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Knowing Your Worth in an Environment that Devalues Your Work

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In this episode, Emily interviews Sam McDonald, a fifth-year PhD student in informatics at the University of California at Irvine. Sam received the NSF GRFP, completed a lucrative internship at a tech company, has won multiple smaller grants and fellowships, and taught classes for additional income. Upon observing this, some of her peers questioned why she was still applying for awards. Even more light was shone on this issue when her department compiled a list of all the grad students’ income as part of the Cost of Living Adjustment protests in the University of California system; Sam was the highest-paid grad student. In response, Sam became discouraged and even stopped submitting funding applications until her advisor counseled her about knowing her worth. Sam has now come out the other side of this financial shaming experience and has great advice for anyone else questioning their worth and what they should be paid in academia.

Links Mentioned in this Episode

grad student know your worth

Teaser

00:00 Sam: Sometimes our expertise and our ability to do stuff is so undervalued. And it’s hard to measure how much you’re personally valued because you have all these different discrepancies in how different grad students are getting paid. And you really, I think just have to sit yourself down and look at comparatively, well, if I were to go into industry right now, how much would I be making? So I’d recommend the students to really go out there and see how much is my value in other places versus in grad school, where I think we have this skewed sense because of this limited budgeting construct of how much you’re actually worth.

Introduction

00:33 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode three and my guest today is Sam McDonald, a fifth year PhD student in informatics at the University of California at Irvine. Sam received the NSF GRFP, completed a lucrative internship at a tech company, has won multiple smaller grants and fellowships, and taught classes for additional income. Upon observing this, some of her peers questioned why she was still applying for awards. Even more light was shone on this issue when her department compiled a list of all the grad students income, as part of the cost of living adjustment protests in the University of California system. Sam was the highest paid grad student. In response, Sam became discouraged and even stopped submitting funding applications until her advisor counseled her about knowing her worth. Sam has now come out the other side of this financial shaming experience and has great advice for anyone else questioning their worth and what they should be paid in academia.

01:42 Emily: It wasn’t until Sam brought up this topic to me, that I realized that I had my own story of financial shaming and academia. Additionally, several of my relatively well-paid grad student, friends, acquaintances, and podcast guests have told me their stipends or that they had won a fellowship, but asked me not to repeat that information. I believe this was in fear of the financial shaming they might experience from their peers. I am a big advocate of transparency around stipends and benefits, which is why I started the websites, PhDstipends.com and PostdocSalaries.com. But transparency is hindered by shame. Asking for what you’re worth is hindered by shame. Shaming someone else for their financial success doesn’t put any money in your pocket, it just discourages them and ultimately harms our whole community. I’m so pleased that Sam volunteered to give this interview. I hope her message encourages you to swing for the fences financially and to speak respectfully when discussing sensitive topics like finances. Those are great lessons for me too.

Book Giveaway

02:35 Emily: Let’s turn our focus to the book giveaway contest in January, 2021. I’m giving away one copy of the House Hacking Strategy by Craig Curelop, which is the Personal Finance for PhDs Community book club selection for March, 2021. Everyone who enters the contest during January will have a chance to win a copy of this book. I’m delighted to bring attention to house hacking, which is when you buy a home live in it and rent out part of it, thereby radically reducing or even eliminating your housing expense. It’s a new name for an old tactic that grad students and PhDs have been using for a very long time, but this book puts a highly strategic spin on it. If you’d 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 [email protected]. I’ll choose a winner at the end of January, from all the entries you can find full instructions pfforphds.com/podcast. Without further ado, here’s my interview with Sam MacDonald.

Will You Please Introduce Yourself Further?

03:54 Emily: I have joining me on the podcast, Sam MacDonald, who is a graduate student at the University of California at Irvine and she’s here to talk with us today about kind of a touchy subject. It’s financial shaming, and she’s experienced this and I’m really just excited that she’s decided to come forward because I know that her experience is not unique. After she approached me about this topic, I started thinking and I realized I’ve experienced this. I’ve realized I know other peers who have experienced this, so she’s definitely not alone. And we’re going to treat the subject very carefully today. So Sam, thank you so much for your willingness to talk about this. I know it’s not an easy subject matter at all. Would you please tell the audience a little bit more about yourself?

04:37 Sam: Yeah, absolutely. Thank you so much for having me Emily. Like Emily said, my name is Sam McDonald. I am a fifth year PhD candidate at the University of California, Irvine studying informatics. I actually study the United States Congress and their use of constituent communication. So I’ve been back and forth in DC and in California to figure out how members of Congress use technology to communicate with their constituents and how to make it better. I have an undergrad degree from the University of Maryland Baltimore County, where I did a lot of research before going straight from undergrad to my PhD and I got a master’s along the way that I got from UC Irvine.

Funding During Graduate School

05:11 Emily: Thank you so much that overview. Super interesting subject matter, not what we’re getting into today, but thank you so much for the context. So what’s been the funding situation for you during grad school?

05:21 Sam: My funding has been different for different years. My first year I got the GAANN fellowship, which is from the US Department of Education that my department supplied to me, which was really helpful not to TA at first. Then I TAed for two years, and while I was doing that, I applied for the NSF GRFP and luckily I got it to fund my last three years of my PhD. I’ve also spent two quarters teaching as additional funding and have gotten grants from congressional research funding and travel grants. And then also I’ve worked for Facebook for an internship, so I have internship money as well.

05:54 Emily: Can you give us like an idea of much money you were being paid — and I know it might be different year to year — versus, if you’re aware of it, the baseline stipend in your department?

06:05 Sam: Yeah, absolutely. The TA baseline stipend is around $2,200 for teaching us a little bit more. And my GRFP is about $2,800 per month, just to give you a baseline ballpark for how much that is.

06:21 Emily: Okay. And it sounded like in your second year you were being funded only from TA-ships. Is that right?

06:27 Sam: Yes.

06:27 Emily: Okay. So on that year, you lived on that baseline stipend and is it every other year you’ve been above that for one reason or another?

06:34 Sam: Yeah, it’s really fluctuated for different months, depending on if I’m getting travel grants, going to DC during the summer is quite expensive, so getting additional grants for that to be moving around, but still keep my apartment in California. I think my money has fluctuated every single month, being different because of all these different activities that I’m doing in addition to this baseline salary.

06:57 Emily: That is such an interesting budgetary conundrum. One that I would love to explore, but not our subject for today. And this is maybe not super on this subject, but I’m just curious how much the internship at Facebook paid.

07:09 Sam: Let me remember. I think it was around. I could be wrong, I think it was around seven per month,

07:16 Emily: $7,000 per month?

07:18 Sam: Yeah. I think it might be a little bit higher than that. I’d have to go back and double check, but it’s definitely around that ballpark.

How Sam’s Peers Reacted to These Extra Sources of Income

07:24 Emily: Yeah. Sounds great. Well, I am of course, wanting to congratulate you on winning the NSF, gaining these other travel grants, but I understand that’s not necessarily how some of your peers reacted to you having this wonderful CV full of accolades.

07:40 Sam: Yeah, absolutely. The NSF GRFP — I want to particularly point out, I’ve had three advisors, not through my own fault, one retired, one moved, and then one picked me up like a lost puppy and she’s been great, but none of them have had funding for me, so I’ve always had to go out and get my own funding as well, which is why I was so motivated to get a lot of these grants. But I always haven’t had the best reactions to it. After I got the NSF, which is amazing and it’s given me so much more flexibility, I still had to pursue other grants for travel to DC, and then I just kept applying to more grants because it looks good on your CV. A lot of students were really supportive, but one or two would always sort of give me side comments of like, “Oh, you’re applying for this grant, I thought you already had the GRFP. Why do you need this? Why did you win this grant even though you already have these things?” So I’ve had to deal with a little bit of tension and figuring out my own worth in that process.

08:30 Emily: Yeah. How did you feel when you got those snide comments?

08:35 Sam: I felt a little bit guilty. I will say with a caveat that like I am a more privileged person. I’m white. I came from an upper middle class family. I am working in technology, so I get tech internships. I have a really supportive advisor. I live on subsidized housing and I also live cheaply because I love hiking and I bike more than I drive places. Just for context here at the University of California, Irvine it’s so expensive to live in Orange County that even the professors have their own subsidized housing on campus and there’s an entire professor community. I’ve done a lot to really sort of push myself towards getting these grants, and it kind of made me feel bad that I was getting them because I am in such a privileged position. So for a while I was feeling bad about applying to grants and had to talk to my advisor and other peers about it to figure out if I’m in the wrong here of applying for more money, even though I already have a more stable income.

09:28 Emily: So it seems like even though a lot of your peers were supportive of this and they were helping you edit your applications and so forth, a few, a minority, were making these comments. What do you think their kind of motivation was behind that?

09:43 Sam: I think a lot of students — we’ve had protests in California about this — are struggling financially in some ways, or maybe they don’t get the grants that they want, and then they’re feeling like I’m getting a lot of grants and my research is very attractive for the current context with everything going on in Congress and wanting to improve that. I naturally do have an attractive topic and I think some people feel like maybe their topics aren’t reaching that same attractiveness when it comes to advertising your own research. Also it’s hard being a grad student and I’ve worked really, really hard to have really good grants. When I did the GRFP, I went to the writing center on campus at least 12 times and had dozens of friends review it and professors review it, so I really, really take my time with grants where I know some people also can do them last minute because they’re so overwhelmed with everything else. I think it depends on the person, but it’s just the struggle a lot to get grants in the first place, I think.

10:38 Emily: Yeah, definitely. I understand that at some point, this sort of crystallized and it was not only people by happenstance noticing that you won this grant or that grant, even though you already had the GRFP, but at some point it came down in black and white. Can you tell us about that?

10:54 Sam: Earlier this year, our department got together and decided to make a spreadsheet of everyone’s income from the department, because this was part of our consolidarity with the COLA protests. And for those who don’t know, COLA stands for cost of living adjustment. Here in California there’s been a lot of protest from grad students around, the cost of living adjustment, especially at UC Santa Cruz, where a lot of grad students are spending 50 to 70% of their income on just their housing alone, because it’s so expensive to live and they are demanding to have an adjustment to their rent because they are so rent burdened. So UC Irvine and my department in particular, especially one or two students who are really involved in the unions on campus, wanted to make a spreadsheet to show how much did we all make because we needed the data in order to demonstrate how most of us are rent burdened. Even though we have subsidized housing, even though we are a tech department, we found out that 99% of us are still rent burdened just going through this. But did find out in that instance that I do make more money than everyone else in the department. And that was in black and white and that’s on a spreadsheet that’s available to all students in my department to see.

12:03 Emily: I think this is a great process to go through actually and I am very in favor of more transparency around what people make, especially in grad school, not necessarily with your name tied to it, but just what people are making and the range. I’m kind of curious about why you ended up, I guess it was because it was asked of everyone, but what the motivation was for including people who were on fellowship, especially external fellowships like yours, along with people making the baseline stipend from the department. The argument is going to be about increasing the baseline stipend, right? So is it, we want the bottom sector here, that’s just making the baseline to be brought up closer to where you are, closer to where other people who receive outside fellowships are? I’m kind of wondering what the angle is on that.

12:47 Sam: That’s a great question. When this was sent out to students, it was completely optional. You had the option of doing it anonymously. I think most of us just decided to do it publicly and to be able to share how much, and we did put specific notes for each person of like where your funding was coming from — is this the baseline, or is this with an addition to external income? Is this pre-tax, this is post tax?. So we had all those details as well and it is a good question because I think with our department particular, there is an assumption, especially in the summertime that you’re going to go out and get other sorts of funding. And they know that there are a lot of students in our department who have Google and Facebook and Amazon and other sorts of internships because we are a more attractive group for those big tech companies that overcompensate sometimes for this wealth gap and this discrepancy for teaching.

13:34 Sam: I think that was also sort of demonstrating, even if there was a baseline, how much students were maybe feeling like they have to go for these internships in order to supplement their income. And just seeing these different discrepancies of if you were lucky and privileged enough to even get an internship. There’s actually someone in our department who studies this and how to get a tech internship, and she’s really helpful, but also shows the different discrepancies that can happen for who gets it and who doesn’t. So all those details, I think, were just really interesting to sort of demonstrate how broad the ranges and incomes in our department, just for students.

14:06 Emily: Yeah. It’s a super interesting project. I’ve actually recently heard of another, not related to the California specific protest, but another department where students took this on and used it as a negotiation tactic, as in a sense collective bargaining, although they were not in a union. So it can be a really powerful exercise. And what happened with either your peers or with your own feelings about this after the spreadsheet is out there?

14:28 Sam: The spreadsheet was out there during the pandemic, so I haven’t seen much of my peers in person, so there’s less discussion that I can have with them. Definitely for me personally, it did really two main things for me. First, it really sort of solidified this idea that I do make more money than everyone else in the department, and sort of feeling a little bit shameful and a little bit uncomfortable with that, but also at the same time, recognizing that I have a privilege to have these sort of grants and I’ve worked for it, but I’ve also been very lucky with some of these grants. And because of that, I do feel like I have a responsibility to share that and make that transparent and advocate for the people in my department who don’t. So on the one hand, it does make me uncomfortable to come out and say like, “Oh, I make a lot of grant money and I do a lot of other things to supplement that money in different ways, but also I am privileged enough to share this with you to show these discrepancies and make sure that we’re all coming up to a baseline.” And even before I had my tech internships, despite getting all these grants, I was still technically considered rent burdened. It’s kind of funny to show that you make more, but we’re all still in this sort of struggling standpoint, so it doesn’t really help to have as many tensions, in-fighting, I guess, as much as it is to collectively work together.

Continuing to Apply for Additional Grants

15:38 Emily: How did you feel regarding going after more funding?

15:45 Sam: That was a little bit hard for me. I had to talk to my advisor once about this and really figure out what’s the best path, because I did have to tell her once that I felt uncomfortable applying for more because I’ve gotten some of these comments. I was like, “I have enough, I’d be okay.” And she really sat me down and made sure I remembered what my worth is and that grants are really important for CVs if you’re wanting to go into academia, and that you should not stop applying for things just because you have some money.

16:13 Sam: I have a great example of this where actually one of my funders, the democracy fund in DC helped me fund an entire summer in DC and they asked me, “Okay, how much do you need to do your research? And I was like, “okay, well I need this much for housing and this much for food and this much for a plane ride and some Metro and like, that’s it.” And they came back to me and said, “This is great, but you forgot to mention your actual value in terms of the work that you’re doing for this grant, so we’re going to double what you’re asking for.” That just blew my mind because it was the first time that someone came to me and told me you’re worth way more than you’re asking for and you need to make sure that you’re asking for these things at a higher level. I think even now I am getting these grant fundings, it doesn’t necessarily mean that that is my baseline worth just because I get something. And that took me a while from my advisor really encouraged me to keep applying for grants coming to me and telling me that I’m worth more than what I’m asking for.

Commercial

17:06 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.

Understanding the Value of Your Work

18:12 Emily: I’m really glad that you can share that with our listeners, because some other people in the audience might be feeling the same way — sort of limiting themselves and saying, “well, I shouldn’t go after more. I shouldn’t do this. I shouldn’t do that.” You had these great mentors in a sense in your life to help you push back against that, but maybe someone in the audience doesn’t have that and they’re hearing this line of thought for the first time, which is really wonderful, so I’m really glad you’re sharing that with us now. Is there anything else that you want to say about like understanding your worth? I mean, that is not just in the context of fellowship and grant applications, but just for graduate students more broadly, this is a very tricky topic to value yourself.

18:53 Sam: Yeah, absolutely. I think sometimes our expertise and our ability to do stuff is so undervalued and it’s hard to measure how much you’re personally valued, right? Because you have all these different discrepancies and how different grad students are getting paid. How much you’re worth versus another grad student. You really, I think just have to sit yourself down and look at comparatively, if I were to go into industry right now, how much would I be making? How much is my value in terms of giving to different nonprofits or companies, which was what I was doing. I was technically partially consulting, but mostly had a grant to do my own research. Having those opportunities and making myself step out there and ask other people, “how much am I worth to you?” I think that makes a big difference, so I’d recommend to students to really go out there and see like how much is my value in other places versus in grad school, where I think we have this skewed sense because of this limited budgeting construct, of how much you’re actually worth.

19:46 Emily: I think that’s a really excellent point and I want to underline it that who is paying you, that context, matters a lot in how much you can command for your value. Your value can be the same in the academic context, in the private sector, or in the nonprofit sector. But what you can get paid is vastly different from those different contexts and if you stay stuck in just the academic context, you’re not really going to realize all those different price points, in a sense, for your work.

20:16 Sam: Yeah, absolutely. I’ve come across different discrepancies, even internally, because in addition to having the GRFP and doing my research, I was extremely lucky and my department gave me a chance to teach twice, the first time being right at the onset of the pandemic. And me never teaching before and then teaching 140 students online wasn’t the funnest, but it really showed me how much they were also paying. And actually apparently we get paid more as grad student lectures than adjunct faculty do, which is kind of crazy think about because we have a better union. Recognizing the transparency that “wait I’m a grad student, but I make more than an adjunct faculty.” That’s just telling me that the value system inside the university is skewed and I really shouldn’t use that as a metric for my worth and that I really need to go outside the university bubble to understand that metric at least for grad school.

Financial Transparency in Academia

21:10 Emily: I understand we’ve been in COVID times, you haven’t seen much of your peers so I don’t know if you’ve actually, now that you have this new mindset around going after things and valuing yourself, maybe you haven’t had a chance really to speak with your peers and receive a comment and be able to respond or push back against it. Certainly tell us, have you had that opportunity at all?

21:33 Sam: No, I really haven’t just because everything’s remote and most of the stuff is just friendly, get togethers and things like that. There was a little bit of work with COLA still going on, but that’s a little bit hard with everything being remote and kind of put off to the wayside, I think, in a lot of people’s minds.

