In this episode, Emily interviews Alexandra Savinkina, who is starting a PhD program at Yale University after completing a master’s degree and working for several years. She has spent the last few years pursuing Public Service Loan Forgiveness while contributing to retirement accounts and saving and is therefore entering her PhD with significant student loan debt and significant assets. Alexandra and Emily discuss Alexandra’s financial goals during her PhD, including how much to spend on rent, financing a car vs. purchasing it with cash, whether to defer student loans or stay in an income-driven repayment plan, and how to continue to invest for retirement while in grad school.
Links Mentioned in the Episode
- PF for PhDs S10E2: What to Do at the Start of the Academic Year to Make Next Tax Season Easier (Expert Discourse with Dr. Emily Roberts)
- PF for PhDs: Quarterly Estimated Tax Workshop
- PF for PhDs S7E13: How to Handle Your Student Loans During Grad School and Following (Expert Interview with Meagan Landress)
- PF for PhDs S7E8: This Grad Student Travels for Free by Churning Credit Cards (Money Story with Julie Chang)
- PF for PhDs S4 Bonus Episode 1: Fellowship Income Is Now Eligible to Be Contributed to an IRA! (Expert Discourse with Dr. Emily Roberts)
- PF for PhDs S2E5: Purchasing a Home as a Graduate Student with Fellowship Income (Money Story with Jonathan Sun)
- PF for PhDs: Podcast Hub
- PF for PhDs: Subscribe to Mailing List
00:00 Alexandra: Yeah, I think it will definitely be a lifestyle decrease. A lot of my spending, not in the last year, has gone to things like travel. And I also think that the longer that I’ve had a salary and have, you know, my social circle has been people with salaries.
00:20 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 five, and today my guest is Alexandra Savinkina, who is starting a PhD program at Yale University after completing a master’s degree and working for several years. Alexandra spent the last few years pursuing public service loan forgiveness while contributing to retirement accounts and saving, and is therefore entering her PhD with significant student loan debt and significant assets. We discuss Alexandra’s financial goals during her PhD, including how much is spent on rent, financing a car versus purchasing it with cash, whether to defer student loans or stay in an income-driven repayment plan, and how to continue to invest for retirement while in grad school. This episode will be instructive for anyone anticipating or in the midst of a career transition or financial crossroads.
00:34 Emily: At the start of a new academic year, I always like to bring up tax considerations, especially for new graduate students. If you haven’t yet, go back and listen to season 10 episode two of this podcast titled, “What to Do at the Start of the Academic Year to Make Next Tax Season Easier.” If you have already started or switched onto fellowship funding for your stipend or salary, please take note of the upcoming quarterly estimated tax deadline of September 15th, 2021. To determine whether you are required to pay estimated tax, fill out the estimated tax worksheet on page eight of form 1040ES. If you need any help with the worksheet, consider joining my workshop at PFforPhDs.com/QETax. The live Q&A call for this quarter is this coming Sunday, September 12th. This is the best time to join this workshop to definitively answer whether you are required to pay estimated tax and how much income tax you can expect to pay in 2021. Again, if you’d like my help with figuring this out, the best place to go is P F F O R P H D s.com/Q for quarterly, E for estimated, T A X. Without further ado, here’s my interview with Alexandra Savinkina.
Will You Please Introduce Yourself Further?
02:46 Emily: I have joining me on the podcast today, Alexandra Savinkina. Our topic today is starting a PhD at a slightly older age. So Alexandra is 30 and she’s starting her PhD this upcoming fall in epidemiology. So I’m really excited to have her on. And Alexandra, would you please introduce yourself a little bit further to the audience?
03:04 Alexandra: Sure! Hi, I’m Alexandra. As you know, I’ll be starting my PhD this fall. I’m really excited about it. I got my bachelor’s degree back in 2013 in biology, and then during that time was working in an HIV virology lab and thinking about graduate school, but knew I wanted to go into the sciences. I was pretty sure I didn’t want to do bench work forever, and so instead of making that decision right away, I did a year abroad teaching in the South Pacific. And experiences there as well as past experiences kind of brought me to public health. So I did my Masters in Public Health at Emory University, right after getting back from the south Pacific. And then I worked at the Centers for Disease Control and Prevention for three years. And at that point started thinking more seriously about a PhD, but instead pivoted a little bit, moved to Boston, and have been working in academia for the last couple of years before really making that decision to pursue that PhD program now.
