shadow, if you will, the dark side of yourself, when it comes to money and actually just really bring that dark side to life. It’s not just about money. It’s about pretty much anything you’re doing about writing, about building your career — if you do not turn and face the places that might scare the bejesus out of you, whatever it is, you’re not going to get a handle on your money, on your love, your sex, whatever it is, your career options, anything that means anything to you, you’re not going to be able to handle it. You’ve got to be able to walk and spend time in those dark places, because once you actually really clear about what the peanut gallery is doing, you can actually go, okay, I understand that’s a peanut gallery. We’re going to do this.

40:41 Emily: I see. And I’m so glad that you mentioned the different tools that you use, the book, the coaching, and so forth, to get to this point, to be facing that aspect of your personality or that side of yourself. Thank you so much for sharing this story with us and I know, again, it’s not something we talk about a whole lot, and I’m sure there’s people in the audience. Well, I’m not sure. I don’t know if someone experiencing money avoidance will be listening to a podcast about money, but maybe someone knows someone and they can send this episode and say, you know, we grew up this way with money. You want to listen to what Michelle has to say about this, because maybe what she experienced can help you.

41:17 Michelle: I’ll say this. I know that I’ve listened to all sorts of resources about money before I actually did anything about it. So I know you money avoiders. You actually would like to not avoid money and you’ll acquire resources. The next step is to actually turn and use them.

41:33 Emily: Yeah. And I think for you, part of your money avoidance, and part of your solution to this was the book Overcoming Underearning. There might be a different book that’s appropriate for different people, depending on because that’s really like an entrepreneurial type. That’s for entrepreneurs.

41:48 Michelle: There’s Jen Cincero, You’re a Badass at Handling Money, which is funny, but also really concrete tools. You see, I’ve read them all. But that’s a really lovely starting point to actually manage money as well.

42:04 Emily: I’ve read that one too. It’s a lot about money mindset stuff, so it’s a wonderful one if you want to start learning about that and start to change your mental relationship with money.

Best Financial Advice for an Early Career PhD

42:15 Emily: Michelle, thank you so much for this interview and standard question that I ask all of my guests to wrap up is what financial advice do you have for an early career PhD? What’s your best financial advice? And that could be something that we touched on in the interview, or it could be something completely other.

42:33 Michelle: Number one, you may need to do the research necessary to find funding for those times where your academic institution isn’t going to fund you. And they may not be super supportive in doing it, but do it anyway. That’s number one. Number two, it’s never too early — All right, I have three pieces of lights. So that’s number one: do the research. Start in September, to look for money for the spring. I mean, for the summer.

43:06 Michelle: Number two, whatever bedevils you about money, you have to look at because whatever bedevils, you will sabotage your relationship with money in a time where you actually are going to need to budget and be really on top of your finances, because I assume I’m presuming that you’re single and you don’t have a lot of the fundamental support that you need. So take time to do that work and I promise you, whatever is screwing with you with money will screw with you about actually getting the doctorate done.

43:39 Michelle: And number three, once you start to clarify what the, what those devils are, find the tools to help you make it work. YNAB is, I think it’s $90 a year. It is worth every dime, as a way of actually managing what you have and sticking with it. Those would be my three pieces of advice.

44:05 Emily: Yeah. Thank you so much. I think that’s a wonderful quick summary of kind of the journey that we’ve gone through during the interview. Thank you again, Michelle. Thank you so much for this interview and for joining me.

44:13 Michelle: You’re welcome! Thank you for having me.

Outtro

44:20 Emily: Listeners, thank you for joining me for this episode!

Emily: 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!

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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!
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Emily: See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps!

Emily: The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC.

Emily: Podcast editing and show notes creation by Lourdes Bobbio.

This PhD’s Money Mindset from Childhood Has Served Her Well Through Multiple Phases

July 12, 2021 by Meryem Ok

In this episode, Emily interviews Dr. Judy Chan, a PhD and staff member at the University of British Columbia. As a child of immigrants to Canada, Judy learned early on the virtues of hard work, saving, and the value of a dollar. She applied these principles consistently while she earned her PhD, started her business, and became a parent—to great effect.

Links Mentioned in This Episode

Dr. Chan’s Twitter (@judycchan)
Dr. Chan’s LinkedIn
PF for PhDs: Wealthy PhD Workshop Registration
Get Good with Money (Book by Tiffany ‘The Budgetnista’ Aliche)
E-mail Emily (for Book Giveaway)
PF for PhDs: Podcast Hub
PhD Posters
The Academic Society (Emily’s Affiliate Link)
The House Hacking Strategy (Book by Craig Curelop)
Reading Town (Franchise)
PF for PhDs: Subscribe to Mailing List

Teaser

00:00 Judy: And it was hard. I do feel that I have more advanced knowledge than my average colleague or my friend, and even going to the bank, they didn’t really take me seriously when I asked them questions. Or they assigned a very junior financial advisor to me when I actually knew all the answers myself. But I didn’t have enough money to get more experience. I don’t know. Is it just my money, my net worth, or my look, or my age, but I was never able to talk to someone who’s more experienced. So I had to do a lot of my own learning.

Introduction

00:49 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 5, and today my guest is Dr. Judy Chan, a PhD and staff member at the University of British Columbia. As a child of immigrants to Canada, Judy learned early on the virtues of hard work, saving, and the value of a dollar. She applied these principles consistently while she earned her PhD, started her business, and became a parent—to great effect. We have a special event coming up on Sunday, July 18, 2021! It’s the second installment of my Wealthy PhD Workshop series, and it’s on everyone’s favorite subject: investing! This workshop is for you if you want to learn how to start investing, particularly if you are a grad student or postdoc who is not covered by a workplace-based retirement plan like a 401(k) or 403(b). I will also teach you about passive investing, which is the most effective, least expensive, and most time-efficient manner of investing. Even if you’re not a novice investor, you can use this workshop to double-check that your current investing strategy is appropriate for your goals. Furthermore, we will discuss the relative merits of discount brokerage firms, roboadvisors, and microinvesting platforms. This is going to be a value-packed session, so please join us on July 18th. You can register at PFforPhDs.com/WPhDinvest/. That’s PF for PhDs dot com slash W for Wealthy P H D I N V E S T. By the way, after you register, you’ll be asked if you want to upgrade into a membership in the Personal Finance for PhDs Community. I do recommend this upgrade because you will have access to the recording of the previous workshop in the Wealthy PhD series, among other things. That workshop on financial goals will help you figure out if now is the right time to start investing or whether you should instead be focusing on saving up cash or paying down debt. Again, please go to PFforPhDs.com/WPhDinvest to register for the workshop this coming Sunday.

Book Giveaway Contest

03:19 Emily: Now onto the book giveaway contest! In July 2021 I’m giving away one copy of Get Good with Money: Ten Simple Steps to Becoming Financially Whole by Tiffany ‘The Budgetnista’ Aliche, which is the Personal Finance for PhDs Community Book Club selection for September 2021. Everyone who enters the contest during July will have a chance to win a copy of this book. Over the last year or so, I’ve become quite a fan of Tiffany’s. I am a loyal listener of her podcast, Brown Ambition, which she co-hosts with Mandi Woodruff, and we read one of her self-published books last September in the Book Club. I was thrilled when her first traditionally published book became a runaway bestseller this past spring, and I knew I had to schedule it into the Book Club. I hope you will join us inside the Community in September to follow The Budgetnista’s plan to become financially whole. 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 July from all the entries. You can find full instructions at PFforPhDs.com/podcast. Without further ado, here’s my interview with Dr. Judy Chan.

Will You Please Introduce Yourself Further?

04:43 Emily: I have joining me on the podcast today, Dr. Judy Chan. She’s a staff member at the University of British Columbia, and she is going to kind of tell us about her life through a financial lens. So we’re going to start with her childhood, we’re going to go all the way up to now. It’s a real pleasure for me to speak with Judy today because, you know, I interview a lot of grad students and recent PhDs on the podcast, and I love it, but I also love getting to hear from people who are more than a few years removed from that because they have a perspective on, you know, the post-PhD stages as well. So I’m really happy to welcome Judy to the podcast. Judy, will you please introduce yourself a little bit further for the audience?

05:20 Judy: So my name is Judy. I am a staff member at my university, UBC, and I have a side business and I am also a busy mom of two kids. Parents around in the city, so yes, busy, and that’s me.

05:38 Emily: Yeah. Great. Well, we’re going to hear your kind of whole life story coming up and we’re going to insert some financial advice for anyone, you know, coming up on that stage as we go through. So Judy, as everyone in therapy will do, let’s start with your childhood. You know, tell us about your childhood and how it, you know, helped you develop a money mindset.

06:00 Judy: I think I grew up in a very hardworking household. My dad was a restaurant owner back in Hong Kong and I remember him. We would hardly see him. He worked 18 hours a day. I remember him sleeping in the back storage area. But he worked really hard. And we didn’t see him. He doesn’t take days off. I remember we are the only business that opened on Chinese New Year day in the whole entire street. We can go in the middle of the road and play. So that’s how I grew up. I remember not spending any time off meaning that I was actually helping early in the restaurant throughout the Chinese New Year.

Childhood Memories and Life Lessons in Canada

06:45 Emily: Yeah. Tell us about what happened upon your parents immigrating to Canada.

06:49 Judy: I think I also learned big lessons because we are very fortunate that growing up, like we were able to move to Canada in a pretty good, solid financial stage. I remember we got a house. In Hong Kong, we lived in apartments, so we got a house here. Everything was good. My parents, my dad was telling us that he’s retired now. So looking back, it was like he worked really, really hard for 15, 20 years, and then he was able to enjoy his retirement in Canada. He also opened a restaurant for a very short amount of time. We helped out. But it was all very good and fun memories. It’s hardworking, but it was a really good memory for us. Every time when I see people who, other people who also grew up in the restaurant, I think we have some shared memory there.

07:41 Emily: I see. However, you did not take that route in your own life. So I’m wondering, you know, looking back on your childhood, I’m glad you have such positive memories, but what have you taken from that about how, you know, you’re raising your own children?

07:56 Judy: Raising my own children, we just have to work really hard and be very sensitive to money. I remember back then getting wholesale, on average, is actually more expensive than trying to get your cans of pops from the super market, from the big retail supermarket, where the retail price is lower than the wholesale price. So my dad would take us to the big supermarket and we would be loading, like hand carry, trays and trays of pops and juice to bring it back to the restaurant. So my dad got us helping all the time and he would tell us, this is how much we are buying. This is how much we are selling, and this is the price difference. And this is how we mark up, or he doesn’t say it, he just said, look, this is how people do business.

08:49 Judy: And people might pay $10 for a burger, but it may only cost us a dollar. But if we can find ways to cut the cost down to 80 cents, that’s an extra 20 cents for us, for the family. So when we go out, my kids are very lucky. They grew up, I think they are in a very privileged space, but we will continue to remind them that things that we get, there’s a huge markup out there. And we may be able to make it on our own, or like clothings or other things, at a lower cost. So telling them the value of the product that we are getting every day.

09:31 Emily: Yeah. So, it sounds like you had some real, you know, organic lessons around cost and value and the value of the dollar and what, you know, what you can add to the situation because you grew up in that entrepreneurial family, and that’s also something that you’re instilling in your children.

Funding During Grad School

09:47 Emily: So let’s move on to your university days. You were at UBC for undergrad and grad school. Tell us about your funding situation during grad school.

09:56 Judy: Oh, grad school was amazing. I didn’t know that there’s so much funding available for grad students. There’s scholarship and fellowship and TA ship. There’s also a lots of smaller scholarship that I never realized. I think in the way, undergraduate in order to get scholarship and fellowship it’s very competitive. My experience is that grad school is so much easier. And so there’s funding and scholarship everywhere, just apply to them and start saving. So again, in my situation, I was lucky enough that I started as early as six years old, I was able to continue to see the numbers in my bank book, bank account, grow. But I do feel that for most grad students that, hopefully, you will get enough fellowship and scholarship for your basic needs. And there are other source of income around campus. Like I work at UBC now. So I see there’s actually a lots of employment opportunities out there and use them to start building your own wealth, your own saving. Those are extra income that you don’t need now. The basics should be covered by your fellowship, scholarship, and the extra money should go towards the savings, if possible.

11:24 Emily: Yeah, I totally agree that probably there’s going to be a lot of work in the life of a graduate student. You know, there’s going to be your work and your dissertation. There may be an assistantship that you’re performing. Hopefully you’re applying for fellowships and winning some of them on top of that. Maybe you have a side job. There’s a lot of different opportunities. Now, some of those opportunities might be restricted by the, you know, the rules of where you’re living. So one, you know, in the U.S., international students, they’re not going to be allowed to have those side jobs, right? It’s only the, you know, 20 hours per week on campus that they’ve been granted. That’s it. Another thing would be like, if your university, or rather your department, restricts outside work in some manner. So you of course have to check into your, you know, specific situation there. But yes, there are a lot of opportunities in theory for graduate students. I also want to ask you, so did you continue to live with your parents during graduate school, or did you get your own place?

12:16 Judy: I continue to live with my parents.

12:19 Emily: So I ask this because I know that Vancouver is an incredibly high cost-of-living city, and that a grad student stipend may not be enough to support someone if they are living independently. And so that’s a real boon to your finances that you stayed in the same city, I’m sure it was partially by design that you did that. Yes. And you had that opportunity. So that’s wonderful. So you were able to work and save and, you know, live with your parents and yeah. Any advice that you have for a current graduate student or an entering graduate student aside from just apply, apply, apply?

12:56 Judy: I also worked really hard. Like I did my research during the daytime, and then I definitely carved out time to do my teaching assistantship, of the fellowship. There are times that I was doing more hours than what my department allowed. But I did work six days a week, seven to seven sometimes or later into the evening. And I was very disciplined. Any money that I earned on the side, I would spend it, you know, let’s go out for a drink, but they would go straight into my savings account.

Side Business as a Franchisee

13:34 Emily: I also understand that, you know, you mentioned during your college years, you were doing a lot of tutoring as a side job, but you also started a business during graduate school as a tutor. Can you tell us about that and why you decided to take that on?

13:46 Judy: Everything is luck, but then it’s also an opportunity. Like I was doing a lot of tutoring, and I noticed there’s a gap and there’s something that is not available here. And a friend introduced me to a franchise, and I think my friend actually asked me, wanted me, was asking me to be a manager to help him out. But I looked at the franchise, I love it. I like it. I really, I really felt the gap that I noticed myself. So I started a franchise, and at that time with my boyfriend then, he always wanted his own business. It doesn’t matter what it is. That boyfriend is now my husband. So, it worked out quite well. And to be honest, now that I look back, I take risks, but it’s all very calculated risk. Running a tutoring center has minimal cost. There’s no inventory. You just need to rent a space, very minimal decoration and renovation. So, I started a tutoring center when I was in the middle of my PhD.

15:00 Emily: Wow. And, you know, you said that a friend initially approached you about this opportunity. Was that a friend who was also in grad school or somebody from another, oh, wow. Okay. So, did he also have a tutoring center locally?

15:12 Judy: So he started, he looked into the franchise and then he started, he became a franchisee. So, then I asked him, well, how can I be one too? So he was also a grad student at that time.

15:27 Emily: Wow. This is a fascinating idea. I’ve never thought about people becoming franchisees during graduate school, except I’m now remembering that I actually knew someone who did that in a different business. So when I was in graduate school, I was friends with someone who was a franchisee for PhD Posters. I don’t know if they’re still in existence, but they had multiple locations around the U.S. And it’s a poster printing service. And so it wouldn’t be, you know, it would be grad students usually affiliated with the university and they would, you know, drop off posters that people ordered to the various lab spaces. And anyway, it seemed like a great kind of business model for a grad student wanting to run a side business. And it sounds like your business was also, you know, in a similar way, a little bit of overhead for the space, but I’m imagining you paid contractors, right? To do the tutoring. So that’s not any, you know, serious payroll costs. Yeah. Interesting.

Investing and Self-Learning Personal Finance

16:17 Emily: Okay. So when, you know, you’re getting to the end of graduate school, it sounds like you had a healthy savings account at that point. Do you want to tell us, you know, what your net worth was? Or were you doing any, like investing, or was it strictly just cash savings?

16:31 Judy: It was, oh, whoa. I started looking into mutual funds. Someone introduced me to the idea of mutual funds. My dad did a lot of stock trading. So I understand the buy low sell high idea. But he only knows about the trademark that’s in Hong Kong. He has no idea how the Canadian or the American system work. So I wasn’t able to get any support from him. Like, he doesn’t understand the system. And he’s, I don’t know, he doesn’t share much about how he managed his finances. So I had to learn everything on my own. And it was hard. I think, I do feel that I have more advanced knowledge than my average colleague or my friend, and even going to the bank, they didn’t really take me seriously when I asked them questions.

17:23 Judy: Or they assigned a very junior financial advisor to me when I actually knew all the answers myself. But I didn’t have enough money to get like more experience. I don’t know if it’s just my money, my net worth, or my look, or my age, but I was never able to talk to someone who’s more experienced. So I had to do a lot of my own learning. But I was lucky during our grad years, one of our technicians in the lab, he’s a very advanced investor. So there were a few of us, we would spend our afternoon tea time. Oh, by the way, I studied food science. So we would spend our ice cream time talking about finance. So there are a few of us who would exchange ideas on what can we do with our money, stocks, mutual funds. But I had to do a lot of my own learning.

18:30 Emily: And so that process did start during graduate school.

18:33 Judy: Yes. Officially start in graduate school. I’ve always been curious and interested about trading, buying stocks, but I just didn’t have enough confidence as a high schooler. I think in high school, I was already keen to know more, but it was, no, I would say I started in undergrad, in college, that I wanted to know more.

18:57 Emily: Yeah. That’s a really kind of interesting combination of like, seeing an example from your parent and getting some of the mindset of the importance of investing from your parent, yet not being able to receive the practical help because of being in a different context. I hadn’t heard of that before, but yeah. So it’s actually for you maybe a little bit the best of both worlds, because you got to be inspired by your parents, but still had to do all the legwork on your own to figure it out. Which of course means you really internalize what you’re learning.

19:25 Judy: I also learned how to do my own income tax when I was in high school. I had to help my parents because English is not their first language. My parents actually relied on me to look for an accountant. And I am someone who loves numbers and money. And so actually read into personal income tax when I was in high school. And so yeah, I had to do all that education on my own. So till today I still do my own income tax.

19:52 Emily: Yeah. They certainly, you were forced to grow up, and it’s benefited you. Right?

19:57 Judy: Thank you. Yes.

Commercial

20:00 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.

Finances Post-PhD: Real Estate Advenures

21:27 Emily: Okay. Let’s talk about the post-PhD phase. But we’re not going to quite get to kids yet. So let’s talk about your finances, you know, after you finished grad school.