21:48 Emily: Definitely. I guess maybe in preparation for you once again seeing your peers in some months, maybe — we’re recording this in January, 2021 — is there anything that you think that you’ll say to your peers at that time, or maybe something you wished you could go back and tell them, earlier on in this process when these comments started?

22:09 Sam: Yeah, absolutely. I mean, the biggest takeaway that I’ve really found, especially contributing to this data when it comes to COLA is that we’re really all in this together. And it’s really important to be open to this process, to share it with other grad students and to not really react negatively when other people are potentially making more than you are applying for more grants than you are, because everyone’s so different. Especially even in my department — my first advisor was an anthropologist, my second was a computer scientist, and my third had a business degree a PhD. Even in that, the professors in our department have different scales of finances just because they come from different backgrounds, so it’s all a little bit hodgepodge anyways.

22:46 Sam: But most importantly, I think it’s important to be transparent. I had an occasion where we had new grad students come into the department, like accepted grad students, and they had a panel of current grad students answering questions about what it’s like living in Irvine. What is the rent like? What is it like being a student and what type of classes do you take? And one of the accepted students asked “what is your stipend like, and how much is it to live on campus?” And none of the other students on the panel were directly answering the question. They’re like, “Oh, it’s enough. It’s reasonable.” And I was like, why aren’t you giving people a number and I just straight up said, make this much money. This is how much I pay for rent. And this is for this type of housing. And they’re like, “Oh, thank you. That’s really helpful.” And I think there’s a stigma still even just to share for accepted students, this is how much you’re actually going to make, because there’s some uncomfortableness with this transparency that I think really needs to be broken because it really does help us collectively to have those discussion.

23:46 Emily: Yeah, thank you for that. And of course, I also contribute to and promote this process through my website, PhDstipends.com and PostdocSalaries.com. That’s an anonymous way that you can share what you’re making, what the funding sources and so forth, because that is also super, as you were just saying, important in this context. Are you making a baseline stipend? Do you have supplemental money coming in from XYZ, other sources? Are you taking out student loans to supplement the income because the rent is so high? Whatever the situation is I’m definitely in favor of being more transparent about it. But I certainly understand the discomfort because this is not, of course, something that exists only inside academia, only in our context, but in our entire society. Employers, even if they can’t actually disallow it, certainly discourage employees from sharing their salaries with one another. It’s really an entire society wide situation, so it’s really commendable for you and also for your peers that you are doing more to throw back the curtain and say this is what it is and we want more and using it as like a bargaining tool. It’s really awesome.

24:49 Sam: Yeah, absolutely. And especially, I think now that we’re having more conversations about minority students and getting a leg up for a lot of people who are underprivileged, it helps to know where the line is and what they should be meeting equally. I work a lot with Congress and there are so many debates about congressional staffers, because staffers are woefully underpaid, but there’s no transparency as much. There is some in documentation about knowing people’s worth in that context. So I’ve just been around these discussions and I feel like the more that we can pull back the curtain, the more we can level up people, especially people who are underprivileged in the beginning and even that playing field.

Advice for Other Early Career PhDs

25:22 Emily: Yeah. Thank you so much and thank you for your willingness to come on the podcast and talk about this because it’s a bit of an uncomfortable process. As we wrap up the interview, the question that I like to ask all of my guests is what is your best financial advice for another early career PhD? And that could be something that we’ve touched on in this interview, or it could be something completely different.

35:43 Sam: Yeah, absolutely. Going along with the theme here, apply to everything, even if you think you have enough, because you’re often worth way more than you think that you are, things cost more than you think they’re going to be in the beginning. That’s always something that happens too. So I think that’s really, really important and always being smart with your money. I’m personally a big fan of the FIRE method. I barely eat out. My activates that I love are cheap, so I’m just naturally in that mindset of being more financially savvy than I think a lot of people want to be, but that’s okay, and that’s my position. Not everyone needs that. But I think the more that people understand to apply and to really say “I could have more and I can really utilize this to my own advantage.” Take advantage of it. There’s so many grants out there that barely anyone applies to and those micro grants really can add up. Just applying for anything that you possibly can, I think is really important. And I know sometimes you get tired, especially towards the end of your PhD, like I am now, but it definitely makes a huge effect in the long run, especially you want to talk about compound interest and investments and things like that. Absolutely doing those as much as possible in the beginning.

26:49 Emily: Yeah. Thank you so much for that advice. And I totally agree with that. I want to emphasize two components of that. One is, like you were just mentioning, kind of the only way you can get a raise as a graduate student is to win outside funding. And whether that is outside funding that replaces your stipend at a higher level or supplements a stipend that you’re receiving, maybe like you mentioned earlier, taking on extra teaching work could be another way to do that. But the fellowship and grant applications are really the way to do it without actually adding more work to your life, so it’s kind of the equivalent of getting raised rather than just taking on more hours of work. A lot of paths to higher income are barred for graduate students, but this is one that is available.

27:30 Emily: The second thing that I wanted to emphasize is, you mentioned earlier that your advisors don’t have funding for you, so this was completely your responsibility. I think that’s part of this mindset of you know that you have to provide for yourself, but I just want to emphasize for people who do have funding to fall back on as a research assistant or teaching assistant, whatever it is for their advisors or their departments, the word guarantee might be in there, but what does it actually mean? And the word guarantee you might not be in there and what does that mean? I had a friend for example who had the NSF GRFP and that finished and she still needed another year or something. And because of a situation going on with her advisor not providing funding as he had in the past, she was left unfunded for a year. That was not something she ever anticipated. That was not supposed to happen in the way the funding typically went in this department, but it did happen. She had to negotiate and say, “you know what, I brought in the GRFP, you can give me another year. I brought in three years of funding.” But that wasn’t necessarily guaranteed to work.

28:37 Emily: In a sense, in academia you’re a little bit like an entrepreneur. You have to hustle for your own money. Yes, you’re supposed to be paid by someone, but how secure is that really? It feels to me a little bit more secure to be applying for lots of different things, have a lot of irons in the fire. And if those don’t work out, at least you can say to your department or to your advisor, “I have applied for four grants in the last year. Hey, they didn’t work out, can you give me some bridge funding?” There’s a way to argue about that too. I think there’s a lot of merits and a lot of different directions for applying for as much as you possibly can. I’m really glad you came back around to that position after having these conversations with your advisor and so forth.

29:19 Sam: Yeah, absolutely. And I love what you said about thinking about it as a raise. Especially as you’re getting more and more in your PhD, you are more valuable, but your finances stay exactly the same. I love the idea of thinking about applying as a way to show that your worth increases over time. Thanks for sharing that too. Yeah.

29:35 Emily: Well, thank you so much for joining me today for this interview, Sam, this was really enlightening.

29:39 Sam: Yeah, absolutely. Thank you so much!

Listener Q&A: Investing

Question

29:42 Emily: Now onto another one of our new segments, the listener question and answer. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall, so it is anonymous. Please note that nothing I say in the segment or anywhere else on the podcast is investing advice.

Answer

30:00 Emily: Here’s the question: How do I invest? I don’t have time to monitor the stock market constantly, but I would like to have at least a small amount of money invested.

30:10 Emily: What a wonderful question and I am so on board with the sentiment here. I also do not have time to monitor the stock market constantly. Who does? Honestly, I feel like people who do have the time and inclination to constantly monitor the stock market should just make that their full-time job, like go become a fund manager and get paid millions of dollars to do so instead of just doing it for your own paltry assets.

30:33 Emily: The good news is that spending that kind of time on investing is absolutely not necessary. In fact, in 99+% the cases it’s actually counter-productive to do. Let me introduce a term to you: passive investing, also known as index investing. Passive investing is the most effective least expensive and most time efficient manner of investing.

31:00 Emily: The real quick gist of passive investing is that you buy one or a small number of index funds and you hold those funds in your portfolio long-term in a percent-wise allocation that you have determined in advance. Index funds themselves are collections of, we’ll stick with the stock market, collections of stocks that reflect a broad market sector. So in these funds, the fund manager is not trying to pick the winners and dump the losers. They’re just trying to buy either everything or a representative selection of everything available in that market sector. My go-to example is always the S&P 500 index. When you listen to the stock market news of the day, you’re going to hear how the S&P 500 and the NASDAQ and the Dow Jones did. So those are three indices that represent how the market overall is doing. The S&P 500 has a really clear definition. It’s simply the 500 largest companies that are traded on the US stock exchanges. So if you were to purchase an S&P 500 index fund, you would be a part owner, a very small part owner,of all 500 of those companies. So that represents the market sector of large cap companies, the largest companies. So basically the learning and the research that you need to do is to understand what passive investing is, what index funds are and which index funds you want to purchase and in what allocation. This might take you a few hours of upfront investment of your time, but it’s not something that you need to put time into on a continual basis. Once you’ve decided on your strategy, you basically just let it ride. Another really easy set it and forget it way of accomplishing this is to use what’s called a target date retirement fund, which is in itself a collection of index funds in a percent-wise allocation like I described earlier.

32:53 Emily: So where to go next for resources. I actually have a set of webinars inside the Personal Finance for PhDs Community explaining what passive investing is, what index funds and exchange traded funds are, how to choose them, which brokerage firm to use for your investments, whether you use an Roth or a traditional IRA, all these kinds of questions. So if you would like to view that webinars series, simply join the Personal Finance for PhDs community at pfforphds.community. And that webinars series will be immediately visible to you. I also have inside the community, a challenge that I ran a few months back on opening your first IRA. So you might be interested in following the steps of that challenge, which point to certain webinars to watch in a certain sequence and other steps to take. That might be relevant for you. Or you could do something like read a book such as the Simple Path to Wealth by JL Collins.

33:46 Emily: Now, another element to this question is that you mentioned you want to have a small amount of money invested. You might be tempted to use. What’s called a micro investing platform. Those are brokerages that specialize in helping people with zero capital upfront get started with investing. Some names you may have heard are Acorns, Robinhood, M1, these kinds of platforms. I want you to be really careful when you’re choosing the platform to go with. Ideally, you would only pay the fee associated with the ETF itself that you end up buying. You wouldn’t be paying fees on top of that. For example, some of these platforms charge like $1 per month to be invested with them. I want you to avoid a platform that charges, that kind of fee. Because when you are investing only a small amount of money, a fee of $1 per month actually takes a big, big bite out of that money. So if you go with a micro investing platform, make sure it’s one that doesn’t charge any fees on top of the underlying ETF fees.

34:46 Emily: You also should check whether the platform offers IRAs, individual retirement arrangements. It might not seem important when you’re just starting out with investing, but retirement investing should probably be your top investing goal when you’re starting out, because it is such a large need, even though it’s a long time away. For example, Robinhood fit some of the criteria I mentioned earlier — they don’t charge you fees on trades, you can buy ETFs through that platform, but they don’t offer IRAs, at least as of the time of this recording. It’s very worthwhile to check out what are called the online discount brokerage firms, like Vanguard, Fidelity, and Charles Schwab. Those are kind of my go tos for being able to avoid higher fees that might be charged by other companies. However, the issue is that sometimes they have minimum amounts that you need to invest to get started, like maybe a thousand dollars, which of course is not at all a that you would have that much money. So in my mind, those are the places to get to, eventually maybe when you’re starting out or maybe later on. But if you need to start out in a micro investing platform or a robo-advisor at the beginning, that’s perfectly fine.

35:51 Emily: I think once you really understand the concept of passive investing and how simple it is, how easy in a sense it is to build up wealth over the decades, you’re going to want to have more than a small amount of money invested. You’re going to be really motivated to increase that savings rate and a discount brokerage firm is a great place to be when you’re saving a hundred dollars a month or more, or have a thousand dollars in your account already. Personally, when I first opened my IRA and started investing, I went with Fidelity because at that time they allowed me to open an account with no money up front, as long as I set up a recurring savings rate of at least $50 per month. So I did that for a little bit over a year until I had $3,000 in my IRA. And then I transferred my account over to Vanguard. They had a $3,000 minimum at that time, and I’ve been with Vanguard ever since. So I hope that is a start to answer your question and that you have a place to go for our further resources, either with me or other people who talk about this. And I really want to encourage you at the start of this investing journey, so I do hope you’ll take that next step. 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 listeners.

Outtro

37:10 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.

What Happens When Personal Finance Education Becomes Your Hobby

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In this episode, Emily interviews Laura Frater, a first-year PhD student at the University of California at Davis. Laura grew up in a low-income family in Scotland and first came to the US a few years ago for a master’s degree. She went from having “zero financial literacy” at that time to being highly engaged with her finances now, and even considers personal finance education to be her hobby! Laura details the top seven tips for financial success that she has implemented over the last few years, including one just for international students. She continues to discover new strategies and experiment with her finances.

Links Mentioned in this Episode

financial education hobby

Teaser

00:00 Laura: You don’t have to sort of wait to be an adult to do those things. Like you are an adult already in grad school, and you can do other things that adults do with their money for sure.

Introduction

00:14 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode two, and my guest today is Laura Frater, a first-year PhD student at the University of California at Davis. Laura grew up in a low-income family in Scotland and first came to the U.S. a few years ago for a master’s degree. She went from having zero financial literacy at that time to being highly engaged with her finances now and even considers personal finance education to be her hobby. Laura details the top seven tips for financial success that she has implemented over the last few years, including one just for international students. She continues to discover new strategies and experiment with her finances. For season eight of the podcast, I’ve shifted up the format. There are two new short segments, one before, and one after the interview. I hope this new format will encourage more interactions between me and you, the listener.

01:17 Emily: January is always an exciting month for Personal Finance for PhDs. First, it’s a brand new year, so a lot of people have a heightened interest in personal finance at this time. They want to start budgeting, increase their savings, open IRAs, et cetera, and I love that energy. Second, tax season has started. I rarely file my own tax return before April 15th, but I’ve learned that a lot of people file in January to get their tax refunds ASAP. Therefore, I’ve already kicked off my tax support for your 2020 return, which you heard about in last week’s episode. Third, I view January as the start of admissions season for PhD programs. Although, I know some people receive acceptances even earlier. So, it’s a thrilling and hopeful time of year for prospective graduate students, and a perfect time of year for them to connect with my material.

02:10 Emily: If you would like to learn more about personal finance and want a friendly environment in which to ask questions and discuss topics, including all of the ones I just mentioned, please consider joining the Personal Finance for PhDs Community at pfforphds.com/community. If you know that you want support in accomplishing a big financial goal this spring, I recommend my group coaching program, The Wealthy PhD. You and I will meet one-on-one to identify and plot a course toward a big financial goal. Past participants have opened IRAs, set up systems of targeted savings, started budgeting, and systematically implemented frugal tactics. Every week for eight weeks, you will participate in a small accountability group that I facilitate that will keep you on track to meet small weekly goals. The next round of The Wealthy PhD starts in mid-February, and enrollment is open now. Visit pfforphds.com/wealthyPhD to learn more.

Book Giveaway Contest

03:12 Emily: Now, onto one of the two new segments, the book giveaway contest. In January 2021, I’m giving away one copy of The House Hacking Strategy by Craig Curelop, which is the Personal Finance for PhDs Community book club selection for March 2021. Everyone who enters the contest during January will have a chance to win a copy of this book. I’m super enthused for my audience to learn about house hacking, which is when you buy a home, live in it, and rent out part of it, thereby radically reducing or even eliminating your housing expense. In fact, I’m bringing back a special guest from the past to discuss the strategy with me in an episode that will be published at the end of January. We’re going to tell you how even a grad student in certain housing markets can apply the principles explained in this book. And certainly, it’s even more viable if you have post-PhD income. If you’d 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 [email protected]. I’ll choose a winner at the end of January, from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Laura Frater.

Will You Please Introduce Yourself Further?

04:29 Emily: I am delighted to have joining me on the podcast today Laura Frater. She is a first-year PhD student at UC Davis, and she’s going to be kind of telling us the arc of her financial story, starting as international student, and now, you know, in her PhD. And she has a great story to tell. And she’s going to be specifically telling us a few different strategies that she’s used, seven different strategies she’s used, in the course of this time to kind of get her financial life in order and now going into a PhD program. So Laura, it’s really a pleasure to have you on thank you so much for volunteering. And would you please, you know, tell the audience a little bit more about yourself?

05:10 Laura: Yeah, sure. So, my name is Laura and I just turned 29. I am originally from Scotland. I was born and raised in Glasgow and I moved to the U.S. when I was 25. So, it’s been about four years. I originally came to do my Master’s in English in New York city. And after four years of being there for very long years, I moved to Oakland, California with my husband about three months ago. So yeah, I’m still settling in and learning how to finally manage my money properly with my brand new graduate stipend, which is exciting.

Funding Journey Over the Past Four Years

05:43 Emily: Great. And so just to get a little bit more detail there, was your master’s funded? Were you paying for yourself? What were the financials during that period?

05:51 Laura: Yeah. Good question. So, I was there as an international student but it was a private school, so I had a full scholarship. I had all my tuition paid for, and then I had a fairly modest bi-weekly stipend over the course of two years. So, obviously it wasn’t a lot of money, but it kind of paid for things like travel. And my now-husband was a rock star and he took care of things like rent. So, I was definitely in a very fortunate situation overall.

06:21 Emily: And did you finish your master’s within those two funded years? And what did you do for the next two years? We’re talking about a four-year period, right?

06:28 Laura: Yeah. Four years. So the first two years, yeah, I started 2016, finished 2018. And then I went onto what’s called the OPT visa, which is like a temporary work visa for international students. So I spent about a year working on that visa, and long story cut short, I got married and applied for my green card and became a permanent resident last year.

06:53 Emily: Okay, gotcha. So, I wanted to give the listeners as well, a flavor of like your current financials. So, you came to the U.S. What was your financial life at that time, and what are you doing now? Like sort of where are you now? And then we’ll talk about, you know, how did you get from point A to point B? So, you know, what was point A, what’s point B like?