Why is Now the Right Time for the PhD?
04:14 Emily: I love that you’ve been out of undergrad, out of your masters for several years now. You have a really solid start to a career, actually. So why is it that you decided that this was the right time for the PhD?
04:25 Alexandra: Yeah, so I actually did apply to PhD programs to be totally transparent. Two years ago, I got into some programs, I didn’t get into other programs. And when I was weighing my options at that point, there wasn’t really any program that was a perfect fit in terms of both something that financially I was comfortable with in terms of stipend and really excited about the program itself. At the same time, my partner matched into a medical residency program in Boston. And when I was kind of weighing my options in that way, I hadn’t been accepted to any programs on the east coast, but I realized all of the programs I was really excited about were in the Northeast. So I started looking at jobs and ended up just accidentally finding something that when I read the job description was like exactly what I wanted to do.
05:22 Alexandra: But while working in this job and being like very solidly in academia, I think I’ve been able to realize that every single piece of the job that I really like is a piece that if I want to continue that as a career, I’m going to need a higher degree for. And so I think that’s really what’s led me to be like, okay, I definitely want to do this. And the upside is that during the last two years, I’ve really been able to grow my network, grow my skillset, and I was able to get into my first choice PhD program both from two years ago and from applying this around.
05:59 Emily: Amazing! What restraint you have, I feel like, for that application cycle from two years ago to get into some places, but then just to say, no, ultimately. Like, I just feel like you feel you’re so committed to that point, right? To the idea of going to graduate school, that I really commend you for holding out for what you really wanted in and you got it and that’s amazing. Congratulations!
06:21 Alexandra: Thank you. Yeah, it was very scary. It was a scary decision to make. So on this side of it, I’m pretty happy, but when I was kind of waiting to hear back from programs this time around, I think there was kind of that anxiety hanging over me of like, what if I don’t get in anywhere? And I did get in places two years ago, so I’m glad it worked out the way it did.
Tell Us About Your Balance Sheet: Assets and Liabilities
06:43 Emily: Yeah. I really can’t imagine that anybody would be a weaker candidate having, you know, another two years of work experience. Plus, you know, I think we could hear the clarity in what you were just saying about, you know, your career plans at this point. Maybe you didn’t have that or had that to a lesser degree, you know, two years before, but that’s amazing. Again, congratulations. So let’s talk about your money. You have money, and not money, at this point in your life. Your balance sheet is a little bit more complex than maybe when you’re coming right out of undergrad. So yeah. Tell us about, just give us a quick overview of your balance sheet, your assets, your liabilities, then we’ll talk a little bit more about each of them.
07:20 Alexandra: Yeah, so right now my one big liability are my graduate school loans from my master’s program. Yeah. That’s kind of the one big thing hanging over my head. I don’t really have any other debt right now. And then on the asset side, my assets are split mostly between my retirement savings, both from the 403(b) that I have from my current position. And then I’ve maxed out my Roth IRA every year that I’ve been able to. So for the last three years. And then the other half is sort of in standard savings as well as a long-term investment account and a little bit in short-term, like swing investment, which is just kind of fun money at the moment. But I’m living in Boston right now. I’m moving to New Haven. So my one new big liability is going to be a car that I’m going to need to purchase.
08:17 Emily: Gotcha. Okay, well, let’s start on the liability side. So it makes sense to me that you have student loan debt from a master’s in public health degree. And that is that just from the graduate degree or also from undergrad?
08:32 Alexandra: I had a tiny bit of loans from undergrad, but I’ve paid all of those off. So at this point, it’s just the graduate degree.
Paying Off Student Loan Debt
08:41 Emily: So let’s take this out of the context of you’re heading into graduate school just for a second and talk about, okay. You’ve been in the workforce for several years post-master’s degree. Have you been aggressively trying to pay down that student loan debt, or are you using public service loan forgiveness? Or what has been your plan for that debt?