21:37 Judy: Yes. So it was time to get married. Looking back, my boyfriend then, my husband now, he said I was crazy. Because we just started a new business. We were still very young, and before we got married, because we were in a very stable relationship, we knew we were going to get married. It’s just a matter of Judy finishing her PhD. Everything was on hold until I was able to finish my PhD, and my choice.

22:06 Emily: I think that’s a common story.

22:09 Judy : And then sometime around that, after the business, before my PhD, before we got married, I said, “Let’s get an apartment. We need to get into the real estate market.” The real estate market in Vancouver has been crazy for the last 15, 20 years. It’s been always up with a little dip, a little dip, but it’s always up. So I said let’s go buy our first apartment. So we got our first apartment, and one of my criteria is we need to have a tenant in the apartment. It will be a bonus if there’s an existing tenant in the apartment. We would just carry over the rental lease. So we did that before my PhD was done, before we got married.

22:58 Emily: Wow. So I’ve learned that this, this term is house hacking. Buy a property, live in it with your tenant. And whether that is, you know, in an apartment where you’re sort of, it’s a roommate situation. That could also be like a multi-family if you went that route. But yeah, really glad to hear that you used that strategy. It’s one I’m very excited about, learning more about this spring. We did a focus on, well, I’m not sure when this will be published, so it’s either in the past or upcoming, but in March, 2021, we are reading The House Hacking Strategy in our book club, inside the Personal Finance for PhDs Community. So if that hasn’t happened yet, listeners check that out if this strategy interests you. I’d like to know some of the numbers on that. Like how much did having a tenant there help you out? You know, was it worthwhile to sacrifice, you know, the privacy and so forth?

23:47 Judy: Yes!

23:48 Emily: And how many years did you do that for?

23:50 Judy: So we had the tenant for less than a year, and then we got married. So we moved into, we asked the tenant to leave because we need to get into, that’s our place. So that’s when I officially moved out from my, our parents, same for him. He was living with his parents. And then, so we got married, I finished my PhD. Finished PhD, got married, and you know, all those orders are important in Chinese culture. So, and then I was pregnant. And then when I was pregnant, I was in the elevator in the apartment, and I go, no, I don’t want my kids to grow up in an apartment. I want my kids to grow in a house. You know, this is why we come to North America. We want to live in a house. And then I did like very quick, it wasn’t too hard to find out that we can actually afford a house. If we rent out the basement, that fits into what you just told us now, the house hacking, because the tenant will basically be able to pay for the difference that we have to pay in our mortgage. That’s it? Why not? Right? We got to sell our apartment, get a bigger house. The rental that we can get from our basement will pay for the difference. So it was a very logical change or purchase for us, for me.

From House Hacking to House Upgrading

25:14 Emily: Yeah. It enabled you to upgrade your housing situation, get more space and so forth without having the full, full burden of the cost solely on your incomes. And so how long did you stay in that arrangement?

25:26 Judy: We stayed in that arrangement for about four years. That was after my second kid was born. And, again, I’m so lucky. I have a girl and a son. A girl and a boy. And then at that time I had that illusion, because I came to Vancouver, Canada when I was 14 and my parents put us in the basement. I was happy. Like my sister and I, we were just happy to be in the basement. So I had that illusion that I can put my kids in the basement. So we can ask our tenant to leave. They can go into the basement. But I forgot that in between five years old and 12 years old, I cannot put them in the basement. So we, at that time in the main floor, we had two bedrooms. So, we really need a third bedroom, because you know, two kids. So, and then we were really lucky again. We were looking for, it was about time to upgrade, oh, by the way, my money advice, any extra money we have, we put it into our mortgage. So, when I shop for mortgage, I really look for a very flexible repayment method. So any extra money goes in, we actually, every month we pay more than we need to. And then at the end of the year, we also put all the savings into the house.

26:51 Emily: That’s on top of investing though. Right? Because you’re still, were you doing any like retirement stuff through your work?

26:57 Judy: Yes, yes, yes, yes, yes. Retirement stuff. Take advantage of the retirement pension plan at work and then putting any extra money into the mortgage. So we were able to, four years into the house, we were able to upgrade to a bigger house.

27:17 Emily: So that strategy, it sounds like is because you knew that you would be not in that house for decades, you knew you’d be changing. And so you get the mortgage paid down. So you have a lot of equity to go into your next property. Is that the idea?

27:29 Judy: No, no. We didn’t know that. Like, when I purchased the house with the, I call that a smaller house with the two bedroom in the main floor and two bedroom in the basement, I really thought that my kids would grow up in the basement because I enjoyed it as a teenager, but I forgot about that “in the middle” time. And so, when it was time, when I needed to have two bedrooms, one bedroom for my son and one for my daughter, I felt that we need, to upgrade the house. And having so much of the mortgage that’s been paid down, helped us upgrade our house.

28:06 Emily: Gotcha.

28:07 Judy: I paid it then, what was the reason, I just don’t want to own that much money. I have extra money, then just pay down the mortgage because everything that I pay then will go straight to the principal, and then I don’t have to pay interest on them.

28:24 Emily: Yeah, absolutely. I’m inquiring about this because, you know, we are in a super low interest rate environment right now.

28:32 Judy: Yes.

28:33 Emily: What was your interest rate at that time?

28:36 Judy: 2.5. It was super low. Yeah. It was super low. Yeah.

28:40 Emily: So this was really about you, as you just said, not being comfortable with holding that much debt and as you know, I’m tracking through your story, this is the first debt that you’ve actually taken out, right?

28:50 Judy: Yeah.

28:50 Emily: Yeah. So you’re just, you’re just a naturally debt-averse person. And this is part of that.

28:58 Judy: But at the same time, it doesn’t matter. Okay. Let’s say just pick a number. 3%. 3% is pretty low. I see where you’re going, why don’t I put the money into the stock market? I have to earn 6% return because I have to pay tax on that return in order for me to earn that 3%. And so to me, and the stock market is known to be volatile. It’s not a guarantee. So on one hand I feel that I am getting that guaranteed 3% saving instead of putting the money in a stock market that I need at least just like rough number. Right. I need at least 6% because I have to pay tax on my, on my earning. And I don’t want to do that calculation. I don’t want to worry about that.

Business Updates and Additional Family Expenses

29:53 Emily: Yeah, no, the guaranteed return on debt repayment is very attractive. I agree. So we’ve talked about, you know, real estate changes. Let’s get an update on your business, you know, from that time period.

30:08 Judy: Business was going well. It was going well, we were happy, word of mouth. We were able to generate the money that we forecast. It was going well. Until the pandemic. I have to admit, pandemic has a huge impact on our finance right now. But it’s okay because I do have a stable job at the university.

30:30 Emily: Yeah. So you have your full-time position. Was your husband’s full-time job the business, or did he have a job in addition to that?

30:35 Judy: No, very soon once we made the decision to go into the franchise, and as we were doing our renovations and as we’re getting the prep work going, he had a full-time job at that time. He felt that he needed to dedicate, and he wanted to. And I said, sure. Because I knew he always wanted to be a business owner, and I was doing my PhD. So it made sense that there’s a dedicated person at the business. So he’s full-time there.

31:06 Emily: Gotcha. And let’s talk then about the addition of the children. And you’ve already mentioned that that’s caused some real estate, you know upheavals, but you know, how else have your finances changed upon having children?

How Have Your Finances Changed Upon Having Children?

31:20 Judy: A lot. A lot. Children are very expensive for financial life. Yeah. It’s like daycare. Daycare is expensive in Canada. You know, every month is one TV, right? Every month is one iPhone, if you have to compare it to material. Also because, in Canada, the illusion is we can get a whole year off, but the whole year off for me also means a significant pay cut, right? Yes. Legally, we can get the time off, and then we will go back to having a job, but there’s a difference in income. So, that was okay. Because I think the business was doing well, and I have enough savings. I never need to worry about that. But I have to say that every month that the childcare, the daycare fee, was hard to swallow in the beginning. Whoa, that’s another iPhone. That’s another TV. So, it’s expensive to have kids.

32:26 Emily: So then what happened with your finances overall? Does that translate to a lower savings rate or, you know, did you change your lifestyle during that period?

32:36 Judy: I think we had to change our saving strategy. Like we just have to put more expenses, and less saving. Yes.

32:45 Emily: Yeah. So I have two children, they’re ages four and two. Of course, pandemic year is a weird year, and we’re not paying for childcare right now, but I am looking forward to my daughter turning five and starting kindergarten. And maybe there’ll be some, you know, before or aftercare, I don’t know, but I’m really looking forward to that state-sponsored childcare that’s coming. I’ll still have to pay for the little one for another, you know, few years, but yeah, it’s a really, really significant bite. And so it’s kind of a, you know, it’s a phase of life, right? When you have to pay for childcare, it’s a phase of life you have to accept. Yeah. Your savings rate is going to be lower than it would have been, but Hey, once the expense goes away, you just can put all that money back into savings and your rate will shoot up.

33:28 Judy: Oh, Emily, I don’t know when that will be, when we can get into that stage. Because when they are four and two is the daycare. When they are five to nine is all the extra curriculum activities. My daughter, she dances. Her first dance dress that she needs for her performance was more expensive than my wedding dress. That’s it. That’s it. That’s expensive.

33:57 Emily: Yeah. I’ve heard that too. Both about expenses with kids, is that, yeah, the daycare is a lot of the beginning, but also just shifts later on to being other things. And then also, you know, the intensity of the parenting is much more like it’s physical when they’re young, but it’s very emotional when they’re older and you just have different kind of roles to play as they age. And how old are your children now?

34:18 Judy: They are 10 and 12.

Financial Advice for First-Time Parents

34:19 Emily: Okay. And so what is your advice for someone, you know, anticipating the birth of their first child or who has young children, you know, financial advice for that person?

34:30 Judy: For kids stuff? I would say, I feel a lot of people, they would like to invest into one thing like a car seat, a stroller. I would say, go ahead, buy that luxurious thing that you really want for your kids. But everything else, get hand-me-downs. Get it from your friend. Because they grow up so fast. They grow up so fast. They don’t need all these fancy little cute dresses. And by the time you actually can fit into the dress, we live in Vancouver. So the summer time we only have three sunny days ever. Like hot sunny days. I mean, I remember we had so many cute little dressed that we really couldn’t use them. So, hand-me-downs. Get hand-me-downs.

35:11 Emily: Yeah. I think we followed your advice for our children. The one big, nice expensive thing that we bought was a Bob stroller. Right. Jogging stroller. And then everything else, we did buy new cribs, but we bought like Ikea, like bottom of the line, like so simple, stripped down Ikea cribs and tons and tons of used clothes. We were so fortunate to be, you know, sort of passed used clothes and then we pass them on to the next family afterwards. That’s exactly it worked. Yeah. Yeah. It’s a wonderful boon, if you can get into a parenting community that does that sort of thing. But yeah, I do think we followed your advice. We picked one thing that we wanted and everything else was just really just as cheap as we could get it.

35:49 Judy: And then the other one advice, well, for me that works really well, is I told my kids that I would pay for their education, for their readings, and everything. Because I think my mom was really frugal to a point that looking back, there are moments I go, mom, you know, you could have spent a little bit more money on my education. Because I think we have PhDs. So we care about education. So I really wanted to let my kids know. I am willing to spend money on things that are important to me. And the thing that is important to me is your education. So they know, they know that they can go into the local bookstore, we call it the bookstore. They can buy almost anything in the bookstore, including toys, you know, the bookstore has so many other gadgets. But they take advantage of it. And I actually allow them to, you know, as a bookstore, we will buy something educational. So I don’t, when it comes to book, I have no limit for my kids. Yes.

36:52 Emily: And is there any other advice that you want to add in at this stage for new parents or parents of littles?

36:59 Judy: The phone is a very attractive thing. You know, it’s just one phone. You have so many toys in there, but stay away from it as much as possible. Get your toys from your friends. Get your free toys from your friends. That costs very little money. And, for me before the pandemic, I’ve been strictly using cash in front of my kids. I carry cash. I really want to show them the exchange of money. But during the pandemic it was a lot harder, but they are older now. I think they understand the money, they have some understanding of money, but before the pandemic, I strictly used cash, especially in front of the kids.

37:44 Emily: Yeah. I think that’s a really good tip. Actually, so I mentioned, my daughter is four, she turned four during the pandemic. And at four we were like, okay, we’re going to start really teaching her about money. Like, what is this concept? You know? But because it was during the pandemic, there was no way that we wanted to handle cash coins, anything. So we did get a toy that, you know, represents money, but it’s something that I feel she’s missing out on a little bit now. And I want to somehow, you know, establish that for her later.

38:11 Judy: Well, four is still young. Right? So you still have a lot of time. There’s no hurry. And yeah. She still has a whole lifetime to learn about money.

Best Financial Advice for Another Early-Career PhD

38:22 Emily: Yes. So Judy, thank you so much for this interview. I loved hearing about kind of your journey and your advice. To wrap up my interviews, I always ask my guests, what is your best financial advice for another early-career PhD? It could something that we haven’t mentioned so far in the interview or something you just want to circle back to and emphasize.

38:40 Judy: You don’t really need to spend money on things that you need to impress other people. You know, just really know what is important to you and what you need. Really understand what you need and what you want, the difference between the two. I mean, I’m not saying that you cannot get the thing you want, but knowing that this purchase is what I need, and this is a purchase that is what I want. And have that differentiation in your head, in your mind. I think that’s already a very good start.

39:11 Emily: Yeah. I think that’s an incredible insight. Especially, to me, I always think about this when it comes to recurring expenses like recurring, fixed expenses. So, you know, we talked about housing a bit earlier. So what in your housing cost is a need, and what is an upgrade to that, a want? And I think it’s important just to keep in mind in case you ever come upon a situation where, you know, you want to cut back, you’ll know, okay, well, you know what, the house actually is bigger than what we needed at this point, or the car, or whatever it is. Like if you differentiate between, okay, well, I could have this, I can afford this, you know, more of a want thing right now, but just to keep in mind. Yeah. There is a way that I can scale this down, you know, should it come to it in the future. Like you said, to differentiate in your mind, I really like that advice. And will you let us know, you know, about your business and you said, you know, it’s a little bit on the skids during the pandemic, give us kind of an update on that and where people can find you if they’re interested in learning more about it?

40:06 Judy: Well, my business is more catered to kids. And so it’s a reading center, we specialize in fostering reading and writing. We have lots of books. Good levels from the state. And so it’s called Reading Town, it’s a franchise and, and I love reading with kids. And we have programs that are good from Kindergarten all the way to grade 12. Lots of readings. Yes.

40:38 Emily: Yeah. Thank you so much for letting me know about that. And thank you so much for joining me today.

40:41 Judy: Thank you, Emily.

Outtro

40:43 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 a 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.

Pursuing Your Passion in a Financially Healthy Manner

June 14, 2021 by Meryem Ok

This episode is a podcast swap! Emily’s guest is Dr. Stephanie Schuttler of Fancy Scientist. Emily and Stephanie interview one another on the financial challenges of a career in wildlife biology and how to pursue your passion while preserving financial balance and health. They discuss the necessity and prevalence of volunteer and pay-to-play experiences in wildlife biology and how to have realistic expectations about the job availability and compensation at various levels of education. Stephanie is an expert in careers in wildlife biology, but this conversation is applicable to PhDs who are following their passions into many other competitive fields.

Links Mentioned in This Episode

PF for PhDs: Speaking Engagements
Emily’s E-mail (for Book Giveaway)
PF for PhDs: Podcast Hub
The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich (Book by David Bach)
Getting a Job in Wildlife Biology: What It’s Like and What You Need to Know (Book by Dr. Stephanie Schuttler)
PF for PhDs: Quarterly Estimated Tax
Citizen Science
The Job Tracker
PF for PhDs: Subscribe to Mailing List
Fancy Scientist Website
Fancy Scientist Twitter
Fancy Scientist Instagram
Fancy Scientist YouTube

Teaser

00:00 Stephanie: In this field, so much is about those experiences. So if you really want those pay-to-play experiences, because, I mean, some of them are super cool, you could focus more on getting into a school that’s more affordable and do some of those things rather than go to a really expensive school.

Introduction

00:21 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 3, and today Dr. Stephanie Schuttler of Fancy Scientist and I are publishing a dual interview! Stephanie is a wildlife biologist-turned-science communicator and expert in careers in wildlife biology. We have a great topic: How to pursue your passion in a financially healthy manner. Stephanie gives the financial and career lay of the land for wildlife biology, a popular and competitive field that requires volunteer and pay-to-play experiences prior to being admitted to graduate school. Even completing a graduate degree in wildlife biology doesn’t necessarily lead to the type of job young people dream about when they enter the field. Sound familiar? Stephanie and I discuss how to limit the financial risk of pursuing a career in a field that you are passionate about.

I have some exciting personal news, which is that I finally received my full vaccination course against COVID-19! I have to say, it was tough to watch my friends and acquaintances who have university and hospital affiliations receive their vaccinations over the last several months while I was waiting for them to become available to my age bracket in California. But my turn finally came. I am ecstatic that my parents are visiting us this week, whom we have not seen in person since November 2019.

01:51 Emily: Prior to COVID, as you likely know, I gave in-person seminars and workshops at universities. I honestly wasn’t sure how my business would fare without being able to travel and with universities facing the uncertainty that they did early on. As it turned out, in the 2020-2021 academic year, my speaking services in the virtual format were more in demand than ever, particularly this last spring. I feel really, really fortunate about that! My calendar is now open for engagements in the 2021-2022 academic year. I am of course offering virtual events, which I assume will continue to be popular. I’m not sure if professional development events and conferences are switching back to being in person this year to any degree, but if they are and I am asked to present, I will certainly consider it. I am over the moon about how I have adjusted my offerings for early-career PhDs this year, which you can check out at PFforPhDs.com/speaking/.

02:53 Emily: First, I got honest with myself about my most popular seminar, The Graduate Student and Postdoc’s Guide to Personal Finance. The Guide is my comprehensive overview of multiple personal finance topics. I was trying to cram it into 90 minutes, but it really is a two-hour seminar with Q&A. It’s great for the end of a workday, not so much for a lunch hour.

03:15 Emily: Second, I clarified the topics for my in-depth seminars, which are financial goals, investing, debt repayment, saving, and cash flow management. Each of these seminars comes in a one-hour lecture and Q&A version or a two-hour workshop version. The workshop version includes the teaching from the lecture version plus spreadsheet templates, worksheets, and/or small group discussion prompts. These seminars work well as stand-alone events or part of a series.

03:45 Emily: Third, I took my tax seminars off my slate of offerings. This is honestly a big risk for my business because my annual tax return seminar was second to The Guide in popularity and always drew my biggest audiences. The preparation of an annual tax return and calculating estimated tax on fellowships are my audience’s most universal financial pain points.