07:11 Laura: Yeah, well, point A was just a total lack of awareness with money. So, I really, I didn’t really grow up with any financial literacy, and I grew up in a very, just like a low-income household, basically. So, money was just always associated with stress and limitations. So, I didn’t have any knowledge about managing it effectively. So I would, I tended to, you know, pay for everything I needed to pay for. And then I would try and like hoard all my money and save everything, but that’s just not realistic. So, it was kind of a mess. And when I was not able to work last year waiting for my green card, I just made a huge point to learn about finances and become as aware as possible about every dollar and where it was going. So, today it’s just much more about engagement and seeing it as a way to feel more free, basically. As free as you can be in graduate school.

Financial Strategy #1: 50-30-20 Rule

08:08 Emily: Okay. So, it’s really been a lot of like sort of mindset evolution then during that period of time. And it sounds like you went about it also very intentionally, at least for a period last year. So, let’s dive into the strategies then. You have six strategies that will be sort of applicable to hopefully anybody and then one that’s particular for international students. So, we’ll talk through each one of these. So, first strategy, what is it?

08:31 Laura: Okay, so this is something I definitely picked up listening to your podcast. So, knowing exactly where your money’s going and what the goal of those segments of money actually is. Again, this is something I learned from you was just the 50, 30, 20 rule. So, 50% goes towards everything you need to pay every month, like rent and utilities, and then 30% is for your wants–things that you want to spend money on–and then 20% towards your savings goals. So, just having those goals clearly outlined has been the biggest thing.

09:04 Emily: Yeah. I definitely like that touch point, which is why you’ve heard it from me before, but I’m curious how it struck you living in New York and now living in California. Because sometimes it’s really hard to hear that living in a high cost-of-living area.

09:17 Laura: Yeah, it’s definitely challenging. And I should definitely preface this by saying that, you know, being married, I share my expenses with somebody, so I have a benefit in that sense, for sure. We talk about our money really openly and we both stay within that 50, 30, 20 limit. So, we really talked about the kind of lifestyle that we could number one afford, and then, okay. So, were we willing to make certain sacrifices to live where we ideally wanted to live? So yeah, we probably spent about a month deciding on, you know, where we wanted to live, the cost of the apartment, did we want a car. All those kinds of things. And yeah, we definitely live, we live in Oakland, so it’s very expensive, but it’s a trade-off. We’ve had to be at peace with that choice.

Impact of Location and Commute

10:05 Emily: And let me, I’ll just ask also, so you’re living in Oakland, but you’re going to UC Davis, and those are not the same city. So, is there like, are you commuting or is it different now because maybe you’re remote or what’s going on with like your choice of location?

10:19 Laura: Yeah. So everything is online at Davis until next year. So, our lease in Oakland ends October, 2021. So, we definitely have the option to go closer to Davis if we want. But honestly, my schedule is very flexible and I only have to be up there twice a week, on average, if I was going up there. So, I don’t anticipate us moving somewhere cheaper so that I can be closer to Davis. My husband works in tech, so he has to be in San Francisco. So it’s really, we have to prioritize how much he has to commute, because that would be like an everyday occurrence almost for him.

10:56 Emily: Gotcha. Well, we’ll see how all of this evolves. You know, we’re recording this interview in November, 2020, and the future is very uncertain. I guess you at least know when your remote period will definitely go until, if not maybe further. Yeah. So, we’ll see how that goes. Anything else you want to say about that? The strategy of like, of budgeting and balancing?

11:17 Laura: I mean, I think you just have to like, not be afraid of the numbers and, you know, we really sat down, especially with the rent. Coming from Manhattan, we thought there’s no way it can be more expensive than Manhattan. And it was. So, you know, this is down to my husband’s great sales skills. He really haggled with the building and got us a really good deal. I wish I could give advice on how to do that, but I don’t. You might be better to interview him for that. So, we got about 12 weeks off of our rent. So, three months of this year we don’t pay for, and we managed to get free parking in our building as well for a little bit. So, negotiation skills is probably my next financial education to-do list point.

Financial Strategy #2: Side Hustles

12:01 Emily: Yeah, that’s incredible. And I think that’s both, it’s just good to know that it’s possible and some people are successful with it. Even if you don’t know, like particularly the script that he used or whatever, you can look up those kinds of things. But I am thinking that, you know, being in San Francisco adjacent kind of area, and also during COVID times, you know, the willingness to negotiate on behalf of the company that’s running the building or whatever is probably increased. So, it’s worth trying whenever, but I suspect your success rates are going to be higher now than they will be a year or two from now or whatever. Okay. So, what is strategy number two?

12:38 Laura: So, number two is something, again, that you’ve talked about a lot is side hustles. So, I’d always aimed to find a side hustle during grad school. You kind of have to. But, I ideally wanted something that was remote during this weird time. So, I was lucky to get, it’s a grading job with UT Austin. So, you’re basically grading papers for this program that they do for high school students who are taking college-level composition classes. And I’m not totally sure how I feel about it yet. It’s definitely a lot of work for the money that you make. So, that’s something to probably think about. You know, maybe have a goal in mind in terms of how much money you want to make off of your side hustle, how much you need to make, and then decide whether that side hustle is the best fit for you. So, I’m going to do it for a few more months and see what else is out there. But I would never say no to even like a little bit extra money in the week on those stipends. So yeah, definitely go for a side hustle if you can.

13:37 Emily: Yeah. So, I do want to note that you’re saying that you did the side hustle post-getting your green card, because you’re not allowed to have an income that you are working for as an international student. So this is only for, you know, people who are citizens or residents and also even a subgroup within that of people who are not going to be risking their funding by pursuing a side hustle or, you know, their relationship with their advisor or whatever. So, it sounds like the kind of the one that you chose is probably quite flexible. Maybe the pay is not great for the hours, but you can fit it in around the other things that you’re doing.

Flexibility and Fellowships

14:09 Laura: Yeah, totally. It’s definitely very flexible and yeah, that’s a good point. I’m on a fellowship. So, I cannot work at UC Davis or any of the UC campuses, but I’m allowed to work anywhere else off those campuses. So, this was actually recommended to me by UC Davis and I felt pretty confident going into it that it was, you know, a good space in which to work. So, yeah, I think keeping an eye on how much I’m probably making per hour, given how much work I’m doing for them. And I love the job itself. I just want to be careful that I’m not giving too much of my time for, you know, a really low rate of money. So, that’s something to definitely be aware of.

14:48 Emily: Yeah. I’m really glad that UC Davis actually gave you that clarity around what the policy was, because I don’t know that that’s actually that common. So like, here’s what’s not allowed, here’s what it is allowed. Oh, recommendations for what, you know, what work you might do. I know I had a side hustle that was doing editing for journal articles for a while after I finished my PhD. And I similarly had to be really conscious and sort of suppress my like perfectionist tendencies, because I was just like, for the rate that I’m being paid, I need to be very careful how much time I spend per paper. And like, yeah, maybe I’m just going to get it 90% of the way there. That’s okay. That’s good enough. And not, you know, toil over every like last detail. So, yeah. Great tip to be conscious about that. Anything else you wanted to add about side hustling?

15:32 Laura: So, one thing I am doing right now is I’m almost a qualified yoga teacher. So, that is something I really want to pursue. And I don’t know enough about setting up my own business yet and things like that. You obviously want to make sure that you’re not, you know, you want to be paying taxes and things like that. That’s really important. But the yoga stuff is just something I love to do. And I started becoming a teacher actually during COVID. Like right at the beginning, there was a really great online course. So things like that, you know, try and make those side hustles fit in with your schedule. Don’t be like missing time on studying just to make money if you can avoid it. So yeah, just looking for flexibility and not being exploited is the most important thing, I think.

16:15 Emily: Totally agree with both of those. And I’ll also add, I really like that you are just experimenting with things. You know, like you aren’t holding onto like, what’s exactly the most perfect thing, and that’s the only thing that’s going to be acceptable. Or you don’t have these limiting beliefs around, I’m not allowed to do anything. I can’t do anything. I can’t fit it in, I don’t have time, I’m not allowed. Yeah, you’re just trying things out and I think that’s a great approach.

16:36 Laura: Yeah. It’s definitely fun. And you know, again, podcasts like yours, you know, finding out from other people what they’re doing. It doesn’t have to be a conventional, probably pretty dull side hustle. Like, you know, try and enjoy your life as much as possible because I think these years only get more intense as you keep going with the PhD. So, try and do something that is good for your soul as well as your bank account.

Financial Strategy #3: Check Your Bank Account Regularly

16:58 Emily: Yeah, that sounds good. Okay. Let’s talk about your third strategy.

17:03 Laura: Yes. So, I think just checking your bank account every single day is, it seems like the most simple advice, but something that I never used to do. I would just, you know, live in denial and not check it for days at a time. So, like take advantage of the apps from your bank. Like they need to be good for something. So, have it on your phone, check it every day. And I also try and look at the last five to six transactions. And I try and work out, are there any patterns in my spending? Are there things that I’m wasting money on? But that also helps you figure out what you actually enjoy spending your money on in the first place, so you can be prepared for it. And it also will just show up any kind of like random transactions that were maybe incorrect, which actually do happen. Like you think that they won’t, but they definitely do.

17:51 Emily: I have an example of that actually, that I was looking at our, my husband, I share a Mint account. I was looking at it the other day, and I saw a charge from Amazon Music for like $15. And I was like, Hmm, husband, did you subscribe to Amazon music without discussing that with me? And he goes, Oh, no, like weirdly my phone was like freezing up and I thought I tapped something and then I wasn’t sure. And so anyway, it was a total mistake that he, you know, accidentally subscribed and, and he, you know, he talked with them and he got it reversed and it was totally fine. But if we had gone a month or two without like catching that, or if it had just gone into the, you know, swept away with all the other transactions, then, Hey, you’re out $15 every single month. Not just one time.

18:32 Laura: Yeah. It’s a lot of money. I mean, also like looking for those free trials that you forget to cancel. Happened to me twice this month. I was so embarrassed because I pride myself on not letting that happen, but Microsoft charged me 75 bucks, which, you know, I would have gotten that free through Davis and I forgot that I paid for last year, and Hulu as well. So yeah, we still have it for one more month, but not worth it at all.

Monitoring Short-Term Savings Goals

18:56 Emily: So, what else do you get out of the particular strategy of checking every single day? Like, are you, I mean, you mentioned finding patterns in your spending, which I think is super valuable. What else are you getting out of that practice?

19:09 Laura: I think the other thing right now that I’m getting out of it is checking on my short-term savings goals, which I’ve actually established, which is really great and has lowered my anxiety. Also like looking for avoiding any bank fees, which are really, really tricky, especially with someone like Wells Fargo, who we can talk about that later, maybe, but like that bank is terrible about those fees. Checking for example, how many times I’ve used my debit card to make sure that I avoid the monthly fee. Things like that, that I never really did before. It’s just another way to be as fully engaged as possible with my spending.

Financial Strategy #4: Make Financial Education a Hobby

19:47 Emily: Alright. So, what’s your fourth strategy?

19:49 Laura: Fourth is just making your financial education a hobby. I guess that’s the best word to describe it. I used to view finances and the education around it with a lot of fear and anxiety, but finding fun ways to learn about it has really changed my life in so many ways. For example, your podcast. I’ll go for a walk by my apartment. I’ll go running, I’ll go to the gym. And I just pick an episode and then I, you know, listen to it and I make notes on it afterwards, normally. Getting an audio book is a really good idea as well. Going on YouTube and just sifting through different people’s videos. There’s definitely some weird people out there for sure. So you can, you can judge that as you, as you figure your way through it. But just making your education a part of your lifestyle, I think is really important.

20:37 Emily: Yeah. I definitely also went down this road with when I was sort of getting, I had been learning about personal finance through reading some books and stuff, but then when I got a little bit interested and more engaged, I was reading about a lot online and like starting to connect with bloggers and then I started blogging myself. So, there was like a community, you know, developing online around it. And I definitely would call that my hobby at that time, which of course has since become my business. But at the time it was just a fun thing I was doing like, you know, wake up, like check my email and like check my like feed for, you know, what the new blog posts are. And I really liked having that perspective from other people. I think those communities have moved more towards like Reddit and YouTube now.

21:17 Emily: It’s not so much like blogging. I mean, people still do that, but it’s not quite as huge as it was at that time. But just finding like a way that you like to consume information, like you were just saying, like audio works really well for you. Obviously, I love podcasts. So, audio works for me too. Finding a way you’d like to consume information and then a few people maybe like on whatever medium that is that you like to follow. There’s a big personal finance community on YouTube now, I know. So, if that’s your thing, like you could definitely find, you know, great influences there. And yeah, I think books still have their place for sure. And if audio books can do well, or if you have the time and capacity to read, then that’s perfect too.

Commercial

21:54 Emily: Emily here for 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 at 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 material or have a question for me, please join one of my tax workshops, which you can find links to from PF F O R P H D S.com/T A X. The first live Q&A call for my workshop on preparing your 2020 PhD tax return is this Sunday, January 17th. Also, for those of you who are paid by fellowship or training grant, the deadline to make your quarter four estimated tax payment is January 15th. If you’re not going to file your tax return by the end of January. 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.

Financial Strategy #5: Decide What Makes Your Life Rich

23:21 Emily: So, what is the fifth strategy on your list?

23:24 Laura: The fifth one is actually from a really good book called I Will Teach You To Be Rich, which was actually the audio book that I just downloaded. And one of the questions, gosh, the author’s name I’ve totally blanked on.

23:36 Emily: It’s Ramit Sethi.

23:38 Laura: So, yes. He’s really great. And I wasn’t super sure about the title at first. I thought it was maybe like a little bit crass, but he has some really good advice including sit down and decide what makes your life rich. And that doesn’t mean in terms of how much money you have for retirement or how much money you have on the day-to-day, but what do you really value and what do you enjoy spending your money on? So, that was something that I kind of made my husband and I sit down and talk about. You know, like what are our individual, you know, finance goals and our joint ones as a couple in the next five, 10 years. Like where do we want to live? Like what kind of life do we want to have for ourselves? And it’s not just helped us plan our savings more appropriately, but it’s also alleviated my personal guilt when I see like what I’m spending money on. For example, I love eating out. Like I never did it growing up and I love doing it now. And that’s part of what makes my life personally rich. So, it just helps you, I think, feel less shame if you’re spending things and you’re initially worried that it’s not appropriate. But if that’s what you value, then you should enjoy it if you can afford it.

24:46 Emily: Yeah. I think Ramit’s voice is a very unique one in the personal finance space, because he does have this emphasis on, you know, spend extravagantly on the things that are really important to you and increase your income so that you can support that. And do not worry about like, cut spending in the areas that are not important to you. I was just actually listening to him as a guest on another podcast a couple of days ago. And I think he said something like, you know, he drives a super old car still and he like, there are some areas of his life that he really does not spend on, but there are a few that he’s identified they’re really important where he spends lavishly. And so that’s, I think it is a really good perspective for someone who is like you were talking about earlier, like sort of afraid to spend money or like hoarding money that like, I can definitely see how that message could help you with your own money mindset.

25:38 Emily: I Will Teach You To Be Rich actually came up earlier on the podcast and we’ll link it from the show notes. We did an interview with Dr. Amanda and she talks about how that book in particular, when it was first published like 10 years ago or whatever totally turned her like money life around. That was like the sort of inception of her money, her financial journey. So, if you want to hear another perspective on, you know, how that book’s helped someone else, that’ll be linked from the show notes. Yes.

In Other Words: What Are Your Values?

26:05 Emily: So, another way of like saying this, like figure out what makes your life rich thing, which is a little bit more like classic financial planning, is what are your values? What is important to you? You also mentioned identifying goals. And I think it’s a wonderful process. Not, you know, not a lot of graduate students might get into this because they feel like they’re more on the survival level. But what I like about this exercise of figuring out what’s really important to you, what really makes you happy, what really makes you feel satisfied, is that there are sometimes ways that you can find a way to fulfill those values that don’t involve spending. And that’s okay. Like for instance, you know, you said earlier that you’ve been trained to become a yoga teacher. So, maybe, I’m guessing, physical health and mental health and balance and things like that are important to you. And it doesn’t take a lot of money to have a yoga practice, right? So, there are ways to find fulfillment, even if you aren’t able to spend right now. But then later, you know, when your income is higher, post-PhD, you can maybe think of ways that you could spend and even enhance that more later, but still find some ways to do it now and fit it into your life right now. Instead of just sort of saying to yourself, I can never do anything. I can never spend anything. I can never afford anything because of my stipend right now. And just sort of shutting all of that down.

27:19 Laura: Totally. Yeah. And I think that’s something as a cohort when you’re in your PhD program, like you should definitely talk about that with other people. Because the attitude, at least from what I witnessed, is like, everyone’s scared about their money. But you’re totally right. If you sit down and think about what brings a particular richness to your life. But when I did it, I realized, Oh, wow, I do yoga. I love hiking. I love going for walks. Like I’m such an old lady that way. So it’s like, I have all these things already there for free. And it just helps you feel, it gives you perspective on your money. It’s, you know, you don’t have a lot right now, but that’s okay because X, Y, and Z doesn’t cost me anything.

Financial Strategy #6: Talk to Your Partner About Money

27:55 Emily: Well, it’s a wonderful point. Thank you so much for expanding on that one. Sixth strategy. What’s that one?

28:02 Laura: So, the sixth is to anyone in a relationship. Talk to your partner about money. It’s not something you talk about the first couple of years, probably, when you’re on your first dates. But I mean, my husband and I have been together for almost nine years, married for just over a year. And you know, he’s so good with money and he has such a natural interest and I have such a fear of it normally that we’re kind of a perfect match that way. But the more we’ve talked about it, the more our relationship has improved, the better our goals are with our spending. There’s no awkwardness about things that we’re both buying. We do also keep, you know, separation there, which I think is healthy. I don’t know everything that he’s spending his money on, but we both know exactly how much the other person makes every month. We both know our bills when they’re due and if there’s any kind of more extravagant purchases that we’re both thinking of having as individuals, we do run them past the other, because it’s just a respectful little gesture. So, just making it a not scary thing. Just talk about it with your partner. The worst thing is to keep it a secret, for sure.