08:59 Alexandra: Yeah, not aggressively paying it off. The first couple of years, I wish that I’d put a little bit more thought into it. I didn’t, I think at that point, my thinking was I’ll pay it off, but without any kind of really exact plan. For the last few years, I’ve really focused that more. And I am going for public service loan forgiveness. My job at the CDC did not qualify because it was a fellowship position, but my current job does. And so I’m about two years in, and I’ve gone through the paperwork. I’ve kind of stayed vigilant with that. And so I’m really hoping, I’m almost certain that any job I’ll take post-PhD will qualify. So I’m really trying to go down that path.
09:46 Emily: Yeah. This makes sense to me with your career plans for, ideally, it sounds like staying in academia, or if not, it seems like there’ll be plenty of nonprofit type work for you after that point. Sorry, did you say you were going to stay in academia? Or planning to?
10:01 Alexandra: Great question. I think right now that’s the plan. I want to kind of use this time in PhD to see if that’s really the course I want to be on. But I do love kind of the freedom that academia offers. I need to see if I’m any good at writing grants.
10:18 Emily: Gotcha. Okay. So plan A, academia, otherwise, probably a PSLF qualifying employer. And did you say approximately what that student loan balance was?
10:29 Alexandra: No, it’s right around $80,000.
10:32 Emily: Yeah. Okay. So I did an episode a season or two ago with Meagan Landress who’s a certified student loan professional. And so she shared with us her rule of thumb that she does with her consulting, which is around one and a half times your full income. So post-PhD income, your expected income. If your student loan debt balances one and a half times or higher, then that, again, it’s a rule of thumb, not super precise, but makes you a good candidate for income-driven repayment programs with forgiveness. Even down to about one times your income would be, if you had an opportunity to use PSLF, that could also be a great option versus paying them off aggressively. And since of course, you know, your ultimate career several years away, you probably don’t have necessarily a good handle on what that salary is going to be. And certainly in the intervening time, your salary is not going to be high during the PhD. So that decision makes sense. And obviously PSLF has a really popular program with academics.
Retirement Contributions, Investing, and Savings
11:30 Emily: Okay. So we have the student loan debt balance, but instead of paying that down aggressively, you’ve instead, it sounds like, been focusing on building up the assets side of the balance sheet. So you mentioned, you know, some retirement with your employer, Roth IRA contributions, and also taxable investments and cash savings, which sounds like a great sort of mix to have at this point. Is there anything that you want to share with us about how you’ve built that up or why you focused on that in the meantime?
11:57 Alexandra: Yeah, I think honestly coming straight out of my master’s program, it wasn’t especially difficult because, while I wasn’t making like a huge salary, it was hugely more than I’ve ever made before in my entire life. And so I think I’d been so used to living really frugally that it was easy to kind of save some money. And once I started and I started learning a little bit more about investment and about the value of money, I think I just made it a priority. So one thing I do is I just automatically have money transfer from my checking account to my savings account every single time I’ve a paycheck. And then I have money transferred directly from my savings account to an investment account as well. So it’s not even something that I think about. Like, it just happens automatically. I know that it’s going to happen. It happens when I know I have money in the account, so I don’t have to worry about like overdrafting. And so I think that’s been one of the best ways for me to do it is just kind of consistency.
Financial Predictions for Graduate School
13:05 Emily: Yeah. I love that strategy, obviously, automating as much as you can with your finances. So let’s shift now to talking about graduate school again, what I guess financial predictions have you made? So we’re recording this in June, 2021. So you’re still, it sounds like probably a couple months away from moving and starting your program. Can you share with us like what your stipend is going to be, and have you put together any of those big rock expenses? Like, do you have your housing set already? You mentioned a car that you’re going to purchase. Yeah. Can you give us kind of a picture there?
13:38 Alexandra: Yeah. So my stipend is $38,000. So my housing I do have set. My rent will be $800, and I’ll be living with a couple of other PhD students. I made the decision to live with people to save a little bit of money and also on the personal end, my boyfriend’s still in Boston. So I do plan on kind of going back and forth. So it didn’t make financial sense to necessarily put more money into living by myself. And then the other big thing will be the car. I’m planning on buying a used car, but I want something that will last me a little bit of time, and I’m a little bit anxious on the car side. I haven’t really owned a car in a long time. Haven’t really had to take care of one. So I want something that’s not too old and too unreliable. So I’m looking at about 10 to $15,000 on that. And I’m still sort of going back and forth between just paying it out right from my savings or financing to just have that monthly payment, which should be affordable.