04:10 Emily: However, I am not leaving you in the lurch with respect to tax education and assistance. Stepping back from giving live seminars on this topic actually enables me to scale the delivery of the help. In place of these live seminars, I am licensing access to my pre-recorded workshops on the same topics. I have been offering these workshops for the past several years, and I know that they are even more effective than live events in guiding graduate students and postdocs to their goal of an accurate tax return and up-to-date income tax payments on their fellowships. Please keep these workshops in mind as we draw closer to tax season for 2021. If you would like to book a virtual or in-person event with me or recommend me to your graduate school, postdoc office, or graduate student association, the best place to go is PFforPhDs.com/speaking/. From there you can learn about all my seminar offerings, read reviews from previous event hosts and attendees, view my speaking fees, and schedule a call with me to discuss your event. I look forward to partnering with you this year to deliver high-quality, high-impact financial education to the early-career PhDs at your university, in your association, or at your conference.

Book Giveaway Contest

05:29 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. The Automatic Millionaire was one of the first personal finance books I ever read, and it had an enormous impact on my financial mindset and behavior. The path to becoming a millionaire is not necessarily quick or easy, but it can be simple and automatic. I can absolutely credit the key strategy that this book teaches as the reason my net worth is as high as it is today. I hope this book effects a similar result for you. 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. Without further ado, here’s my interview with Dr. Stephanie Schuttler.

Will You Please Introduce Yourself Further?

06:49 Stephanie: Hi, I am Dr. Stephanie Schuttler, and I am a wildlife biologist, and now I’ve turned a science communication entrepreneur. A brief background of myself is that I kind of stumbled into this career. I didn’t know I wanted to be a wildlife biologist until my last year in college when I decided to study abroad and I randomly chose a wildlife management program in Kenya. So that changed my life. And I knew from there that I had to go to graduate school. So I got some experience doing three different types of internships over the course of three years. And then I went to graduate school to get my PhD at the University of Missouri, where I spent close to seven years there, followed by one short postdoc and one long postdoc, lasting, probably about, honestly, seven years. Yeah, so my short postdoc was at Missouri and my long postdoc was at the North Carolina Museum of Natural Sciences where I got to work on a lot of camera trap stuff that I talk about today. Yeah, and now the last part is I started my own business last year. I’ve been blogging for the past few years and I officially made it a business last year where I spread knowledge about science communication, I educate people, I started kids’ programs, and then of course I help people in their wildlife biology careers.

08:20 Emily: Fantastic. What is the name of your business?

08:23 Stephanie: A Fancy Scientist.

08:25 Emily: Great. I’m really excited to speak with you, Stephanie, today because are subject is kind of, you know, the finances of pursuing a career in wildlife biology, but it’s a little bit more general than that really, because we’re really talking about how to stay sort of financially balanced and healthy while you’re pursuing a passion that is not necessarily, or immediately, lucrative. And in fact might, you know, you might be paying for, in the form of your education, you might be paying for career experiences. So that’s kind of our general topic. So even if those of you who are coming to the podcast are not in wildlife biology, like still stick around because this is going to be generalizable information.

09:03 Stephanie: Yeah, absolutely. I would even add that our field can be more lucrative in terms of going to graduate school than other fields. Like I’ve heard about people who are getting their PhDs in English and their TAships get paid just so poorly. So a lot of the experience and advice here will definitely transfer over.

How People Develop a Passion for Wildlife Biology

09:25 Emily: Yeah. Let’s talk more about specifically how wildlife biology is positioned because it’s a science field, of course, which you might immediately think, oh, like you make money in science, of course. But on the other side of it, it’s a very competitive field and people follow it because of long-held passions. So let’s talk more about that. Like how do people develop their passion for wildlife biology and pursue that?

09:47 Stephanie: I think people develop it usually from a young age. That’s what happened for me. I always loved animals and I love nature. And like I said, I didn’t discover it until a career as later on. Like when you’re young, people always say, like, why don’t you become a vet if you really like animals? So I didn’t know it was a career option. Some people do, but when you track back to like, why people want to do it, it usually has to do with those experiences of being outside in nature when you’re young. And actually a lot of wildlife biologists, a lot of them start off like hunting and they just spend a lot of time outdoors. So I think that a big reason why people are so attracted to the field is that they think they will be spending a lot of time outside.

10:35 Stephanie: And this is definitely true for some careers. It depends on what level of education you have, and of course, what job you have. But in general, the more education you have, the less time you spend outside. It’s like an inverse relationship. And you know, we get really cool experiences. A lot of us get to travel. Of course, some of us get these really close interactions with animals that regular people can’t have, or even just accessing different types of places. Like some of the field sites I’ve been to would have been difficult to visit as a tourist and some of the experiences you have. So yeah, I think that’s what’s really attractive about it. And you’re right. It’s really interesting because there’s so much push for STEM education and especially getting People of Color and girls interested in STEM because our field is not very diversified.

11:33 Stephanie: And a reason to advocate for STEM careers is often actually like finances, that it’s a really financially beneficial career. But again, it totally depends on what you do, and wildlife biology is not very lucrative. And it’s just simply because there’s not a lot of money in wildlife and conservation work. A lot of our employment is nonprofits. The universities and, I mean, universities, you can definitely get paid well. And any of these jobs you can get paid well. But in general, if you think of like disease research, there’s going to be so much more money from the U.S. government and other sources to invest in like medical research than there is in saving wildlife. So, that’s really the big difference. But I think most people go into it because they love it so much. And that’s what I always said. I knew I wasn’t going to make a lot of money, but I loved it so much. So that’s why I went into it.

12:38 Emily: It’s so important to go into these kinds of career choices with your eyes wide open as to what the possibilities are, including the financial possibilities. So it sounds like people, maybe from the time they’re children, have a very like romantic idea of what this career is going to be, but the reality does not necessarily line up with that, especially as you advance further and further.

12:57 Stephanie: It’s interesting though, that you said that about like the romantic version, because I have a book, Getting a Job in Wildlife Biology: What It’s Like and What You Need to Know. And I had a review on there recently, it wasn’t a bad review, it was a four-star review, so it was good, but it was a parent that bought it for her daughter and she read it first, and with the intention of getting it to her daughter. And after she read it, she was kind of like, I’ll leave it up to my daughter to read. And her review was all about how realistic I was. And, and that’s exactly why I wrote it because people have this really romantic view of what wildlife biology is, like myself growing up, I saw Jane Goodall. And I mean, Jane Goodall, isn’t really considered a wildlife biologist. She’s more of a primatologist, but still that’s what you imagine it to look like, or Steve Irwin. And the reality is you’re not doing those types of things. So I pride myself on telling the truth, and I don’t want to dissuade anyone from entering this field. I just want them to know like what it’s like going into it.

Volunteer and Pay-to-Play: Are They Really Required?

14:01 Emily: So, one thing that I learned from our prior conversations is that in your field, it’s very common for people to have to do volunteer experiences or even pay-to-play experiences, to get into graduate school, to get a job, to advance. And this is not necessarily as common in other areas. So could you please tell us more about what, you know, what does pay-to-play mean? What are the kinds of volunteer experiences that people may be required to have? And are they really required?

14:30 Stephanie: Yeah, absolutely. This is a really hot topic right now. I personally think that you cannot get into graduate school without having some sort of experience. And in order to get that first paid experience, honestly, you really need experience for that. And you can, I would say you can get it in college if you volunteer with a lab and you get college credit for it. So that’s essentially not totally volunteering. And there are some work-study programs in colleges as well, but really to get your first experience, you need to volunteer. And that’s just the unfortunate reality of it. And this is a big problem because it discourages diversity from our field. So, I’m in no way, like advocating for these experiences. I just feel like that’s the reality of the situation. So there’s lots of experiences. And even our museum, when we had interns in our lab, we did have money for some of them.

15:27 Stephanie: And I constantly applied for grants to get money to pay interns, but they don’t come through. So either like I would have people email me and be like, I’m so interested in your research. Can I help you out? Or I would have a lot of research to do, and I would come across people and offer them experiences to help me with this. And there are exchanges in other ways. Like I write them letters of recommendations and I invite them to be on journal publications and stuff like that. But yeah, we can’t afford to pay for everyone. So it’s hard to deny people experiences who want them. But also, the pay-to-play thing is that some experiences are so desirable that they can afford to charge for them. And I do think there are some sort of scammy experiences out there where they profit off of it, but there are also legit scientists who are working in another country and they have to pay for the field site and the food costs and things like that.

16:35 Stephanie: So I’ve seen job advertisements where you get to maybe go to like South Africa for a summer and you have to pay to stay there. And they mention that it just covers the field costs and they’re not making money off of it, but still, I know a big reason why I got certain opportunities was because of my experience in Kenya. I had a study abroad program and an internship in Kenya. And Kenya was, it really was volunteering because I did get paid, but I got paid a Kenyan salary. And then I did have to pay for half of my airfare. So it ended up being a year where I didn’t make anything. And yeah, if I didn’t have those experiences, then I would have not had like my graduate school experience of studying forest elephants. So if somebody who comes from a financially disadvantaged background really wants to do something like work internationally, honestly, it’s really tough because those experiences are more desirable and people are willing to pay for them.

17:42 Emily: Yeah. You outlined a couple of reasons why these experiences exist. It really sounds like the field is in a bind. There’s not enough funding coming in for all the work that needs to be done, sort of from above, but from below, from the people coming up the ranks, there is an eagerness for people to do the work, even if it’s on a volunteer basis, even if they have to pay out of pocket for it. But it sounds like this just comes back to a funding squeeze, right? And the field being so popular and competitive. Those things combined have set up the conditions for this system to develop. And I agree with you. It sounds nightmarish, actually, for someone who doesn’t come from a financially advantaged background. And it’s a little bit like, you know, in the recent, I don’t know, last decade or two, there’s been so many more conversations about unpaid internships and the elimination of unpaid internships in most fields because they’re not great for anybody. Especially people who, you know, can’t afford to do them. But it sounds like that hasn’t quite touched the field of wildlife biology yet. Because these are essentially unpaid internships like on steroids, because you actually have to, in some cases, pay to access the site or what have you.

18:53 Stephanie: Yeah, absolutely. And that’s, like I said, that’s a huge conversation right now. And I think it’s especially difficult for nonprofit organizations because, you know, they obviously always need more funding. And they have been under attack, like posting unpaid internships. And I understand both sides. Like I understand that people need to get paid for their time, but I also don’t think it solves the diversity problem because if you’re just taking experiences away in general, then anything that is available is going to be so, so, so competitive. So it’s like a lose-lose situation.

Financial Risks in Pursuing a Wildlife Biology Career

19:32 Emily: Yeah. It definitely sounds like that. Okay. So we’ve kind of talked about the downsides to the field of kind of relying on these volunteer and pay-to-play experiences in the pipeline, at the beginning of the pipeline. To get into graduate school, you need to have some kind of experience. To get that first experience that maybe you get paid, well, you have to have an unpaid experience before that point. There are downsides to the field of like losing out on having great scientists, budding scientists who could be part of the field, maybe being turned away for financial reasons. What are the financial risks that are posed to an individual who tries to pursue a career in wildlife biology?

20:06 Stephanie: I think, I mean, just going into debt or living paycheck to paycheck constantly, that’s like super common in our field, but I know many people who have gone into debt for these like pay-to-play experiences or to do a volunteer experience, but they don’t have the means to cover themselves financially while they’re doing that experience. And it affects your entire life. The opportunities, I guess, like they kind of go away, but they manifest in different ways. So like once you get your PhD, well actually after your master’s too, like I talked about my friend, Rebecca, a lot of times you have these temporary opportunities, and it’s really difficult to get things lined up financially. And it’s a very demanding career. There are always things that you could be doing for your career, especially once you get to like the science route of doing more research-based things, then you are going to want to be working on your publications and things like that to get you that next job. So you don’t necessarily have the time to be able to like take on another job. So I mean, it’s really just that you have the potential to go into debt. People do go into debt, and then they don’t have the finances saved to be able to keep going, in the future, if opportunities don’t line up.

21:40 Emily: Yeah. This does remind me of the general like pursuit of the tenure-track in some fields where you need a PhD to get, and your goal is to get, a faculty position, but the employment opportunities, if you don’t end up, you know, landing that faculty position, are non-existent, very rare, not very lucrative. And so it’s like, yeah, if the stars completely align and you get that job that you’re going for, it all works out. But for most people who pursue that, it’s not going to work out. And so you have to realize that going in, it doesn’t mean you can’t like, you know, shoot for the stars and everything, but you need to have some kind of nets and backup plans and safety. Because the stats are that a tenure-track position is not going to work out for the vast majority of people who pursue one. And so it seems like there’s, you know, an analogy here with the field, the career in wildlife biology,

22:33 Stephanie: Do you see any additional downsides or risks?

Debt and Opportunity Cost: Loss of Compound Interest

22:38 Emily: I mean, mentioning, going into debt like you did is absolutely perfect. But to me there’s another layer on top of that, which is the loss of opportunity to get compound interest working for you. So if you go for many years in your twenties and into your thirties, maybe doing temporary work and underpaid work, and maybe you’re accumulating some debt, or even if you’re not, but you’re not doing anything like on the saving, investing front to get ahead with your finances, then that’s lost time. That decade or so is lost time. And it’s possible to make up for lost time, but you just have to save so much more later. But what if you end up, maybe in your thirties, in a job that pays, as you mentioned before, $50,000 a year, when you were hoping for something that paid more or was more stable or something like that? Like that’s where you are, and that’s what you have to live off of and save off of after that point and still try to make up for that lost time. So I think that people can be financially successful at all different kinds of salary levels, but like we were talking about earlier, you just have to be realistic about what the opportunities are, the salary opportunities are in the field that you’re pursuing, and also in your backup plans, if that primary plan doesn’t work out that well. So yeah, the loss of time to get compound interest working for you is the main one that I see there.

23:48 Stephanie: And I think that people in our field don’t think about that stuff at all and even, or I know they don’t think about that stuff at all. And even like talking about the loss of time with your first starting salary. You really don’t have at least a good first starting salary. I had a starting salary in graduate school, but like how most jobs work is you get your first job, and that’s your starting salary. And then that’s like the bar for you to negotiate a higher salary every job that you get. So for myself, when I graduated from my PhD, I was, what, thirties, close to 30. And you know, my husband who is an electrical engineer, he had been in his career for, for several years already. So not only are we getting paid little when we’re starting out, but we’re starting out later in age.

24:45 Stephanie: And another thing is people don’t do retirement investments either. So my dad grew up poor. His dad died when he was younger, and he had his brothers to take care of. So he was always like financially worried, and he always had us read financial books and stuff like that. So I’ve had a retirement account since legally you can have one, I think maybe 16 or 18. But yeah, like we’re not taught that. Like, you’re right. Like nobody’s talking about this stuff. And they, like, my friends would be like, well, I’ll get it through my job, when I get my first job, but some of my friends didn’t get their first jobs until they were close to their forties, and your retirement compounds. And that’s really where the money comes from. So if you are waiting a while to start that, then you’re missing out on a lot of that income compounding.

25:42 Emily: Yeah. And I think, again, to generalize, like this is something that I see with graduate students all the time, postdocs all the time is that there’s an optimism about what the future salaries are going to be post-PhD, post postdoc. And I certainly have the same optimism for them. But the other thing that happens as you age, generally speaking, is that your life gets more expensive in a variety of ways. You know, maybe you buy a house, maybe you have a child, maybe you have to take care of aging parents or other family members, like, so even if you do see a post-PhD, jump in salary in whatever field that you’re in, it might not go as far as you were hoping that it would. And so to me, my attitude is more like, you know, work with what you have now, that is, try as best you can to live a sort of financially balanced lifestyle and do some of that retirement investing or paying off debt or whatever it is that your goal is while you still have a lower salary, while you’re still in graduate school. And yes, like I do hope that that higher salary comes, the permanent job comes and it will all be much easier later, but just in case it’s not, let’s get started now so that you have that time, as we were talking about for, you know, your money to compound, or at least your debt to not compound as much.

26:54 Stephanie: Absolutely.

Commercial

26:57 Emily: Emily here for a brief interlude! Heads up, fellows: The next quarterly estimated tax payment deadline is Tuesday, June 15, 2021! This one always catches me by surprise because quarter two, strangely, is only two months long, while quarter four is four months long. Yet, a full quarter’s payment is due on June 15th. If you aren’t having income tax withheld from your stipend or salary and haven’t yet filled out the Estimated Tax Worksheet in Form 1040-ES, now is the time to do so. The worksheet will tell you how much you can expect your tax liability to be this year and whether you are required to pay estimated tax. If you need some help with the Estimated Tax Worksheet or want to ask me a question, please join my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers the common questions that postbacs, grad students, and postdocs have about estimated tax, such as what to do when you switch on or off of fellowship in the middle of a calendar year. Go to PF for PhDs dot com slash Q E tax to learn more about and join the workshop. Now back to our interview.

Advice for Pursuing a Financially Risky Career

28:13 Stephanie: Okay. So knowing that this is a financially risky career, what do you think, like, what’s your advice to people who want to pursue it in like, they’re absolutely sure they want to do this and maybe they don’t have a financial safety net or they don’t come from a really, really wealthy background? What can they do?

28:33 Emily: I think the first thing to acknowledge is that you, as an individual, are a whole person and that you have needs and desires that are perhaps independent of this career in wildlife biology that you want to pursue, or any kind of competitive and perhaps not lucrative kind of career. And what I mean by that is that I would love for you to pursue like your career kind of passion, but just as you’re doing that, keep in mind that you still have needs as a person. You have financial needs, you have relational needs, you have spiritual needs, health needs, all these things matter as well. And I think there’s a tendency for people, especially when they’re younger and in their twenties and so forth, to drive hard at their career goals at the expense of some of these other areas of life. And it will catch up to you, eventually. You will reach age 30 or age 40 and realize that you have some deficits or dearths in these other areas, because you were trying to sort of suppress your needs and desires in those areas for so long to pursue this career.

29:35 Emily: So I don’t think that’s healthy and don’t do it. So try your best. Right? And so we’re going to talk about the finances, but there’s all these other areas of life as well. So don’t forget that you’re a whole human and you’re more than just your future career or job in wildlife biology. So that’s kind of the first thing to keep in mind. So, as we’re talking about sort of financial health and financial wholeness, as you pursue these careers, I do think you need to create your own safety net and your own financial security and backup plans as you go. And so that may mean that it will take you a little bit longer to get to graduate schoo, for example, if that’s like your next goal. Maybe you might take an extra year instead of, you know, taking a one or two year gap, take a three or four year gap between finishing undergrad and that graduate degree, for example. And that’s to build up more of your own financial security in the meantime.

30:25 Emily: And so one of the things we talked about earlier, these pay-to-play or volunteer experiences, is it possible for example, for you to plan around that and say, I’m going to have a summer job? Maybe it’s not even a job, I’m going to have a summer experience, and it’s going to cost this much money, or I’m going to be paid this much, but my lifestyle needs are this much. And how can you save in advance for that? And what kind of job can you have when you’re not actively engaged with these experiences? How can you pursue a job and a career that will allow you to have the experiences, but still give you some financial stability in the meantime? And one of the things I end up talking a lot about, and that I’ve learned a lot about from people I’ve interviewed on my podcast is regarding money mindset and limiting beliefs.

