In this episode, Emily interviews Josephine Shikongo-Asino, a second-year PhD student at Oklahoma State University from Namibia. This is Josephine’s second stint as an international graduate student in the US, having completed a Fulbright fellowship about ten years ago. She has great advice for prospective and rising international graduate students in the US about the financial transition into graduate school. Josephine and Emily discuss funding models, the importance of saving and debt reduction prior to matriculating, researching cost of living, visa restrictions on working, credit and debt, budgeting, remittances, and more. Josephine’s excellent advice nearly always applies to prospective and rising domestic graduate students as well; this episode is for everyone!

Links Mentioned in this Episode

• Find Josephine Shikongo-Asino on Twitter
• Living Wage Calculator
• Q&A Question
• Related Episodes
  • Season 4, Episode 17: Can and Should an International Student, Scholar, or Worker Invest in the US?
  • Season 2, Episode 6: Making Ends Meet on a Graduate Student Stipend in Los Angeles
  • Season 6, Episode 3: The Financial Hurdles of Moving to the US as a Postdoc
• Personal Finance for PhDs: Tax Resources
• Personal Finance for PhDs: Community
• Personal Finance for PhDs: Podcast Hub
• Personal Finance for PhDs: Subscribe to the mailing list

Teaser

00:00 Josephine: If anyone is considering to come, I would say before you hand in that resignation letter, really do an inventory analysis in terms of your financial needs and maybe also pay off any loans, if you can. If you have any loans, you can pay them off. If you have a car, sell it, you weren’t needed at least for a year. So yeah, that’s really doing a financial inventory to make sure that you are in the right place.

Introduction

00:34 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts.

00:42 Emily: This is Season 8, Episode 5, and my guest today is Josephine Shikongo-Asino, a second-year PhD student at Oklahoma State University from Namibia. This is Josephine’s second stint as an international graduate student in the US, having completed a Fulbright fellowship about ten years ago. She has great advice for prospective and rising international graduate students in the US about the financial transition into graduate school. We discuss funding models, the importance of saving and debt reduction prior to matriculating, researching cost of living, visa restrictions on working, credit and debt, budgeting, remittances, and more. Josephine’s excellent advice nearly always applies to prospective and rising domestic graduate students as well; this episode is for everyone!

01:32 Emily: It’s always a pleasure for me to create content for international graduate students, postdocs, and PhDs with Real Jobs, and I’m really grateful to Josephine and everyone who has donated their time to help me and my audience learn more about how to navigate finances while in the US on a visa.

01:48 Emily: Some other episodes in which I’ve covered this topic are S4E17 Can and Should an International Student, Scholar, or Worker Invest in the US?, S2E6 Making Ends Meet on a Graduate Student Stipend in Los Angeles, and S6E3 The Financial Hurdles of Moving to the US as a Postdoc.

02:08 Emily: I’m actually working on some tax content specifically for international graduate students this spring, so if you aren’t already on my mailing list, please join to hear more! You can do so at PFforPhDs.com/subscribe/.

Giveaway

02:21 Emily: Now it’s time for the book giveaway contest! In February 2021, I’m giving away one copy of The Simple Path to Wealth by J L Collins, which is the Personal Finance for PhDs Community Book Club selection for April 2021. Everyone who enters the contest during February will have a chance to win a copy of this book.

02:42 Emily: If you would like to enter the giveaway contest, please rate AND REVIEW this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily@PFforPhDs.com. I’ll choose a winner at the end of February from all the entries. You can find full instructions at PFforPhDs.com/podcast/.

03:03 Emily: The podcast received a review this week titled “Crucial knowledge for a first year PhD student”. The review reads: “I started listening to this podcast a couple months ago, and the tricks I have learned have increased my confidence in personal finance has tremendously. As an international student. Not all advice work for me, but I especially enjoyed episode two in season eight, when Laura was sharing her experience as an international student. In general, this podcast have taught me to manage my new monthly stipend the best way. I now know that it’s okay not to prioritize paying down my student loans, I’m not crazy to be checking my bank account on a daily basis, in fact, it’s encouraged, and I’m now putting together a 50/30/20 budget. My goal is to one day be managing my personal finances in a way that I could be a guest on Dr. Robert’s podcast”.