14:41 Emily: Yeah. I mean, it sounds like with the stipend as relatively high, that’s among the higher stipends that I hear right now. Which is awesome. Congratulations. And then yeah, the rent being pretty reasonable for that level of income. Yeah. It sounds like you could afford the debt payment if you wanted to. But it also sounds like you have the option of paying in cash. So yeah. What are your thoughts there? So, in general, I kind of don’t love the idea of graduate students holding debt that they don’t need to. That is to say, debt that like, they need to actually be making payments on like a car payment. But, you know, you could do it. The other thing about that car purchase is I think it’s a lot more painful to part with cash than it is to finance something. And so you might end up with a lower-priced purchase if you told yourself it has to be in cash. So I don’t know. Where do you think you’re going to come down on that?
15:35 Alexandra: I’m really torn on it. I think part of it is almost mental. I think I know that if I have a car payment I need to pay, that money will go towards that car payment. I think I’m a little bit less certain that if I don’t have that car payment, that same amount of money will go into savings. And so I think that’s the one place where, and I don’t think that’s necessarily a good financial decision. But I think mentally that’s one of the reasons why I’m considering financing. But I agree with you. I am a little bit nervous about taking on more debt. And so I’m still sort of on the fence about it. I have been slowly putting away money. So I will have the cash kind of handy outside of investments if I do choose to do it out in cash.
16:27 Emily: And if you end up financing the car, will you keep that money in cash or will you invest it?
16:33 Alexandra: That’s the other thing. I would most likely transfer that into investments. And so there is some question about kind of where that money would be making the best value.
16:42 Emily: Yeah. So it’s more about like maybe leveraging debt, not just yeah, having cash, but also paying debt at the same time.
16:52 Emily: Emily here for a brief interlude. These action items are for you if you recently switched or will soon switch onto non-W2 fellowship income as a grad student, postdoc, or post-bacc and are not having income tax withheld from your stipend or salary. Action item number one: Fill out the estimated tax worksheet in form 1040ES. This worksheet will estimate how much income tax you will owe in 2021 and tell you whether you’re required to make manual tax payments on a quarterly basis. The next quarterly estimated tax due date is September 15th, 2021. Action item number two: Whether you are required to make estimated tax payments or pay a lump sum at tax time, open a separate named savings account for your future tax payments, calculate the fraction of each paycheck that will ultimately go toward tax, and set up an automated recurring transfer from your checking account to your tax savings account to prepare for that bill. This is what I call a system of self-withholding, and I suggest putting it in place starting with your very first fellowship paycheck so that you don’t get into a financial bind when the payment deadline arrives. 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 PhD trainees have about estimated tax. Go to PFforPhDs.com/QETax to learn more about and join the workshop. Now, back to our interview.
Expected Expenses and Lifestyle Changes
18:31 Emily: Do you have any idea about the rest of your expenses? It sounds like maybe you’re sort of a more naturally frugal person. So have you made any predictions on that front about like, you know, general spending money or like groceries? Or I guess what I’m asking is, do you think you will be able to keep a similar lifestyle to what you’ve been living the last few years, or will you actually have to take a lifestyle decrease and be a little bit more frugal on the lower salary?
18:57 Alexandra: Yeah, I think it will definitely be a lifestyle decrease. A lot of my spending, not in the last year, has gone to things like travel. And I also think that the longer that I’ve had a salary and, you know, my social circle has been people with salaries, eating out has become more expensive, trips have become more expensive. And that’s one of the things I think I’m going to need to be more careful of because, you know, most of my social circle aren’t grad students, but I will be, which is different than the last time I was a grad student where my entire social circle also made no money. So I think it’ll definitely be a little bit of cutting back on some of, kind of more of the luxury items I’ve gotten more used to. I’ve always been pretty frugal in terms of big expenses. Things like rent, bigger kind of monthly payments. But I have kind of splurged on some things which I’ll need to be a little bit more careful on, I think.