Navigate Limiting Beliefs

31:06 Emily: And so a limiting belief that someone in the field of wildlife biology might hear, and they might even get this from your work, again, the realism, is I can only ever have a temporary job and I can’t have a job the other seven or eight months of the year, because that’s not in my field, whatever. But maybe there is a way for you to build a job or an income or a career in that part of the year and still have that balance where you want to do, you know, these special experiences in the summer or the spring, or what have you, but still be making money in the other part of the year. And honestly, I think one of the most accessible ways is what you and I are now pursuing, which is entrepreneurship. So maybe there’s a way to have, you know, set up your own stream of income.

31:45 Emily: Maybe you work on it more intensely in one part of the year and less intensely in the other part of the year. And you can create that balance for yourself to still allow you to pursue the experiences in the career that you want to have, but still be making money in the other part of a year or a little bit, you know, while you’re having those experiences still. So that’s one idea. The other one is about this debt, you know, either going to have experiences or on the flip side, maybe not paying down student loan debt that you’ve accumulated in the past. I mean, we’ve had a student loan debt crisis that’s been building and building ahead of steam for a long time, but especially in the last decade. And, you know, in the last decade, I think many people have come to realize, you know, your student loans, your education, especially at the bachelor’s level is not necessarily an investment.

32:30 Emily: It’s not automatically an investment. You can’t pursue any bachelor’s at any price and, you know, be sure that that’s going to pay off. Same thing for graduate degrees. You know, your home is not always an investment. There are things that used to feel safe that used to give you a path to the middle class that are not there, they’re not guaranteed any longer. And so I think you have to be really, like, in thinking about pay-to-play experiences as an extension of student loan debt. So like I’m taking out student loan debt to pursue my education. I’m taking out some kind of personal loan or consumer debt to pursue this experience that I want to have to get into graduate school. You can think about them sort of analogously. And so one rule of thumb that works for student loan debt that maybe you could extend to, if you’re going into debt for these experiences in wildlife biology, is don’t take out more debt than one year, your first-year starting salary.

33:20 Emily: That’s like the rule of thumb for an undergraduate degree. And so if you’re, you know, going into a little bit better or forgoing salary to pursue these volunteer pay-to-play experiences, can you keep the debt level down to one year of your current salary or lower? Is that possible? So like, so yes, pursue these experiences, but make sure you’re not giving yourself carte blanche, right? To spend and go into as much debt as you might want to. You’re sort of putting some checks and balances on yourself along the way to make sure that you’re not getting in too far over your head.

Consider the Cost of Your Education

33:56 Stephanie: Yeah, absolutely. And actually one of my big, I have a lot of advice for people, something I think that people should do is not worry about the school so much. Like a lot of students are super obsessed with like, what’s the best graduate program or what’s the best college to go to. And I honestly think that students should really, especially at the college level, focus on getting in the school that’s going to cost them the least, because like you mentioned your degree doesn’t necessarily pay off. If you’re going to invest, you know, $120,000 for a college degree and you can get the same result with one that’s going to cost you $10,000. I mean, I actually regretted for a long time, my experience because I didn’t know what I was doing. I didn’t know what I wanted to be.

34:49 Stephanie: An, I even applied poorly to schools. I applied to like only Ivy league schools because that’s what I knew. And the only schools I got into were my local state school and other schools that cost like $30,000 a year or a semester. And I was like, okay, I’m just going to start from my state school because I don’t know what I’m doing. And then it also felt weird to dorm at my state school, which is like 20 minutes down the road from me. So I stayed with my parents and I regret not having the college experience, but I also love that I don’t have debt and that it was, I mean, I paid, I think a thousand dollars a semester for school. So in the long run it definitely was worth it.

35:34 Stephanie: And in this field so much is about those experiences. So if you really want those pay-to-play experiences, because I mean, some of them are super cool. You could focus more on getting into a school that’s more affordable and do some of those things rather than go to a really expensive school. And this is true for graduate school, too. And graduate school in science, you do get paid, you get a stipend, but you get paid different amounts according to the different schools and even according to the different programs. So I was actually not in the wildlife biology program for my PhD, or in the department. I was in the biological sciences department, and they had a fellowship. So I was paid a lot more and I didn’t have to TA. And that played a huge role in me deciding to do that as opposed to another program where I would have to TA and get paid less.

36:31 Emily: I think that’s a great point. Both at the graduate and the undergraduate level. It’s more about what is the actual work that you could be doing? Who can you be working with? Rather than maybe the name of the school. And of course the finances come into play as well. Because again, I think my basic point here is like shore up security for yourself as you go as best you can to keep you on this route, as long as you want to be on it in pursuit of a career in wildlife biology. So that if you get to the end, let’s say of your PhD and you realize, okay, I can get the permanent job. I’ve achieved all my goals. Everything is wonderful. Well, you have some good, you know, financial, a nest egg behind you perhaps, or at least not as much debt as you could have been in.

37:15 Emily: That would be great. But if you get to that point and you say, Nope, I’m going to exit this career now. I’m not going to have the type of job that I thought I would have. I’m going to have some other type of job. At least you won’t have the financial regret behind you of, oh my gosh, I pursued this school, that school, they didn’t pay me well enough. I spent too much on this experience. Yeah. I think what you said is perfect is like focus more on the experiences. If you want to go for, you know, a less expensive college education, but save your dollars for some pay-to-play experiences that are really high impact, then that makes a lot of strategic sense to me.

FIRE: Financial Independence, Retire Early

37:45 Stephanie: Yeah. And another route, I think we talked about this in our chat, you talked about an acronym FIRE.

37:51 Emily: Yeah. So FIRE stands for Financial Independence Retire Early, or Early Retirement.

37:57 Stephanie: Yeah. So you could either do that or do a sort of hybrid model. And I interviewed somebody who did something kind of similar to that, inadvertently. He didn’t, I mean, he didn’t retire early, but he had 20 years in a corporation that was a really good job. And he participated, he volunteered in the Citizen Science programs on the weekends and in his spare time. And his corporation actually paid for him to go back to school. So he did get a degree in environmental sciences. But when he was finished and on the job market, he got the second job he applied for. And I could not believe that I was like, oh my gosh. Wow. And it was because of those volunteer experiences, he had so much experience that he was like leading groups and organizing events and stuff like that. So that all translated really well.

38:48 Stephanie: So you could start off in a more lucrative career and volunteer with conservation organizations, with Citizen Science, and make enough money then where you can take a less lucrative career. Or if you’re a real go-getter in today’s world, like, I mean, there’s really not a financial limit to like what you can do online and with entrepreneurship and stuff like that. Like, it is tough to do, but it’s, I mean, there’s so many like millionaires who are six-figure earners from selling courses online, and in practical stuff, too. Like I remember I was listening to this one podcast, this woman, she had a podcast all about goats and she made six figures just from selling a course on how to raise backyard goats. And she had like, she had like different courses, too. So it’s like, you know, you just don’t think like, oh wow, like you can make a lot of money off of information and goats, but you can. So there’s a lot of opportunities out there.

Combining FIRE with Passion Careers

39:52 Emily: Yeah. What I think is really interesting about the FIRE movement and combined with like these sort of passion careers, whether it’s wildlife biology or whether it’s maybe some other things you want to get a PhD in. So if, you know, the most intense people in the FIRE movement, the goal is to retire in about 10 years, not retire necessarily, but become financially independent in about 10 years. That would be like a fast goal. So you get out of college when you’re 22, you know, by 32, if you’re really intense about it and chose the right career, maybe you were an engineer or something like that. You could be retired by that point or, you know, financially independent, optional to retire at that point. Now that is a route to free up the entire rest of your life from age 32, to whatever, to do anything that you want.

40:37 Emily: As long as your lifestyle expenses don’t creep up to the point they exceed your investments’ ability to support you. And so that is where you could spend the next 50, 70, a hundred years of your career working in wildlife biology in any kind of capacity that you can achieve knowing that your finances are already taken care of. And that’s a very unconventional route, right? But I think it’s something that maybe more people should consider if their passion is in a field where it’s so difficult and so competitive to get a full-time position. And, you know, I think it also goes back to the realism discussion we’re having earlier. You know, maybe there’s something about wildlife biology or whatever field that you’re in that you would like that romantic version, but you are not so enamored with the reality of having a career in that field version, and maybe becoming financially independent allows you to experience the romantic versions of the career, you know, of rather the field to a great extent without having to commit to having to earn in the career and doing maybe the work that’s not quite as exciting to you.

41:43 Emily: And so that’s, I don’t know, it’s a very like interesting idea. I actually did meet someone one time at a financial bloggers’ conference who had reached financial independence in his early thirties through, whatever, he’s like a finance guy or something. And he was telling me, oh yeah, I’m considering going back and getting my PhD in some completely unrelated area because I can do whatever I want now, essentially. It doesn’t matter if I get a stipend or not. I can support myself. He can pursue anything he likes. And so I’ve never really like discussed this idea with anyone in terms of PhDs before, but I think it’s, I don’t know. It’s not the most outlandish thing.

Wildlife Bio: Career or Lifestyle?

42:19 Stephanie: Yeah, absolutely. And I actually, I mention this in the last chapter of my book is, like you said, maybe you don’t want it as a career, too. And maybe that’ll actually be more satisfying to you. So I had this talk with this very prominent biologist and he was talking about his friends, how like they’re traveling all over the world and showing him all these cool pictures and all these cool places that they’ve been to. And one of the countries that he said was a country that he does a lot of work in. And I was like, you work there, you’re like always traveling there. And he’s like, yeah, but I am in like conference rooms, I’m in meetings. I’m not going to see like this beautiful waterfall or go to the beaches. So again, it might be that romantic version of like, once you get higher up with your education, you’re going to be doing like more administrative work.

43:10 Stephanie: And you’re going to be writing scientific papers and writing grants and stuff like that. And, to be honest, that’s sitting behind a desk writing. So I just want people to like really understand what it’s like and what they’re getting into. And, yeah, like, if you’re really driven because you want to travel or have cool experiences with animals, there are Citizen Science vacations, Earth Watch does this, that you can pay for that give you those opportunities. Like you can pay to work with a sea turtle biologist and help him tag turtles or help them tagged hurdles. And so you can still have these experiences. But you’re not the one leading them, which actually might be nice because then you don’t have to worry about like all the logistics of setting everything up, and yeah. And managing people and things like that.

44:03 Emily: Yeah. I love that idea. And it’s just kind of thinking outside the box, right? Like how can I get to have this lifestyle that I want? Does it have to be my career, or can it be something I do on the side as you’re building a career in another area? Or I’ve retired from my career. And so now I can do it afterwards. I think that’s a really exciting idea that you can be in wildlife biology in more ways than just a full-time professional scientist.

44:32 Stephanie: You’re so right, too, about your, your life choices changing when you get older. I talk to a lot of young people who are like, I don’t need to live in a big house. Or maybe not necessarily live in a big house, but you do want more things as you grow up. Like you want more stability and things like that. You don’t want to be moving around all the time. And like, even myself, I didn’t want to have children, but yeah, like I want to be stable and I want to stay put and not going from here to there all the time.

45:02 Emily: Yeah. What I often repeat on my podcast is money gives you options. And so really what you’re doing when you, for instance, take out a bunch of student loan debt and then go into even more debt for these, like, pay-to-play experiences and eventually go into graduate school. And you’re there for a long time. And then, you know, all the things that you might have to do to get this final career that you are going for, if all that while you’re just accumulating debt and you’re not putting money into retirement, you’re basically hamstringing yourself into this career has to work out, or I am sunk, you know? And instead if you try to pursue it, but in a more balanced manner in terms of finances and other areas of life, you can get to that point, maybe when you’re done with your PhD and say, okay, I have options. I can still pursue this career that I’ve been going for. I can get another type of job because you have built up some financial stability along the way. So it gives you options. You don’t feel like you’re stuck in just the one type of job that you’ve been going for that whole time, which might not even be available to you.

46:06 Stephanie: Absolutely.

Best Financial Advice for Another Early-Career PhD

46:08 Emily: Okay. Well, as we’re wrapping up the interview, Stephanie, one thing that I ask all of my guests is what is your best financial advice for another early-career PhD?

46:18 Stephanie: I think probably the best is, and this is where I always tell people to start out in this career, is to look at the jobs out there now that they ultimately want. And I have a tool on my website for this it’s called the Job Tracker. And you basically just like write down, or you copy and paste, like what jobs you like, how much they pay, what your education is. And then, in my course, I actually, I also have a budget planner too. And like, see if you can afford that career and see if it works out to be the type of lifestyle that you want. So really like copy the salary and the location, and look up houses in that area and how much they cost, and see if this fits into your lifestyle. But again, like really get an idea of like, where you want to end up. So there’s no surprises and you can pivot more easily along the way if you decide, okay, I love this, but I really want to make more money. Which is okay, because, like I said, some of these jobs, they pay very little and it can be difficult to live with those jobs. I knew somebody who had what other students thought was like an absolute dream job, but she was just so sick of not making money.

47:38 Emily: Absolutely. I love that advice. It goes along with the general theme of like being realistic. Okay. So where can listeners find you, Stephanie?

47:49 Stephanie: They can go to fancyscientist.com or just Google, fancy scientist I’ll come up and they can contact me any way. I check all my messages. I’m happy to answer their questions. And I love hearing from people.

48:02 Emily: And what is the title of your book?

48:05 Stephanie: Getting a Job in Wildlife Biology: What It’s Like and What You Need to Know.

48:10 Emily: Great.

48:11 Stephanie: Very blunt. Well, thanks so much for doing this. I had a good time talking to you and I learned a lot.

48:17 Emily: Thank you. It’s exciting to me to learn about a new field and kind of wrap my mind around like particular financial challenges within that field.

Outro

48:26 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 listserv, 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.

How a Boom-and-Bust Money Mindset from Grad School Serves This Start-Up Founder Well

April 12, 2021 by Lourdes Bobbio

In this episode, Emily interviews Dr. Lindy Ledohowski, a PhD in English, former tenure-track professor, and founder of the ed tech start-up EssayJack. Lindy describes the money mindset she developed as a college and graduate student while experiencing boom and bust cycles of income and budgeting for must-haves and investments in herself. Lindy narrates how her money mindset has been in concordance or not with how she’s generated income throughout her career, and how it is serving her well now as a start-up founder. She emphasizes that a safety net enables career risk and how she prefers to bet on herself rather than other financial instruments.

Links Mentioned in this Episode

Find Dr. Lindy Ledohowski on Twitter and LinkedIn
Find EssayJack on Twitter, LinkedIn, Instagram, and Facebook
Quarterly Estimated Tax for Fellowship Recipients
Personal Finance for PhDs: Quarterly Estimated Tax
Personal Finance for PhDs: Community
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Subscribe to the mailing list

Teaser

00:00 Lindy: Even that TA income that was more regular, certainly wasn’t enough to comfortably cover month to month costs. I’ve since read that you’re not supposed to spend something more than one third of your income on fixed housing costs and that was never my case. It was often I was spending anywhere from 60 to 90% of what monthly envelope was on just fixed costs.

Introduction

00:33 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 15 and today my guest is Dr. Lindy Ledohowski, a PhD in English, former tenure track professor, and founder of the ed tech startup EssayJack. Lindy describes the money mindset she developed as a college and graduate student while experiencing boom and bust cycles of income and budgeting for must haves and investments in herself. Lindy narrates how her money mindset has been in concordance or not with how she’s generated income throughout her career, and how it is serving her well now, as a startup founder. She emphasizes that a safety net enables career risk and how she prefers to bet on herself rather than other financial instruments.

01:31 Emily: I’m recording this near the end of March shortly after finishing my 10th webinar for a university client in this month alone. That sets a record for my business in terms of speaking engagement density. I want to send a super sincere and heartfelt thank you to all of the people who have recommended me to their universities and other organizations, particularly in the past year. I shared with you last month that I really wasn’t sure how my business would fare when the pandemic started given that the revenue was so reliant on in-person speaking engagements, but between webinars, individual, and bulk purchases of my tax workshops and the Personal Finance for PhDs Community, my business has actually flourished in the past year, and especially this spring. I know that is in large part due to the recommendations of the graduate students and PhDs who listened to this podcast. I know that because the people who book me tell me so. I really, really appreciate you supporting me in this manner. I’m so happy to be able to provide this podcast to you for free, and it is possible thanks to the products and services I sell to universities and individuals.

Book Giveaway

02:42 Emily: Now it’s time for the book giveaway contest. In April, 2021, I’m giving away, one copy of “Walden on Wheels” by Ken Ilgunas, which is the Personal Finance for PhDs Community book club selection for June, 2021. Everyone who enters the contest during April, we’ll 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 April, from all the entries you can find full instructions@pfforphds.com/podcast.

03:22 Emily: The podcast received review this week titled “Customized and Encouraging Info”: “I’ve been interested in personal finance for awhile, but a lot of advice from other sources doesn’t really apply to my unique situation as a graduate student. This podcast, and the online resources on filing taxes as a grad student on a fellowship have been so enlightening and useful/relatable in a way that other sources aren’t. They’ve also helped me to challenge my sometimes limiting mindset about money as a graduate student, and have helped me begin to save and invest more than I thought I’d be able to on my stipend. Definitely recommend for anyone grad school or thinking about entering grad school. This is really important info that we don’t get from our school/programs.”

04:04 Emily: Thank you so much for this review! This reviewer really gets what I’m doing with the podcast and business. Without further ado, here’s my interview with Dr. Lindy Ledohowski.

Will You Please Introduce Yourself Further?

04:22 Emily: I have joining me on the podcast today. Dr. Lindy Ledohowski. She is the founder of EssayJack. She’s also a PhD. She’s a former faculty member — we’re going to find out all about that. When Lindy and I were preparing for this episode, we realized that she has a super interesting parallel story to her career story, which is the story of how her money mindset has served her very well in some of these stages, not so well in other stages. And it’s a little bit of an interesting flip on what we usually hear. A lot of times we talk about how money mindsets we develop in academia are harmful to our finances. Lindy has found the opposite of that. She’s found some concordance with her money mindset nurtured in graduate school with her success with finances later in life. We’re going to hear all about that. Lindy, thank you so much for joining me today. I’m really pleased to have you on. Will you please introduce yourself a little bit further to the audience?

05:15 Lindy: Yeah, absolutely. Thanks so much for that introduction. I am Dr. Lindy Ledohowski. I have an English PhD. Before I was an English professor at the university of Waterloo, I had been a high school English teacher. Then I left full-time teaching and founded, as you say, EssayJack, which is an ed tech software solution in the academic writing space.

