Personal Finance for PhDs

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PhD Job Transitions Are an Opportunity to Break Negative Financial Habits

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Pursuing a PhD and post-PhD jobs usually means frequent professional and personal upheaval. Changing jobs/”jobs” and moving are typical for each stage of training and possibly career: posbacc programs or jobs, master’s/PhD programs, postdocs, and Real Jobs. Every time you change jobs or move, your routines and habits are upended, including those that affect your finances. The upside of these frequent transitions is that each time you give yourself a clean slate upon which to write new habits. That’s great news for anyone with a degree of dissatisfaction with their current habits.

transitions financial habits

I recently read Better Than Before* by Gretchen Rubin, which is about how to create and maintain habits. The quotes included in this article are from the chapter “Temporary Becomes Permanent: Clean Slate.” While it is not a financial book, the strategies included in Better Than Before can be applied to your financial life, and the Strategy of the Clean Slate struck me as particularly useful for PhDs.

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Why the Clean Slate Works

A great proportion of our decisions each day are not ones we make consciously but rather are part of our routine or standard responses to stimuli. This is great when you have cultivated positive habits or at least are not in any negative habits. But a negative habit can be incredibly challenging to break under normal circumstances.

Any beginning is a time of special power for habit creation, and at certain times we experience a clean slate, in which circumstances change in a way that makes a fresh start possible–if we’re alert for the opportunity.

Experiencing a clean slate – a wiping away of your previous habits in part or much of your life – can greatly benefit you if you had any negative habits or even a desire to start new positive habits. The old stimuli that prompted you into your negative habit are no longer there, and instead you can tie your new stimuli to positive habits. There is also an opportunity for a strong change in your self-conception, such as “In my new job/city, I am a person who ___.”

There’s a magic in the beginning of anything. We want to begin right, and a good start feels auspicious… Because we’re creatures of habit, the first marks on that slate often prove indelible. We should start the way we want to continue.

When you experience a clean slate for whatever reason, you should very intentionally start practices that you want to become positive habits and keep yourself from falling back into old habits. This will likely take some preparation in advance of the occurrence of the clean slate. You should devote some time to brainstorming the positive habits you want to begin practicing and the negative habits you want to drop so that you’re ready to hit the ground running when you have that clean slate.

I now pay very close attention to the first few times I do anything because I know those decisions will shape my baseline habits; to deviate from them will feel like a deprivation or an imposition.

Job Transition and Moves Are Perfect Clean Slates

The slate may be wiped clean by a change in surroundings: a new apartment, a new city, even rearranged furniture. Or some major aspect of life may change: a new job, a new school, a new doctor.

Job changes for PhDs come relatively frequently throughout training and sometimes following, and many or all of those job changes may very well involve a move. A new job in a new city is just about the cleanest slate you can get when it comes to your habits (not including changes in the members of your family): new home, new job, new co-workers, new commute, new city to learn.

Not only are you in a different environment with your old triggers and routines wiped away, but the people surrounding you are no longer reinforcing your prior habits and associating you with them. You have a chance to forge relationships without succumbing to any negative habits.

What Kinds of Financial Habits Should You Lose with a Clean Slate

Mindless Spending

The entire point of a habit is that it takes little to no conscious decision-making to carry out. If you are aware of any mindless spending that you currently engage in, resolve to drop it with your upcoming clean slate (if not before!).

Mindless spending is spending that you neither need nor even truly want to do. Perhaps it gives you some satisfaction, but it’s all too fleeting. You pick up a coffee every day during your commute because that’s what you always have in your hand on your way in. You browse a certain store and make a purchase on the same day of the week because that’s how you kill time in between work an an evening activity. You go out with the same people to the same bar/restaurant/club every weekend because that’s where you went when you first met them. Somehow these actions became habits even as your desire to do them faded. You may not have even realized the cumulative effect they were having on your finances.

With your clean slate, you have the opportunity to drop these old habits and begin how you want to continue, e.g., brewing coffee at home, taking a route that doesn’t pass any shops, and meeting people through fun and less expensive activities.

Living Beyond Your Means

In many graduate programs and at many places, limiting your spending to the means provided by your stipend/salary is not possible or at least not palatable. In those cases, accruing debt, usually student loan or credit card debt, is a necessary evil. Still more PhDs (in training) accrue debt because of a lack of sufficient motivation to avoid it.

Living beyond your means is a negative financial habit, necessary or not. When you start a new, higher-paying job, make a clean break with that habit. In your new job, you are A Person Who Lives Within Your Means. In fact, you should not only resolve to not accrue any new credit card (or similar) debt, but you should start repaying your accumulated debt. If credit cards were your debt of choice, stop putting new charges on them entirely.