20:03 Emily: So, when you move, you’ll have a whole new cohort of peers. So, they will be making probably exactly the same amount of money as you, right? The people in your program, or more or less. So, you’re really talking about your partner and your friends in Boston and maybe other places around the country. Is that right?
20:19 Alexandra: Yeah. Yeah.
20:20 Emily: Yeah. So I’m thinking that it may be fairly easy for you to keep those day-to-day or month-to-month expenses on the lower side, since that will be, you know, the people you’re interacting with there in New Haven. But yeah, you may have to be pretty intentional about budgeting for travel, for example, or whatever are things you might be doing with these like older friends.
20:40 Alexandra: Yeah, definitely. And I think, you know, I really don’t want to be dipping into my savings for any kind of normal life expenses. So, I think I will just need to be a little bit more strict and careful about that. I do think it’s very doable. It is a very decent stipend comparatively, so that’s really nice.
21:05 Emily: Yeah. In the grad student world, it’s a great stipend. In the working world, it’s a low salary.
21:11 Alexandra: Yeah.
Travel Hacking and Asset Building
21:12 Emily: Yeah. Well, have you gotten into travel hacking at all? Is that something you practiced earlier on?
21:18 Alexandra: I’m not sure what that is.
21:19 Emily: Oh, okay. Yeah, so travel hacking is basically just sort of structuring credit card rewards to figure out how to pay for travel, either get it for free or super inexpensively. So like, it sounds like you haven’t gotten into that game yet.
21:35 Alexandra: I actually do have one really great travel credit card, and it is the card that I use for almost all of my purchases and it does purchase a good amount of my plane tickets, which is nice. So yeah, I guess I just didn’t know there was a term for it, so a little bit. Yeah. And that helps.
21:55 Emily: Yeah. I’m thinking that, as a graduate student, it might be a way to enhance that travel aspect of your life without necessarily spending much more money. Although it is difficult to turn credit cards as a graduate student because your spending is going to be on the lower side. So like meeting signup bonuses. Anyway, if you’re interested, we’ll link in the show notes, I’ve done a couple of different interviews with people who have travel hacked as graduate students through credit card reward accumulation. So anyway, only a strategy good for someone who is really strict about their credit card usage, but very on top of things. So it sounds like you are that way anyway. Okay. So what financial goals do you think you’ll pursue during your PhD? You already stated one which is not dip into savings, so live off of the stipend on an ongoing basis. Yeah. Anything else that you think you might want to do either in terms of building assets or the step that you’ll have maybe during grad school?
22:49 Alexandra: Yeah. So in terms of assets, yeah, my biggest one is not to dip into my savings. I think beyond that, if possible, I would really like to keep funding a Roth. I don’t know if I’ll be able to, I’m not sure what the mechanism of my stipend will be yet. I know I’ll be able to find one for 2021. But if I’m able to, after that, I would like to do that.
Non-W2 Income Eligible for IRA
23:13 Emily: Actually, let me pause there for a second. So, are you referring to having W2 income versus fellowship income?
23:22 Alexandra: Yeah.
23:22 Emily: So the good news, and this may be different from the last time you were in grad school, is that fellowship income, non-W2 income, is eligible to be contributed to an IRA as of 2020. So that’s a new like law change. So we’ll link in the show notes the podcast episode where I discuss that. But yeah it changed with the SECURE Act, which was passed at the end of 2019. So, going forward, whatever type of stipend you in grad school, you would be eligible for the IRA all the way through.
23:49 Alexandra: Oh, that’s excellent. Okay. So I think that would be one of my goals. But it sort of ties to the second part of, I am trying to decide what to do with my loans a little bit. Right now, I’m in income-based repayment, and I could stay in income-based repayment and make very low payments monthly, or I could pause my payments completely during graduate school. And I haven’t made the decision of sort of what’s the right move.
Public Service Loan Forgiveness (PSLF) Eligibility
24:20 Emily: Yeah. So, I’ve looked into this before. So, I want to ask you, I thought that you had to work full-time, or let’s just say like 30 hours a week or more, to be eligible for a PSLF. Is that not the case?
24:34 Alexandra: Yeah, it is. So I would not be eligible for PSLF during that time, unfortunately. I would, I think, if I stay in income-based repayment, be eligible for like the 20-year forgiveness. So it keeps me on track for that, I guess.