Money Mindset in Young Adulthood

05:38 Emily: That’s fantastic. It’s obvious how your business grew out exactly of your career, so fascinating. We’ll get a little bit of that story today, but really I want to focus on this money mindset aspect. What was the money mindset that you were developing in your childhood early experiences with money in your young adulthood?

05:56 Lindy: It’s actually interesting looking back in hindsight, because you don’t know that you’re developing a money mindset when you’re in the middle of it. For me I think it’s best characterized as kind of a boom and bust. All throughout high school and then my undergrad, I certainly taught during the school year. I was a busser on weekends and then I was a waitress and then I would make the majority of my money that had to last throughout the school year in the summer months. When I was a high school student that was all day long babysitting, nine to five, whereas during the school year, it might be a couple of hours after school. And then similarly through undergrad, I relied very heavily on making a lot of tips and making all that money over a full-time summer working gig, and then during the academic year, I would scale back so I could focus on my full-time classes.

06:51 Lindy: That really gave me an approach to finances that was like, make as much as you can in as short a time as possible, and then budget that surplus over a long sort of drought period. That really started to get shaped for me in my teen years and then into my undergrad. I had my first job was as a paper route when I was 11, and then it was, as I say, babysitting, and then into the hospitality industry and customer service.

07:25 Emily: Now I can see how that kind of pattern, which I think is not uncommon for young adults and people who are still in their schooling years, but I can see how that pattern could divorce in your mind work from money in the sense that you’re doing a lot of work all the time, which is the work of being in school — the classes and so forth — but sometimes you’re not doing that kind of work and you’re doing the kind of work that makes money and that’s that period of intensity of earning the money and then spreading it out through the rest of the time. As an entrepreneur, I can see how that separation of what is work for money and what is work that just has to be done to further your general development, how that can help you later on, but you developed that early on while you were still in the cycle of the academic year.

08:11 Lindy: Yeah, absolutely. You put it really well that it made that separation between work and money. And then also I think it gave me a sense of budgeting through scarcity. And also I’m not really counting on financing for things because I very early was training myself to not think about, “Oh, I have a stable monthly salary, which I will then allocate for various purchases.” I always had to make a bunch of money and then buy the thing, whatever that thing is that I wanted.

Money Management and Budgeting Strategies through Scarcity

08:56 Emily: It’s so interesting that you use that term, budgeting through scarcity. And I think when we were prepping for this, you also use the term hoarding — hoarding money during the good times and eking it out during the leaner times to get through that. What kinds of strategies were you using during those early years? How did you budget for when your income was much lower or like zero versus when that income was much higher?

09:19 Lindy: One of the interesting things, and I don’t know if this is just my own personality traits, but as you focus on developing a money mindset unconsciously, in my case, what that meant is that I very quickly began to prioritize the “must haves” and the “nice to haves” for me. I was never, for instance, really into like clothes or fashion. That wasn’t my thing. I also had an older sister whose best friend was really into fashion, so from the two of them, I could inherit hand me downs and that was more than enough for me. I don’t know if I’m particularly stylish, so I didn’t need to color my hair or all that. Those kinds of things became “nice to have” for me and even in a time when my bank account was very flush, I still never ran out and bought a bunch of clothes or did my hair or things like that.

10:15 Lindy: Whereas, books were always my passion and I could justify also spending some of that money on books because I would think of them as a longer-term investment in my intellectual future. Even if I was buying books as a high school or undergrad student, I always knew that I was going to sort of go on and do more. I loved books and that was sort of investing in myself. Similarly for me a must have, would be say traveling. Interestingly, I had a conversation with my then boyfriend as an undergrad because his attitude towards money was to invest it in financial investments. Whereas if I had a little bit extra, I’d budget a backpacking trip and I always thought, well, I’m investing in myself and how my brain is going to be broadened by different perspectives. I think that came into play in terms of creating a hierarchy of, if I have limited funds in that hoarding and scarcity time, what will I spend it on and what won’t I spend it on?

11:22 Emily: I’m so glad you gave us that insight, because first of all, I’m glad to hear that your “must haves” were not literally just like food and shelter. Of course you took care of that, but had added onto that what you considered to be investments. And it’s so interesting that you were thinking about them that way, even that early on, because as I said earlier, obviously your career has evolved in such a way that probably all those experiences, the books, especially, did contribute to ultimately like your founding of your company and everything. I don’t think that many people at that age think about investing in themselves in those ways, but you did.

12:00 Lindy: I think maybe that’s a personality quirk of my own, or maybe my good fortune. And speaking of good fortune, as you mentioned, I did have a place to live. During my undergrad, I lived at home. The deal with my parents was that I could live at home rent free and so I need to flag that because that’s just a tidbit of good fortune on my part that not everybody shares. Again, back when I was doing undergrad, so that was in the nineties, I was able to make enough money waitressing and saving my tips over the summer that I could afford tuition. And again, that’s a very different financial reality than what people are facing today. That kind of make it all and then put it into your tuition, buy books, and then also the fact that I did have that family help, means that I had a bit of a buffer and it’s fair to recognize that little bit of a buffer that I certainly had.

13:00 Emily: Absolutely. It sounds also then that you didn’t take out debt, at least you haven’t mentioned it so far during those undergrad years.

13:07 Lindy: No, no. And that was actually what the conversation was with that then boyfriend, because he and his parents took out student loans and then he and his parents had a plan for investing that money and making money on the student loans and all that. It was very sophisticated in a way that I didn’t have with my family at all. We didn’t really talk about finances in any sort of concrete way, aside from the “we love you and if you need help, we’ll help you” kind of way, which again, I’m lucky that I had people in my corner, but it wasn’t like a sophisticated financial education in those early days.

13:47 Lindy: In my young twenties, then that boyfriend, and he was the first boy I lived with, we then had to talk about those finances in terms of how we split things up financially in a shared housing. I was really sort of dumbfounded to know that he had this whole other financial reality based on the availability of student loan debt at the time, whereas I just had the neither a borrower nor a lender be. And so if I didn’t have the money, I didn’t spend it, was kind of my approach at the time.

14:23 Emily: Yeah. I like your simpler approach. For the record, for anyone who’s listening, please don’t take out student loans just to invest the money. I do not endorse this approach. It is something I’ve been asked about from time to time and it’s very risky, very, very risky. I’ll just put it that way.

14:39 Emily: That was some of the strategies you were using. What about budgeting at that time? Did you have any particular way that you were doing it, or you just found this sort of natural rhythm of your spending?

14:48 Lindy: A couple of ways. One, I definitely found a kind of natural rhythm to the spending, which is you don’t spend very much and then whatever you have leftover is the surplus for travel or for something else. After my undergrad degree where I was living at home, then I did have a proper job that had a salary and the deal with my parents was I could have one more year at home rent free, so I could sort of get on my feet. I used that to again, sort of boom and bust, to hoard that income so that I could then go and do another degree, and that was my education degree. I was more conscious of budgeting at that time, because I had a really specific target. I want to do a bachelor of education degree. I know that I’m going to have to, at that point, move away, pay for housing, pay for tuition, sort of figure out all of that. I did have a spreadsheet and tracked things, and then once I had a couple of months of the spreadsheet, I could then sort of see, okay, well, typically this is how much I spend on a given month. If I go over that, that’s a problem. And then if I can be competitive with myself and get under that, then that’s great.

16:06 Emily: I see. So you actually had a little like gamification element kind of going on.

16:10 Lindy: Yeah, absolutely. Like self gamification. It was like, can I go lower?

Income Changes and Money Mindset During Graduate School

16:16 Emily: Yeah. And so we’re kind of talking about you mentioned a second bachelor’s degree, but then of course, at some point you went into graduate school and got your PhD as well. Can you talk about how this money mindset served you or didn’t serve you during that time?

16:31 Lindy: As I just mentioned, after the undergrad, then I worked and saved money, did the education degree. Then I worked as a teacher and saved money so that I can go to graduate school. I did a master’s, which was unfunded and then the PhD, which was fully funded. I went straight through for that and I did borrow some money from my dad, at the time to do that unfunded masters, but I had a chunk saved from my education degree. That money mindedness meant that as I went through, one of the things for sure, when I was contemplating a PhD after the masters, and I really loved my master’s degree, which is what made me want to continue on and do doctoral work. But one of the absolute deal breakers was it had to be fully funded and it had to be significantly, fully funded. Not all fully funded PhDs are fully funded equally.

17:29 Lindy: I knew that any university would happily take me as a PhD if I was going to be willing to pay them, but it would be a real vote of confidence if they said, yes, we will take you, and here’s the financial commitment we’re making towards you and your success. I think the fact that was a real must have for me in the application process for the PhD came out of that money mindset that had been developing along the way.

17:58 Lindy: And then in the PhD, similarly, there’s these funding cycles. You apply for grants and scholarships and all of that at one time of the year and then it ups your funding for the subsequent years of the PhD. had five years of guaranteed funding from the university, and I immediately then upped that by various kind of scholarships and grants. And again, then was able to sort of dole out the month by month stuff when I would get a big stipend or a big award in September or January, and then make it last for the subsequent term and semester and top up. I did also do some teaching and TA work and again, that was paid more regularly, so I at least had the combination of some TA work that was paid regularly and then grants and scholarships and fellowships that came in these lump sums.

18:48 Emily: Yeah, so a combination of regular income, irregular income, larger sums, and I really liked that you pointed out the grant cycle and the fellowship applications and all of that, because that’s another example of how you work, like on an application, it’s not immediately for money, but some percentage of them presumably will work out and you can have this cash influx based on that later. For you, I think it was just probably grooving in even further, again, this boom and bust cycle and all the things that you’ve mentioned so far and work not being directly for pay, but sort of indirectly for pay later on.

19:26 Emily: Is there anything else you want to say about those grad school years? How did you come out of them financially? It sounds like you maybe were making a decent amount of money with all these sources combined.

19:37 Lindy: Yeah. Interestingly, I made more money as a grad student than I did as a high school teacher, to be quite honest. And part of that again has to do with taxation, so certain grants and fellowships and scholarships, aren’t taxable in the same way that a teaching income is fully taxed as regular income

19:57 Emily: Actually, we’ll note, because we haven’t said so far, but you’re in Canada. Actually, no, you mentioned the university name, so we know you’re in Canada. But yes, different situation in the States.

20:04 Lindy: Yeah, I was going to say, anything I say about taxes will be specific to the Canadian context. My schooling was in Canada and then my work life has also been principally in Canada. There were certain kind of tax benefits to the way that the graduate funding was set up. Everybody sort of jokes about being a starving student and I still was, but I was less starving as a PhD student than I had been as a full-time school teacher. And again, that’s just because you know, it was early days and I hadn’t sort of stuck with teaching long enough to go up the ranks or anything like that.

20:44 Lindy: The only thing that I will certainly say about my PhD experience from a financial perspective is that even that TA income that was more regular, certainly wasn’t enough to comfortably cover month to month costs. I’ve since read that you’re not supposed to spend more than one third of your income on fixed housing costs. That was never my case. It was often I was spending anywhere from 60 to 90% of what a monthly envelope was on just fixed costs. I got very good at going to every single free wine and cheese on campus and getting food. Any holiday party anybody would in invite me to. I ate a lot of canned goods and pasta, and so if I was invited to somebody’s house, it would be the produce that I’d be eating because that you couldn’t sort of buy in bulk at the beginning of the semester and have it last, whereas you can buy cans of tuna and that’ll last. That gives you a bit of a color on that PhD experience.

21:57 Emily: It also does for you and your budgeting method, I guess. Knowing that you have money in the bank, but eating this way, being this frugal and so forth, knowing that you have to make it last until the next influx comes in. I do think that gives us a good picture.

Post PhD Salary: How Having Steady Cashflow Changed the Money Mindset

22:12 Emily: Now, after your PhD, you had regular employment. You had a salary, maybe not for the first time, but maybe in a different way than you had before in your life. Tell us about that period when you were a professor.

22:26 Lindy: After my PhD, I did a post-doctoral fellowship and again, that was much the same as, as the PhD in terms of lump sums of money. Then I became a tenure track professor. That had full benefits, full salary, all of those sorts of wonderful things. But interestingly, at that point I was then married. My husband is an academic and we had jobs in different cities. And so again, the budgeting became sort of weird because we were now using our two regular salaries to spend on the monthly costs of running two homes. We had two apartments in two different cities and traveling back and forth. Then any surplus I had was on driving or flying to be in the same city as my spouse. However, what I did find in that because that was our experience, I was well-suited to continuing a bit of that boom and bust and spend the money that was surplus on travel to see my spouse.

23:26 Lindy: What was interesting for me is at the time banks were only too willing to give us financing. because we were in two different cities, I had an old 15 year old car, we were going to sell that and buy a new car so that I could safely drive on the highway. And the dealership is like “we can give you this kind of financing because you’re both professors” and I was really uncomfortable with that. We were like, “well, we have our savings, let’s just buy the car.” In hindsight, I don’t know that that was the smartest decision given that cars are depreciating assets.

24:02 Lindy: But again, at the time I was very uncomfortable with this idea of taking on something that was a month to month to month debt, because I hadn’t built up my trust in the system that money would be there month to month to month in the way that I think if you start working at a regular job early and have that continuity over time, you start to have faith that, yeah, even though you might run out of money by the 30th of the month, it rolls over and new money comes in. I, temperamentally, didn’t feel that that was the case, even though, obviously as a professor, that is the case.

24:41 Lindy: So as I say, we made the choice to buy the car outright and again, hoard all of our money and live cheaply in the hopes that we could then save up for a down payment. That’s kind of how that money mindedness — the boom and bust, the hoarding — carried over into the academic job when we were both professors and seemingly could have had a much more regular financial life. We still kind of didn’t.

25:06 Emily: I’m so glad you pointed that out because really we’re talking about whatever it was 10, 15, maybe close to 20 years of this boom and bust cycle developed by the type of income you have with maybe some periodic, yes, you had some regular income, but it was never as much compared to that irregular income. I can totally understand why you didn’t immediately have trust that the salary is going to keep coming in and so forth.

Commercial

25:31 Emily: Emily here, for a brief interlude. The federal annual tax filing deadline was extended to May 17th, 2021, but the federal estimated tax due date remains April 15th, 2021. This is the perfect time of year to evaluate the income tax due on your fellowship or training grant stipend. Filling out the estimated tax worksheet and form 1040ES will tell you how much you can expect your tax liability to be this year and whether you are required to pay estimated tax. Whether you’re required to pay throughout the year or not, I suggest that you start saving for your ultimate tax bill from each paycheck in a dedicated savings account. If you need some help with the estimated tax worksheet, or want to ask me a question, please join my workshop, quarterly estimated tax for fellowship recipients. It explains every line of the worksheet and answers common questions that postbaccs, grad students, and postdocs have about estimate tax, such as what to do when you switch on or off a fellowship in the middle of a calendar year. Go to pfforphds.com/QETax to learn more about and join the workshop. Now, back to our interview.

Transitioning to Entrepreneurship

26L49 Emily: So you’re going along, you have your salary job and everything, but at some point you become inspired to start your company. I’d like for you to talk about the financial aspects of that transition — did you prepare financially before jumping into self-employment or were you already prepared based on the way that you were living? Or these kinds of insights?

27:10 Lindy: Before starting the company that I now head up, which is EssatJack, and that’s an ed tech software solution, I did a couple of years of consulting. So between being a professor and starting a tech startup, I was like, “okay, this living in two cities as two professors is untenable. All of the money that we’re making, we’re spending to rent two apartments or to travel back and forth to see each other, and I just don’t see this being a sustainable future for us. Something’s got to give, and the something that’s got to give is I’ll give up this job and figure out what comes next.

27:45 Lindy: I was very lucky. Again, I secured a grant — this is apparently just how I roll. I get the chunk of money and then decide what to do with it. So I secured a grant which gave me the confidence to take a year’s no pay leave from my job as a professor, as a kind of get the first toe in the water of quitting without actually quitting first. I had this grant, I was working on a conference in a symposium and ultimately it then became a book. But what I also did during that time was I started consulting. I started taking consulting projects just to see what can I do and then that gave me a certain confidence in being able to charge for my services.

28:27 Lindy: You made a really good point earlier on in the podcast about how my mindset divorced labor from financial remuneration, which I think is absolutely spot on. The time as a consultant remarried those two things together for me, because it made it very clear that my time was worth money, so I had to a, charge appropriately for it and not do free work on the gamble that it would pay off later in the way that say applying for grants and things like that is that kind of a gamble. Secondly, I also ran into like a scalability problem. There are only so many hours in the day that as a single sole proprietor consultant, you can work. At some point you max out and you can’t charge for 27 hours a day worth of work. That was ultimately how I got to the end of my time as a consultant is that I just sort of was like, there’s more work than hours in the day for me to do it, so I need to now start thinking about what’s the next step? Do I grow out the consultancy or do I think of something else? That’s kind of how that money mindset of the boom and bust carried over into consulting and I really did have to change my approach to labor and finance and more closely see every minute I worked as having to be worth money.

29:56 Emily: Yeah, I see. You had in that narrative that you didn’t officially leave your job, but you took unpaid leave for a year, testing the waters, after securing a grant as well. I’m wondering, obviously I think anyone can see that your life at that time with your husband was untenable, that’s not a long-term solution, but I think a lot of other people still in the face of something like that of there’s this really big thing about my job that’s unsatisfactory, they still stay in it maybe longer than you did. I would like for you to just speak briefly about this transition and how you decided to do that unpaid leave versus just leaving it right away. Did that make it easier taking the half step out? And also, is there anything that you wish you had done differently in that transition from the full-time position to the consulting?

30:48 Lindy: I think the first part of the answer is profoundly gendered. Many female professionals in the Academy and other professional fields find their careers just taking off at the time where they biologically, if they want to have children, they have to. That’s the window, you kind of have to do it. And that was the case for me. I was in my early thirties as a professor and my husband and I, we hadn’t yet decided whether or not we had wanted kids. It had always been like a “maybe one day kind of conversation. But being professors in two different cities and the ages that we were made it very important for us to get some clarity around, well, do we even want to have a family because if we do, that’s something that we’re really going to have to get on sooner rather than later. What came out of that conversation was the recognition that while we still didn’t know if we wanted kids or not, we knew that we didn’t want that decision to be made by circumstance. We didn’t want to fall into not having kids because we lived in two different cities and couldn’t figure out how to do it in that context, in a way that would make us both happy and satisfied as parents or as a family. That I think helped because it was like, well, this is a huge life decision and it could happen to us by circumstance and you can never know what that feeling is going to be like down the road, if you regret it. And I certainly didn’t want to be in that situation.