03:51 Emily: Thank you for this a wonderful review and I can’t wait to have you on the podcast without further ado. Here’s my interview with Josephine Shikongo-Asino.

Will You Please Introduce Yourself Further

04:02 Emily: I am delighted to have joining me on the podcast today. Josephine Shikongo-Asino. She is a second year graduate student at Oklahoma State University. And she’s here to talk with us about international students and their transition to the US, particularly the financial aspects of their transition. This is a subject I’m highly interested in. I hope you are as well. I’m interested in for all types of graduate students, both domestic in the US and international, but I’m really, really happy to have the focus on international students on the podcast today, because it’s a group that is highly in need of more information about this. So Josephine, I’m really pleased that you suggested this topic and that you’re joining me on the podcast today. Will you please tell the audience a little bit about yourself?

04:42 Josephine: Thank you, Emily. Thank you for having me. I’m Joseph Shikongo-Asino. I am originally from Namibia, which is in Southern Africa. We are just above South Africa. I’m sure many people know where that is. My background — I’m a certified accountant. I have a master’s in strategy as well, which I did here in the US. And then I’ve spent about 10 years working in the financial sector, including financial services, banking, and investments. But currently I’m a second year PhD student at Oklahoma State University with my research interests, really more on higher-ed finance and policy.

05:20 Emily: Wow. What a great fit for this podcast. I’m so glad you’re joining us. And between your master’s and starting your PhD, did you stay in the US that whole time, or did you live back in Namibia, or elsewhere?

05:31 Josephine: No. I had to go back home because with my master’s, I was sponsored by the Fulbright program. They require you to work two years at home once you finish your program so that you can give back, which is the purpose of the Fulbright program. I had to serve two years in my country and then come back to proceed with my PhD.

05:49 Emily: Gotcha. So you really have the perspective of having transitioned into the US twice?

05:54 Josephine: Yes.

Similarities and Differences Between Finances in Home Country and the US

05:54 Emily: Perfect. So tell us a little bit about, maybe before that first time that you came to the US, a little bit more about the finances in your home country, and how they are similar or dissimilar to the US.

06:07 Josephine: Namibia is classified as an upper middle income country by the World Bank. So it is actually, one of the better performing economies on the continent. And even when I came here, I realized that there’s not much of a difference in terms of salaries back home and being in the US, other than currency exchange, obviously. But, because I had to quit my job, I did not have a backup, I did not have any cushion, that could keep me in case something happens. In case I have an emergency, I did not have, um, any backup. And also because I’m coming from a low income family, I did not have any other backing, other than the sponsorship, which I go through the Fulbright program. I really had to do to survive on my own. I took a decision to leave my job because I thought that I would come to a better situation, which will give me better opportunities afterwards. Looking back, maybe I would have made a different decision after the two years were over. I don’t know if I would have necessarily quit my job had I known what I was signing up.

Advice for Prospective International Grad Students

07:24 Emily: I see. Okay. So I think we’re going to get a little bit more of those stories as the interview proceeds. First of all, you just mentioned that you quit your job, no savings, no backup before you came here. What’s your advice for another international student planning to come to the US? We’re recording this in December, 2020. I think it will be out sometime in the early spring, so people are receiving decisions about their admission to grad programs, but they still have a bit of time before they actually need to matriculate. What is your advice for that time period?

07:59 Josephine: I think the first question really is can you afford to quit your job. For me, that’s the first question you should ask yourself. Do you have expenses such as maybe dependents at home that depend on you on you solely, financially? Do you have a home loan? Do you have a personal loan, that needs continued financing from you?

08:20 Emily: Okay, so you mentioned paying off debt earlier, but what about generating savings? You know, I imagine a degree of savings is helpful for anyone who is moving, but more so when that move is international. So can you speak to that a little bit?