Hiding Your Head in Sand

Sometimes a negative financial habit is simply the absence of a good financial habit. Your financial state during grad school or after can be so discouraging that you stop looking at it entirely. You might slip into being unaware of the balances in your checking and savings accounts, the balances on your credit cards, the total of your student loan debt, the value of your investments (if any!), etc.

At some point and after some healing, you’ll start looking at your finances again – perhaps when you have a higher income and the future looks rosier. With your clean slate, leave behind your habit of hiding your head in the sand and put in place a new habit of regularly looking over your finances comprehensively, even if it’s painful at first.

Keeping Up with the Joneses

Keeping up with the Joneses is a negative financial habit for anyone, but it’s particularly impossible for PhDs on trainee income. You don’t want to be in that habit when your higher income rolls in, as you might actually be able to make a go of keeping up. Do whatever you need to do to (leave/filter social media, stop watching HGTV) to keep the Joneses out of sight and out of mind.

What Kinds of Financial Habits Should You Implement or Maintain with a Clean Slate

The Strategy of the Clean Slate can help us launch a new habit with less effort.

With your clean slate, adopt a new identity as a person who practices positive financial habits and is actively working to improve your financial health.

Tracking/Budgeting Your Spending

Tracking your spending and creating a spending plan (a budget) are fundamental tools for managing your finances well.

Tracking can be done relatively automatically with software, so the easiest way to implement this habit is to sign up for Mint/You Need a Budget/similar, hook up your bank accounts, and check on your spending periodically (at least once per week).

After you have an idea of your expenses, you can start projecting them with a budget, which will help you be mindful about your spending in your trouble areas. You may have to update your budget frequently if you’ve recently moved, but after some time checking in with it once a month or more will become automatic.

Track Your Net Worth

When my husband and I transitioned to our first post-PhD Real Jobs, I started manually tracking our net worth. Yes, our Mint account has it, too, but I liked my own formatting. Once per month on the 1st, I copy all of our account balances into an Excel spreadsheet and update my graph. You don’t need to check frequently for the habit of tracking your net worth to be valuable. After all, “That which is measured, improves.”

Negotiating

That a candidate will attempt to negotiate a job offer is almost always expected. (Grad school offer letters are an exception, though some students do attempt to negotiate. Negotiating a postdoc offer is more common than you might think.) If your clean slate comes with a new job, be sure that you negotiate that job offer (and every one that follows). You may make an exception if the offer is clearly and objectively on the generous side of appropriate, but even then you can still try to negotiate some benefit. A raise gained through negotiation is the easiest money you’ll ever earn, and it compounds throughout your career!

Automatic Saving and Being “a Saver”

Post-clean slate and with a higher income, you are a saver, no matter what you were before. Enforce this positive financial habit by setting up automated transfers to your savings account, loans, or investments, depending on your goal. Incrementally increase your savings rate over time.

Investing can be very intimidating to someone just starting to get their finances in order. It’s doubly intimidating for someone who doesn’t have access to a 401(k)/403(b)/similar like a grad student and some postdocs. With your clean slate, put in place the positive financial habit of investing (if that’s an appropriate financial goal). If your new job offers a retirement account match, by all means take full advantage, and invest beyond that up to your goal amount. Never leave match money on the table!

It’s a shame not to exploit the power of the strategy of the Clean Slate when it presents itself. For instance, the time of moving introduces so much upheaval into our customary habits that change becomes far easier. In one study of people trying to make a change–such as changes in career or education, relationships, addictive behaviors, or health behaviors including dieting–36 percent of successful changes were associated with a move to a new place.

The Downside to a Clean Slate

While the clean slate offers tremendous opportunity for forming new habits, it can disrupt a person’s existing good habits by eliminating a useful cue or breaking up a positive routine.

To this point in the article I have largely assumed that you have some negative financial habits that can be eliminated by a Clean Slate, and I’ve suggested positive financial habits to fill the vacuum. But you also may well have positive financial habits that will be jeopardized by the Clean Slate. It’s understandable that you habits will be disrupted by a Clean Slate as dramatic as a move and job change, so as soon as possible (before you feel settled and ready) jump right back into your old positive habits so you don’t slide into negative habits in their absence. As much as possible, maintain monitoring your habits through your transition so you have an accountability system urging you to return to them as soon as possible.