32:28 Lindy: Taking the leave kind of helped, as I say, sort of give me the confidence that I could actually make money outside of the Academy, which was my big fear. I was like, “Well, this is what I know. This is what I’m good at. This is what I can do. And I like it and all the rest of it.” Being able to sort of throw my hat over the fence, so to speak, as a metaphor for then you got to go in and get your hat, meant that I then began to feel confident that I could pitch for consulting gigs. I could get them. I could do the work. It could be rewarding. I could get paid. And then that also gave us the opportunity to live in the same city, to think about whether or not we wanted a family. In the end we decided we didn’t want kids. We have a cat. She’s amazing. But I’m very happy with that because it was a choice that we made as opposed to one day we woke up and realized that that that window had closed. So that, I think, as I say, the first part of that answer is a profoundly gendered answer.

Money Management Shifts during Self-Employment

33:28 Emily: What I found really interesting in there is that, okay, so you’ve, you stated that this period of consultancy, tied your time and earning back together. Your husband during that time, I think still was salaried. Is that right? So you still had that part of your finances was salaried. How did that change your money management or did it? Were you starting to trust the salary system or were you still like hoarding and then making these investments?

33:58 Lindy: I was definitely still hoarding. As soon as I left my job as a professor and started as a consultant, I definitely got back into the hoarding mindset, partially because as a consultant, it is also very boom and bust. You have periods of intense work and then periods where you don’t necessarily have the work or you’re calling around and trying to get work, so you need to kind of have enough that you’re carrying yourself through the lean times. Particularly at the beginning, you have no confidence that the lean time will end. You do one job and then it’s lean time and you think, Oh my God, I’m never going to make money again. And then you get another job. And then over time, you start to feel a bit more confident that even in a moment when there happens to be a break, that that’s temporary, but it takes a while to sort of get through that. And every time there’s a bit of a break or a lull in projects, at least for me, I was like, “Oh my God, I’ll never work again and I’m a failure and this is terrible and I’m never going to make any money.” I certainly hoarded quite a fair bit.

35:06 Lindy: And then again, because we didn’t know in the early days, did we want to have kids? I wasn’t paying into any benefits package at that point as a consultant, I was just myself. I knew there’d be no maternity leave, so whatever the next step was going to be, I needed to make sure that we had saved and had a buffer. And again, just as I flagged, my early years, I was very lucky to have family support. I had a home where I could live and, and there were financial resources there to support me, as an adult I was very lucky to have a spouse who had a full-time job. Again, I’ve had the ability to take probably some greater risks because of that backstop.

35:56 Lindy: Other people who are in similar situations to me may also think about one person covering the costs and one person taking the risks, because I think that’s a reasonable way for two people in a financial partnership, a marriage, to plan things out. My dad always said, if you can live on 50% of what you make, so one person’s salary and bank the other, you get much farther ahead than if you spend a hundred percent, month to month to month. Again, the finances of dad, the boomer generation are obviously different from us, but I did have that message in the back of my mind for sure.

36:40 Emily: Yeah. That is a really interesting way to put it and quite true that a safety net is maybe not strictly necessary, but can make it easier and more psychologically palatable to take a risk like that.

36:55 Emily: Okay, now you’re in this period of you did this consulting work for a while, but you mentioned earlier that you wanted to scale, ultimately, and so that’s where the business, the software solution comes in. Also, to today, is your husband still in that academic position?

37:09 Lindy: Yeah. He’s still a full-time tenured law professor and he loves it, and will probably continue doing it until one day he’ll be an emeritus professor, I think.

Interplay Between Lindy’s Money Mindset and Entrepreneurship

37:22 Emily: Okay. Another question we have here is after doing the consulting and starting the business, did you start to realize that there were some mismatches between your financial mindset and how the system worked? We talked about the system of being a salaried employee earlier in terms of your employer, but what about the system of, as you mentioned earlier of financing for instance, or you’ve also brought up taxes?

37:46 Lindy: Yeah, so really interestingly, as I say, as a consultant, I was doing that hoarding. Initially because it was like, well, maybe if we want to have a kid, we want to have a buffer. And then there were also things like, well, maybe we want to buy a house, so we need a down payment. And then as I started to think, okay, well, let’s get away from a service-based business and start thinking about a product-based business, we know we’re going to need to have some savings to put into that. All of those considerations required having some kind of chunk of money to allocate towards them.

38:19 Lindy: Then it was as we started to refine those things — okay, now we’re going to buy a house. We thought we were in such a great position because neither of us have student loan debts, we have some savings. Then when we started house hunting, we realized actually what we could afford was kind of not what we thought we wanted, so that was a bit of an eye opener to realize that while we, I think very blithely and naively thought, “Oh, well, we’re sort of trundling towards a middle-class life,” we weren’t, and that was surprising. The houses we saw in the neighborhood we were looking at, which we thought were standard middle-class-y, “this is us”, we’re utterly priced out of that. That again was one of those moments where I was like, well, I need to work a lot harder and save a lot more money so that we can sort of buy a nice house or whatever the case may be.

39:17 Emily: To clarify there, was it that you weren’t making enough money to afford that kind of house or was it that the lending system didn’t recognize your income as contributing towards a mortgage of the size needed?

39:30 Lindy: It was essentially that the mortgage that we needed to secure would be based on my husband’s income, not mine, because I didn’t have…and again, you need say as a consultant, self-employed, you need years of income that you can then show and they still only take a percentage of that, that they count towards your overall income to debt ratio. That meant we were in a much smaller position. The only way to up that was we had to make and save more money, so that even though the overall borrowing amount, the debt amount would remain the same, we’d have a bigger down payment, and so the actual house purchase increased. So we paused that house hunt and I scurried around and tried to make a bunch more money so that we could have more. That’s what got us thinking and that carried over into, we were like, “Hey, I need to move from a service based business to a product based business.”

40:35 Lindy: It got me thinking about income to debt ratios in a way that was entirely new and my money mindset, which is very boom and bust is helpful. Particularly now in sort of tech and startup, you may have to spend a fair bit of money at the beginning to build the thing before the thing that you’re building is actually going to start generating revenue. There’s a chunk of time where you’re spending money, but not making any because you haven’t built the thing yet. But it also got me into dealing with traditional lending institutions. In a tech company, there is no collateral. If I want to start a restaurant, I go to a bank and I have the business plan and I’m like, “okay, I want to borrow some money and either rent this restaurant or buy this restaurant or whatever,” and there’s stuff that the bank can take back if that business fails.

41:31 Lindy: Whereas if I say, okay, here’s my business plan, here’s the product I want to build, it’s this technological product and it’s going to be built in the cloud. There is no hard good. There’s nothing a bank can take, it’s all intellectual property. While there’s a lot of value in that intellectual property, it’s not value that somebody else really can monetize in your absence. I was kind of naive about that. I thought, “Oh, well, you know, we’re building this thing. There’s this need, both educators and students need help with academic writing and there are essay mills out there where people are plagiarizing and cheating, and we are actually providing a real viable, technical solution that’s pedagogically sound, that’s built by a couple of professors, all of that. But it means that you can’t necessarily go to banks and get that funded, unless you’re willing to say, “Oh, and you can take my house if this fails.” It’s really sort of getting comfortable with a fair degree of financial risk.

42:38 Emily: I’m thinking this is where venture capital comes in. Is that something you have pursued or are pursuing?

42:44 Lindy: Yeah. We’re right now in the middle of a financing raid. We held off on venture capital for a very, very long time. We had revenues and savings and bootstraps and friends and family and loans and any grants. As I say, I’m the queen of getting grants. Any kind of, um, funding we could get without external investors in the early days, that’s what we pursued. VCs can be fantastic, but there’s also a risk in the sense that if you get them in too early, they are driving a particular business model for your business, and for us, in the early days, I wasn’t sure exactly what our business model is. Academic writing — is that something that’s going to go viral? Do we want it to go viral? Or is it going to be like a meat and potatoes business where you sign up, you get a subscription, it serves your needs while you’re a student writer, and then you move on to the rest of your life, being able to think and write critically because of the skills that you’ve learned. Or do we need to lock you in like Facebook and keep you forever?

43:52 Lindy: I was very wary of inviting other people into the company early on, lest they derail what is…My passion is to create an ethical business that is viable and that provides a real solution and isn’t a gimmick, and isn’t just out there to steal user’s data and sell it to the highest bidder. But of course, many VCs, that’s what they’re looking for. In the early days, I felt our bargaining power would be quite low, because it’d be like, “here’s my idea” and they’d be like, “well, your idea is unproven.” Whereas now, as we’re going out to investors, like, “okay, we’re selling all over the world. We have schools, colleges, and universities. We have individual subscribers. We’ve won a bunch of awards.” We’re in a much more solid position to then say, “Do you VC want to be part of this journey?” As opposed to “do you want to derail and take over the journey yourself?”

44:58 Emily: So fascinating. I’m so glad you gave us that insight. I’m sure there are probably many people in the audience who are thinking in their futures that maybe, VC or startups could be part of that. I’m really excited that you shared that.

Investing in Yourself as a Way of Financial Growth

45:10 Emily: Is there anything else that you want to add about your money mindset that you’ve been developing all these years and your financial life as a founder that we haven’t covered already?

45:19 Lindy: The only thing that I would add is that I think I have been able to take sort of a fair degree of, and I mean, it’s calculated risk, but my calculated risks are always to invest in myself. At earlier times where it was like, I’ll put the time and energy into this grant or this application, now as a startup founder, it’s “I will put the time into developing this content or this product, or pitch decks or financial business models that I’m going to present to lending institutions.” All of that work, which now again, is sort of decoupled from payment in a very specific way. I’m back in the realm where I do a bunch of stuff, and I’m betting that it will pay off in the end. And so being able to do that has always been I’m betting on myself. I’m assuming that if I put any chunk of money I have in a financial institution savings vehicle, that I’ll make small percentages. Whereas if I invest in myself, what I’m gambling on is that I’ll be able to make multiples on that investment. That has developed over time, as I’ve started to think, well, I have the personality type, I’d rather be the one trying really hard, than just handing my money over to the bank and letting an account manager invest in various funds, and I have no insight or understanding on how those work. I’m not a trained financial analyst. I still don’t understand money markets with that degree of specificity. And if I wanted to invest in that, I’d need to then rely on somebody else. Whereas if I invest in myself, I rely on myself. If I take a day off, then that’s my fault if I screw up. Whereas if I work really hard and produce results, I’m the one who benefits from that. That’s the final that I would say, is that I certainly have had to develop the confidence in myself to then bet on myself.

47:35 Emily: Yeah, this is so fascinating. And it is a very different approach from my financial approach, so I’m so glad to have your perspective on the podcast as well, because again, I think this is going to resonate with a certain slice of the audience who wants to be or is the type of entrepreneur that you are. This is really going to resonate with them. And you know, what some other people might be listening and say, I don’t want the life that Lindy has. It’s not for me. I want that salary.

48:00 Lindy: Exactly. That’s the thing that’s so clear is that if you’re going to leave the Academy or leave a stable job, I think you do need to know. If a must have is financial stability and security, then certainly don’t become an entrepreneur. If say you have the backstop of either you’ve got family money or in my case, a spouse with a job or something like that, and you have the sort of weirdo seemingly risk-taker, roll the dice kind of personality, then I think entrepreneurship is really exciting because the relationship between whether you do a good job or not is absolutely connected. Not in a day to day “did I get paid today for my work,” but in the big macro picture. The market, the world at large will tell you whether you did a good job or not.

48:54 Emily: Yes, absolutely. Well, Lindy this has been such a fascinating conversation. One, can you tell people where they can find you, where they can find EssayJack and so forth?

49:04 Lindy: Yeah, so EssayJack is essayjack.com, and then on Twitter and Instagram, it’s @essayjack. For me, I’m @DoctorLindy on both Twitter and Instagram. On Instagram, you’ll just see pictures of my cat, but you’re more than welcome to find me there. And then both on LinkedIn as well.

Best Financial Advice for an Early Career PhD

49:26 Emily: Yeah. Great. And the question that I ask all my guests at the conclusion of our interviews is what is your best financial advice for another early PhD? It can be an emphasis of something that we’ve already touched on in the interview, or it can be something completely different.

49:39 Lindy: The best bit of advice is honestly to keep your debt load as low as possible, like consumer debt load. Ideally at zero, but as low as you possibly can because ultimately if you’re starting from a level position and then earning onwards, whether it’s with a stable job or entrepreneurship, you’re already in the positives going upwards. If you’re already in debt, it is just so hard to start digging your way out. So as much as you can minimize that, that would be my key advice. Learn how to get hand-me-down clothes from your older sister.

50:20 Emily: Yes. I totally totally agree, especially, gosh, for people who are in graduate school and have that lower income. If you have the option to not obligate that future income, please avoid it whenever possible. I totally agree. Well, Lindy, thank you so much for giving us this interview. It was a real pleasure to talk with you and I’m sure the audience found this absolutely fascinating as I did.

50:39 Lindy: It was really great to chat through all of this with you. You unearth things that I’m not aware that I think until I say it.

Listener Q&A: Investing on a Living Wage

Question

50:51 Emily: Now onto the listener question and answer segment today’s question was asked in advance of a live webinar I gave recently for a university client, so it is anonymous. Here is the question: “How much should I invest if I make a living wage?”

Answer

51:08 Emily: Back in season eight, episode seven, I answered a simpler version of this question, which was” what percent of income should be used for investment? In that answer, I gave my overall ideas about what percentage of your gross income should be used to invest for retirement. Now this question specifies that the person makes a living wage. So does my general answer from the previous question change at all, knowing that this person makes a living wage?

51:37 Emily: Living wage is sort of a general term, but I like to refer to the living wage database from MIT, livingwage.mit.edu. That living wage is calculated by looking at how much money a single person or a family spends on average in a variety of different necessary budgeting categories.

51:58 Emily: Let’s say you’re a single person and you’re earning the living wage for a single person in some given area of the country. What that means is that if you are an average spender across all of these different categories, you would not spend any of your wage on discretionary expenses or saving. All of it would go towards those necessary expenses.

52:21 Emily: The first way I can answer this question is if you’re only making a living wage, it’s okay if you’re not investing, I mean, of course I want you to be investing or saving or working on debt repayment or whatever your goal is, but given how much you’re being paid and how much the cost of living is in your area, that may not be feasible for you. I want you to give yourself some grace, if you are not able to invest right now, or you’re not able to invest as much as I talked about in that previous answer.

52:50 Emily: Now, let’s go a step deeper with this. I just mentioned that the living wage is based on averages. You do not have to spend an average amount of money in these various categories. The big, big one that goes into this is on housing expense, so again, if you’re a single person, the living wage calculator that I referenced assumes that you will live on your own. Just by making the one choice to live with a flatmate, instead of by yourself, you’ve already radically reduced your spending compared to what the living wage thinks you should be spending in probably your biggest expense area, overall. That one choice alone, even if you’re average in every other category might free up enough money for you to be able to spend on some discretionary expenses and start investing.

53:39 Emily: You don’t have to do this just with housing. In every one of these necessary expense categories that go into the living wage, you can strive to spend below that level. And if you did that across all these areas, you would free up quite a bit of cash flow to go towards other financial purposes. So that’s my answer. If you are making a living wage, you “should” be investing anywhere from 0% up to the amounts I talked about in that previous answer of 10% of your gross income, 15 or 20% of your gross income, depending on your age when you start investing.

54:13 Emily: But I want to leave you with one final thought, which is have a plan to make more than the living wage. Whether that is by finish up your graduate program and moving on to a postdoc or another type of job. Whether that’s increasing your income in some other way in the meantime, before you can make that career leap, earning more is the other way to circumvent this problem on investing when you only make a living wage.

54:38 Emily: Thank you so much to anonymous for submitting this question. 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

54:55 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.

A Low-Cost Lifestyle Can Be Both Necessary and Enjoyable During Grad School

April 5, 2021 by Meryem Ok

In this episode, Emily interviews Dr. Trevor Hedberg, who completed his PhD in philosophy at the University of Tennessee at Knoxville in 2017. His academic year stipend was $15,000 throughout graduate school, yet he finished with about $35,000 in savings. Emily and Trevor discuss the money mindset and financial strategies that enabled Trevor to save even on this low stipend, including his willingness to apply for any possible extra funding and conduct frugal experiments.

Links Mentioned in This Episode

Dr. Trevor Hedberg’s Website
Dr. Trevor Hedberg’s YouTube Channel
PF for PhDs: Tax Workshop
Walden on Wheels (Book by Ken Ilgunas)
Emily’s E-mail (for Book Giveaway Contest)
PF for PhDs: Podcast Hub (Instructions for Book Giveaway Contest)
PF for PhDs: Quarterly Estimated Tax
PF for PhDs: Subscribe to Mailing List

Teaser

00:00 Trevor: Don’t fall into that self-fulfilling prophecy. Don’t just assume that your destiny, as a humanities PhD, is to live paycheck to paycheck. It doesn’t have to be that way for everybody.

Introduction

00:15 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 14, and today my guest is Dr. Trevor Hedberg, who completed his PhD in Philosophy at the University of Tennessee in Knoxville in 2017. His academic year stipend was $15,000 throughout graduate school. Yet, he finished with about $35,000 in savings. We discussed the money mindset and financial strategies that enabled Trevor to save, even on this low stipend, including his willingness to apply for any possible extra funding and conduct frugal experiments. Have you heard about the IRS pushing back the federal tax filing and payment deadline? By the time you listen to this, it would have happened a couple of weeks back. The new deadline for filing your federal tax return and paying any remaining tax due is now May 17th, 2021. I hope that by now, your state will have made up its mind about whether to extend its deadline as well.

01:21 Emily: So, check on that. Please note, however, that the federal deadline for making the quarter one 2021 estimated tax payment on your fellowship, if you’re required to, remains April 15th. And of course, you need to check with your state as well. In response to this extension, I added live Q&A call times to How to Complete Your Grad Student Tax Return (And Understand It, Too!). If you join the workshop now, you’ll be invited to any and all of the remaining Q&A calls, which will take place on April 10th, May 2nd, and May 15th. You can learn more about and join the workshop at pfforphds.com/taxworkshop. I hope to see you inside.

Book Giveaway Contest

02:08 Emily: Now, it’s time for the book giveaway contest. In April 2021, I’m giving away one copy of Walden on Wheels by Ken Ilgunes, which is the Personal Finance for PhDs Community book club selection for June 2021. Everyone who enters the contest during April will have a chance to win a copy of this book. Walden on Wheels is a memoir about student loan debt, if you can believe it, and the steps the author took to get out and stay out of it. Although I haven’t read it yet, the book has been on my radar since its publication because of the extremes the author went to to avoid taking out student loan debt while he was a graduate student at Duke, which is my Alma mater. I’m really looking forward to this one. 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@pfforphds.com. I’ll choose a winner at the end of April from all the entries. You can read full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Dr. Trevor Hedberg.

Will You Please Introduce Yourself Further?