24:52 Emily: But I think, what we’re talking about then is you making, however long your PhD is, five years or whatever it is, five years of payments, that you wouldn’t need to make if PSLF ends up working out. Is that right?
25:06 Alexandra: Yeah. I think the only reason I’m sort of considering it is it does make me nervous that, you know, the balance is going to go up and up and up while I’m in grad school. At the same time, you’re right. It doesn’t make a lot of sense because I’m just paying in money that I don’t need to. So most likely, my thinking was, especially now that I know I can fund a Roth IRA, would be to put my money there.
25:33 Emily: Yeah. I mean, unless your payment was zero, which, I mean, I guess that’s possible. I don’t know exactly how that would work on precisely what your stipend is, but if it was a zero payment, it’s like, oh, well, why not? You know, keep it going. But if it’s anything above zero, yeah, because, well, it’s a gamble, right? Because either PSLF is going to end up working out and you’ll make ultimately, whatever it was, eight more years of payments after your PhD, or it’s not and it would have been a good idea, I guess, to make those payments during your low-earning graduate school years. So yeah, it sounds like you would either be doubling down on PSLF being the route for you, or deciding that that’s too risky and that you want some other backup options.
26:20 Alexandra: Exactly, exactly. So that’s kind of where my thinking is, as well. That said, I think the amount of payment I would be able to make or would need to make in income-based repayment wouldn’t be that high enough to make a huge difference, I don’t think.
Keep Within the Rules of the Game
26:36 Emily: So, it sounds like you’d be sort of like purchasing an insurance policy. Like I’m going to make whatever this low payment is, which is manageable for me on my grad student stipend, as a backup plan to have five more years or whatever it is of payments if PSLF doesn’t work out. Yeah, I guess it depends on how risk-averse you are, right? And how much you believe in the program. Yeah, I haven’t heard anyone propose that strategy to me. So, you may be more risk-averse than other people I’ve spoken to about PSLF, potentially. But I encourage you to go and listen to that interview with Meagan Landress, because it may make you feel a little bit more comfortable with that ballooning payoff balance. Because the way that she talks about it, and the way that people who work in this area and are, you know, strategic about it, it’s just, it’s like playing a game.
27:31 Emily: Like you just have to keep within the rules of the game. And you know, as you said, you’ve been really on top of like getting your income, you know, your employment certified and all of that, so like, it sounds like you have the practice of like complying with PSLF already, so that probably wouldn’t end up being an issue. But yeah, it’s just about like playing the game and manipulating the numbers. And like we talked about with the debt, you know, whether to take out a car loan or whether it be cash and maybe you could invest, it’s a little bit of a leverage situation. You know, keep this student loan debt that ideally would be in part forgiven later on so that you can fund the IRA and do all these things on the asset-building side. So yeah, that episode might make you feel a little bit more comfortable with this, I’m just going to compartmentalize this debt, it is what it is, you know, that kind of approach.
28:19 Alexandra: Yeah, definitely. I do always do better when I don’t really look at it. So yeah, I think I will listen to that episode for sure. And I think even this conversation kind of makes me feel a little bit better about just letting that go for now.
Consider Projected Asset Growth
28:35 Emily: Yeah. And you know, we’re, again, I’m recording this in June, 2021. So you’ve had over a year now of having payments paused. So you’ve had over a year of credit toward your PSLF time and you haven’t been making payments, right? Yeah. So good. You’ve been building up the asset side of the balance sheet, which is exactly, you know, the intention of the program to give people some relief there. So when you volunteered for this episode, you said that you were, you know, a bit nervous about this income decrease, and then also correspondingly not being able to invest as much. So you want to keep the IRA going some level or perhaps even maxing it out if you’re able to, but have you looked at all into how much your existing assets are projected to grow over that five-year period?
29:23 Alexandra: No, I’ve not looked at the five-year. I use Wealthfront for my long-term investment, so I can see like projected growth to retirement, but I haven’t really looked into it over five years at all.