Travel and Savings Are This Frugal Grad Student’s Top Priorities

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This podcast episode is a budget breakdown with Latisha Franklin, a third-year graduate student in biochemistry and molecular biology at Penn State University. Latisha works to keep her housing and especially food spending low so that she can spend more on experiences, such as her yearly international vacation. She employs several powerful strategies in her frugality and budgeting to enable her saving, such as taking out cash for variable spending, prioritizing a “me” budget category, vegan meal prepping, and actually reading her email to find free food on campus. Emily and Latisha discuss how establishing a routine schedule lends itself well to developing frugal practices.

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0:00 Introduction

1:14 Q1: Please Introduce Yourself

Latisha Franklin is a third-year graduate student in the Biochemistry and Molecular Biology program at Penn State University. She moved to State College, Pennsylvania, for graduate school from her hometown Mobile, Alabama.

Her stipend is $1,996 per month after taxes.

2:27 Q2: What are your five largest expenses each month?

Latisha’s top expense categories are rent, car insurance, food, bills, and “me,” in other words, money she can spend freely on herself. She shares that she budgets much of her income for her Roth IRA and savings.

3:57 #1 Expense: Rent

Latisha lived in a one-bedroom apartment with her dog at the time of the interview. However, she had plans to move. Her rent was $820 per month and the rent in her new place is $710 per month. Originally, she wanted to move to a new place with a roommate. When those plans fell through, her realtor helped her find the new apartment.

Her new apartment is attached to a house. She has access to a backyard for her dog, which was appealing to her. Her new apartment is closer to Penn State, a 5 minute drive and 20 minute walk from campus. The neighborhood is family-oriented. This is in contrast to her former neighborhood that had a good mix of graduate students, young families, and late-career adults.

Latisha thinks Penn State graduate students living alone pay about $900 or more for rent. She thinks that $700 is the low end of the range for rents. In her estimates, she is not taking into account possible lower rents in shared housing with roommates.

8:29 #2 Expense: Car Insurance

Latisha has a 2016 Hyundai Tuscon. She bought the car new in winter 2015 and paid it off completely within two years. She used savings she had been building since middle school to buy the car new. Her monthly insurance payment is $159.

10:22 #3 Expense: Food

Latisha spends $150 per month on food. She spends $20 each week for food that she’ll eat during the week, and $50 each month to buy items she’ll use throughout the month. Her strategy to keep food expenses low is to meal prep and cook in bulk.

During her first year, she found herself cooking every other day. Cooking was too time-intensive, so she read articles about meal prepping. Now, she uses Sundays as her meal prep and cooking day. She makes enough to last the week and portions food into six or seven containers.

Latisha didn’t have any dietary restrictions or considerations during her first year in graduate school. She has now removed meat and dairy from her diet. She uses many kinds of beans, rice, nuts, and fruit in her meals. She buys fruit from the farmers markets and from her share of community supported agriculture (CSA).

Her meals include muffins, which she eats every week, salads, soups, and pastas. Additionally, Latisha eats free meals on campus as often as three times a week. She takes ten minutes each day to read her university emails to find events with free food that also match her interest. She rarely eats take-out or at restaurants, and this expense is from her “me” category.

18:54 #4 Expense: Bills

Latisha’s pays for electricity and wifi, because heat and water are included in her rent. Her parents pay for her cell phone bills. The electricity bill is $13 per month and wifi bill is $32 per month. To keep electricity costs down, Latisha makes the most of daylight for work. During the evening, she relaxes and minimizes her electricity use.

In her new apartment, she will have to pay for all utilities separately. She’ll have more bills, so she has planned to increase this budget category.

21:38 #5 Expense: “Me,” or Variable Spending

Latisha budgets about $20 a week, or strictly $100 a month, to spend as she wishes on herself. Typically, she uses this money to go to the movies, go out to dinner, or try something new. She bought herself a microscope because she enjoys using it to look at everyday items. Overall, she prefers “experiences, not stuff.”

Latisha’s strategy is to keep her “me” budget in cash. Using cash is strategy to keep variable spending in check. She mentions that credit cards didn’t suit her.

25:17 Q3: What are you currently doing to further your financial goals?

Latisha prioritizes savings. Since her teenage years, she kept savings for undetermined large purchases. For example, she bought her new car with her savings, even though she hadn’t intentionally planned the purchase.

She contributes $150 per month to a Roth IRA for retirement. She saves $50 per month in her savings account. This is about 10% of her net income. She is focused on building her Roth IRA

She started savings with a CD, about three years ago, without much knowledge of savings or investing. Her dad encouraged her to get a Roth IRA. Latisha read Emily’s emails and is now working on better managing her Roth IRA.