03:23 Emily: I have joining me on the podcast today, Dr. Trevor Hedberg. I’m really delighted to have him on. He is now out of his PhD, but he’s going to be telling us about how he managed his finances during graduate school, which as a slight departure from many of the other interviews we’ve had, Trevor was in a humanities field, philosophy, and he had a lower stipend. So if you are in the audience and have been tired of listening to interviews with people who have had much higher siphons than you did during graduate school, this is the one for you. So yeah, Trevor, thank you so much for joining me for this episode.

03:55 Trevor: Sure, Emily. Thanks for having me.

03:57 Emily: And would you please tell the audience a little bit more about yourself?

04:00 Trevor: Sure. So, my present position, I’m a postdoc at the Ohio State University situated in Columbus. I’ve got a joint appointment with the Center for Ethics and Human Values in the College of Pharmacy. My two main responsibilities are coordinating Center for Ethics and Human Values events. Right now we’re doing webinars because of the whole COVID thing. And I’m teaching bioethics courses to students in the College of Pharmacy. I also do some of my own research in areas of applied ethics.

Length of Time and Stipend in Grad School

04:26 Emily: Yeah, that sounds fantastic. Great kind of postdoc work to have, I think. Okay, so let’s go back to the grad school years. Tell us what years were you in grad school for?

04:36 Trevor: I was in grad school for a while. I started at the University of Tennessee in fall 2010, and I picked up a master’s degree on my way to the PhD and I got the PhD in spring of 2017.

04:48 Emily: Okay. Actually, that doesn’t sound that long to me.

04:52 Trevor: It is about average for humanities PhDs. So it’s like, I don’t feel bad, but when I think back I’m like, man, that was a seven-year chunk of my life, you know, that’s a while.

05:03 Emily: Yeah, it is. My husband also took seven years to finish his PhD and he’s in a bio kind of field. So, it can take a while. Okay. So, what was your stipend during that time? Or if it ranged, maybe just give us the range.

05:15 Trevor: The base stipend for the time that I was in the program, so if you had a standard teaching assistantship package, didn’t do any summer teaching, just fall assignments, spring assignment, was $15,000.

05:26 Emily: And were you at that the whole time, or did you ever get above that?

05:29 Trevor: My first year I had an introductory like one-year fellowship, which reduced my teaching responsibilities to half, well you’re normally at half-time, it reduced it to quarter-time. And I also got like a lot of extra money, which is kind of weird, right? You get paid a bunch of extra money for doing less work, but that’s, you know, why it’s a fellowship. It’s supposed to give you time to work on research. So for that semester, I made around 20,000, $21,000 something like that.

05:58 Emily: Yeah. This is a note for any prospective rising graduate students in the audience that you can get an offer letter and your first year it can look nice and rosy. Oftentimes fellowships are given to help people, you know, transition into grad school or whatever, but you need to be asking about years two plus, because I hope that you were aware that that was a, you know, a short-term thing, but some people may not be aware just looking at that first year.

06:21 Trevor: Yeah. So actually, my situation’s the opposite. I got admitted without having that fellowship and I applied for it under the supervision of a faculty member after they’d already admitted me to the program and then I got it. So it was a bonus on top of my initial offer. So I did not get, you know, deceived or something.

Finances at the Beginning and End of Grad School

06:40 Emily: Good. Yeah, I’m glad to hear that. Okay. So base stipend $15K, a little bit extra in one year, but that was basically what was going on. And so, over that seven-year period, overall, how did your finances end up going? Like where were you financially when you started? Where were you financially when you finished?

06:57 Trevor: I went to Knoxville with a little bit, somewhere between five and $6,000, just kind of a nest egg that had been given to me by parents and other relatives and so on during undergrad and I just had not spent that much of it. And I was able to, without taking out any additional loans or anything, I had some loans from undergrad. I didn’t add to them at all during grad school, but I was able to leave graduate school and go and move to Tampa, Florida with between 35 and $40,000 in my bank account. I was also able to purchase a new car while I was, I didn’t really want to, but my Mitsubishi Lancer was totaled out in a freak hailstorm. And it happens, I guess, in April of 2011. And so I wound up leasing a car for a while and then buying it at the end of that, I ended up getting a Hyundai Elantra. But that was, I got some money from the insurance company for like the payout from the Lancer. But it was, you know, that was still a sizable expense that I had to cover in the long-term.

08:03 Emily: Yeah. I mean, the numbers that you just threw out, I mean, having 35 or $40,000 in savings, that’s two years of what you were earning during that seven-year period, plus buying the car on top of that. That’s quite surprising to me and obviously probably a motivating reason why you came on the podcast because somehow you were able to do that. And we want to hear about how on that lower stipend, right? So kind of like let’s dig into that. Why did you end grad school with so much savings? Was it an intentional thing that you set out to do? Or was it just a happenstance thing based on, you know, your personality or something?

Ending Grad School with Savings

08:39 Trevor: One of the few pieces of financial advice that I got going into graduate school in philosophy is whatever you do, don’t take out any loans en route to your degree because the employment prospects in the humanities, and philosophy included, are just so uncertain. There’s, you know, every job has hundreds of qualified applicants and you may apply for a hundred jobs, but the odds are still very uncertain as to whether you’ll actually wind up with employment at the end of it. So the idea is don’t take out a ton of money for, you know, for a career that might not pan out. And a lot of what happened just kind of resulted from being very steadfast in doing what I could to minimize my expenses and to try to save where I could and also apply for as much extra money as I could get.

09:28 Trevor: I mentioned the first year of fellowship, I also got a couple of summer dissertation fellowships, which were just basically extra money because people thought your dissertation project was cool. Did some summer teaching, which paid very well Tennessee relative to the amount of extra work. And when I traveled to conferences or did events like that, I always put in my, you know, travel reimbursement requests and things like that. And just over a seven-year period of time, these kinds of small, you know, savings or these extra little bundles of cash that you happen upon, it just adds up over time.

10:03 Emily: So at kind of the root of this is you being really realistic about job prospects. And I assume also the possibility of having a lapse of income, right? Like, while you’re job searching. And so having that kind of, let’s say one to two years of, you know, living expenses in the bank when you finished is a hedge to help you pursue the career that you want. Is that a fair characterization?

10:28 Trevor: Yeah. The other thing I was cognizant of is that once I was out of grad school, I’d have to start repaying student loans. And so I wanted to be in a position where, you know, if I’m in fact unemployed, I can float while making loan payments successfully for a while, you know, long enough to if it requires going a non-academic career route, so be it, whatever. But you don’t want to be stuck in that situation where you’re living paycheck to paycheck, then you’re not getting any more paychecks. Now, student loans are coming due and you’re in a really tough spot.

10:59 Emily: Yeah. So really it’s about like financial flexibility in a sense, and being able to meet your obligations, even if you haven’t landed the ideal job yet.

11:10 Trevor: Yeah, I think that’s fair to say.

Summer Funding Strategies

11:10 Emily: Okay. So you mentioned a few different ways that you increased your income during graduate school, such as by pursuing summer funding and summer jobs. I’m wondering, did you have funding in some way or another every summer? Or were there some summers where you were unfunded?

11:26 Trevor: So the first two summers I was there I did summer teaching, and summer classes paid very well. They were about $4,000 which I was offered to adjunct some classes at community colleges. Like I would be getting paid less than half of that. So I turned down those instances, because that’s too much. I think that’s too much time and energy for not enough pay. But four grand for, you know, five, six weeks to teach a summer course was a pretty good deal. One summer I had a research assistantship that I think paid between $2,500 and $3,000 where I was basically helping a professor edit a book that he was putting together. And then there were two summers where I had a dissertation fellowship, which was around the same amount of money as teaching a summer class, but you’re supposed to just be working on your dissertation during that time. So there were two summers in there where I didn’t have any extra income, but that’s still pretty good. Five, you know, five of those seven summers, I managed to add something to what I was getting.

12:31 Emily: I was just thinking, based on your kind of sort of defensive posture towards financial planning and saving that, were you thinking like every year I need to be prepared financially for an unfunded summer? If money comes in, if I get work, that’s a bonus. But were you confident that you, and, you know, there were two summers where that was the case. So were you using your cash to fund, you know, your living expenses through those periods?

12:54 Trevor: I didn’t have any trouble. The amount of money that it seemed to cost to live in Knoxville, Tennessee, where I was living and with what I was doing, was roughly $12,000 a year. [Note: It was actually closer to $14.4K.] So I didn’t really seem to have, there was no danger of if I didn’t have money in the summer that like it was going to be, you know, I was going to take a loss in the year.

Frugal Living Tips for Grad Students

13:18 Emily: Gotcha. $12,000 per year, not bad. Do you have any you know, sort of frugal living tips for the listeners? And I’d really love to hit, for sure the big three expenses for grad students, which are housing, transportation, and food.

13:34 Trevor: Yeah. So the housing in Knoxville is really good. I was able to live in a pretty comfortable, not quite 600 square-foot, I think it was around 600 square-foot, one bedroom, one bathroom apartment for right at $500 a month. That included some, but not all utilities. Transportation-wise, you know, I got that new car. I didn’t have any car payments for almost the first year of grad school. And then I had around payments for around $300 a month once I did have a car again. So that right there is 800 bucks. I said it was around $1,200. I think groceries came out to a little bit, like $200 to $250 a month, give or take. And there were utility expenses, right? So I got a cell phone. You got to pay for gas.

14:24 Trevor: I had a very unusual like cable internet situation because I eventually just got so tired of Comcast because they just rate-hiked ludicrously. And after they did that enough times, I just said, no, I’m done. And just, and I had a period where I didn’t have any internet or television at my apartment, which was an interesting six months. When you’re basically doing all your, now, now during the remote learning period we’re in right now, that would not be doable, but this was a different time. You know, a simpler time where you could have all your internet access on campus and it was okay. So just on average, this whole situation came out to around $1,200. I will say, I wasn’t living like an extremely miserly existence. I was still, you know, it’s not like my apartment was destitute or that I had no material possessions. I still enjoyed the same amount of video games the average person in his twenties nowadays probably enjoyed. I would say that there were certain things that I didn’t do as much as some grad students might. I certainly wasn’t like going to bars frequently. I was eating out on special occasions, but not very often otherwise. So, there were some sacrifices, but I do want to stress I don’t think that it was unbearable.

15:41 Emily: Yeah. You know, in what you’re saying, I’m reflecting on my own time in graduate school as well and thinking about how we did eventually, my husband and I, did eventually get into a rhythm of just kind of simple living, you know, relatively low costs. We were okay with the fixed expenses we had. Yeah, the going out expenses weren’t too much. By about halfway through grad school. We had found friends, we love to hang out with who also wanted to socialize in a low-cost manner that didn’t require us, you know, going out all the time. We would just hang out at each other’s homes and stuff. And so we just kind of settled into what I felt was a very satisfactory, but also pretty low cost, sort of lifestyle. It sounds like what you were doing was similar. Were there any other, you might say discretionary expenses that you did engage in? You haven’t mentioned travel so far.

16:29 Trevor: Oh, so yeah, I did go back. My hometown is in Topeka, Kansas, so I did go back about twice a year to visit. Usually, my parents were willing to cover the flight back. As far as travel to conferences and things like that. It was very rare for me to pay for hotel rooms and other things because I would always apply for travel reimbursement. So I did go to a fair amount of conferences. I don’t know what the average would be over grad school, but I had, you know, 13, 14 conferences on the CV by the time I was on the job market, like at the end. But I didn’t generally have trouble getting reimbursed, provided you go through the actual administrative channels and you show that you actually did present at that conference, you know, show the receipts and all that stuff.

17:12 Trevor: So, that wasn’t really a huge obstacle for me. I suppose if someone, if you were an international student for example, and you’ve got to go abroad to go back home to visit, that would be a more significant expense. There were also some, you know, not all TA assistantships include like health insurance, which was something that I had through my assistantship. So, that’s an extra expense I didn’t mention that I didn’t have to pay. And when you’re making so little money, your taxes are very low. They’re not nothing, but usually like the income tax that was withheld would usually be much greater than what I actually owed. So if anything, I’d be getting a check from the IRS at some point.

17:52 Emily: And there’s no state tax in Tennessee, right?

17:55 Trevor: That’s true as well. Yeah. No state income tax.

Money Mindset Developed in Grad School

17:58 Emily: Yeah. So, you know, we just talked about sort of having a satisfactory but low cost existence. What was the money mindset that you developed, by the end of graduate school, regarding where happiness comes from?

18:11 Trevor: Well, I saw some graduate students, like some of my peers, who lived even more miserly than I did. And I sort of realized there were certain limits. Like there were apartments I could have gone to in Knoxville that had much lower rent than even the $500 I was paying, for example. But there were certain thresholds below which I wasn’t willing to go to save money. So there was an extent to which I did, you know, it wasn’t just save money at all costs. There was a certain amount of prioritizing my own personal satisfactions. But I also think that there were certain things that just, I was able to live without too much trouble. I mean, cable television was a great example. I grew up with cable television and when I didn’t have it, I just didn’t care. It didn’t really make that much of a difference.

19:01 Trevor: If anything, I was just glad that I wasn’t seeing commercials all the time. Now, the internet was different. That six months without internet access was kind of rough. That was an experiment that was probably worth doing. But, never again, right? Like always going to have internet whatever it goes for. But there were lots of things like that that I just kind of tested and experimented with to see what I could do without and what I needed. If you test enough things, pretty quickly, you hone in on what’s important to you and what’s worth spending money on and what’s not. And I think that process is really important when your money is very tight.

Frugal Experimentation

19:37 Emily: I love that point. Absolutely. I use the same word, experimentation, when I talk about, well, I use the term frugal experimentation. So, sometimes if people are, you know, in my audience, looking for ways to decrease their expenses, I’ll say, you know, conduct a 30 or 60-day frugal experiment where you try out a new tip you found. You’re not sure at the outset if it’s going to be right for you. One, you know, you have to sort of evaluate, like you were just saying, like, what impact does it have on your quality of life? If it’s negative, or maybe it could be positive. And how does that compare to the actual savings that you realize? And you can’t really know until you actually try something out. So I’m really pleased that, you know, you also came to this idea of experimentation and it sounds like you did it in multiple areas. Do you want to give us some other examples, aside from the cable and internet one, of some other experiments you did?

20:27 Trevor: So, some of it had to do with technology upgrades in general. So, I was one of the last people, for example, to buy like a smartphone. Because I actually really liked the model of phones where you had the little slide-out keyboard. So they were really good with texting, but not so great for like the web browsing and other stuff that we do on them now. That was one where I was perfectly content to not technologically upgrade for as long as possible. So, you know, once that phone was paid off, I just had that phone for a really long time. And that bill was lower as a result. I wasn’t able to keep my PC around for all of grad school. When I was working on my dissertation, the motherboard finally died, but I mean, I’d had that PC I was using for seven or eight years. And it had been through heavy, heavy usage. So that was another thing that like, I didn’t need to replace. I think that nowadays, especially, we’re so prone to just want to upgrade, upgrade, upgrade when a lot of times the upgrades are marginal and just cost us more money and don’t actually make our lives much better. Those are the obvious other examples I can think of.

21:31 Emily: I have one that I remember from grad school really calling out as a frugal experiment on the blog that I was keeping at the time, which was no longer using our clothes dryer or rather using only for like towels, like that kind of thing. And we were just hanging, drying you know, shirts and all the rest of the stuff that would dry pretty easily in that manner. And I wasn’t that diligent to like, actually look at the difference that made on our electricity bill, and I’m sure it made some kind of small difference. But yeah, that was just something that we like tried out, weren’t super wedded to whether we would keep it around or not, and ended up doing it for a couple of years. Because it was really no more difficult, and again, you know, we weren’t running the dryer, so that probably helps some.

22:08 Emily: So I remember that as being one of our frugal experiments I’m also really big on, this is just like my personality type, I’m big on like rules. Like I love boundaries, like things being black and white and not gray. So for instance, one rule, you mentioned this earlier, but one rule we made eventually in graduate school was that we would only eat out for social occasions and we would not eat out for convenience. Because we noticed that was a pattern going on for us, that we would be, Oh, I’m staying late on campus. I’m just going to grab dinner from whatever fast food joint. And so just that wasn’t really bringing a lot of satisfaction, just convenience, into our lives. So we decided to cut that out and I made a rule for myself. Okay. No more eating out for convenience, only with other people. I wonder, I don’t know if your personality is the same way, but did you end up having sort of a set of rules, financial-related rules, for yourself by the end of graduate school?

How Low (ºF) Can You Go?

22:56 Trevor: Real quick, before I answer that question, there is one other one that comes to mind because you just mentioned like the clothes-drying thing. One of the other things I experimented with was what temperature I could stand to live at. So just adjusting the AC or the heat. And Knoxville has really good weather for that because there’s about a six-month period of the year where you really don’t even need the AC or the heat on at all. The temperature outside is mild enough that it just kind of self regulates. But that was one thing. So, if you need 70 degree summers, so to speak, inside, that’s going to cost you a lot of money in Knoxville, Tennessee. If you’re willing to satisfice for, you know, 76 or 78, that could be $50 on your utility bill at the end of the month. That’s not an exaggeration. Found that out in the first, like couple of months in the summer that I was there. So.

23:50 Emily: That’s a great example. Thank you.

23:53 Trevor: Now, your question about other rules. I’m not necessarily, I like the idea behind setting, like these kinds of rules and rigid boundaries, but I often find that you always wind up being put in a weird situation where you’re tempted to make an exception.

24:08 Emily: Travel is my exception to the no eating out for convenience rule. Yeah. It’s going to happen when you travel sometimes.

Forming Good Financial Habits

24:14 Trevor: Yeah. So I like to think of it maybe in terms of, instead of rules, like habits. Like things that you kind of just try to motivate yourself to do regularly, but not in a sort of rigid ironclad sort of way. So there were quite a few habits that I developed. A few of them I’ve already mentioned, like I always applied for money that I thought I had a chance to get. I always tried to, one of the big habits I developed was not auto paying very many bills and always taking the time to like manually manage what I was doing. Just so that I was more cognizant of the money that was being spent so that, you know, a $70 bill doesn’t just go by and you know, just the system pays it and then, you know, it’s handled.

25:04 Trevor: Nowadays, I do auto pay a fair amount of stuff because I just have more bills and more expenses. But also it’s because I don’t need to be aware of every tiny little expense here and there. But as a grad student, I felt like I did need to be aware of that stuff. I needed to be aware of exactly where all the items on my credit card statement were coming from. So, that was one big habit. Some of the other ones I think would overlap with things you’ve mentioned, like generally not going out to eat unless it was a department event or a Friday night social gathering with a bunch of the other grad students. Reserving that kind of stuff for special occasions. I also have just never been a big drinker. So for me, not regularly going to the bar was not much of a sacrifice, not something that I really had to think too much about to follow.