08:34 Josephine: Yes. I mean, most people plan their international studies way ahead before they happen, because you even go through the process of first researching the institution’s, researching where to go. So when you start thinking about going to study internationally, I think you should start at nest. You should start putting money that you can have in case, even if you don’t get a full tuition waiver, even if you don’t get a full scholarship, to have something that you can either supplement yourself, or you can just supplement your expenses, or you can keep paying off the debt back home with that. It’s very important to definitely start the saving nest the moment you start looking into going to study international, and as you really want to have a cushion to land on

09:22 Emily: One other thing to point out here is in this process of researching where are you going to be moving, I find this the idea very daunting of figuring out what is the cost of living in a country that I’ve never lived in, in a city that I’ve never lived in. The US is obviously very diverse in terms of cost of living, and some places I’m thinking about bringing savings, like to a place where if you’re going to rent somewhere it requires, first month, last month deposit all upfront, that can be thousands of dollars easily, as well as just the actual transit, the transitioning costs. Plus sometimes there are fees to be paid to universities upfront. It depends on how your university structures things, but sometimes there could be over a thousand dollars, multi-hundreds of dollars in fees to pay near the start of the semester, that are not like prorated over time. So all of these things have to go into the research of where you’re going to be living.

10:23 Josephine: Yes, they definitely have to and I always advise people that do not look at the big cities. It’s very tempting to want to go to the big cities, because that’s what you’ve seen on TV all your life. And that’s where maybe some of the most universities that you’ve heard of are, but smaller cities actually have just as good universities, but their cost of living is lower. When you’re in a smaller city, your cost of living could really be low, which could then make it easier for you, but as you do the research, look at programs that offer graduate assistantships, if you can, if they offer full graduate assistantships. And like you said, some of them include fees and others don’t, so if you can get a program that pays for fees, pays for health insurance, and a stipend at least close to the cost of living in the town, because those are available online; you can look up the cost of living. That could make really your life more manageable, if you can get an assistantship that can give you full tuition, including fees, health insurance, and a stipend. Otherwise, fellowships or scholarships, because all of these are really, they’re not just readily available, they are competitive. It’s important to look out. Some of them are not even advertised, so sometimes you might have to just write to people at the university and say, “Hey, I’m looking at coming into your program, can you talk to me about the funding structures of your program?” Because some things are not advertise, and if you don’t ask, you wouldn’t know. So it’s really, it’s an investment into just looking into deciding where to go to ensure that you are not under financial strain while you are in your studies.

12:15 Emily: I totally agree. This is the same process, again, that domestic students need to go through is figuring out what the funding structure is. I would say most primarily in your field, because this is oftentimes very field dependent, like whether funding typically comes from fellowships or training grants, or whether funding typically comes from research assistantships versus teaching assistantships. Versus other fields, maybe the funding is very spotty. Sometimes it’s here. Sometimes it’s not. And all that you need to be going in with your eyes wide open as to what that situation is. I usually suggest a bit of networking and informational interviewing, not necessarily with the faculty, but rather with anyone you have a connection with who’s already at a university in particular, if you have one in mind or even just your field more generally. Like alumni associations, for example, is a great way to reach out to people. You don’t know who they are, but they have some kind of connection with you and maybe they’ll be willing to have a conversation with you because you can really get the best insights, I think from current students. Faculty, sometimes they might paint a little bit too rosy of a picture about the finances in a graduate program, because well, one, they may not be aware of some of the difficulties that students are going through. And two, they may want to recruit you and so they might be a little more optimistic than things really are. So I would say talk to with current students. Of course you do eventually need to connect with faculty members as you’re in the application process, but maybe when you’re just getting more information, just trying to narrow down the field, students are really great resource.

13:46 Josephine: Oh yeah. Students will give you the true picture without needing to paint it any rosey, because they have gone through it and some of them might not have had the same guidance. They will tell you the truth, so the reaching out to current students is definitely a must, I would say.

14:03 Emily: Yeah. And the extra wrinkle there for international graduate students, you can correct me if I’m wrong about this, but the extra wrinkle there is, well, really please do talk with other international students, and even particularly if there are some from your own country that would be especially helpful, because a lot of times programs don’t pay very well, like you just mentioned pay at least equivalent to the cost of living in a certain city. The resource that I really like to point to is the living wage database at MIT, livingwage.mit.edu. That’s an awesome resource for telling you in every county in the US or every metro area, what is the baseline amount of money that this research points to as needing to just get by just necessary expenses.