Latisha has set a goal to take one big trip a year. Here she discusses saving for her trip to Iceland. She has budgeted about $100 per month and has $1,200 saved at the time of the interview. She likes to travel and wants to get out and see the world while she has minimal responsibilities. Iceland is the first big trip that she has initiated on her own.

33:24 Q4: What don’t you spend money on that might surprise people?

Latisha spends very little on food. Many of her peers claim to not have the time to cook, so they get take out or eat out more often. She found the time on the weekends to prepare all her meals for the week, so she saves time during the week. Emily and Latisha agree that in reality, getting take out or going to eat can take just as much time as preparing your own meals. Prioritizing cooking your own meals is a great frugal strategy.

35:34 Q5: What are you happy with in your spending and what would you like to change?

Latisha is happy that most of her money goes to experiences, not things. She wants to add money to food, because she believes trying new kinds of foods is a good experience. Joining the CSA is one way she is trying new foods. She is interested in new fruits, like dragonfruit. Additionally, she is happy has “cushion money” so she is prepared for anything.

36:48 Q6: What is your best advice for someone new to your city who is budget-conscious?

Latisha recommends over estimating your budget so you have cushion money. This reduces stress and helps even out irregular expenses. One strategy that Latisha uses is to set up separate accounts for her money. For example, she moves her income out of her spending account into a reserve account. This restricts how much money is available for her to spend, but the money is still accessible if she really needs it.

Latisha also recommends personalizing your budget. She has had financial training that emphasizes certain income percentages for budget categories, but this advice doesn’t suit her lifestyle. She realized this when she went through the process of purchasing a home but ultimately could not get approval. During the process to buy a home, she found that financial advisors insisted that 50-60% of income is budgeted to living expenses. Though she was frustrated she couldn’t buy a home, she is glad she went through the process and would recommend the experience to other graduate students.

44:46 Q7: Would you like to make any other comments on what it takes to get by where you live on what you earn?

Latisha takes the bus for her commute. She does not use her car for every day commuting, just for irregular driving, like taking her dog to the groomer. Penn state has a graduate students bus ridership program that Latisha says is a $180 one time fee, then free riding for the entire year. Just a few rides each month would make the pass pay off. She says this is definitely worth it.

Latisha says her budget is possible because she manages her time carefully and sticks to a routine. Her budget is a result of her focused lifestyle. Emily and Latisha agree that budgeting is easier and more accessible when you recognize the patterns you have in place in your life.

48:30 Final Comments

Latisha and Emily hope listeners learned more about frugal strategies for living on a graduate stipend.

48:45 Conclusion

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

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

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0:00 Introduction

1:18 Q1: Please Introduce Yourself

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

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

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

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

4:15 Expense #1: Rent

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

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

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

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

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

11:43 Expense #2: Groceries

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

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

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

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

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

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

19:13 Expense #3: Eating and Drinking Out

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

21:21 Expense #4: Other Regular Monthly Expenses

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

22:12 Expense #5: Therapy Co-Pays

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

23:24 Will you be finishing grad school soon?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

40:13 Conclusion

How to Combat Lifestyle Inflation When You Exit Grad School

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Lifestyle inflation is one of the great personal finance sins that just about everyone falls into at one point in time or another. However, as a graduate student you have the opportunity to anticipate the temptation to inflate your lifestyle that will come with your first Real Job and prepare yourself to fight it using the financial skills you’ve learned during grad school.

A version of this article originally appeared on GradHacker.

combat lifestyle inflation post-PhD

What Is Lifestyle Inflation and Why Is It Damaging

Lifestyle inflation is the mindless increase in spending as income rises. Generally speaking, people spend (virtually) all of their take-home pay (the average personal savings rate of Americans has been hovering below five percent in recent years). Even as income generally increases with career progression, expenses find a way to increase as well without the individual intending them to. This makes beginning or accelerating debt repayment or saving quite difficult, as lifestyle deflation is usually perceived as unpleasant.

My main objection to lifestyle inflation is not that it’s wrong to spend more as you earn more but rather that the spending increase is unintentional and undirected. The mission statement of my business includes encouraging PhDs(-in-training) to “make the most of their money,” which means optimizing your use of money to maximize your life satisfaction. Spending more across the board as your income increases isn’t optimized; rather, you should minimize the increase in the expenses that you care little about so that you can direct your income toward goals and spending that matter more to you.