29:10 Emily: It sounds like you two have found like a balance. You have transparency but you also have a degree of autonomy. So, no secrets, anything that needs to be flagged as brought to the other person’s attention, but the decisions are still ultimately your own individually for certain aspects of your spending. And obviously certain aspects you have to come to an agreement. I did a pretty interesting podcast interview recently with Dr. Michelle Roley-Roberts where we talked about joint and separate finances.

29:40 Laura: Yes. I listened to that.

Financial Strategy #7: Learn About U.S. Credit Card Culture

29:42 Emily: Cool. Yeah. So, I’ll link that in the show notes, in case people want to follow up on like, okay, well, what is the money management system that might work well for me? And you can certainly hear, you know, Michelle and I discuss our respective systems, which are somewhat different and somewhat similar. I think that your last strategy is specific to international students. So, will you share that one please?

30:00 Laura: Yeah. So this one, I so wish I’d known before I moved here, but better late than never. Learn about credit card culture in the USA, because it’s not going away and you will be all the better for accepting it. And I know it’s not always possible on a student visa to get a proper credit card. That was the problem I ran into, but they will give you something like a credit card from certain banks, and it will be a way to transition into an adult credit card, so to speak. I just got my first credit card. I’m not ashamed to admit it. So if anyone else out there is thinking, Oh gosh, I don’t even have one yet. It’s okay. Like better to just go and do it. But I just had so many questions about them because growing up in Scotland, we were always told don’t get a credit card. It’s, you know, it’s because you’re a failure financially, if you need to get one. But here it’s a very valuable thing to have a good credit history. So, learn about it as soon as you can, and go to your bank and just ask a ton of questions. And do not leave until you know the answer to all of them. Because they’ll try and just brush you off most of the time.

31:08 Emily: So, the credit card culture that you were just mentioning. It’s so closely held for me. I was taking a second, like, what do you mean by this? What is this culture? So, what you’re saying is like the importance of credit, like your credit score, your having good credit reports and so forth is not just for when you want to get a mortgage or when you want to take out a car loan or whatever. It can be checked by landlords. It can even be checked by employers in some cases. And so it’s like, yeah, weirdly important to have a really good credit or, you know, a decent to good credit score. And it doesn’t mean, like you were just saying, that you’re necessarily in debt or, you know, taking out lots of debt, or that you’re in a need or anything like that.

31:50 Emily: But yeah, it is it’s pretty weird and it’s pretty insidious that other kinds of payments are not reported on your credit report. Like, Hey, I pay my rent every month. Shouldn’t that count for something? And it’s also weird that your income doesn’t factor into your credit score. So, it’s a very strange system. I agree. And so, okay. So, I understand. So you had to understand what was going on with the U.S. system and kind of accept that, yes, you did need to establish a credit score. These are the steps to do, you know, get a secured card, later on, get a regular credit card once you have a credit score, and then kind of work it up from there. Is that right?

32:26 Laura: Yeah, totally. And again, like I was in a very privileged position because my husband has a credit score. But again, I didn’t know that to get an apartment, for example, in New York, even with his credit score, which is really solid, it was still a challenge. Like you got to wait until it’s processed. There are a lot of questions afterwards as well. So, just establishing that, the sooner the better. It will lift your anxiety about it and it, unfortunately it just will give you more freedom down the line. So, I would start off really small. You know, I just got my credit card and I’m only allowing myself to use it for certain expenses in the month so I can practice using it appropriately. So, just figure out how to use it properly and stick to the rules. And I think you should be good to go.

Credit Cards Can Intimidate Anyone 

33:12 Emily: I’ll actually like add in, even for, you know, people have grown up in the U.S. or whatever. Like, I also was very afraid of getting my first credit card, which thankfully I don’t know how, because I was very ignorant at the time, but thankfully I did not sign up for any credit cards during my undergraduate degree. So, I got through all of that with only, you know, I had student loans and so I actually had a credit score, but I didn’t have any credit cards. Thankfully. And by the time, I don’t know, I had just been like warned so strenuously about the dangers of credit cards that I was very, very nervous to get one for the first time. But like you, I was reading about how important it is to build credit. And this is, you know, an easy way to do it without actually paying interest on anything, which is also nice.

33:52 Emily: So, I like very carefully picked out my first credit card, very reluctantly, like signed up for it, used it very infrequently. And, you know, have still maintained that account to this day because it’s my oldest account. So, it’s definitely not just international students who can be kind of like perplexed and nervous about this whole system. It’s a little bit easier, of course, if you did go to college in the U.S. and you did take off student loans because you will have a credit score, even if you have never made a payment on student loans or anything like that. It’ll actually probably be a decent, I don’t know. It’s so weird. It’s such a weird system.

34:26 Laura: It’s so weird. Yeah. I mean one last thing I would say is just when they give you those documents at the bank with all the terms and conditions. It’s very tempting to just put it in an envelope and not look at it again. I have a whole box, actually in my office right now, and I’ve gone through the whole thing with a highlighter. And I asked my husband the definitions for things. I search online. I called the bank twice more because I wanted to confirm something. Like, ignorance is just not bliss. You just, you need to know what exactly you signed up for to really feel confident about it.

Benefits of Reflecting on Your Money Mindset

34:55 Emily: Yeah. Well, thank you so much for adding that. I know that a lot of international students I think hear this advice of open up a secured credit card when you get to the U.S. But I think a lot of them will kind of find some kinship with you in your like trepidation about this. And what exactly is this about and what are the attitudes? So, yeah. Thank you so much for adding that. So, what are the benefits that you’ve experienced from going through this, you know, this process and reflecting on your money mindset that you grew up with and putting all these strategies in place. Obviously, I’m assuming your hard numbers of your financials are looking rosier than they would have if you hadn’t gone through this process. But is there anything else that you want to add about benefits aside from the, you know, the black and white?

35:38 Laura: Yeah. I think that the biggest benefit is just, you know, getting out of this mindset as a grad student that you can’t have any savings goals. That was the big misconception that I had. You know, once you learn, for example, what an emergency fund is, what a Roth IRA is, all these little things. You realize, Oh, wait, it is possible to save for the future. Yeah. It’s not going to be as much as someone working as a lawyer or whatever, but it’s going to add up over the five, six years that you are on this smaller stipend. So, you know, it gives you a lot of hope and I think the mental health during graduate school, that’s something you have to be aware of. And putting aside, you know, a couple of hundred dollars a month to your Roth IRA, for example, that’s a great feeling. And that’s, you know, one of my goals that I have by the spring. You don’t have to sort of wait to be an adult to do those things. Like you are an adult already in grad school, and you can, you can do other things that adults do with their money for sure.

36:35 Emily: Yeah. I also, very coincidentally, I gave an interview this morning for Roostervane, which is Dr. Chris Cornthwaite’s brand. And I was talking about this as well, the mindset of really that label of being a student. It makes sense in a context, but it can really trip you up and mess you up, like in your mindset, because I think, you know, at least in the U.S., you know, for traditional college students, we’ve kind of accepted that it’s an extended adolescence period of time until you graduate from college and it’s okay to be dependent on your parents. And, you know, you may be still not really working on your finances because, Hey, you’re probably taking out a bunch of debt. We’ve kind of accepted that. And then when that student label gets applied to funded PhD students, there’s really a disconnect. And it’s much healthier, as you were just saying, to not really make that student like the closest part of your identity, but recognize that you are an adult, you need to have a well-rounded life, you know, financially healthwise, in your relationships, all these other areas. It’s not really feasible for you to kind of suppress and ignore various different facets of your life for the length of a PhD, which is very long.

37:42 Laura: No. Yeah, I completely agree. And also, I do understand the anxiety of the student label, right? But at the same time, you do have to kind of wake up to the fact that people are actually offering you money from a lot of different resources. Like, especially at Davis, where they are excellent at emailing us with fellowships and funding, money here and there. You do have to be proactive about it. You know, it’s still very hard and it’s stressful, but for example, go through your emails every month. And if you’ve missed anything with free money, put it in a spreadsheet like I’ve been doing. It does add up after a while and you realize, Oh, wait, year two, I can apply for, you know, $2,000 here for this. It doesn’t have to be so limited for the entire time.

38:26 Emily: Yeah. It’s kind of funny because I think in some ways earning more money while you’re a graduate student is like frowned upon in certain corners of academia or even not allowed as we talked about earlier. But there are other ways where earning more money is like completely sanctioned and encouraged by everyone which is applying for fellowships and applying for grants and doing all these like academia-style, like raises and like, you know, the things that we would use different terms for it outside of academia, but inside it’s still allowed and still a good idea. And like you were saying, some programs are pretty good about, you know, showing those opportunities to you and presenting them in a way that’s easy for you to take advantage of. So yeah, that’s wonderful to hear.

Best Advice for Another Early-Career PhD

39:04 Emily: So, I’d like to conclude with your best advice for another early career PhD. I feel like we’ve already heard a ton of great advice throughout the whole interview, but if there’s anything you want to add to that in a different area or something you want to emphasize, make sure the listeners walk away with, you know, please let us know.

39:20 Laura: Yeah. I mean, just, I think two things. My main points of advice would be to just make your financial education, or whatever you want to call it, a hobby. The more you know, the less anxiety you’re going to feel. And don’t think that saving for things like retirement or long-term savings goals have to be put on pause. It’s better to have a little bit saved towards that kind of goal than to have nothing in five years. So, the longterm does not have to be on a permanent pause by any means.

39:48 Emily: Yeah. And even, as you know, from compound interest, any little tiny bit of investing or debt repayment that you can do right now makes a massive difference later on. So, you know, don’t feel bad if it’s like $10 a month, $50 per month. Anything on that scale is still going to really, really add up over time. Well, thank you so much for this wonderful interview, Laura. I really enjoyed getting to know you a little bit.

40:09 Laura: Yeah. Well, thank you for having me. This was really fun.

Listener Q&A: Savings

40:16 Emily: Now, on to the second of two new segments. The listener question and answer. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall. So, it is anonymous. Here is the question. How can I effectively build my savings back up while still feeling like I have room to go out to dinner or buy a book when I’d like to? I feel so guilty whenever I make unnecessary purchases. Thank you so much for that question, Anonymous. It sounds like your main financial goal right now is to build up savings. And you’re struggling to find a way to balance that with discretionary expenses. And you might hear this as a strange solution, but I think the answer is budgeting. Most people think of budgeting as a way to cut back on their expenses or reduce their expenses or beat themselves up when they go over the amount they were supposed to spend in one category or another.

41:17 Emily: But that’s actually not how I see budgeting. I see budgeting as a method of intentionally and thoughtfully creating balance among the different purposes that your money has. So, what I think you should do is write into your budget “unnecessary purchases,” like going out to dinner and buying a book. And in this sense, these are not categories that you should, you know, try to spend much, much less than the cap. Your goal is instead going to spend right at that level that you identified when you set up the budget. This means that you have to decide what is an adequate savings rate. There are not just two broad categories in your budget, that is paying for your necessary expenses and saving. There are three. Necessary expenses, discretionary expenses, and saving. I’ll point you to the balanced money formula, which I really like the idea behind, although I have to acknowledge that it does not work in every city in the U.S. on any grad student stipend. The balanced money formula is that you would devote no more than 50% of your after-tax income to necessary expenses, 30% to discretionary expenses and 20% to savings.

42:31 Emily: Now, for your budget, that savings rate might be a little bit too low, or it might be unattainable, depends on where you are right now. But the point is that discretionary expenses hold a place in a balanced budget. It is really psychologically difficult to go for months and years spending little to no money on discretionary purchases. If you accept what I’m saying, that you need to build discretionary expenses into your budget, but you’re still saying to yourself, I’m not saving as much as I would like to, instead of cutting back on those discretionary expenses, I want you to take a really hard look at your necessary expenses. Necessary expenses are almost like this misnomer because, yes, it is necessary to house yourself and feed yourself and clothe yourself. But often we’re spending more than we absolutely baseline need to, to accomplish those things. So, for pretty much every quote, unquote, necessary expense, there’s going to be an actual necessary portion, and a discretionary portion.

43:34 Emily: So, I would really encourage you to go through your necessary expenses with a fine-tooth comb, starting with your largest fixed expenses like housing, perhaps transportation, moving to other fixed expenses like utilities. Then moving into your large necessary expenses like groceries. Then moving into your smaller necessary expenses, like maybe gas for your car. Reevaluate every single one of those expenses in that order to try to find a way that you can reduce them. Now, that may not happen instantaneously, if you have to do something like move, obviously. But the point is that you don’t just have to focus on your discretionary expenses and your savings. You can also pay some attention to those necessary expenses. In my mind, it’s way more fun to save money and also to spend on discretionary expenses. Spending on necessary expenses doesn’t really light people up. So, it definitely makes sense to reevaluate them and see where you can cut back.

44:34 Emily: Now, if you’ve done all of that, you’ve built the discretionary expenses into your budget. You’ve really evaluated if you can reduce any of your necessary expenses, and your savings rate is still not as high as you want it to be, then you need to consider increasing your income. Maybe that is the right solution. Some grad students are able and allowed to side hustle. So, you can look into that, if that’s your case. Some grad students are not allowed to work outside their appointment as a graduate student. And so in those cases, you might have to look for side incomes that don’t require work to generate them. I’ve talked about this quite a bit on my site. You can search for a side income or side hustle to find more discussion about that. Okay, Anonymous. I hope this helped. It is legitimate to spend money on discretionary or quote unnecessary purchases.

45:22 Emily: Absolutely. It’s just a matter of finding the right balance between your savings, your discretionary expenses, and your necessary expenses. And oftentimes, the two culprits in those areas are your necessary expenses and your income being too low. I hope that helps. Thank you so much for submitting this question. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions. So, please submit yours.

Outtro

45:53 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly on social media with an email listserv or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing debt, repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

How to Set Yourself Up for a Successful Career and Financial Life Post-PhD

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In this episode, Emily interviews Dr. Jennifer Polk, a career coach specializing in PhDs whose brand is From PhD to Life. Emily and Jen explore the damage that graduate school and academia often does to PhDs’ financial lives, in terms of both dollars and money mindset. They answer the question, “What can a graduate student or PhD do to mitigate academia’s financial damage?” from both a financial and career perspective, starting in grad school and extending several years post-PhD. Jen concludes the interview with an incredible insight that can only be gained with years of distance from the PhD.

Links Mentioned in this Episode

post-PhD career and finances

Teaser

00:01 Jen: Woo boy, I think the two-word answer is compound interest. The more that you can put away, even very, very, very small amounts earlier on, make such a huge disproportionate difference over the long term.

Introduction

00:23 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode 14, and today my guest is Dr. Jennifer Polk, a career coach specializing in PhDs, whose brand is From PhD to Life. Jen and I explore the damage that graduate school and academia often do to PhDs’ financial lives, in terms of both dollars and money mindset. We answer the question, “what can a graduate student or PhD do to mitigate academia’s financial damage?” from both a financial and career perspective, starting in graduate school and extending several years post-PhD. Jen concludes the interview with an incredible insight that can only be gained with years of distance from the PhD. If this episode, and that final insight in particular, get your wheels spinning about what you should be doing right now in your finances, there are several ways you can work with me in the upcoming months to level up your financial life.

01:29 Emily: The Personal Finance for PhDs Community is always open to new members. That’s where you can find my courses on financial goal setting, budgeting, investing, et cetera, plus monthly challenges to participate in a book club and lots of opportunities to ask me questions and engage in discussion with other like-minded graduate students and PhDs. You can find out more at pfforphds.community.

I’m facilitating my brand new half-day workshop, Chart Your Course to Financial Success, twice in the next couple of months. Spend four hours with me and a small group of peers, and you’ll come away with clarity on what your current financial goal should be and how to achieve it, plus super actionable ideas for increasing your income and decreasing your expenses. On December 12, 2020, I’m facilitating the workshop exclusively for funded graduate students. And on January 10th, 2021, it’s exclusively for PhDs. You can find out more at pfforphds.com/chart.

02:34 Emily: Finally, Mark your calendars for the next round of The Wealthy PhD. My two-month group-coaching program that provides guidance and, most importantly, accountability to help you achieve a significant financial goal and set you up for future financial success. Enrollment will open in early January, 2021. You can find out more at pfforphds.com/wealthyPhD.

I’m so pleased to be able to offer you all these different avenues of support going into the new year. I hope you will identify one that fits you the best and sign up.

If you’re not quite sure about diving into working with me, please join my mailing list at pfforphds.com/subscribe. Every Friday, I’ll send you an email detailing, a personal finance concept, an actionable strategy, or an inspirational story. You will receive an incredible amount of value, absolutely for free, through the list.

Without further ado, here’s my interview with Dr. Jen Polk.

Will You Please Introduce Yourself Further?

03:28 Emily: I’m delighted to have joining me on the podcast today, Dr. Jen Polk. You probably know her brand From PhD to Life. She is a career coach specializing in PhDs. So, she has a lot to say to us around this topic. And we’re actually going to be talking about money mindset today and specifically how it affects, you know, your finances, but also your career journey as you’re moving through and beyond the PhD. So, Jen, thank you so much for joining me on the podcast day. It’s wonderful to have you.

03:56 Jen: Yeah. Thank you, Emily. It’s my pleasure. I’m nervous. I’m excited.

04:01 Emily: It’ll be fun. So, please tell the audience just a little bit more about yourself.

04:05 Jen: Sure. So Jen, as Emily says, I work with PhDs figuring out what to do next in their careers and my business is From PhD to Life. That’s fromphdtolife.com. And I’m self-employed and I live in Toronto.

What Academic Culture Teaches Us About Money

04:22 Emily: What does academic culture–in your experience, and also what you’ve observed from your clients–what does academic culture teach us or tell us about money?