14:48 Emily: Okay, so speak with other international students, because I know what happens a lot on the domestic side is that if universities are not paying well enough, domestic students will side hustle. They will have outside jobs. And that is, as we discussed earlier, at least for jobs originating in the US, not an option for international students. Also debt is almost completely not an option because you have to have a US guarantor and that’s a whole big hurdle to get over. And so pretty much student loans are not accessible to international students unless you already have connections in the country. The fallbacks that domestic students have — the safety pressure release valves on their finances — are not necessarily available, usually not available to international students. That’s something really important to consider that if a domestic student is telling you, “Oh yeah, it’s okay, but I work 5-10 hours a week tutoring or whatever outside of my primary appointment,” please know that that option is not available to you and you’re going to have to make the finances work another way.

15:48 Josephine: Yeah, absolutely. And I would say that you would also need to just manage the little that you have when you get it. If you manage to get an assistantship, if you have a scholarship, if you somehow have an assistantship, even if it’s outside of your department, in the university, really try to stick to a budget. Draw up a monthly budget, stick to it, your income is fixed, so your expenses should be. Those really include things such as like sharing an apartment, to reduce the rent costs, just keeping your expenses low, using campus resources, such as buses to get around, instead of buying a car. If the university has a good bus system, you can use that to get around, you don’t need to get a car. Medical expenses, try to minimize those. Use the university campus health facilities, because medical expenses can be really high. I’ve had experiences in both times. When I was here the first time, there was a time I had to get an ambulance, and that cost me a lot of money. And this time I also had to go to an ER and that, again, cost me a lot of money that I had to continue to pay off. So try to minimize those. Save every month. If you have a stipend that you receive, even if it’s just $20, just put away something, you never know when you might need it, especially when you’re in a country where you might not have a network at all, not anyone that you can just call up. If you don’t have obligations at home, you will manage somehow. Try to stick to your budget and save every month, if you can.

17:42 Emily: Totally, totally agree with all of that. Especially about not committing yourself to higher fixed living expenses, right away. Yes, definitely find a place that’s on a bus line. I do remember, so I went to graduate school at Duke, so Durham, North Carolina. At the time, it was a very car dependent town, so moving there as a domestic student, I was like, “Oh, I have to buy a car.” I was living actually car-free before that point, but I was like, “Oh, Durham, I have to buy a car there.” But once I moved, I noticed that a lot of the international students who were my peers did not have a car yet because, there’s a process to go through. They had to get a license. They had to be able to get credit, to qualify for a loan. It took six months or 12 months for them to buy cars. So I was realizing, “Oh, well, they’re managing to get around okay. Yeah, they have to bum an occasional ride, but mostly they’re using the buses” and it’s actually pretty manageable. Try to set your life up that way, at least in the first year. You can reevaluate in subsequent years if that’s working for you or not, but really try to get those baseline expenses low until you have kind of your bearings in your new city.

Commercial

18:54 Emily: Emily here for a brief interlude taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the, or have a question for me. Please join one of my tax workshops, which you can find links to from pfforphds.com/tax. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

US Funding Models and How They Impact International Grad Students

20:00 Emily: Was there anything else that you wanted to add about funding models in the US. We mentioned a few of them — assistantships, fellowships and scholarships. I did notice I’ll add here, in my own graduate program, a lot of international students did come with funding from their own home countries. So they were sponsored by their own federal government, so that is an option you can investigate in whatever your home country is, but I noticed that as another possibility.

20:27 Josephine: Yes. There are some countries that would have scholarships within their own funding structures, so if those are available in your country, that’s great. Some companies within the country could also sponsor you, or maybe even your employer, they might be able to sponsor something so that if you have those options, that is great. But the one thing that I also wanted to mention on the funding structure is that as you review an offer for an assistantship, for example, they usually do not include summer. That’s another aspect that you need to look at — what will you be doing in the summer? Will you be able to survive during the summer? Will you have an option to work? Would you be able to get an exception to work, or would you be able to have your assistantship extended to cover the summer? Because most assistantships do not include summer and many international students find themselves over the summer, really stranded and not having any funds. And it can be tragic.