How Graduate School Prepares You for Battle

Graduate students who live only on stipends for at least a couple years have a unique position with respect to lifestyle inflation. During graduate school, our incomes were held to a lower level than they would have been had we not pursued additional education. Therefore, our (most of the time initial) adult lifestyle was set at a low level, which forced us to budget, practice frugality, and discover the true distinction between needs and wants (all valuable skills to carry forward).

The salary jump that comes with the first post-grad school Real Job presents the opportunity for serious lifestyle inflation. After all those years of frugality, don’t we deserve to finally have nice things? Yes, we do, but keep in mind that the nicest things will come not from mindless lifestyle inflation but from intentional lifestyle increases.

How to Fight Lifestyle Inflation

How do you increase your lifestyle without inflating it?

The most common advice for the general population in combatting lifestyle inflation is to “live like a college student,” which means to keep your cost of living as low as it was during college for as long as possible. I think this was great advice for Baby Boomers, but I’m less convinced of its applicability to Millennials due to the many perks and amenities now offered on college campuses. However, I think “live like a grad student” (or the M.D. version, “live like a resident”) is generally good advice, with a caveat that you should selectively and judiciously treat yo’ self.

While you’re still in grad school, consider what aspect(s) of your lifestyle you would most like to change. Are you itching to live alone for once? Sick of “beans and rice, rice and beans?” Ready to overhaul your wardrobe? Dreaming of a vacation that doesn’t involve a conference? Identify the aspects of your lifestyle that would bring you the most satisfaction if you were able to throw more money at them.

Once you’ve landed that coveted Real Job, default to maintaining your spending as it was in graduate school across the board, but build in some spending increases in those areas that matter the most to you. From the get-go, you’ll also need to set up a serious savings rate that will go toward your savings account, retirement account, loans, etc., especially if you weren’t able to work on those financial goals during grad school.

My Experience Combating Lifestyle Inflation after Grad School

When my husband and I transitioned from Ph.D. training to Real Jobs, we decided to focus our lifestyle increases in two areas and kept all the rest of our spending as similar as possible to when we were in grad school. (Oh, and as a one-time splurge we bought a few pieces of new furniture from Ikea).

First, we moved from a medium cost-of-living city (Durham, NC) to a high cost-of-living city (Seattle, WA). This move automatically increased our spending in several areas even while we kept our perceived lifestyle constant. We made sure to find a rental that fit comfortably within our budget (we downsized), and after that didn’t worry too much about the fact that we were spending more on housing, utilities, and food.

Second, we had a baby, which of course opened up totally new spending opportunities for us.

With just those two areas of intentional increase and maintaining the saving percentage we established in graduate school, pretty much all of our income increase was spoken for. I’m very glad that we focused our lifestyle increase in the areas that mattered most to us. Inflating our lifestyle in any other areas (e.g., buying a more expensive car) would eventually have caused us to sacrifice in another area or decrease our savings rate.

What lifestyle increases would you like to implement once you have a Real Job?

Give Yourself a Raise: Prepare Your Own Food Even with a Busy Schedule

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Grad students and postdocs typically spend a significant portion of their income on groceries and restaurant food; these budget categories are often targeted by trainees who want to cut back on their spending in favor of reaching other financial goals. Forming new habits around cooking and eating is challenging but certainly not impossible, even for busy researchers.

prepare food busy schedule

A version of this article was originally published on GradHacker.

If you are looking to “give yourself a raise” by reducing your spending on food, the go-to suggestions are to:

  • Reduce the number of meals you eat in restaurants or as take-out.
  • Prepare food from base rather than pre-processed ingredients; shop the perimeter of the grocery store.
  • Buy food in season.
  • Don’t waste food.
  • Buy in bulk.
  • Plan your menus.
  • Stick to your shopping list.
  • Patronize alternative food retailers.

Sometimes trainees justify their high food spending by citing long hours on campus and variable schedules. They tell themselves they don’t have time to plan, shop, or cook or they can’t commit to being home by dinnertime. They are often inexperienced in the kitchen, which means they rarely cook or are slow when they do.

Early on in my grad school career, I fell into some of these high spending patterns. I ate out with classmates because I wanted to bond with my peers. I wasn’t very capable in the kitchen, subsisting largely on sandwiches, fruit, salads, and canned goods. When I did cook, I picked rather involved recipes from cookbooks with several ingredients I wouldn’t use again, and making each meal took a large investment of time. I often stayed late on campus, and I ate far too many meals at Panda Express because I hadn’t planned ahead.