04:32 Jen: Yes. Yes. Big question. So, my own personal background is from the humanities, a history PhD. And I think that academia emphasizes, at least my corner of academia, to use that phrase, thinks of money as a bad thing, as kind of a necessary evil. And extremes to which we might take that view do exist out in the wild. There are people out there who will, they can’t possibly live this way every day of their lives, but they will literally say things to me that anybody who has more money is morally inferior or that it is unethical to have, you know, more money than one needs, et cetera. And I think that, yes, one can find that view in academia.

05:29 Emily: Is that defined as more money than they have? Is that the dividing line?

05:34 Jen: Probably, probably, probably. But yeah, I think that thinking about money, talking about money makes you somehow less of a scholar, less of an intellectual. Of course, as we know, the truth is that you can’t actually do scholarly work over the long-term if you are constantly worried about money. It’s difficult. But yeah, there’s definitely a sense that if you’re the person–and I think this is also tied in with aesthetics–if you show up in your humanities department wearing flashy suits and red lipstick and earrings you will be deemed less serious as a scholar, as an intellectual. I think that is related to money mindset as well. It’s really gross. It’s really gross. And yet, of course, you need money.

06:33 Emily: Yeah. I mean, you just said that, of course over the long term, you, you have to have money or else you’re going to have a constant, you know, really it’s a fog in your brain. When you’re constantly stressed about money, when you experience scarcity, and this has been studied, you know, through research, that you literally don’t cognitively function as well as you could, if you did not have that stress in your life. So it’s really actually perplexing to me that we do this. We–academia–does this to graduate students, especially, but also postdocs and also, you know, adjuncts and other faculty members to a degree. Why are we doing this to our youngest, most vulnerable developing scholars? I mean, I know you can’t answer that question, but it’s really perplexing to me that, you know, the system chooses to put this kind of stress on people, and then moralizes it, as you were just saying, says, “Oh, this has been official to you that you don’t have the distractions of money and flashiness and opulence and so forth in your life.” When really what it is is, “No you’re stressing us out, so we can’t even think properly.” And that’s, it’s horrifying, really.

07:37 Jen: Academia is perplexing. I think that’s a good short way of putting it. There’s a lot of work to be done to kind of recognize the truth of one’s situation and think about what you actually do value that is different from what academia implies that you should value.

Money Mindsets in Academia

07:57 Emily: Yeah, I will say from my, you know, my corner of academia and engineering, I did not get the message that money is evil or money is to be shunned. Certainly, we were still under, you know, some money stress depending on how well-funded you are. But definitely from the advisor or the faculty level, we weren’t getting that kind of message. And yet, there were still money mindsets that academia tells even to students in disciplines like that, like all your best time and energy has to be spent on research. Like, you know, you’re not allowed to do XYZ other things in your personal life or earning money on the side. Even if it is not explicitly disallowed, it is certainly frowned upon, because again, you should be spending all your best energy on your research. Things like that. And I think another really sort of damaging thing that happens that probably speaks a little bit more to your experience as a career coach, is that people become anchored at the graduate student salary that they are earning during those years. And so how do they judge what they’re worth in the marketplace after they exit academia when their skills can and should be valued much differently? But how do they, you know, transform their own understanding of the value that they bring? Maybe we can talk more about that.

09:14 Jen: And I also see from scientists that, of course it varies and everyone’s experience is unique, but a lot of worry about getting a quote unquote industry job is morally inferior. And I think part of that is that those jobs pay better than academia. And I think people not only would you make more money, but potentially, I mean, depending, you would have a better life and a better career. Because there’s just lots more variety out there. And there’s a lot more better places that one could be for a lot of people. But I do think that money is part of it as a signal of virtue. Does that make sense, Emily?

09:56 Emily: Yes, I definitely hear what you’re saying. I actually would add onto that. It’s possible that you can have more of an impact on the world in industry than you could in academia, potentially, depending on your field. So, there’s that too. Is your scholarship actually getting out there?

10:11 Jen: Yeah. More money, more impact.

Financially Damaging Money Mindsets

10:14 Emily: We’ve talked about how these money mindsets are not true, damaging in some ways. How is this financially damaging?

10:25 Jen: Whoo boy, the two-word answer is compound interest. The more that you can put away, even very, very, very small amounts, earlier on makes such a huge disproportionate difference over the long-term. There is such a potentially, I mean, again, it really varies, but there is a real opportunity cost to spending time in academia, as a graduate student who is not earning, you know, a whole lot of money. And then, you know, if you do post-docs and then in a lot of disciplines, even a tenure-track professorship, is not going to pay you really enough to live in a lot of cases. And that, you know, life isn’t about comparing oneself to others, but it does put you behind, to use that framing, other people with similar types of education in terms of your financial resources. And of course, if you have debt.

11:20 Emily: I couldn’t agree more. I mean, you know, sometimes I think about there’s been, I don’t know, I think I’ve seen studies from time to time on, “Oh, a PhD is worthwhile like salary-wise because yes, you take this income hit early on, but then later you could make, you know, much more than you would with just a bachelor’s or whatever.” But I really wonder, and I have not done the math on this. I really wonder, well, you’re disagreeing with even that assertion because I’m sure it is very individual, entirely. But even taking that as a given, if you then factor in the opportunity costs for compound interest of paying off your debt, starting to invest for the long-term for retirement, it becomes very dubious.

11:58 Jen: Well, that’s just it. That’s just it. Exactly what you say. Like, even if the salary itself is higher, you’re starting so much later than other people. Like Emily, you and I are both in North America, U.S./Canada context. PhDs take a while. You know, on average, somebody is 30, more than 30, almost 30, right, when they finish, with limited prior work experience. And yeah, it’s not just about annual salary. I’ve seen those studies where everybody’s like, “Look how much more money PhDs make” than people with other degrees. And yes, that is an average. And, you know, it varies a lot. A lot. Not only between disciplines, it does vary a lot between disciplines, but within disciplines, it varies a lot, over gender and race and immigration status, et cetera, subfield. And whether you’re in an academic career track or not, right?

12:54 Jen: There’s a lot of variety there. But yeah, it’s not just about your salary number. It’s not just about that. Yeah. It’s about all of the other things you said. You know, if you’re 10 years later entering the housing market, you might not enter the housing market, et cetera. Anyways, I don’t mean to bemoan and lament, but I do think that it is a message that if anybody listening is considering a PhD or in a PhD program earlier on and doubting whether they should continue, please take this seriously and know that I respect any and all decisions to not apply, not enroll and potentially, you know, if it’s right for you, to not continue in a PhD, because it really might not be the right thing for you for lots of reasons, including financial ones.

Working on the Post-PhD Money Mindset

13:40 Emily: Yes. I would actually love to expand on that. So, we were just saying, okay, to people who have not yet applied for graduate school or are early on in your graduate school journey, take seriously any doubts you may be having and explore other career possibilities for you. For my part, I’m a little less don’t do the PhD, but I’m more on like, why don’t you get some work experience and see what’s out there for you and be able to judge the PhD more, not from, okay, I just got out of undergrad and this is what I want to do, but judge it in a little bit of a more informed context? So let’s say someone is on that path and they’re firm about finishing the PhD, but they’re still early on or, you know, midway through. What can that person be doing to be, you know, both working on their mindset, setting themselves up for financial and career success, following the PhD, what can they do at that stage?

14:31 Jen: I think that, you know, and this comes from my own work, you know, day-to-day career coaching PhDs. I think it is never too early, never too early to think about your career because there is, and I don’t, I think this surprises people, there is so much work that you can do that you really ought to do, but you know, that you can do before you ever apply for a job. And part of that is about money and how much you really need and how much, you know, you 10 years from now is going to want. But I would really, the quicker that you can get into a job and the quicker that you can get into a job and a career that is one that you like, and you can really excel in and you know, it doesn’t sort of match up that you would excel in a career and you make money, but a little bit, right, the quicker you can make that happen for yourself after you graduate, the better.

15:28 Jen: So, do all of the work that you can when you’re still a student. And I just mean the self-assessment, the reflection, like what you were talking about, Emily. Identifying the right, you mentioned identifying the careers that you are interested in going into, right? Like do all of the work ahead of time to identify those, and then start building your network, and, and draw on your network to learn more about those career paths, to get really specific about the types of work that you could do. To have a kind of a draft resume in place for various different kinds of roles that you might apply for. Again, long before you ever get to the point of application. So that six months, four months before graduation, before you’re kind of ready to work, you can hit the ground running.

16:13 Emily: You mentioned like doing self-assessments and so forth. I did a lot of that stuff and it was provided by the career center at my university. I wouldn’t say I showed up at every event, but I was definitely like a regular frequent flyer at, you know, what they had going on. And I was able to do like, yeah, some of the various self-assessments and that was wonderful.

Career Exploration: Know Thyself

16:30 Emily: So, there’s resources that may be available to graduate students through their career centers. There’s your website of course, From PhD to life. Do you know, would you recommend any other resources outside of the university context, for people to help in this like career exploration phase?

16:46 Jen: Yeah. I think at this point, anything can be useful. And so, you know, I think it can sound really simple, simplistic but even just sitting down and making a list of the things that you actually truly value and that are really important to you, that there’s real power in that. Taking a few minutes and just doing a brain dump, like, okay, what do I actually value in having, and write it down. Make a visual of it and make a graphic that you stick on your computer desktop. I mean, whatever it is so that you can keep reminding yourself when academic culture is swirling around you, which can be, I’m exaggerating, but it can be a bit of a totalizing culture and impose values and priorities on you that, you know, can kind of make things messy, just to remind yourself of what you truly value.

17:42 Jen: When I say anything can be useful at this point, I mean, sure do the Myers-Briggs. Scientifically dubious, doesn’t matter, because point is to give you new language, like literal words, and new perspectives, different perspectives on the types of skills and strengths that you have. So, any kind of like skill assessment, strengths test, value survey, anything like that, you can find online. Any of those that can be really kind of interesting to get you thinking about yourself in a different way. And then make your own lists. Some people like spreadsheets. And take advantage of any and all assessments that, yeah, you get from your career center on campus if that’s available to you. This process, I’m talking about it like it’s a mess, and that’s because it is a mess. So, it’s fine. And the other thing I would say is that this is not a process of identifying your one true right job.

Do Not Get Stuck on the “Dream Job”

18:42 Jen: Your dream job. No, no. Wipe that from your mind. That’s not a thing. A lot of jobs out there are broadly similar. And you, whatever your PhD discipline, whatever your background, you can do a lot of them. So they’re broadly similar and you can do a lot of them. And so what becomes important is not that particular job title, but more where in the world do you want to live? What kind of lifestyle do you want to have? What the vibe of the office that you want to be in? What kinds of like actual work do you want to do every day? Who do you want to hang out with? What kind of impact do you want to make? So all of those kinds of questions that, like job title is not even that relevant. At a certain point, you’re going to try and identify some so that you can find jobs to apply to. And so that your network can help you out by making suggestions. But yeah, it’s a mess. Embrace the mess and know yourself.

19:37 Emily: At that stage. Because you can be really open to a lot of different things, like you were saying. We’re not at all trying to like narrow things down, right? It’s about sort of broadening. So, I’m also thinking about, for an early-stage graduate student, mid-stage graduate student, how to mitigate this financial damage that we were talking about. And so very briefly, I just want to say, as you said earlier, compound interest. So if you are at a stage in your finances, when you’re able to save, get an emergency fund together, but after that start tackling your debt, start investing if that’s where you are. And I of course talk about that many, many other interviews and so forth. So people can find a lot more resources. But as you said earlier, the early you get started, small amounts of money, perfectly fine. It’s still going to make a difference.

The Value of Outside Work Experiences

20:18 Emily: So don’t dismiss just because you’re a graduate student, “Oh, I can only save 50 bucks a month or I can only save a hundred bucks a month.” That’s amazing. That would be a lot of money if you actually got that invested. So don’t dismiss that while you’re, you know, doing all this other career stuff. I also want to bring up outside work experience. You know, you mentioned earlier, like, you know, think about your network and so forth, and you can do that without working. You can expand your network. But you know, for some PhD students, it is possible to do internships or to have some kind of side hustle, that’s going to ultimately help you in your later job. Can you speak to that a little bit?

20:53 Jen: Yeah. And I take your point, Emily, that you said for some they can have, because yes, acknowledgement that, you know, it does depend on visa status and the contract, et cetera, et cetera. But, so in response to a Tweet I sent earlier this morning, somebody, I think she’s a humanities PhD student, said that in her program, when she was doing her PhD, she was reflecting on one of her colleagues had this like prestigious grant. So she didn’t have to have a job on campus to pay the rent. Because she had the prestigious grant. And the person who wrote the tweet was saying, you know, I didn’t have that, but instead I worked outside of academia and that, you know, the implication here being that, that gave me the same amount of money. And the vibe she got, not only the vibe, the actual literal the message she got from her professors in the department was that the fellowship was of greater value.

21:46 Jen: Even though from our perspective now, as people out in the world, you know, working jobs, we know that actually in some ways having actual work experience is more valuable. And that is really, really, really important and can’t be undervalued. This is not, you know, to ask students to do more and more and more work. But just to say that when you are making decisions about what to do in your kind of free time, quote unquote, you know, where you have a choice about whether to do this and this and this, just to pause and say, “Well, the, the thing that I think that I should do is adjunct one more course.” Well, hold up, just think to yourself, what is the value of adjuncting a course versus stepping up your side hustle or getting a job outside campus, even just in retail? I mean, it’s not obvious from where I sit that adjuncting a course is the right move. Whereas that can be like just a totally obvious thing according to academics, but no no no. I mean, it really depends. So, I would, you know, use your critical thinking skills and question the things that seem obvious to you.

Commercial

23:00 Emily: Emily here, for a brief interlude. You are invited to my brand new half-day workshop, Chart Your Course to Financial Success. The central question this workshop will help you answer is what should my singular financial goal be right now and how should I best pursue it? I’ll teach you my eight-step financial framework that explains when you should save versus pay off debt versus invest. And we’ll explore many, many strategies to increase your income and or decrease your expenses. I will facilitate the workshop exclusively for funded graduate students on Saturday, December 12th, 2020, and exclusively for PhDs on Sunday, January 10th, 2021. You can learn more and sign up at pfforphds.com/chart. That’s P F F O R P H D s.com/ C H A R T. The deadline to register for the December 12th workshop is Wednesday, December 9th. So, don’t delay. There are discounts currently available for both workshops and registration is limited. Now, back to the interview.

Pay Attention to Your Base Salary

24:10 Emily: Let’s now talk about someone who’s finishing up about to finish up the PhD, and maybe about to finish up a postdoc, if that’s the choice that you made following the PhD. And you want to get a real job and it’s not going to be in academia. So, what can a person who’s reached that stage do, again, to mitigate the damage that the mindsets and the financial damage that academia has caused?

24:31 Jen: It’s really tricky this because you know, some people ask, how do I know when to take this job now, or to take the risk of turning it down in hopes that I would get a higher offer six months from now? So, you know, I think it’s not obvious what the answer is and it will highly depend on the individual person. But one thing for sure to think about is, when you’re ready to accept and negotiate a job offer, right? Accept and negotiate, right?

25:02 Jen: Both of those together. That your base salary is a really important consideration. It’s not the only thing up for negotiation. It’s not the only thing to discuss. But that a one time payout, like a bonus, like a signing bonus of five grand, for example, that seems great in the moment and sure you could invest that, but over the long-term, it’s probably better for you to have like $500 extra on your base salary, something like that. I mean, I can’t do the math immediately, but I think tending to base salary is really important.

Do Not Underestimate the Value of Your Network

25:37 Emily: To pick up where we left off with the career exploration, exploration of yourself. Now this person is ready to narrow things down and apply for some jobs. So, what do they do at that stage?

25:53 Jen: Yeah. So, I think don’t underestimate the value of your network. And before people are like, “Hold up, Jen, I don’t have a network.” No, you have a network, you have a network and you know people, and the people that know you also know other people. And, it can depend, but your academic network, don’t discount them. Even if you’re applying for non-academic jobs. Again, it can depend. But, I mean, I have a client now who is a research associate, a post-doc, and he was nervous about talking to his PI about the fact that he’s, you know, he’s on the job market. And he had the conversation and the PI was very supportive. And then the PI sent a few emails. My client got some interviews literally the next week and, you know, might have a job offer like within like a month. And so don’t discount the value that your network can come through for you.

26:54 Jen: And I know in my work with PhDs, with my own clients, but also all of the research that I’ve done over the years that you talking with people, and that’s all I mean when I say you should network, is you should interact actively with people in your field, with other professionals, quote, unquote. Just actively interact with people, that pays off enormously. And if you don’t do that, it’s going to be so, so, so, so, so much harder. At this stage, unless you have really particular technical skills, and I would wager that a huge number of PhDs don’t–and that’s not a criticism, that’s not a criticism–but if you don’t have these like really narrow, really specific, really rare technical skills, and you’re not at the right place at the right time, then you really have to use your network.

People Can Connect Us to New Opportunities

27:48 Jen: And that’s all of us. Not only so that potentially you could get referred to a job, you could be an inside hire as it were. Right? That’s great. But it’s not only that. It’s so that you can learn what’s out there. It’s so that you have people on your team to send you job ads. I applied for a job in September, and I wouldn’t have seen it except that somebody that I know and have known over the years. I’m not frequently in contact with her, but she kind of knows about me in general. She sent me the job ad as soon as she saw it posted. And I was like, “Oh my goodness.” And what happened is I had a number of other people send me the job ad subsequently.

28:26 Emily: Your branding is so clear that many people could identify what is a perfect job for you.

28:31 Jen: Exactly, exactly. Right. Exactly.

28:34 Emily: I actually have another story to add to that pile, which is how my husband got his job in industry. And so this is more about the value of networking with people from your own program who have moved on in the years prior to you. Because it’s not just the faculty who have networks. It’s anybody who’s exited academia. Even an undergraduate that you worked with who is now in the workforce can be a contact in your network. So my husband, some person who had graduated from his program a couple years earlier, sent a job listing for his, you know, at the time current company to my husband’s PI and said, I know that your lab lines up very well with what we do here. Could you show this to your students who are graduating? And that happened, and my husband got that position. So that was like just, yep. Clearly networking. Because of course it was on the strength of his PIs reputation. This individual didn’t know my husband in particular. But yeah, that’s exactly how it happened and it was quick and easy.