21:32 Emily: Yeah. I would say that goes into the research that you need to be doing into how your field, and then how specifically the programs that you’re looking into are funded. Because as you said, many places do not offer summer funding, or at least the funding might be different. Like maybe you have an assistantship during the year, but then summer it’s on you to go and apply for fellowships and when win of them., so that could be the expectation. Other places do have 12 month, year round funding. It really just depends and so it’s something you have to go in your eyes wide open and aware of. Again, I’ll repeat, the same advice for domestic students read that offer letter really, really carefully, because I’ve read many that just say what your funding is for nine months, then just stop talking about what happens next. You really need to ask those follow-up questions — what’s typical, what’s on the table? If they just say, “Oh, well, yeah, you’re definitely going to be funded, we just don’t know exactly how, we don’t know exactly what the mechanism is, but don’t worry about it, you’re definitely gonna be funded.” That’s a great answer to hear, but if you hear, “Oh, well, right, summer’s on your own, you need to figure that out,” then, okay, you need to know that going in.

Money Management Tips for International Grad Students

22:34 Emily: Now in terms of strategies for money management, you already mentioned budgeting. You mentioned saving even if a small amount. Are there any other strategies that you particularly want to point out for international graduate students?

22:48 Josephine: It’s really more looking at what you can bring in from home and this simple things such as watching…I don’t know, some countries have exchange rates that really fluctuate a lot, so if you have some money at home, for example, and something your currency just suddenly became favorable in comparison to the dollar, you should set up the money transfer from home in that way to say, “Oh, look at my currency — if I transfer right now, I’ll get double the money then I would get some other time.” I mean, obviously it’s something you need to actively do, and maybe it needs a special skill, but it can benefit you if you transfer money at times when your currency is not too weak against the dollar. For me, that’s something you can, you can as well look at. Again, leaving no obligations at home, I think that that can really leave you free and be able to focus on your studies, because if you have a debt back home that keeps needing money from you, it will weigh on you and you will need to accommodate it in your budget here in the US, and that can just kind of set you back up.

24:13 Josephine: Try to find really people that you can share expenses with, like whatever you do, if you’re able to share expenses with people — I loved to travel, when I was here for my masters, because I had the time, unlike now, and I would find friends and we would go to visit a state that we have never seen before. And when we are in a big group, you are able to share that cost without necessarily breaking a bank and you you’re able to kind of also have a good time, so that you’re not just focused on your studies. You have a good time as well on a budget, but when you have friends that you can share with it keeps your expenses down. Phones, again are another thing where if you have a friend who you can share, who can maybe help you put on their family plan, which are cheaper, instead of subscribing for your own phone directly.

25:21 Josephine: Don’t get yourself into things such as getting cable and do what you can stream online. Books for school — there are many used books out there that are cheaper. There are rental options. You can also stick to just maybe borrowing books from the library and really checking which book do you really need to buy in the end, instead of just buying all the books that are required. Books can be really expensive, so I had worked with the library for the most part. At the beginning of the semester, what books do I need? Check the library. Are they available? And then if I see that it’s a book that is really important for my future, then I will actually I’ll actually go and buy it, but otherwise I just borrow, use it and take it back. That way I keep my expenses low.

26:16 Emily: I’ll add a note on the textbooks there. I ended up borrowing textbooks from other students who had taken the course the previous year or whatever. Sometimes there might be an edition change, but sometimes not. And so I found that to be really useful because yeah, some people do invest in books and they want them available to them long-term but yeah, they can part with them for a semester, especially when they know where to find you. So that’s another good resource is just students who took that class last year.

26:41 Josephine: Yeah.

26:43 Emily: I do want to bring up remittances. You mentioned earlier supporting maybe dependence back in your home country, but that could extend not just to your children, but maybe your parents or other family members. So you have any suggestions for people who are expected to help continue to support family members or the like?