Over the course of my grad school career, I slowly improved both my time management and food preparation skills to the point that I was able to reduce the amount of money I spent on food while still feeling satisfied with what and with whom I was eating. My health also improved in parallel with my nutrition.

Sometimes the stumbling block in our efforts to reduce our spending is not that we don’t know how to spend less but rather that we don’t understand how to adjust our lifestyles to meet our new goals. The remainder of this post will not focus on how to spend less money, but how to make typical strategies for spending less money on food more palatable to a grad student or postdoc.

Think ‘Food Assembly’ or ‘Food Preparation’ Rather than ‘Cooking’

Novices in the kitchen may be intimidated out of preparing much of their own meals because they don’t know how to replicate, especially in a time-efficient fashion, the meals they are accustomed to eating in their parents’ homes, dining halls, or restaurants. But feeding yourself doesn’t have to involve skilled or elaborate cooking; you can reframe it as food assembly or food preparation.

Identify a few simple (components of) meals that you like that have only a single or a small number of ingredients and may or may not involve ‘cooking.’ You’re the only one you need to please with your meal, so don’t worry about whether it would be worthy to bring to a potluck.

Some of my favorite meals during grad school that involved little to no cooking were spinach salads loaded with vegetables and hardboiled eggs or ham, curry tuna salad paired with fruit, tuna mashed with avocado, a taco bowl, and a bunless cheeseburger with steamed broccoli.

Get into a Groove

Repetition is an amazing time-saver when it comes to eating out of your own kitchen. You don’t have to master every cooking technique out there; you just have to become competent at preparing a small number of meals that you like. Rotate through each meal in your wheelhouse at whatever frequency you need to keep from getting bored; add in new foods and techniques slowly so you don’t become overwhelmed.

Some personalities are more amenable to this strategy than others. My husband has eaten virtually the same breakfast and lunch nearly every weekday for years, and before we were married he only ever cooked a handful of different dinners; this amount of variety is satisfying to him and certainly has cost him very little in terms of time and money. Disabusing myself of the idea that I needed (or wanted) a different meal every day of the week was one of my big breakthroughs in committing to preparing my own food while pursuing my PhD.

Establishing patterns in your weekly or monthly meals also makes grocery shopping much easier; you don’t have to spend much time making a list or running to the store for forgotten items.

Acknowledge Your True Schedule

I didn’t have many peers in graduate school who seemed to keep a fixed work schedule, and I don’t remember any non-parents doing so. On top of the large number of hours many researchers put in each week, the nature of research often demands time flexibility. I frequently found myself staying on campus well past what my body told me was dinner hour to finish up labwork, meet up with classmates for a study session, or knock out some administrative tasks.

Early on in grad school, I didn’t plan ahead for these evening workday extensions; while I was quite consistent in bringing lunch to campus daily, I was ‘forced’ to buy dinner on campus if I wanted to stay late. Once I acknowledged that I would be eating dinner on campus from time to time, even if I didn’t know exactly on which days of the week that would occur, I started to plan for it. I prepared a few refrigerator-stable, microwavable, single-serving meals each week to keep in my office for the late nights, replenishing my supply as needed.

My favorite microwavable dinners to keep on campus were chili, split pea soup, flaxseed meal pizza, Mexican lasagna, and pasta with sauce. Full meals aren’t even needed in many cases to help you resist the convenience food available on campus; there’s really no reason to not keep some snacks around to tide you over. Easy room-temperature or refrigerator snacks to keep in your office are instant oatmeal, nuts or nut butters, yogurt, hardboiled eggs, cheese, raw vegetables, and fruit.

Don’t Allow Yourself to Get Too Hungry

‘Never go to the grocery store hungry’ is great advice; hunger can sap our willpower to stick with our eating plan, causing us to overbuy expensive, unhealthy, or unnecessary food. As a graduate student working sometimes long and late hours, I realized that allowing myself to become quite hungry caused me to make poor eating choices on campus and at home in addition to at the grocery store. It’s pretty difficult to arrive home hungry and take the time needed to prepare a meal, especially for a slow cook.

I started flipping my schedule around; nearly every weekday evening, I ate a pre-prepared dinner (or snack) right when I arrived home, and then cooked subsequent days’ meals later in the evening when my hunger was already satisfied. An alternative is to do as much food preparation as possible in advance (washing, chopping, saucing, etc.) so that finishing your meal when you arrive home takes a minimal amount of time.