29:31 Jen: Yeah. And that’s what you want. Right? I mean, life doesn’t always work out that way, but quick and easy means that there was years of work that went into that ahead of time, but it doesn’t have to difficult. It’s all, I mean, it’s just about making friends, having good conversations and doing work that you find interesting and that you find engaging. And if you do that over the years and you are in conversation with people about that, hopefully kind of stars align at a certain point and it seems easy.

Always Try to Negotiate Your Starting Offer

30:03 Emily: Yes, exactly great point. So, okay. Our candidate has, you know, done the job searching, done the self-reflection, applying for jobs. You mentioned a moment ago, negotiating base salary as incredibly important. And so this to me also is one, probably your biggest opportunity, to mitigate financial damage that’s occurred during your PhD, is to get that first starting offer as high as you reasonably can within the scope of the field and your skills and so forth. But to negotiate that offer, because I think some PhDs might be kind of bowled over by, “Oh my goodness. You’re offering me how much money?” And again, they’re anchored to their graduate student salary. And so, might just feel so grateful, yeah, and I get that, that they don’t negotiate. But really it’s expected. It’s absolutely expected in industry and it’s probably going to be pretty well-received.

30:54 Emily: Even if the answer is, no, this is a union job and you can’t negotiate, that might be the answer, but you’re not going to be faulted for trying. Right? So, definitely at least attempt that negotiation, because as you said, having a slightly higher base salary, that’s going to affect for sure, whatever salaries you have, as long as you stay at that company. And may even beyond that, if you know, employers shouldn’t, but are allowed to, at least in the U.S. In many cases ask about prior salaries, it depends on what state you’re in. So it’s possible that it could even affect once you leave that, you know, that particular employer, could still follow you. So getting that starting salary as high as you can is a great idea. Even if it seems really scary and daunting to you in terms of the number.

31:38 Jen: Yeah. And I would recognize, you know, everything in life is a risk. Sure. Of course. But once an employer has made an offer to you, they are imagining you solving their problem and hanging out with them every day. And that gives you some power here. As I say, there’s a risk, but I would, you know, own the power that you have in that situation to make a strong case for yourself. You have to make the case. But you want to be successful in that position long-term to help the team grow, et cetera, et cetera. And so, you’re going to show up for them and they should show up for you in terms of base salary.

Good Employers Make their Employees Feel Valued

32:22 Emily: Yeah. And I think it actually goes back to what we talked about earlier that academia, for whatever reason, decides to put this financial stress on its trainees. Your employer probably does not want you to be under that kind of financial stress. They want to pay you enough to reflect the value, to make you feel like you’re valued. That you’re not going jump ship and go to someone else. That you’re going to be able to live in the city that they’re in, you know, comfortably without having to move an hour away for your commute. All of that stuff affects your performance at work. And so it can all come into play when you think about what is the salary that I want to have to perform well in this position? That’s really your opportunity to express that.

32:57 Jen: To a certain extent, there’s some recalibration that might need to happen for folks coming out of academia, where things can be such a struggle, and you can have this impression that any employer is kind of out to get you, out to screw you over. Depending on the experience that you have in academia and the experience of your colleagues and friends around you. But yeah, as Emily said, I mean, any employer that you would really want to work for, they recognize the crucial importance of their labor, of the people doing the work. I mean, this is so, so, so important, and employers, good employers, employers that you want to work for. And there’s lots of them out there. They’re not going to pay you outrageous sums of money potentially, but they want you to be able to have the lifestyle and do the work and be happy and get what you need to be on their team, solving their problems. So, I would assume, assume that they want to pay you equitably right. Fairly and adequately. And, you know, maybe a little more than that. I would assume that, and go forth.

34:04 Jen: Yeah, I am glad you put in the caveat of a good employer, because certainly there are ones that–maybe not employers broadly, but maybe a manager, someone who views this more as a competitive thing, like I’m going to pay you less because I have that better from my bottom line. But it really should be viewed more so as, “We want you to do a great job, and we’re going to compensate you well to do that great job.” And certainly if you get into a salary negotiation process with an employer and you’re getting a vibe that they don’t really seem like they want to support you, then that’s your red flag. And that’s the time to go back to the exploring you’ve done and go back and look at other, you know, positions that you might have, and so forth.

Avoiding Lifestyle Inflation and Unhealthy Mindsets

34:40 Emily: Okay. So, let’s then talk about, you’ve got the job, maybe you’re a few months, a few years into that point. What should you still be doing to again be mitigating the mindset and the literal financial damage that your time in academia has wrought?

34:55 Jen: Yeah, it’s interesting. I mean, I think there’s lots of things that one could say here, but something that comes to mind for me is a phrase that I’m sure, you know, people that grew up in this part of the world have heard, penny-wise and pound-foolish, right? And to a certain extent, you know, when you’re in academia, there are a lot of things that you don’t pay outright for, of course you do pay for them through tuition, et cetera. But it doesn’t occur to you. So there might be things that you yourself would want to invest in, to use that term. And I use that term kind of in a broader sense that will help you over the long term. Ideally, your employer pays for professional development and pays for coaching and whatever, pays therapy, right? Ideally you have benefits around that. But it could be, you know, if you don’t, or if you’re unemployed at the moment, that it can be really valuable to invest in those kinds of services for a relatively short amount of time, because the investment as a metaphor is the right one, because there will be a longer-term payoff.

36:01 Jen: And if you can get your career started kind of on a good footing, great. Right? It’s just so helpful. It’s so helpful. And I would sit down with a money advisor, financial advisor, or whatever the term is, you know, somebody who can kind of tell you things, even if it’s your mom, right? Because if you can get into the lifestyle kind of early on of making good decisions around money, but also, you know, making decisions about you suddenly have more money, hopefully maybe you can set money aside for vacation. You know, that’s a good thing too, et cetera.

36:43 Emily: I totally agree. And actually, this is a phase that I’ve come to now that I’m, you know, a few years post-PhD and into my career, my business with Personal Finance for PhDs, is this idea of investing in myself was something I was very reluctant to do, right? Because I was being penny wise, pound foolish right when I finished my PhD because I wasn’t making that much money yet. So how can I, you know, decide to invest? But actually, you were one of the first people who I worked with, you know, near the start of my business. And it was a was a small investment, but I joined one of your programs. And it, I mean, I still talk about it and laud it, this was Self-Employed PhD, and how we originally met and what an impact that made on me.

37:23 Emily: And I’ve since then been much more willing to invest in training and professional development for myself. So I would definitely, I mean, obviously my field as an entrepreneur is, is different from what other people were doing, but just be thinking about what are the professionals, if it’s again, not provided, as you said, through your workplace, which sometimes it is, what professionals might I work with that can help further my career further, my financial development? Of course you are one of those professionals. If the question is more on the career front with PhD to Life. I am one of those professionals if the question is more on the, how do I handle my finances? How do I handle my budget? You know, what should I be saving for? What should my life look like? If those are the kinds of questions, then of course, feel free to work with me, but there are also many other types of professionals, depending on the exact needs that you have.

Invest in Your Future

38:06 Emily: And as you said, it is an investment. It takes money to work with a professional in the way that we’re talking about. But ideally, the dividends are going to start coming very, very soon after you begin that relationship. Another sort of financial tip, I’ll definitely say, once you’re into that, you know, your career and you’re making a much better salary than you were as a post-doc or as a graduate student. This is now the time to not super increase your lifestyle. Yes. Hopefully, you will be spending more so that you don’t feel stressed. But to some extent you should keep your lifestyle level on a little bit lower than maybe where you see your new colleagues at because you do need to make up for lost time a little bit, and doing things like starting to invest inside your company’s 401(k), even maxing out that 401(k). So to be going into those tax advantaged, designed for retirement types of accounts to a great degree, I mean, just put money away from your salary. You never see it coming in your paycheck. It’s all payroll deductions. That’s the best way to do things. So it might seem like a large number. Right now, a 401(k) in the U.S. would be $19,500 per year to max that out as an employee.

39:17 Emily: Why not? Why not? If your salary has jumped up by much more than that in this transition, why not go for that? Why not have that be your new anchor in your mind? So think about maxing out that 401(k), or at least contributing a good amount to it. Think about making serious, serious progress on your student loans if you have decided that you’re not going to go for an income-driven repayment plan and forgiveness plan. So all kinds of other questions, but this is the time when you get into that job where you can really, like you were saying earlier, you know, hitting the ground running like you’ve done these years of preparation for your career so that by the time it’s finally time to apply for a job, you’re ready and raring to go. It’s kind of the same thing financially. You’ve been keeping your lifestyle low for such a long time. Now you have the salary, don’t do too much lifestyle inflation and just get saving, get investing, get on that debt.

Think of Your Future Self

40:02 Emily: When we were preparing for this interview, you told me you had a message for people earlier on in their PhD journeys than you are currently. So what is that message?

40:12 Jen: Oh boy, your future self is going to care so much more about money than you do now. You know, if you’re in a PhD program, like I started my PhD at 24, like I was like, “Whoa, $15,000 a year.” This was a while ago now. Great. I can’t believe, you know, we hear this all the time. I can’t believe I’m going to get paid to do a PhD. That’s amazing. Okay. Awesome. Congratulations. But just know that your future self is going to care so much more. I mean, I happily, relatively happily, lived with a roommate for years and years and years, and I now live by myself and I pay a lot more money for that privilege, but I just, I just don’t, I don’t want to go back. Right? And so, of course I need a lot more money than I used to. And that, yeah, your future self is going to thank you i you care about it a little bit more than you might be inclined to when you’re, say, 24.

41:15 Emily: Yeah. And by doing the things that we’ve been talking about, like negotiating, like starting to invest early, even if none of your peers are doing it. Like having a side hustle maybe to bring in a little bit of extra money. I’ll say from my perspective too, like now that I, you know, my husband and I got married during graduate school, so we really, you know, we didn’t need any more money after our marriage than we did before. We were both in graduate school. But after we finished our PhDs, we had a couple babies and you know what, once you get on that train, things get very expensive very quickly. And so that’s not at all to say that you can’t have children earlier. That’s just my personal journey, but I certainly feel like we need to command a much higher salary at this stage in our lives and our family formation than we did years ago when we were, you know, DINKS [dual income, no kids]. So there’s that too, if you want that in your future. Yeah. It’s something to start thinking about now.

42:08 Jen: One of my recent clients, she lives in an expensive part of the U.S. Right? Granted but the lifestyle that she has now, a few years out of her PhD with a couple of kids and, you know, a mortgage and all of the above, she really can’t accept a job that pays her less than $150,000 a year. And right. It’s just the reality. And that might seem outrageous to folks listening now who are living on, $30k or less, maybe much less. Like, just keep that in mind. It’s not, you know, I’m not saying that my client, she’s not greedy. It’s just the reality of the situation. Life can get expensive really quickly.

42:45 Emily: Yeah. And I’ll link actually in the show notes, a wonderful interview I did with Dr. Scott Kennedy a year or two ago where he talks about his own realizations as he formed his family during graduate school, that he was going to have to change his career plans, to go into a different field that was going to pay more because he could not afford, now that he had a family, to stay on the track that he had been on. Even though that was sort of intellectually, maybe his preference from earlier on. So these kinds of things have, you know, your life has real impacts on how much money you need to make. And that’s something to start, you know, being realistic about as early on as possible.

How Can People Work With You, Jen?

43:24 Emily: All right, Jen, how can people work with you, should they, you know, if they’ve been intrigued by this interview?

43:32 Jen: For sure. Yeah. Thanks for asking. So, start on my website fromphdtolife.com. I work with individuals. I do small group things, coaching, open discussions. Those are a lot of fun. Shout out to small group things. I think those are awesome. I do drop-ins for Self-Employed PhDs. So, if that applies to you at all, check those out. And then I also work with institutions. So I’m happy to come to your campus, virtually please, I do a presentation or a workshop. I love workshops. So there’s different options.

Best Financial Advice for Another Early-Career PhD

44:07 Emily: Wonderful. And final question that I ask of all my guests. What is your best financial advice for another early-career PhD?

44:15 Jen: So this is a totally “do as I did, and also, as I say,” usually those two things do not go together. But one thing that I have been doing for 20 years, gosh, wow, something like that, is I track every penny. There are no pennies in Canada anymore. I track everything that I spend. So I know how much my life costs. Like I literally know how much my life costs in different categories. And years ago, I used to do this on a, it wasn’t even Excel. I use the WordPerfect version of excel, just a spreadsheet. But now there are lots of programs out there. But I think, you know, tracking what you spend is really, really important. It’s different from budgeting. You can do both together. But the example I like to give is like, I think this is really common for grad students.

45:11 Jen: Like you might spend like a lot of money, like on clothing kind of once or twice a year, not on a monthly basis. So some of the kind of standard ways of thinking about budgeting is sort of like a monthly thing. You go to your big annual conference one month and suddenly you’ve spent $2,000 more than, right? So anyways, but track, and then you can see the trends over time. And by seeing the amount of money that you’re spending in different categories, literally being able to like, see it on a spreadsheet, you can make decisions, better decisions about, you know, how much, how do you really want to spend $200 on takeout every month? Maybe. Yes. Maybe no. Right. But it makes it very clear.

45:55 Emily: I totally totally agree. Foundational personal finance advice. Step number one, track your spending. Track your expenses. Well Jen, this has been such a wonderful conversation. Thank you so much for coming on the podcast and sharing your expertise.

46:07 Jen: Thank you.

Outtro

46:09 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

How to Identify and Change the Money Mindset You Developed in Academia

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In this episode, Emily interviews Dr. Chris Cornthwaite of Roostervane. Chris and Emily share the money mindsets that they have observed among PhDs and academics, including believing money and wealth to be evil, scarcity, relating time to income, and anchoring. They discuss how to identify and change your own money mindset. Chris shares how his money mindset has evolved from his youth idolizing poverty through his underpaid grad student years and now into his employment and entrepreneurial journey.

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Link Mentioned in this Episode

PhD money mindset

Teaser

00:00 Chris: It’s one thing to start when you’re, when you’re 20 or 25, and have the value of compound interest over time and save that $40 a month or whatever it was. But it’s actually quite a different thing to start when you’re 35 with student loans that need to be paid off and try to create a sizeable chunk of wealth.

Introduction

00:23 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode 11, and today my guest is Dr. Chris Cornthwaite of Roostervane. Chris and I list the money mindsets that we have observed among PhDs and academics, including believing money and wealth to be evil, scarcity, relating time to income, and anchoring. We discuss how to identify and change your own money mindset. Chris shares how his money mindset has evolved from his youth idolizing poverty, through his underpaid grad student years, and now into his employment and entrepreneurial journey. As you’ll hear during this episode, one of the best ways you can change your money mindset is by intentionally seeking out and learning from people who have the money mindset you want to move toward, whether that is through books, other media or new acquaintances.

01:22 Emily: If this episode convinces you that you should work on your own money mindset, I invite you to join the Personal Finance for PhDs community at pfforphds.community. Inside the community, you can communicate with me and other like-minded PhDs through our forum and monthly live calls. The community has a monthly book club and group financial challenges as well. In November, 2020, we’re reading Get Money by Kristin Wong and in December, it we’ll read The Millionaire Next Door by Thomas Stanley and William Danko. Our challenges for November and December are to create a frugal stack and set up a system of targeted savings accounts. One of the eBooks included in the community, The Wealthy PhD, also has a chapter on what money mindset is, why it’s important, and how to shift it. While I didn’t understand it at the time being part of the personal finance blogosphere while I was in grad school was absolutely vital to the level of financial success I had then and now, and was directly my inspiration for starting my business. With the Personal Finance for PhD’s community, I’ve attempted to replicate many of the positive elements of that experience while making the whole process more time efficient and accessible for you. If you’re interested in learning more about and joining the community, you can do so at pfforphds.community. Without further ado, here’s my interview with Dr. Chris Cornthwaite from Roostervane.

Will You Please Introduce Yourself Further?

02:49 Emily: I’m so delighted to have joining me on the podcast today, Dr. Chris Cornthwaite of Roostervane. He writes a lot about PhDs and career transitions and career over there, but he also has a lot of material about money, wealth, money, mindset, and so forth. And that’s why I invited him on the podcast today to tell us more about money mindset. So, Chris, will you please just introduce yourself a little bit further to the audience?

03:14 Chris: Yeah, for sure. So in terms of my academic background, I have a PhD in religious studies from the University of Toronto and after I finished my PhD, I was kind of lost and didn’t know what to do for work. Kind of was the impetus for starting Roostervane, eventually. But I went and I worked for a think tank. So I ran projects for Canadian think tank. Kind of a lot of different projects, but some that kind of related to money that are still interesting to me is things like economic development and prosperity and things like that. And then I went and worked for the federal government for a little while, the Canadian federal government. I worked on a project that helps other countries launch refugee programs. Basically it’s a lot of like international diplomacy kind of stuff and that was really neat. And I still do some consulting in that world, in the refugee program world, but I also run Roostervane. I started a blog, initially it was kind of chronicling my own journey out of academia, but it’s just evolved to things that I like to write about. It’s become everything from a little bit on personal finance, as you say to careers, LinkedIn, ideas about purpose, which has really been an interesting question for me. That’s become about, I would say it’s maybe like 80% of the work I do, but it’s not my full-time income yet. It’s growing, but as you know, it takes time, so I’m working on that too. That’s me.

4:40 Emily: So interesting. Thank you so much. So money mindset is our topic for today.

What Are the Common Money Mindsets of PhDs and Academics?

And I wanted to start off by asking you what are the common money mindsets that you have observed in PhDs or academics?