27:04 Josephine: Yes. I think there’s many tools online that actually charge really, really low fees to transfer money back home and are easy and fast. If you have a bank account, which for the most part, you would probably have, there’s ways that you can send money through your bank to your country, but that tends to be more on the expensive side, in terms of the international wire fees. There are online tools, financial apps that you can use to send money back home, as long as the person back home is able to receive it, and you can track it, that’s okay. But for me, I found those services cheaper compared to doing it through my bank, because the bank is obviously to involve the process that you have to go through. The money might not be available as soon as you needed, if the people need emergency money. It’s better to use the international wire tools that are available online. I think, I don’t know if I should mention any of them, but there’s WorldRemit, there’s MoneyGram, and the likes. There’s this many of them. One really just has to look and see which one offers the lower cost for sending money to your country, because the cost also varies depending on where you’re sending the money. So check which one has a low cost of sending money to your country and a fast one as well, because often people at home are not going to wait a week if they need the funds. So find the ones that it’s cheaper and faster to send money back home instead of doing it through your bank.

28:55 Emily: Yes. Thank you so much for making those suggestions. That’s something that I hadn’t thought about, like the mechanics. And I know a lot of people hear about building credit in the US when they first move here. Can you make a couple comments about your experience with that, or the best way to do that?

29:11 Josephine: Credit card companies here just give you unsolicited credit offers. And for me, I would say resist them if you can. It’s important to build a credit if obviously you plan to stay here, and maybe eventually get a job. But credit needs discipline. And as a student who might not necessarily have the means to always service your credit, my main advice is to stay away from the credit, but if you find yourself not able to, and you would like to take on some credit, either for credit building, or just really to make up some gaps that you need, then make sure that you do pay it off. Do not take away anything that you are not able to settle within that the month. Or if you really need, if it’s an emergency, then you have to set up a fixed repayment plan to make sure that you pay back because you also don’t want to leave the country with debt. I would advise against getting debt. If you’re going to get a job, just wait until you have a job. But if you want to access the credit that’s available and you have some offers then make sure that you do pay them off.

30:44 Emily: Yeah, I think my perspective on that question is it is helpful to have a credit score, a good credit score, in terms of actually just finding rentals. And this also depends on the housing market that you’re in, so it might be different, you know, cities versus smaller cities. Go ahead and build the credit, but like you said, don’t actually use it by carrying debt or carrying balances or paying interest. Do it in a way that you don’t have to pay any fees, essentially, but you can still build your credit score for the point that you need it. And like you said, maybe you won’t really need a credit score until you need to get a job or take out, like I mentioned car loans earlier. That could be a possibility if you feel you can support the debt. It’s a funny thing because credit scores seem like they should only be useful when you’re taking out debt, but in fact, they creep into other areas of life as well. It’s like a helpful thing, although not maybe like strictly necessary depending on your housing market.

31:43 Josephine: Yeah. I mean, yes, you do get kind of penalized if you don’t have any credit history, like you have never taken out credit, they penalize you on that. But yeah, build as little as you can for what you need, but don’t get into it because you probably come across friends who have used debt to pay off their studies, especially the domestic students, but it’s different. I would say as an international student do not take on any credit that you are not able to service immediately.

31:17 Emily: I totally agree. And we talked about the dangers of having debt earlier, when you’re obligating a portion of your already very small stipend, already completely limited stipend. It’s a tool you have to be really, really careful with because it’s very easy to get in trouble.

32:33 Josephine: Oh yeah, and they just send you, sometimes the moment they have the address, they just send you offers — “you qualify for a hundred thousand”, “you qualify for a credit line and you also get this airline miles” and you’ll still have to pay for them, so just stay away from it.

The Financial Culture Shock for International Grad Students

32:50 Emily: Absolutely. Is there anything that has struck you about the financial culture in the US that you think international students need to know about before arriving?

33:01 Josephine: I think for me, what was shocking is really the 20 hours a week that that is really strict. I think when we come, sometimes we think, ah, I’ll be able to make my way around this. I’ll be able to find a job. I’ll be able to make extra money. You really can’t. So you are only allowed to work 20 hours a week and it’s important to keep that in mind, That that 20 hours a week is the only income you will have. Life is expensive. Just buying bread itself, I was shocked at how much bread cost around here. The culture of eating out for the most part and really not, not cooking at home. So you would have to resist always being out, because obviously you won’t be able to probably fund it, and find ways to really cook at home. For me, the credit card offers were the most shocking, because I’m like, “Do they know how much I earn? Why are they offering me this credit?” Because in my country getting credit is very difficult. You only get credit if you earn a certain salary and you can prove that you have a good credit history of paying off any loan that you have had before. So getting offers from companies to just say, you qualify for credit, without me doing anything, was what was kind of surprising.