Commercial

25:59 Emily: Emily here, for a brief interlude. The federal annual tax filing deadline was extended to May 17th, 2021, but the federal estimated tax due date remains April 15th, 2021. This is the perfect time of year to evaluate the income tax due on your fellowship or training grant stipend. Filling out the estimated tax worksheet and form 1040ES will tell you how much you can expect your tax liability to be this year and whether you are required to pay estimated tax. Whether you’re required to pay throughout the year or not, I suggest that you start saving for your ultimate tax bill from each paycheck in a dedicated savings account. If you need some help with the estimated tax worksheet, or want to ask me a question, please join my workshop, quarterly estimated tax for fellowship recipients. It explains every line of the worksheet and answers common questions that postbaccs, grad students, and postdocs have about estimate tax, such as what to do when you switch on or off a fellowship in the middle of a calendar year. Go to P F F O R P H D s.com/Q E Tax to learn more about and join the workshop. Now, back to our interview.

Financial Values Post-PhD

27:17 Emily: I want to go back and like emphasize again this experimentation that you were doing. And I don’t want anybody to take what I’m about to say the wrong way. Graduate school is a very financially challenging period of life, especially for, like you, living on such a low stipend. So I don’t want to lionize that too much. But one of the benefits, if you want to look at it that way, is that you are, many people are sort of forced to do what you did, which is experiment and really figure out, you know, what is going to add to your happiness and your satisfaction with your life at the end of the day and what is not. Because you really have to be kind of brutal about managing your money and cutting out those things that are not adding that much to your life. And I went through that process as well during graduate school. And I think it’s been really beneficial overall. I mean, now post-graduate school, we have a much nicer income and that’s lovely, but I still go back to the lessons and the identification of my own values that I came to during that period of time. And have you carried some things forward into your post-PhD life like that?

28:25 Trevor: Yeah, definitely. Still don’t have cable television, for example. But thinking about it more generally. I would say that the same habits of like checking where my expenses are coming from on like my statements and things like that that, that’s pretty much just stayed the same. Some things are different. I’m a little more willing to like upgrade, you know, things now that I was in graduate school. For example, like once we started this remote learning thing, I bought a printer for my home office, which is something I would have never even considered in grad school. Like always use the department printer, right? Like it’s free and you’re on campus so often. But, so there are things like that or buying new computer software, or stuff like that, I wouldn’t have considered buying, you know, in grad school. You just use whatever freeware alternative, you know, you can get. So some things are a little different.

29:20 Trevor: I am willing to spend a little bit more. And the place I’m living at now is a little bit bigger, like a little bit larger. A little bit more comfortable, higher rent. I have an add-on garage, which I wouldn’t have paid for in grad school, but now, like I like the extra security. And guess what? If it hails, my car won’t get totaled. So that’s nice. But I would say overall, you know, aside from those kinds of incremental changes over time as my income’s gone up and I’m no longer required to micromanage my finances so much, a lot of the habits are still kind of the same. It’s not that big a difference.

Avoiding Lifestyle Inflation

30:00 Emily: Yeah. So, a common term used in the financial space is lifestyle inflation, right? So like when your income goes up and your lifestyle just, somehow the money goes away and you’re suddenly living a higher lifestyle every time you get a raise. I think of a positive process of lifestyle increase that can happen when you go from grad school to a postdoc, postdoc to a real job. That is to say, that like you were just mentioning, adding in intentionally item by item some things into your lifestyle that you think really add to it that you can now afford on the higher salary, but not just blindly increasing everything across the board, right? So that’s what I kind of meant about like keeping the insights that you gained into your own values from that lower-earning period of life in graduate school.

30:47 Trevor: Yeah, definitely. The mere acquisition of more material possessions does not automatically make your life better or make it more fulfilling. It just gives you more stuff. And if you’re like me and you’ve had to move a couple of times since your PhD, having more stuff is not always a good thing for other reasons. I would say, you know, as you said, you want to be more deliberative about the things you buy and about what you add into your life. You want to make sure that it’s actually going to provide some kind of meaningful benefit.

Beware of Financial Pitfalls

31:17 Emily: Yeah, absolutely. Do you have any bits of advice for current graduate students, some things that you’ve maybe observed like, you know, pitfalls that other graduate students have fallen into that maybe you either used to fall into or, you know, learned how to avoid?

31:33 Trevor: Yeah. There are a couple. So, I think there would be basically three that would come to mind. One is, especially in philosophy and English and some of the other humanity fields I’m familiar with, a lot of graduate students seem to assume that they are going to have to live paycheck to paycheck. That they will never be in a financially stable situation at all while they are a grad student. And of course, if that’s your mentality going in, it kind of creates a self-fulfilling prophecy. You’re very unlikely to get out of that position if you think it’s inevitable and don’t take any steps to avoid it.

32:08 Trevor: Another one is, I was shocked to learn there were lots of grad students in my program, I don’t think our program is anomalous, i’s just a common thing, that just didn’t apply for stuff. That were eligible to get travel reimbursement, or to apply for certain kinds of fellowships, whatever, and just wouldn’t apply for it. And they’d say something like, sometimes it was just forgetfulness maybe, or not knowing the like Byzantine administrative requirements, or something like that. There were also some of them, you know, that thought they weren’t good enough to get a fellowship or something like that. But the thing is like, there’s so much arbitrariness in how these things are evaluated. You have no idea whether you’re good enough or not. Let the committee tell you you’re not good enough, you know. Always apply for whatever it is.

32:53 Trevor: And the last one we’ve already kind of alluded to a couple of times in some of the habits we talked about. But I think there’s a really serious tendency to discount small but frequent expenses. So, you know, one $10 on-campus lunch, not a big deal. But if you’re doing that four days a week for a 15-week semester, suddenly like that’s over a thousand dollars a year that you’re spending, you know, buying lunch on campus, as opposed to what you could be doing, which is just taking a few minutes in the morning, packing a sandwich and whatever else and handling things that way. So, I would say, you know, we’re not great at that kind of arithmetic, like human beings just aren’t wired that way to sort of aggregate those small expenses over really long periods of time. But you’ve got to fight that habit and recognize that that stuff does make a difference.

33:45 Emily: I love all those examples so much. I mean, they really all are about as you were just saying, like mindset and habits. And I think that, you know, they’re especially impactful for someone at the kind of stipend level that you were at, right? Like, I mean, you were able to do quite a bit of savings, but it was still a low stipend overall during that period. And so, it absolutely makes such a difference as you were just saying to go into that situation with believing that there’s something financially possible for you above living paycheck to paycheck. I mean, of course, we all know grad school is very difficult financially, for some people more so than others. But like you said, if you never even think that it’s a possibility to get out of that, you definitely never will. I guess I’ve heard the phrase, like whether you believe you can or believe you can’t, you’re right.

34:35 Emily: This can be applied generally. I don’t think that’s quite true at the graduate student level because many graduate students may believe that they can, but they still can’t just because of circumstances. But the opposite is definitely the case. If you don’t believe that you can get out of the paycheck to paycheck cycle, you absolutely won’t no matter what your circumstances are. So I’m so glad that you brought up those points and I hope that, you know, current and entering graduate students will take note of all three of them.

Navigating Savings and Loan Repayment Post-PhD

34:59 Emily: So, now that you’re on the other side of the PhD and you’re in your postdoc, how does the way that you handled your finances during your PhD affect your life? You know, did you end up having to use the savings during a job search? Or how did it work out?

35:14 Trevor: After it, yeah. So when I was in my last year of graduate school, I wound up getting a postdoc at the University of South Florida, which is where I went and spent two years in Tampa. And now I’m at another postdoc at Ohio State. So I didn’t wind up having to dip into savings to navigate any employment gap, which was very fortunate. I was very happy to have that money on hand though, because I was able to really pay off my loans very quickly as a result. And I was also able to pay off my car. So I think that all my loans and the car were both paid off by the end of like December of 2018 or no, was it 2019? I don’t remember, before I finished up at Florida. The December before I finished up at Florida. And that was obviously very satisfying. Now, like the money that I’m saving is mainly going into like an investment portfolio which is something I wasn’t thinking about at all during graduate school. But, you know, as time goes on, your financial goals and what you’re trying to do have to change with your circumstances,

36:14 Emily: I’m wondering why you chose to pay off the debt during that first postdoc, both the car and your student loans, when you could have worked on those earlier, instead of having such a large cash cushion? What was the calculus there?

36:29 Trevor: One was medical emergency. Wanting to have money on hand in case something like that happened. That never happened to me personally, but there were peers I had to whom that happened. And I wanted to be prepared for that possible contingency. I had no reason to think I was high risk. But some of them didn’t, either. And so, that was part of it. I actually did pay off one of the loans while I was in grad school. I could have theoretically paid off all of them. I don’t know how much of a dent it would have taken in that like 35 grand or whatever I had when I was leaving, but it would have been substantial. The other thing I learned is that I didn’t know how much the moving expenses would be, but because of the delay in getting my first paycheck in Tampa and because of other moving-related expenses, you need around five grand as a minimum to do the kind of move that I did and not be in kind of a tough situation.

37:30 Trevor: You also got to put down security deposits, pay, you know, at least one, I had to pay two months rent without any paychecks in Florida, because I was delayed getting into the system. You know, stuff like that. So, the short answer is, I don’t know if it was necessarily the right call. Like some of those loans though, the interest wasn’t running until I graduated. So for those at least, I’m sure it was fine. But I’m honestly not sure looking back if that was like the financially optimific way to do it, but that was the rationale.

Any Financial Regrets?

38:00 Emily: Yeah. I’m not trying to criticize your decision. Just wondering, like, as someone who held onto the cash for so long, why were you able to let go of it at that point? But having loans actually start accruing interest is a great reason to kick into the repayment mode instead of just save the cash mode. Do you have any financial regrets from graduate school?

38:23 Trevor: I think that any financial regrets I would have would be tied to the choice to get a humanities PhD in the first place, right? Because there’s an opportunity cost with going to grad school, right? Like, I’ve got plenty of friends in non-academic positions who during the time that I was in graduate school, they got a certain degree of career capital, such that when I was getting my PhD, they were like getting promoted or something like that. But insofar as I, you know, don’t regret getting a PhD or having one, I don’t regret the financial circumstances I’m in.

Best Financial Advice for Another Early-Career PhD

38:58 Emily: Yeah. Thank you for pointing that out. We sometimes overlook the most important financial decision, which is whether to go to graduate school or not. So yeah. Thank you for that. Well, Trevor, I’ve enjoyed this conversation so much, and I think that, you know, it’s been really valuable for the listener as well. As we’re wrapping up, the question that I ask all my guests is what is your best financial advice for another early-career PhD? And that can be something that we’ve touched on already in the interview, or it could be something completely else.

39:25 Trevor: I’ll just reiterate one short little low-hanging fruit point, which is don’t take out loans to get a degree in the humanities. But that one I’ve already mentioned. The less obvious one I think might generalize across all PhDs is you have to take initiative with your finances because you’re not going to get any feedback from anyone that you’re interacting with about them. So, think about like if I was in a seminar and I wrote a crappy term paper. I would be told that I wrote a crappy term paper and I would be made aware of that and be given suggestions for improvement. But if I made a bad financial decision, no one would know. There’d be no feedback, no graduate advisor is going to be like looming over you to make that kind of decision, which means that you have to self-police pretty much entirely.

40:13 Trevor: No one’s going to give you, you know, any kind of pushback even if you’re making like poor choices or suboptimal choices, repeatedly. And so the only way to kind of keep to avoid that is you have to take the initiative yourself and you have to make some effort, you know. Whether that means making a spreadsheet of all your expenses and tallying them, or just repeatedly like logging into your accounts and checking where your expenses are going or what deposits are being made. Whatever it is, whatever you have to do, like do it because no one else is going to push you in that direction.

40:55 Emily: Such an interesting point. As you were making that, well, one, I thought of the phrase, no one cares about your money as much as you do, which is kind of a truism, but yeah. And the other one is, you know, generally for Americans, like we’re pretty much on our own like financially in a lot of respects with the, you know, pensions being almost non-existent. Social security, yes, it exists. How reliable is it? We don’t know. It’s not that well-funded anyway. It’s not like you get that much money. So in general, Americans are pretty well on their own financially, but the situation is intensified during graduate school because your employer is not giving you the retirement benefits. They’re not giving you certain kinds of insurance. Like unemployment insurance, for example, if you’re a student, I’m pretty confident is not being paid in for you. So other examples like that of just like sort of social safety net kind of stuff. Also, you’re not paying into social security or Medicare. Social safety net stuff is like, we’re kind of exempted from it as students, which is a little bit odd. Especially when you’re getting into your late twenties and thirties, maybe even forties, and you’re still, you know, in PhD training. It’s such an interesting point. So yeah, while Americans in general have to kind of captain their own ship in this, it’s like even more so during graduate school because yeah, your employer is not doing anything for you.

42:13 Trevor: Yeah. That’s an interesting set of observations. Your situation as a graduate student is just very weird and very financially perilous for so many reasons.

42:22 Emily: Yeah. Gosh, well, Trevor, I’m so glad to have gotten your insight on this interview, and I’m really glad that you, you know, had the experience you did in graduate school and all the things that we’ve talked about today and it was positive overall and you got that nice, healthy, you know, nest egg by the end. And yeah, I wish you all the best and thank you so much for volunteering for this.

42:41 Trevor: Sure, thanks Emily. It was good talking with you. And I hope my story can help some other people in the humanities who are struggling. I mean, there were some advantages that went my way. You know, I don’t care how good you are with your money. You’re not making a 15 grand stipend work in New York or LA. So, Knoxville was really good for that. But as I said, you know, don’t fall into that self-fulfilling prophecy. Don’t just assume that your destiny, as a humanities PhD is to live paycheck to paycheck. It doesn’t have to be that way for everybody.

43:11 Emily: I think that’s a perfect note to end on. Thank you so much.

43:15 Trevor: Thanks, Emily.

Listener Q&A: 1098-T

43:15 Emily: Now, on to the listener question and answer segment. Today’s question was asked in advance of a live webinar I gave recently for a university client. So, it is anonymous. Here is the question. Quote: is the form 1098-T accurate? I am confused by it. End quote. I loved the simplicity of this question. I think my conclusion on this is that the form 1098-T is accurate, but it probably doesn’t mean what you think it means. It’s not really trustworthy. The sums in chiefly box five and box one of the form 1098-T draw from the transactions in your student account. So one of the reasons that you shouldn’t take form 1098-T at face value is that not all of your awarded income and not all of your qualified education expenses might have been processed by your university’s student account.

44:23 Emily: You could have awarded income that completely bypassed your student account and just landed in your bank account thanks to some kind of external funding agency. You also could have incurred some expenses that your university did not process. So in that sense, the form 1098-T includes some awarded income and some qualified education expenses, but not necessarily all of them. You still have to critically evaluate your own actual cashflow situation to see the totality of the picture. The other way that the 1098-T maybe doesn’t mean what you think it means is that box one of the 1098-T reflects payments received for qualified tuition and related expenses. That might sound like the same term as qualified education expenses, which is used elsewhere by the IRS, but they’re not quite the same. The sum reported on your 1098-T in box one might be all of the qualified education expenses you can use to make your awarded income tax-free, or it might not. More likely not.

45:34 Emily: There are several education expenses that are considered qualified education expenses for the purpose of making scholarship and fellowship income tax-free that would not be included that are explicitly not to be included in box one of the 1098-T. So, if you incurred those kinds of transactions, even if they show up in your student account, they’re not going to be in the sum reflected in box one of the 1098-T. Therefore, once again, you can’t take box one of the 1098-T at face value. You have to go into your student account and really look at all the transactions that occurred there and figure out whether or not they’re qualified education expenses for the benefit that you are taking. Bottom line, the 1098-T has some issues. And the IRS knows about these issues.

46:27 Emily: And the IRS knows that you may be using qualified education expenses to make some of your scholarship and fellowship income, or what I call awarded income, tax-free that’s not reflected on the 1098-T, and that’s okay. The IRS is aware that this can happen. So the form 1098-T is not given a whole lot of weight when we’re talking about the particular benefit of making scholarship and fellowship income tax-free. It’s given much more weight for the Lifetime Learning Credit, the Tuition Fees Deduction, and the American Opportunity Tax Credit. But those are less often used by funded graduate students. If you want to learn more about the expenses that could be qualified education expenses that you can use to reduce your taxable income and reduce your tax liability that do not show up on form 1098-T in box one, you can join my tax workshop, How to Complete Your Grad Student Tax Return (And Understand It, Too!). You can find more information about that at pfforphds.com/taxworkshop. Thank you to Anonymous for this beautifully phrased question. 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

47:50 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 episode 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 listserv, 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. 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.

Money Mindset

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Teaser

Introduction

Will You Please Introduce Yourself Further?

Money Mindset at the Start of Post-Bacc

Money Mindset Growth in Grad School

Saving ~50% of Student Stipend

Biking and Cutting Food Costs

Investment Strategy

Commercial

Living the “Good Life”

Entrepreneurship Journey

Funding Structure in Grad School

Consider Grad Programs that Encourage Direct Experiences

What’s Next for You?

Best Financial Advice for Another Early-Career PhD

Outtro

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Teaser

Introduction

Book Giveaway

Will You Please Introduce Yourself Further?

Money Mindset Developed in Early Childhood

Money Mindset During Law School

Money Mindset During the PhD

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Financial Stress during the PhD

Finances as Gatekeeper for Academia

Finances and Money Mindset Post-PhD

A Shift in Money Mindset

Money Mindset as a Business Owner

Best Financial Advice for an Early Career PhD

Outtro

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Teaser

Introduction

Book Giveaway Contest

Will You Please Introduce Yourself Further?

Childhood Memories and Life Lessons in Canada

Funding During Grad School

Side Business as a Franchisee

Investing and Self-Learning Personal Finance

Commercial

Finances Post-PhD: Real Estate Advenures

From House Hacking to House Upgrading

Business Updates and Additional Family Expenses

How Have Your Finances Changed Upon Having Children?

Financial Advice for First-Time Parents

Best Financial Advice for Another Early-Career PhD

Outtro

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Teaser

Introduction

Book Giveaway Contest

Will You Please Introduce Yourself Further?

How People Develop a Passion for Wildlife Biology

Volunteer and Pay-to-Play: Are They Really Required?

Financial Risks in Pursuing a Wildlife Biology Career

Debt and Opportunity Cost: Loss of Compound Interest

Commercial

Advice for Pursuing a Financially Risky Career

Navigate Limiting Beliefs

Consider the Cost of Your Education

FIRE: Financial Independence, Retire Early

Combining FIRE with Passion Careers

Wildlife Bio: Career or Lifestyle?

Best Financial Advice for Another Early-Career PhD

Outro

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Teaser

Introduction

Book Giveaway

Will You Please Introduce Yourself Further?

Money Mindset in Young Adulthood

Money Management and Budgeting Strategies through Scarcity

Income Changes and Money Mindset During Graduate School

Post PhD Salary: How Having Steady Cashflow Changed the Money Mindset

Commercial

Transitioning to Entrepreneurship