4:53 Chris: This is such a fun conversation. I’m really glad to have it. I think the thing that I see a lot of, I mean, we could talk about scarcity mindset and that sort of thing, and that’s certainly common. I think the thing that I deal with the most, especially as people are like leaving academia and it’s not just about money, but it’s about careers in general, but there’s a lot of constructs within academia, like ideological constructs that money is bad, money is evil. The pursuit of money is something that, especially for those pursuing life in academia, a lot of people kind of buy the idea that this is a noble cause and worth doing for nothing basically. I think that a lot of PhDs have the idea that they shouldn’t think about money or that they’re bad for thinking about it or that they’re not serious academics if they want to think about it.

5:46 Chris: The irony is that, I remember having one exchange with a student in particular and he was kind of saying some of these things to me and he was quoting his professor. And some of the things his professor had said about how this is not about money. And I said, “is that your professor who makes $170,000 a year?” There’s a huge discrepancy, I think, between the idealism of PhDs and the reality of both the Academy and just “real world”. I think that’s the biggest holdup I see in terms of money mindset is that people have this idea that poverty is noble or that earning money is bad. Investing is capitalism, capitalism’s bad. I think those become really big holdups and I think can actually seriously hinder people from first of all, making good decisions about their career, but also from actually acquiring wealth and getting comfortable, much less wealthy.

6:38 Emily: So I think here, your discipline might be showing because like in contrast, so I’ve heard the same things, but it was not until I started speaking with PhDs more widely across a lot of disciplines that I encountered that mindset. Because for me as an engineering PhD and in the STEM fields, yes, scarcity mindset was there. Yes, undervaluing yourself was there, but not the money is evil aspect of things because I think we were all expecting like, okay, yeah, this is a low-income period of life, but this is not characterized my life overall. Like overall I’m going to be a highly employable, decent to good earner as an engineering PhD or STEM PhD. And honestly, even in my let’s say path through academia in terms of the professors that I interacted with, because I was in science fields and engineering fields, I didn’t have any professors say to me, capitalism is evil or anything like that. So it’s not an idea that I found until I started interacting with humanities PhDs that I even encountered that. I think this is really feel dependent.

7:48 Chris: A hundred percent, I agree. And it’s interesting for careers too. I’m always kind of realizing where these field differences are and it’s hard because I write for PhDs, like it’s one audience, and in some cases I think there are a lot of things that are kind of universal, but you’re a hundred percent right. And I think a lot of the kinds of ideologies around money that I was exposed to, and I mean, I still see them a lot, but you’re you’re right, they’re definitely much more predominant in humanities, social science fields for sure.

8:13 Emily: Yeah, but I’m so glad you brought that one up because I think that one is maybe the most insidious, like the hardest to reverse, which of course we’ll get to in a moment, but that was a great first observation to bring up. Do you have any other ones? You mentioned scarcity mindset earlier, but didn’t actually define it. Do you want to talk a little bit more about what scarcity mindset is?

8:31 Chris: Gosh, yeah. I think scarcity mindset for me, the way I understand it is just the idea that like there’s never enough money and it’s always, I’m just going to be poor and I’m always going to be poor. I mean, I don’t know, we’ve never had the conversation about the philosophies of money behind it, but a lot of the people that I read see this as manifesting into your life, that you adopt this type of scarcity and it becomes true for you. There’s a whole different conversation we could have, but I think at least anecdotally that’s been true in my life too, that when I kind of live this kind of scarcity — there’s never enough money, I have to keep it all tight, and pinch every penny and be just really, really controlling about, about my money. I think that’s what I see and I saw a lot of that in academia and I think, I mean, a lot of people are poor. I actually did all right, because I won the right fellowships. I mean, it’s just luck of the draw. There’s not really any reason why one PhD makes $15,000, another one makes $50,000. But all that to say that I saw a lot of that scarcity mindset. But the other thing that I think one of the things that I really observed academia taught me was this idea of linking your time to money. I didn’t get paid by the hour other than when I did TA or RA work, so I think one of the really valuable lessons I learned in academia and it’s a mindset that academics have if you kind of dig for it is this idea that you can actually work on a grant application for five or six hours and it might bring you a hundred thousand dollars. I think there are also some positive money mindsets from academia too, if you want to dig for them, but it’s just hard to kind of hard to get at them sometimes.

10:16 Emily: Yeah. I think that’s a really interesting point to bring up. Actually, I wanted to go back to the scarcity mindset for a second because there’s actual scarcity in your life and there’s the scarcity mindset and those things can come together or they can be separate from each other. You can have one or the other, you can have both, you can have neither. There is actual scarcity, especially at the graduate student level in terms of how much money you’re making. Now, does that apply to everybody? No, because of course there’s fellowships you can win, you can have side hustles, but there is scarcity in a sense. But whether it limits your mindset or not doesn’t necessarily come along with that scarcity. And the other thing is the academic job market, like there is literal a lot of scarcity in the academic job market. And I think that PhD’s observing that market, even if they choose not to pursue it or don’t end up in academia long-term, they still take that observation with them onto their other career paths and imagine the kind of scarcity and other places that they have rightly observed within academia.

11:15 Chris: Yeah. That’s really interesting. One thing I’m thinking of as you say that some of my professor friends who sat on on grant committees, especially for university-level scholarships and realize how many scholarships actually didn’t get any applications. So it also kind of does make me think that like there is of course literal scarcity, but I think one of the ways for example, that that can play out is that instead of me saying as a student, how can I go make more money or how can I increase my, my income? What scholarships can I apply for in this case because there was a lot of years that they didn’t give out a lot of the scholarships. It’s easier just to say, well, I’m just poor and this is my lot in life and woe is me kind of thing. So I hear what you’re saying. I do. I totally agree with you. And I think there’s a balance there for me between the actual scarcity and the mindset that says, how can I make the most of this? There’s obviously going to be some kind of a limit, but how can I expand what I do have access to?

12:11 Emily: Yeah, exactly. I think it’s really depressing for graduate students to think about their hourly wage, because they imagine, especially because they work so many hours, usually beyond 40 and yet they’re only being paid ostensibly — you mentioned RA or TA work earlier, that’s typically limited to like 20 hours a week, at least in the US — so they’re calculating this off of like 40 plus hours per week when actually they’re only being paid for 20 and technically they’re doing their dissertation for free and a lot of people don’t understand that. So it is depressing, they calculate their hourly wage, but like you said, that’s not actually literally what they’re being paid for. And sometimes you can, as you said, win an award for just a handful of hours of extra work on top of the work that you are already doing. So I do like the idea of divorcing the hourly wage thing, but it’s disheartening to think about in the first place.

13:05 Chris: I’m trying to look on the bright side. There’s a lot to be sad about, about the financial state of academia. So overall I’m not saying it’s like, great, but there are things that I’ve realized — I know we’re going to talk about it later — but as I’ve moved into my life, there are things that academia trained me for that I’m actually like, Oh, that’s actually not a bad thing.

13:22 Emily: Yeah. So let’s finish up talking about the mindsets that you see. Are there any ones that you’ve have any other ones that you’ve observed either positive or negative, helpful or unhelpful?

13:32 Chris: Let me think. Well, I guess so, so I think the thing that initiated this conversation was you had mentioned a post that I wrote where I had identified a lot of different things that I had learned. I’m trying to think about how much they relate to mindset, but I think there are principles, some of which do relate to mindset, about money that students kind of carry forward. So we already talked about the hourly wage, but I was thinking about in terms of scale, like when you think of I don’t know, a journal publication, like creating one thing that can influence multiple people. That’s not so much a mindset though. I guess I think the answer is no, I don’t really have any other mindsets offhand that I talk about.

14:13 Emily: I think the only other one that I’ll bring up is anchoring. So when you’re in graduate school and you’re making this tiny hourly wage or maybe you think about your yearly salary also tiny, because you’re anchored there, because that’s the first, early on salary that you’ve experienced in your life, you may not really understand your value in the marketplace once you go forward from that position, whether it’s in academia or outside of academia. And so your anchored to this, as you mentioned, 15 or 30 or whatever it is, thousand dollars per year, you’re making as a graduate student and you think, “Oh, wow, could I make double that?” And that’s like amazing to you. Instead of thinking, I want to three X, four X, five X, 10 X what I was making in graduate school, or more. I think that’s another really insidious one is, is the ultimate under valuing that you do later on.

15:04 Chris: Yeah, that’s a great point.

How Do You Identify Your Money Mindset?

15:06 Emily: So we talked about the money mindsets that are common among PhDs. These are not universal. So how does an individual determine what are the money mindsets that I currently have? And this is such a tough question because money mindsets are so closely held you don’t even recognize them as such. It’s just how the world works according to you. So how do you identify your own, your own money mindset?

15:28 Chris: I think the thing that helped me most was reading. I would say the first book I read on money was The Undercover Economist. And I read that, I mean, that must be 10 years ago now. I read it somewhere in my graduate journey, I think pretty early on and it rocked my world and I started reading every single personal finance or money book I could get my hands on after that. So I’ve read a lot of them. And I think a lot of what I saw through reading kind of reflected back to me in my own life.

16:01 Chris: For example, I started to, I can’t even pinpoint like where I got it from, but I started to see like things that I was raised with. I was raised in quite a poor family. My dad worked as a maintenance man in hospital, my mom stayed home with five kids, and a lot of my money mindset came from there. There was never enough money, money doesn’t grow on trees, money is for other people, and then we were also religious, so it was also spiritualized. I don’t know if I ever heard that money is evil, but I definitely heard that poverty was kind of noble, poverty was spiritual. I think the more I started to read and just hear people name similar things to what I had felt and seeing other people who grew up in similar places, I started to unpack a lot of those. There’s one podcast I really liked, it’s called Profit Boss, and she really did a fantastic job. Is it Hillary Hendershot? Do you know that one? I haven’t listened to it about five years.

17:00 Emily: I don’t think I know that one.

17:00 Chris: She had done an episode on money mindset, and it was really good and really opened up to me a lot of my own limitations and that really helped a lot. I think just hearing people name their money mindset and seeing it in myself.

17:17 Emily: So I totally agree with you that you have to start encountering other minds to recognize your own mindsets and whether that’s through reading as you were doing. I also early on in my life journey was reading the personal finance blogosphere quite a lot. So hearing from other personal stories of people who are talking explicitly about money. That’s the thing is you have to actually kind of get towards money or money related topics when you know, exchange these other minds. So it’s a little bit easier to do in an impersonal format, like reading or listening to podcasts or watching videos or whatever. But I’ll add into that talking with other graduate students, maybe like we mentioned earlier, outside your own discipline and outside your own worldview. Or not even other graduate students, but just like your peers, maybe peers who have real jobs, that can help you open up. If you’re actually, again, touching on these money or money related topics can help you recognize what’s a mindset in you and what’s like actual observable truth about the world versus just your perception of it. Encountering other people I think is crucial to identifying your own money mindset.

18:24 Chris: The kind of thing that that makes me think of is this idea of even talking about money. And I know that’s another money mindset I had is like, we don’t talk about money. We don’t talk about it with anybody. Money, politics, and I guess religion were the three things you’re not supposed to talk about. Right. And that’s definitely something that I’ve experienced. It’s funny, even with Roostervane. For example, I wrote a post a while back and it was just for fun about how PhDs can be worth a $100K or something, and it was one of the most read posts that I’ve ever done, but it’s actually one of the least shared. People were happy to kind of read about it, but didn’t really want to talk about it. I think there’s a lot of shame in talking about money and expressing an interest in money, and even an interest in having money or growing wealth. That’s another mindset that had held me back in the past. And I think it’s still pretty prevalent.

Commercial

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

How Do You Change Your Money Mindset?

20:27 Emily: Okay, so an individual has started to identify their own money mindset by listening to this podcast or reading your articles or reading other materials. How do you think they should actually go about changing a money mindset that they’ve identified as unhelpful that they have?

20:44 Chris: I’ve given a lot of thought this. It’s an interesting question, because I think what I realized is it doesn’t change overnight and I will find myself even years later, like something identified years ago and all of a sudden I kind of will stop myself when I’m doing something and say like, Oh, that’s my X mindset that has kind of played in, but it’s kind of sneaking back in. It’s really, really hard to change the way that you are kind of hardwired to think about money. It takes a lot of time. I mean, I’ve done things like I do journaling and I will sort of journal about it. I just watch and read a lot of stuff. I think really immersing yourself in things that kind of present a different view from what you’re used to, I think that kind of immersion has really helped me a lot. I’m trying to think what else. Those would be the two main ones, just kind of exposing yourself to different ideas and kind of recognize that you’re on a journey to change your money mindset. It will definitely take time. It’s not going to happen overnight. Start taking kind of the little incremental steps to grow it. And I think also education, I would say, is a big part of that. The more you learn about money, the more you learn about growing wealth, the less scary it get. It can get confusing because there’s a lot of contradictory information, but it’s at least less scary. So ideally you’re going to, you’re going to be a little more competent and therefore comfortable with actually thinking about and dealing with your money.

22:07 Emily: I totally agree with you that I think the first stop is sort of the extension of the identification. It’s continuing to encounter other ideas about money and maybe now you can kind of selectively go towards, “okay, well, this is a money mindset that I would like to cultivate, or this is the money mindset I want to get away from, so I’m going to specifically listen to source X or source Y, which is going to help me move again slowly over time towards that more helpful money mindset.” So yeah, I totally agree. Like for instance, listen to this podcast. Maybe this is giving you a different perspective on money than you had before. Or continue to read other sources. I know I, as I mentioned earlier, totally immersed myself in like the personal finance blogosphere. That was really helpful in changing some of my money mindsets, especially around like earning more because definitely as a graduate student, I had those limiting beliefs about like, I can’t have a side hustle and like, I can never increase my stipend, but that turned out to not be true after working on it for years and years I finally figured that out. So definitely getting around other people. I don’t remember the exact phrase, but there’s that thing where like, you’re the average of the five people you spend the most time with. And so with respect to your money mindset, if you’ve had parent one, parent two, professor one in that circle before, you can maybe, at least with respect to this subject, edge those people out in favor of people who, have the mindset that you want to adopt.

23:28 Chris: Exactly. Yeah, I totally agree.

23:30 Emily: And I’ll add in, you mentioned a little bit earlier, abundance mindset and thinking and so forth. And I’ve also read a little bit about that in the entrepreneurial space. That’s how I actually first sort of encountered the topic of mindset was through the entrepreneurial stuff. One of the things that is talked about a lot in that space, which I think might be helpful, is actually writing and saying affirmations. And you mentioned, it’s a little bit related to journaling. Basically what we’re talking about is self-talk. You’ve been telling yourself money is the root of all evil and capitalism needs to die and I will never have money and all those things. You’ve been telling yourself those things for years. And so now you need to start telling yourself other things. It might be helpful to actually write down an affirmation, something that you know maybe intellectually to be true, but you don’t really feel it. You haven’t really internalized it yet and start reciting those to yourself. Maybe it’s once a day or a few times a day, to kind of get that self-talk like grooved in. And so eventually you’ll go to it more naturally. This is something I recommend to people who I work with on money mindset. It’s not something I practice all the time, but I do it from time to time when I feel like I need a little boost or a refresher with my mindset. Have you ever done the affirmation thing?

24:46 Chris: I do actually. I think I just, wasn’t clear in defining how I think of journaling because I do journaling, but within my journaling, I do affirmations as well. I have every day and there’s one in particular, there’s one that I’ll share just because it’s been a recent realization for me. I’m not particularly religious anymore, but coming from this idea of my youth that having money is evil somehow or whatever, I’ve really been thinking through like trying to get myself to adopt the idea lately that money is almost spiritual. That having money and creating wealth, especially as an entrepreneur, is actually an indication of the value that I bring to somebody else’s life. Rather than our ideas about entrepreneurship growing up is like, well, business people trick people into giving them money or whatever. In fact it’s quite the opposite. My wealth, the amount that I get paid is reflective of the value that I bring to people’s lives, and that’s really a beautiful thing. I think that’s one thing, just for example, that I’ve been kind of writing down variations of that for quite a long time now, trying to really worm it into my head because I really do believe it’s true, actually.

25:54 Emily: Yeah. I’m working on a similar one for me and my business as well. The amount of money you’re bringing in reflects the value that you bring to the world. That’s true, if you have a job too, but it’s sort of brutally true when you’re an entrepreneur, like you’re feeling that like all the time, there’s no comfort of the salary.

Chris’s Own Money Mindset Journey

26:13 Emily: Okay, so we’ve talked through what kind of mindsets you might have if you’re in academia, how do identify them, how to change them or start to change them, because you said, it’s going to be a process. You’ve talked about your own personal story here and there throughout this. Is there anything that you want to add more so about your career or your financial journey, especially as it relates to your money mindset?

26:35 Chris: Yeah, I think it’s interesting. I’ve had a constant evolution of my money mindset and it started back when I started reading personal finance books, at the beginning and each personal finance books was like a revelation. Like the first one, I remember reading a book called The Millionaire Teacher. I don’t know if you know that one. And it was like, okay, it’s low cost index funds, that’s how I’m going to build wealth. Low-cost index funds, low MER, ETFs — that’s the answer. And then I read the next one and it was like, actually people with managed portfolios do better over time and like, okay, who do I believe?

27:11 Chris: I think one of the most interesting things about my money journey has been, first of all, just digesting the huge amount of contradictory information out there. And there is a lot of it. For example, I remember reading Dave Ramsey and David Bach around the same time, and Dave Ramsey is like, pay down debt, don’t buy a house until you’re out of debt and David Bach was like buy a house tomorrow because nobody’s going to let you leverage that amount of money anywhere else. So it’s funny, I think like looking back now, I was forming my own views around money, even though there are little nuances in how they actually play out. I remember reading one book in particular and it was after I had read all these different people and the book was, I’m almost ashamed to say it. There are two money books I’m really ashamed to say that I like. I wonder if you could guess them, the first is Robert Kiyosaki’s Rich Dad, Poor Dad.

28:05 Emily: Yeah I was going to say Rich Dad, Poor Dad.