34:40 Josephine: Big cities, again, very, very expensive, every little thing costs you money, so it’s better to stay maybe in like a rural town, which is very close to a big city where you can take and one hour train to a big city, for example, that takes off a lot. If you can stay in a smaller town, which has a train that goes into a big city for one hour, that kind of gives you the best of both worlds. But yeah, the financial culture in the US is just, it’s a spending culture. It’s obviously about revolving money in the economy and supporting the businesses. So it is just, we have to keep spending there’s always holidays that have different things that you need to spend on. You really need to be able to manage your spending within such a culture.

35:39 Emily: I agree. I think from what I’ve read about, let’s say permanent immigrants to the US, they come with certain, I’m generalizing, obviously the world is very diverse, but oftentimes the US is more consumeristic and then the countries that they come from. And so, maybe that first-generation keeps some of the mindsets from their home country, original culture, but it gets diluted, and within two, three generations, the descendants of those people are just totally in the thick of the consumerism of the US and completely Americanized in that way. I would imagine it can be quite shocking, and a lot of pressure to spend once you’re here.

36:24 Josephine: I think the other thing is also to pay your taxes. Obviously in many countries, people still pay taxes, especially if you’re in a salary, your employer has an obligation to deduct that, but the deadlines on when to file and all that could be like flexible. But here it’s really, I feel it’s important to keep to the deadlines and ensure that you file the taxes and don’t do anything to feel maybe, “Oh, okay. If I say this, then I can claim more.: Don’t do it. It will ruin your life and it will ruin your chances to ever be in the US, so do pay what is due to the tax man and do not claim anything you are not entitled to.

37:18 Emily: Yeah. So I think what I’m hearing you say between the rules about visas and then the tax stuff is, there’s not flexibility here. The rules are the rules, and you need to follow them. You need to toe the line, because especially as you said, if you eventually want to get a green card and stay in the US, there could be things that come up in your history, your record, that torpedo that application, if you’ve made any missteps early on. So really, really keep to the rules. I have corresponded with international graduate students who have skirted the rules and worked extra or whatever, and they got away with it, I guess, for the time being, but I always say don’t chance it.

38:01 Josephine: No, because then you walk around looking over your shoulder, wondering if someone will come after you at some point. So I think just live, you’re in another country, just live according to their rules.

Financial Advice for Early Career PhDs

38:12 Emily: Okay. Josephine, as we wrap up, what is the best financial advice that you have for another early career? PhD could be an emphasis of something we’ve already talked about today, or it could be something completely different.

38:24 Josephine: I think there’s a few things that I just need to emphasize, which is seek funding. There are options out there. Don’t up on your dream thinking, there’s no way I can study in the US, I don’t have the money. There are options. There are funds out there that sometimes go unclaimed. Talk to as many people as possible that can help you to give you the information on where to find funding, because there are ways for you to be able to fund your PhD dream. Again, avoid debt. Live modestly. The rewards will obviously come later, hopefully.

39:04 Josephine: And then just make sure that you do it for the right reason. As you make your decision to pursue a PhD, it’s not like a master’s program where you do it, you finish maybe within two years or one year, and you can go and get a job. It takes time. So at some point it will get tough. Whether it’s financially or just the coursework, it will get tough. But if you have a clear motivation, if you have a “why” you’re doing it, you will remain on track. Don’t come to do a PhD as a way to just be in the US because when it gets tough, you will find it hard to keep motivating yourself. When the stipend is much less than the salary you used to get back home before you resigned, there will come a day when you are like, why am I even doing this? Why did I have to give up my job to come and do this thing, which is now going to take me four years to finish, but if you have a clear motivation on why you’re doing it, I think it will keep you going., when you can keep going back to your why.

40:15 Emily: Beautiful, beautiful advice. Thank you so much for adding that. For the international listeners, I will add a few links in the show notes of previous interviews I’ve done, some articles I’ve written specifically for international students. There’s one especially, we didn’t touch on investing in this interview, but if you’re interested in investing as international student, I have an interview on how you can make that happen, so that could be of interest as well. Josephine, thank you so much for joining me on the podcast and giving me this wonderful interview.