Batch Cook

Acquiring a slow cooker halfway through grad school absolutely revolutionized how I prepared food; it was my introduction to batch cooking. Batch cooking is preparing multiple meals at once to freeze or refrigerate until they are consumed. Slow cookers are not the only way to batch cook, but they are an incredible tool for preparing large quantities of food at once with relatively little active work or skill needed. Batch cooking usually doesn’t take any or much more time than preparing a single meal, so it’s perfect for a busy trainee. A single person can prepare a meal of 4 or 8 servings and eat for a week off that one-time effort!

Socialize Economically

The connections you make in graduate school are very important for your career; I would not suggest that you skip chances to engage socially with your peers simply because you are trying to spend less money on food. You can, however, often socialize in a manner that limits the damage to your budget. For example:

Changing your eating habits is certainly not easy. However, by overcoming the challenges to eating out of your own kitchen while you are still a student or postdoc, you can effectively give yourself a raise both during your training and throughout the rest of your life.

How have you kept your food spending low as a graduate student or postdoc?

Stack Frugal Strategies for Long-Term Savings

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Have you ever thought that only rich people can afford to be frugal? Many frugal strategies don’t help you spend less today; in fact, some instruct you to spend more today so that you can spend less long-term. But how do you go from being completely strapped for cash to being able to frugally plan your spending over the course of a year or longer? The answer is to stack frugal strategies.

stack frugal strategies

Stacking frugal strategies (a term that might be original to me!) means cutting your spending radically in the short term to free up money to put toward long-term frugal strategies. The short-term strategies may feel painful and sacrificial, but you won’t have to maintain them once you put in place at least one long-term strategy (unless you want to). The short-term strategies are cuts to your variable expenses, which take willpower and effort to maintain, but the long-term strategies are cuts to your fixed expenses, which take no willpower or effort to maintain.

Further reading:

Frugal Strategies for Today

These frugal strategies form the base layer of your stack. Implementing them slows down or stops your spending in these areas immediately so you end the week/month with some money in your pocket. They aren’t usually sustainable for the long term, at least not in their most extreme form, but if you keep them up for a month or two can leave you with a healthy amount of cash that you normally would have spent. If you try out a lot of them, you might even find a few you’re willing to maintain as new habits.

  1. Eat down your pantry. Eat everything you have in your fridge/pantry before doing much grocery shopping. That might mean a few meals in a row of canned tuna or buttered pasta! Only allow yourself minimal shopping to enable you to eat what you already have.
  2. Don’t drive your car unless absolutely necessary. Walk or bike everywhere you can. Set up a carpool (but contribute gas money – don’t mooch!). If you have access to free public transit such as on your university’s campus or through a university-subsidized pass, use that to the greatest extent possible.
  3. Don’t go out with friends (except for free). Pass on restaurant, bar, and entertainment invitations from friends just for a short period of time. Search out free activities that you can suggest for outings.
  4. Substitute free coffee/alcohol. If buying coffee or alcohol is part of your routine, break it. Source free coffee and alcohol on campus, or make/drink it at home.
  5. Fast from shopping. No new clothes, no new household purchases, no new electronics. Delay every possible purchase.

Overall, the idea is to halt or at least seriously reconsider any spending that requires you to pull out your wallet (or click ‘Purchase’). Make do with what you have already to the greatest extent possible.

Frugal Strategies for Next Month

This set of frugal strategies forms the intermediate layer of your stack. Implementing them will pay off not immediately but in a month or two. However, they are more easily turned into habits for long-term maintenance.

  1. Use less electricity/gas. Turn down the temperature regulation in your home (use less heat/air conditioning). Use less hot water, including showering on campus instead of at home if possible (e.g., at the gym). Keep your lights turned off as much as possible. Track down sources of vampire power and unplug those appliances. Spend less time at home if you don’t mind.
  2. Switch utility providers when possible. For example, switch your internet or cell service, if you’re not under contract, to a less expensive provider, or downgrade the plan you have with your existing provider.
  3. Cancel subscriptions. Re-evaluate every subscription service you currently use (e.g., streaming video, streaming music, Amazon Prime, periodicals). If you don’t use it much, can get the same content elsewhere for less, or don’t mind a fast, cancel.
  4. Meal plan and shop strategically. Meal planning is the foundation of many frugal tips relating to food spending. Your meal plan enables you to buy in bulk, stock up on sale items, and batch cook, all of which save you time and money in the long run.

These frugal strategies usually take slightly more research and planning, but they are more sustainable than the shortest-term strategies.

Frugal Strategies for This Year

This set of frugal strategies forms the top layer of your stack. Implementing them requires an up-front investment of money, time, and/or research. Often, it takes months of concerted effort before you can implement the frugal strategy. However, once implemented, they have the biggest payoff potential for the least ongoing effort.