29:38 Emily: Yeah. I think that is another just element add into this, as you’re thinking about whether to invest the money you would spend on a car versus, you know, paying for it in cash versus financing, that kind of decision. And also, as you’re thinking through, you know, your ballooning student loan balance, you thought about those liabilities growing, but yeah. I encourage you to look at how much your assets are expected to grow, because yes, it is a disadvantage in some capacity to be having this, you know, salary decrease to be going to the PhD program, but you already have assets in your corner. You already have what I say is sort of a tailwind at your back in terms of your net worth growing throughout graduate school. So, the income for you is not as important because you know, of course we’re assuming that like the stock market, for example, will go up over five years. Maybe it won’t, it’s a short period of time. But you at least have that possibility of that happening, the likelihood of that happening over a five-year period. So it may make you feel a little bit better about the student loans to see how much the assets are potentially going to grow.
30:40 Alexandra: Yeah. That’s a really, really great point.
Have You Thought About Purchasing a Home?
30:42 Emily: So, I’ll just ask you one more question. Have you thought about purchasing a house, or rather to say, a home?
30:49 Alexandra: No, I am also a little bit commitment-phobic and purchasing a house sounds very frightening to me. That said, my partner just purchased a house in Boston.
31:03 Emily: So you are familiar with the process. Well then, I have one other podcast episode to recommend to you which is way back in season two, I think. So I did an interview with Jonathan Sun who was going into his second-year PhD at Yale, and he purchased a house. And so we talk about the process of doing that and some of the difficulties that he ran into with his fellowship income, which has since we’ve done a lot more work in that area. And it’s a little bit less of an issue now, but anyway, I just mentioned it because having a very decent stipend and New Haven real estate being like maybe approachable. We’ll see, I know everything’s been in a big, like run-up recently, so maybe not, but it’s the kind of market where like, sometimes it’s possible for a grad student to buy. Now that may be not be a good fit for you personally, for whatever reason, but in terms of like, you know, upleveling your finances during graduate school, purchasing a home, and then having as you already plan to, roommates in that house would be a very strong financial move, but not the right fit for everyone.
32:06 Alexandra: Yeah. I think I would be thinking about all of this a little bit differently were I not in a relationship. I think right now my plan is actually to move to New Haven for about a year. And then, the way that the PhD program works is you take courses for the first year and then you’re pretty much working on your dissertation. So I’m hoping to be able to pop back over to Boston for kind of the next few years and just commute into Yale when I need to be there. The pros of which is I probably will save on living expenses after that first year.
32:42 Emily: Yeah. That makes sense. Yeah. If it’s a one-year stint in New Haven, then absolutely. I mean, you wouldn’t even be able to like purchase because it takes months and months to set that sort of thing up. Yeah, that makes sense if you’re not actually planning on living there. Yeah, very good. Well, I’m really glad to hear this, like, long-term plan from you.
Best Financial Advice for Another Early-Career PhD
33:01 Emily: Well Alexandra, I end my interviews by asking my guests, what is your best financial advice for another early-career PhD? And it could be something that we’ve touched on in the interview or it could be something completely new.
33:12 Alexandra: Yeah. So I think one thing is that I already kind of touched on, I think it really helps me to have all of my savings and investment money automatically taken out of my account. So that it’s just something that happens that I don’t have to think about. I think another thing that has always helped me, especially when moving from one position to another or from one place to another, is I do a line budget for like a month or a couple months where I’ll write down every single thing that I buy and where that falls into my budget. And that has really, I think, helped me stay within my budget as salaries have shifted or locations have shifted. And I plan to do the same again when I start my PhD to make sure that I’m living within my means and able to make those savings payments.
34:03 Emily: Yeah. That’s an awesome, awesome tip. Well, it was a delight to have you on Alexandra. Thank you so much for sharing like your thoughts about this upcoming period. I think it’s going to be really relatable to other people who have been in the workforce for several years, and definitely other people who have had, you know, debt from previous degrees and heading back into graduate school. So thank you so much for being so open about this and best of luck to you this fall.
34:25 Alexandra: No problem. Thank you so much. This was really great and really helpful.
34:35 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. 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. 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 effective budgeting. I also license prerecorded workshops on 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 by Lourdes Bobbio and show notes creation by Meryem Ok.
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[…] PF for PhDs S10E5: Entering a PhD Program with Significant Debt and Investments (Money Story with Alexandra Savinkina) […]