40:45 Josephine: Thank you. Thank you, Emily.

Listener Q&A: Credit Cards

Question

40:47 Emily: Now it’s time for the listener question and answer segment! This week’s question is one I ran across on Twitter from Jake Thrasher, who gave me permission to answer it in this segment. Here is Jake’s Tweet: “Does anyone have good credit card recommendations for grad students? I’ve never had a credit card before, and I have no clue what I’m doing.”

Answer

41:08 Emily: Jake got a lot of great answers to this question on Twitter, and I’ll link to it from the show notes.

41:13 Emily: I’m going to answer this question not with respect to what might be the best credit card for a grad student right now, but rather how to find a first credit card no matter when you may want one.

41:23 Emily: First, you should determine what characteristics you’re looking for in a first credit card. It is recommended that you keep your first credit card open indefinitely because having a higher average age of credit boosts your credit score. So even if you open and close other cards later, ideally you would keep this one open for many years. Given that, I recommend that you sign up for a card with no annual fee and also with a creditor who has a reputation for good customer service. Some other features that are nice-to-haves but not must-haves, in my opinion, are ongoing rewards, a sign-up bonus, and waived foreign transaction fees.

42:03 Emily: If you have any inkling in your mind that you might carry a balance on this card in the future, look for a card with the lowest interest rate that you can find. I did this when I signed up for my first credit card because I didn’t 100% trust myself to pay it off completely every statement period. I ended up creating a track record of paying my cards off completely and on time, so now when I open credit cards, I don’t even look at the interest rate. But if you’re just starting out with credit cards, that’s reasonable to take into account.

42:34 Emily: Finally, to avoid applying for cards that you won’t get approved for, you should take into consideration your current credit score. If you’re new to credit you might not have a credit score or it might be not very high yet. You can search for cards that don’t have a credit score requirement in that case. For anyone new to the US, it’s typical to apply for a secured credit card as your first one.

42:57 Emily: Once you have your lists of must-haves and nice-to-haves, it’s time to start searching for current offers. You can definitely Google “best first credit card” or some variation on that and see what you get. I also like to use the sites bankrate.com and Nerdwallet.com. Those sites typically set up categories of cards for you to peruse, such as student cards, no annual fee cards, cards for bad credit, etc. However, please note that probably any credit card review you run across online has an affiliate or commission structure in place. That means that if you click through a review to open one of the cards, the site hosting the review will get paid, and that can bias their reviews. Look across a few sources to see if some cards commonly pop up within the criteria you’re searching for.

43:46 Emily: For example, when I’m doing this exercise in January 2021, I’m seeing that Discover offers a student card that probably fits the bill. Many of the people who responded to Jake’s prompt said they used Discover cards when they were starting out. I read Discover’s policy, and apparently after you are no longer a student they reclassify the card to a non-student card with the same benefits structure, so you keep the longevity of that account going. While I’ve never had a Discover card myself, they are one of the major players in the credit card space and their online reviews seem to be solid, which leads me to believe it will be easy to keep the card open for a long time.

44:22 Emily: Another great suggestion from the Twitter responses is to open your first card at a local credit union because they are likely to be less predatory than a bank. So that’s a great approach as well, provided that you will still be able to use the card with ease if and when you move away from the area that the credit union serves.

44:40 Emily: One final suggestion for Jake since he said he has no clue what he’s doing: Read my article titled Perfect Use of a Credit Card, which is linked from the show notes, and follow its advice to the letter. It’s super, super easy to slip up with a credit card and quickly get in over your head with the high interest rate. I’m very strict about how I use credit cards, which I explain in the article, and I suggest you set up rigid rules for yourself as well, such as treating your credit card exactly like a debit card.

45:11 Emily: Thank you, Jake, for posing this question on Twitter and permitting me to answer it here!

45:16 Emily: If you would like to submit a question to be answered in a future episode, please go to PFforPhDs.com/podcast and follow the instructions you find there. I love answering questions so please submit yours!

Outtro

45:29 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.