  1. Pay off debt. In the short-term, you have to accelerate your debt repayment amounts, but then the payment disappears!
  2. Reduce your spending on rent/mortgage. This is my #1 suggestion for a long-term way to reduce spending. It’s challenging to execute a move or adjust to having a roommate, but it’s worthwhile if you can reduce such a large expense by a significant fraction!
  3. Go car-free/downgrade your car. Cars are a huge money suck, and expensive/new/financed cars are the biggest money sucks. If you can live without a car, do so. If you can share a car with your spouse/partner/roommate, do so. If you can sell your expensive car and buy a cheap one, do so. Think of all the money you won’t have to spend on purchasing/paying for the car, insuring the car, fueling the car, maintaining/repairing the car, paying tax on the car, etc.
  4. Shop around for insurance. Re-evaluate both your insurance provider and level of coverage to see if you can get a better deal on all of your existing policies.
  5. Travel hack. When you plan your travel well in advance, you can research possible rewards systems that may defray some of the cost of the trip, such as credit cards that offer sign-up bonuses or rewards for ongoing spending. It may take several months or a year for a lower spender to accumulate the necessary points (if ever).

These are the frugal strategies worth keeping around for the long term – the ones that will help you reach your financial goals!

Always start your frugal stack with at least one long-term strategy in mind. You can go whole hog for one month with the short-term strategies; at the end you’ll have made deep cuts that radically changed your lifestyle over the short term, and you’ll have some extra money in your pocket. But you can’t do that month after month. You need to use that extra money to ladder up to mid- and long-term frugal strategies that pay off every single month in perpetuity.

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An Illustration of a Frugal Stack

Rachel’s starting point is that she is essentially living paycheck-to-paycheck. In occasional months, she accumulates a bit more credit card debt, on which she pays a high interest rate. She lives alone in a 1BR place and is willing to live with a roommate in a 2BR place, but doesn’t have the money for the expenses associated with the move or the security deposit (her current place didn’t require one).

The ultimate goal of Rachel’s frugal stack is to save up enough money to move once her lease is up. She estimates that she’ll spend $250/month less on rent and utilities once she completes the move, but she needs $800 in cash for the moving expenses and fees.

Rachel goes scorched earth on her short-term spending over the course of one month. It’s not sustainable, but for one month she virtually never pulls out her wallet. She eats down her pantry, drinks the free drip coffee available on campus, declines invitations from friends that would require spending (and plans a couple free activities to see them at other times), walks everywhere possible, and doesn’t do any shopping that could reasonably be put off. It’s a crazy ascetic month, but she ends the month with a few hundred more dollars in her bank account than she usually has. She keeps part of the money around for frugal investment and puts part of it toward her credit card debt, knocking down the balance significantly.

In that first month as well, Rachel implements some of the strategies that will take a month or more to pay off. She turns the temperature control in her home way down, unplugs everything at home that she’s not actively using, and spends a lot more time on campus, even showering at the university gym instead of at home on the days she works out there. She goes through her fixed spending with a fine-toothed comb; she switches one of her utility services to a lower-cost option and finds a couple superfluous subscriptions to cancel.

In the second month, Rachel has to restock her depleted pantry, so her food spending jumps up, but since she’s able to buy some items in bulk and is committed to cooking instead of eating out for convenience, she ends the month with about the same amount of grocery spending as was typical before and less money spent on the go. Her ongoing food spending settles out to about $50/month less than it had been before, even including a few meals/drinks out with friends each month. Rachel also eases off the gas pedal in some other areas like entertainment and using her car, but her spending never returns to where it had been.

Meanwhile, the changes Rachel made to her fixed expenses start paying off, and in total she is spending about $50 less per month on those services, as well as a slightly lower electricity bill.

Her first priority is to pay off her credit card debt completely, which she does in a few months, eliminating the interest she had been paying on it. After that, she saves up for her move, and within about six months she has enough money available to move without accumulating any credit card debt.

Rachel’s new reduced rent pays for the moving expenses she incurred within about a month (as she’ll get the security deposit back when she moves out), and with the $250/month reduction in rent and utilities she feels comfortable increasing her variable spending approximately back to where it had been, though she keeps her new grocery shopping and cooking habits. She pays off her credit cards completely every month and is now able to save money regularly. It took one month of intense sacrifice and a half-dozen or so more months of moderate sacrifice, and now Rachel is able to live a comfortable lifestyle while still saving money every single month.