28:08 Chris: I’m so embarrassed to say that I liked that one. First of all, because if you Google Robert Kiyosaki, as an individual, I’m not endorsing Robert Kiyosaki. He’s had some interesting business practices and definitely has some interesting beliefs today. But the book was revolutionary for me. It really changed the way that I thought about business and wealth and just my own upbringing. The second one, this one it’s called The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime! It’s by a guy named MJ DeMarco. I would almost recommend it, but I’m hesitant because it’s like a bro book. He’s just one of those…he was an internet millionaire and it’s really, especially when you read it there are just some things that like don’t sit right. But the one thing that I will say that hit me about that book is he said actually when you look at all these personal finance gurus, none of them got rich off of following their own advice. Dave Ramsey and Susie Orman, these people didn’t get rich from saving 15% of their paycheck. They got rich by creating something that had massive value, massive scale, and creating huge personal brands and putting it out there in the world.

29:16 Chris: And I think that was really like something clicked. I had been working for the government too and realizing that even though I was making quite good money compared to what I was making in my PhD and I was interviewing for jobs that would make even more, I was giving away a third of it in taxes. I was struggling. Even our family, we thought we were going to be wealthy now that we have a paycheck and have a good job and I have a pension. And I mean, the opposite was true. Trying to scrape together that 15% to save every month or whatever it was going to be, it felt almost impossible, just because of the realities of our cost of living and raising kids and unexpected expenses. And I remember kind of thinking this through and saying, okay, it’s one thing to start when you’re 20 or 25, and have the value of compound interest over time and save that $40 a month or whatever it was. But it’s actually quite a different thing to start when you’re 35 with student loans that need to be paid off and try to create a sizable chunk of wealth. It’s possible. It’s definitely possible.

30:23 Chris: At the time I was the only one working my spouse Carolyn was home with our kids and she is a graphic designer, so she does some freelance work, but she wasn’t making a full-time income. So I think I just kind of came to the reality and it was about the time I read this, that it kind of shook me. And I said like, actually the way that I’m thinking about wealth is right for a lot of people, but it might not be right for me. For your listeners, there’s probably a variety of people. If you’re a two income family earning $180,000 a year, it might be pretty easy to catch up and squirrel away 30% a month instead of 15% a month and catch up to where you would have been. But for my own reality, I fell in love with the idea of business and the idea that in my case, especially with an internet business that I could start with almost like nothing. I could start with $3 a month and create a business that’s worth a lot of money. I didn’t know where else you could leverage that. Like you have that kind of leverage or create that kind of scale from starting with like paying Bluehost $3 a month and putting my ideas online to creating something. And I don’t know exactly, like I’m not great at evaluating blogs, but I think even today, Roostervane, from what I understand would be worth like between $30 and $60,000, which is not a huge amount of money, but I started it last year.

31:39 Chris: As a business person, it’s just thinking through business has changed everything about how I see money and I’m no longer one of those people trying to squirrel away part of my paycheck. And those are totally fine if that’s the position somebody is in and that’s kind of their money worldview, that’s totally great. But for me personally, I just got a lot more interested in creating an asset. Creating this asset that’s called a business and it changes everything. I don’t really care how much I take out of the business. I don’t care how much my paycheck is because I actually love having money in the business to reinvest back into it. It’s just little things like that, that as an entrepreneur radically reorients your relationship to money and it really changes the way you view everything. It’s been a long journey and I think I’ve talked a lot about it, but it’s been really interesting, and I still have so much to learn, but it’s just that constant growth and realization, coming to the idea that there are some principles that I’ve come believe about money, about things like scale and impacting people and creating value. And that’s some of the things that I’ve put on the blog, which I haven’t really blogged about why you should invest in low cost index funds. I’ve just blogged about here are some of the kind of generic things that I believe about building wealth.

32:54 Emily: Yeah, I’m so glad to hear that narrative and I see a lot of my own story reflected in that as well. Of course, I’ve also come to entrepreneurship.

Chris’s Business

33:01 Emily: So if people want to read more stuff from you, tell us where they can, they can find you.

33:08 Chris: Yeah, Roostervane.com. It’s kind of like a weather vane, but there’s a rooster on top — Roostervane. And that’s where I blog about…my main thing is careers with purpose. It’s just thinking through like how we actually get jobs and careers, but also how we make meaning from them. That’s the kind of humanities thing that I bring to it is how we think about meaning. So Roostervane.com. You can find me on Twitter, @cjcornthwaite is my handle. You can just search my name, Chris Cornthwaite. Twitter, LinkedIn, wherever I’m always happy to chat.

33:40 Emily: Wonderful. And last question for the interview, Chris, what is your best financial advice for another early career PhD? And it could be related to something we’ve already discussed in this interview, or it could be something completely else.

33:52 Chris: Educate. Education, learn. It’s amazing how many people can spend five or ten years learning about the nuances of a field, but don’t actually want to take any time to learn about the basics of personal finance. I would say read as much as you can, listen to a podcast like this one, and just educate yourself and you’ll be empowered to actually create wealth and to get over some of those mindsets we’ve talked about.

34:18 Emily: Wonderful advice. Thank you so much for joining me for this interview, Chris.

34:22 Chris: Thank you, Emily. My pleasure.

Outtro

34:24 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

Fully Joint and Fully Separate Finances in Marriage: Perspectives from Two PhDs

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In this episode, Emily discusses marital finances with Dr. Michelle Roley-Roberts, an assistant professor at Creighton University. Emily and her husband keep fully joint finances, whereas Michelle and her husband keep fully separate finances. They detail their respective systems, list the advantages of each approach, consider how the legal realities line up or not with their preferred conceptions, and consider whether they would ever change their methods. They touch on IRS filing statuses, student loan debt, income shifts, living apart, and the addition of children.

Links Mentioned in the Episode

Teaser

00:00 Michelle: Every November, I have these two conferences and I know I’m going to be spending more money around that time. He doesn’t have to think about that at all. And if we had a joint account, we would always have to talk about that. And because we don’t, it’s not a thing that we need to discuss, he just knows that I go on these conferences.

Introduction

00:26 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode three, and today my guest is Dr. Michelle Roley-Roberts, an assistant professor at Creighton University. Michelle and I discuss our methods for handling finances in our marriages. My husband and I keep fully joint finances, and Michelle and her husband keep fully separate finances. We detail our respective systems, list the advantages of each approach, consider how the legal realities line up with our preferred conceptions, and consider whether we’d ever change our methods. We touch on IRS filing statuses, student loan debt, income shifts, living apart, and the addition of children. Without further ado, here’s my discussion with Dr. Michelle Roley-Roberts.

Will You Please Introduce Yourself Further?

01:18 Emily: I have joining me on the podcast today, Dr. Michelle Roley-Roberts, and we’re doing a little bit of a different format today than my typical podcast interviews. Michelle and I are actually going to have a discussion today. The topic of our discussion is how to handle money in a relationship. And I was looking for someone to discuss this topic with me because my husband and I have our finances completely joint. And I know that that is not necessarily as common as a model as it used to be. And so I wanted to have someone on who would tell me about a different model. So, Michelle volunteered. She and her husband have separate finances. So, we have those two perspectives represented today. And there’s a third model that won’t be represented, which is the yours, mine, and ours model, which is sort of in between these two.

02:02 Emily: So, I hope you’ll get something from this that’ll be interesting to you. If you are in a relationship, if you handle money together as a couple, hopefully you’ll find some common ground with one or the other of us, or maybe you’ll disagree with both of us and say, “Well, I want to handle things completely differently than these two.” But yeah, that’s the topic for today. So, Michelle, thank you so much for joining me and having this discussion.

02:22 Michelle: Yeah, thanks for having me. I’m looking forward to talking about this.

02:25 Emily: All right. So, why don’t we start Michelle with a little bit further introduction to you, like your academic and career background and where you live?

02:34 Michelle: Sure. So, I am a clinical psychologist by training. I’m currently living in Omaha, Nebraska, and I am an assistant professor at Creighton University and I’m a licensed clinical psychologist at CHI Health Initiative. I have a PhD from the University of Toledo in Ohio and my husband and I have been moving all across the country, met in undergrad and have been together ever since then. So, he’s been really following me around through all of my steps to get to where I am now. And I think that really factors into how money has been handled in our relationship because he is not a PhD. So, while I’ve been accruing debts and lots of things, that’s not been true for him. We started out as, you know, dating and as roommates before we were ever married. And so, the roommate piece has always been a factor in how we’ve handled money. And I think as we married that never changed because we had already found a system that worked for us.

Timeline for Michelle and Emily’s Relationships

03:49 Emily: Gotcha. Yeah. Can you put some dates on this? Maybe I’ll share some dates of my own as well. So, like when did you meet, when did you move or change things in your relationship? Going from dating to living together to marry, those kinds of things?

04:05 Michelle: Yeah, so we met in 2004 and we did not get married until 2016. So, I graduated in May of 2008 from undergrad, moved from Ohio to North Carolina and lived for a year on my own while he was finishing up his degree. And then he moved to North Carolina with me. So, I was a postbac at Duke for three years, we, that sort of started our trajectory on roommates. And then he followed me from Duke to Toledo for my PhD. And we lived in Toledo for four years. And then a requirement for clinical psychologists is that we do a year-long APA accredited internship somewhere in the country. And so, I happened to match at the University of Arkansas for Medical Sciences. So, we moved from Toledo, Ohio to Little Rock, Arkansas in 2015. And then we got married in the middle of my internship year in 2016. And then from there, we moved from Arkansas back to Ohio for postdoc, where I was a postdoc for four years at Ohio State. And then from Columbus, Ohio to Omaha, Nebraska, and have only lived in Omaha for about two months.

Separate to Joint Finances vs. Maintaining Separate Finances in Marriage

05:40 Emily: Yeah. Thank you for sharing that. That is a lot of moving, but not too unusual right? In the PhD world. So yeah, I’ll share kind of the counterpoint. There’s actually some points of overlap in our story, which is really interesting. So, my husband and I, before we married, Kyle, we graduated from college in 2007. We started dating in 2006 and we lived in different cities for a year. He started at Duke and I did a postbac at the NIH. And then in 2008 in the fall, I moved and started my PhD at Duke. We lived separately for two years until we got married in 2010. So when we got married, moved in, that’s when we combined our finances. So, we went from completely separate to completely joint.

06:30 Emily: Well, there’s a little bit of a transition, but aspiring to be joint when we got married that was in 2010 and it’s been that way since. So, we did have a small period of living apart for a few months when I did a fellowship after I finished my PhD, but we both defended in the summer of 2014. We lived in Durham for another year. I was in DC for part of that year. And then in 2015, we moved from Durham to Seattle. So, that’s kind of our story. And for the listeners, we’re recording this in September, 2019. So, that’s the perspective there. So, we’ve already heard a little bit about the history of like how the handling of the finances for both of us has changed over the course of our relationships. Is there anything else that you want to add to that as to maybe like philosophically, like why you’ve chosen to maintain the system that you had been using all along? Whereas of course I, as I just said, we changed at some point.

07:23 Michelle: Yeah. So, for me personally, my debt that I was accruing was my debt for my education and my career advancement, wasn’t necessarily my husband’s. And yes, I know legally it’s his debt now because we’re married. By not having our finances joint, it makes me feel like it’s still my debt and I’m still working to pay off my debt. And it actually helps me a lot. So, on fellowship, I got an NIH loan repayment grant and I was able to do that pretty easily because I had not consolidated my loans, and his undergrad loans weren’t part of mine and we didn’t have to deal with any of that. And I was told by NIH loan repayment that our finances were much more straightforward and it was easier for them to give me money because they didn’t have any headache with that. So, it was helpful in that regard. We were not thinking about that when we decided not to join accounts.

Benefits of Filing Taxes Jointly as a Married Couple

08:39 Emily: Yeah, sometimes there are unexpected benefits that come up along the way. So, I’m curious, do you guys file taxes married, filing jointly, or married, filing separately?

08:49 Michelle: Jointly.

08:50 Emily: Okay. Because that also, that sometimes affects like this loan repayment, like loan forgiveness stuff, depending on like what program you’re in. Did you want to add to that?

08:58 Michelle: It’s definitely like, we talked about how we were going to do that. And I think because economically we would benefit more from filing jointly as opposed to filing separately. And so that was pretty much the decision. It was more of an economic decision as opposed to a philosophical one, I guess.

09:12 Emily: Yeah, there’s this really strange thing, I guess, in the tax code that it does matter a lot, whether you’re married or not. Right? That’s the sort of defining line is legal marriage, depending on how you file. And then there’s a real disadvantage to married filing separately. I mean, there are some conditions under which some people choose to do that, but it’s not at all the same to do married, filing separately as it is when you’re not married. Like those are two vastly different treatments under the tax code. So, I find that to be very I mean, I’m sure there are reasons for it, but I find it to be kind of puzzling. So, there are sort of very, very special circumstances where it makes sense to do married filing separately, but they’re kind of rare actually, and actually often involve large student loan debts. And that’s one reason that people do file separately.

Advantages of Separate Finances in Marriage

09:59 Emily: Okay. So, I would say for my counterpoint on that, the philosophy or the reasoning behind us joining our finances when we got married was around our understanding of marriage or our idea of what marriage should be. And so, there are certain attributes of a married couple that we believe in. And one of those is joining finances. That’s not to say that everyone has to do it the same way we do, but that’s how we view our marriage. And so, it was important for us to go from not having anything in common before we were married to, after we were married, deciding that everything would be in common. So, let’s get to talking about, kind of like, what are the advantages of the joint finances model and the separate finances model? And please go first.

10:48 Michelle: Okay. So, advantages that I see are control. Control of your own money and how you spend it. Like, I don’t have to ask my husband and he doesn’t have to ask me to spend money. Because we both know what’s in our respective accounts and we are decent money managers. And so, we’re not necessarily consulting eachother about money all the time. And in fact, it’s very rare for us to have a discussion about money, or I don’t think we’ve ever fought about money because we’ve never needed to. So, I would consider that definitely a pro because finances are a common theme for stress and tension and marriage, and by us having separate accounts, I’m never needing to have that discussion with him because the bills that I pay are paid and it’s on my own volition and what he’s paying is on his and I never have to track that.

11:50 Emily: So, I have kind of a follow-up question about that, which is so at some points you do have to make decisions around money like where to live, for example. So, do you just eat sort of assess your own budgets and so forth and say, “Okay, this is how much I can spend on the next place that we live.” And you both just kind of agree on a number, is that right?

Separate Finances, Shared Vision and Life Goals

12:08 Michelle: Yes. Yeah. In general, we know, so we have, even though our finances are separate, we have shared goals for our life. So, our goal right now is to live like a postdoc, even though I’ve started my career. And with the goal of paying off my student loans and our credit card debt, so that we can then save for a house and just have a better life down the line. And so, we both share that vision, but how we go about getting to that vision is a little bit different because our accounts are separate.

12:46 Emily: Yeah. I’m really glad that you clarify that. That like, the vision is united. And the, as you were just saying, I thought you put that very well. The methods by which you each get there financially could be separate, but you’ve agreed on kind of where you’re headed. And so, you do aspire to own a house together. It sounds like.

13:05 Michelle: I think so. That’s a goal one day.

13:08 Emily: Okay. Gotcha. Any other advantages? I mean, that’s a big one.

13:12 Michelle: I mean, that for me is the biggest one. And just a sense for my just having my own autonomy within my relationship. I think that’s an important value for me as a person. And so, I get to have that. And my husband supports that because we have a very, like our philosophy on marriage is very much partner-focused and that we’re in it together. And that neither one of us is, you know, the owner of the other. We don’t have that kind of philosophy. And I think that reflects true in our finances. And I find that as an advantage.

Advantages of Joint Finances

13:55 Emily: Yeah, definitely. I thought of a couple of advantages to the joint system. So, one is complete simplicity. We have one checking account, both of our names on it. We have a set of savings accounts that both of our names are on. As I said, the credit cards are a little bit more complicated. Some of those, we have both of our names on there’s like one or two on each of our sides that we only have one, mostly because the other one might sign up later to get the parks as well. So yeah, to me, that simplicity is there. Now, I’m not sure how you handle this part, but I know that for some people who, for instance, have the yours, mine and ours model, they end up having a joint checking account, separate checking accounts, joint savings, separate savings, maybe joint credit cards, maybe separate credit cards. And also there’s a lot of transferring going on. So, I don’t know, like when you pay your bills, for example, do you, like one is responsible–like, how do you handle, I guess the transferring that might need to go on? Or do you avoid that?

14:47 Michelle: Yeah, so for bills, I, in fact, up until this move, had handled all of the bill paying, and so I would pay the bills every month and then we would split finances. So, he would literally write me a check, and then I would deposit that into my account and make sure all the bills got paid. This move, because of all the stress and things in my own world that were happening around this move, he actually took some ownership on setting up some of our bills for this new move. And so, now he’s responsible for some bills that I would have previously been paying, and that seems to be working out okay. It’s just what he’s paying and then gets deducted from what he would owe for the rest of his half.

15:35 Emily: Gotcha. Yeah. So there still is some, when you live together and you have shared expenses, you still have to do some of this transferring or somehow decide how to split it up. So, one advantage of joint finances, is the simplicity. Oh, and when we get paid, like all of our money goes into that checking account. Although, you know, come to think of it. My business is something that’s separate, because the business is not in my name alone. But when I pay myself from my business, that goes into our joint checking. And I’m not like spending out of the business for personal stuff, obviously. So, kind of once it is entering into our personal finances it’s joint. So, that’s one advantage is the simplicity. Not having to do the transfers.

Complete Transparency and Agreement

16:14 Emily: And then another one is complete transparency. So, this is not something that necessarily everyone desires, but we do. And so, obviously because everything’s joint, we both have complete access to everything and there’s no, basically there’s no way that any of us could keep a secret from the other without going and opening another account. That obviously could happen. Like, logistically one of us could do that. But in terms of what we know about, we can all see everything. And actually, so in addition to actually like literally sharing the accounts in terms of his name or on them, we also have a Mint account that we share where everything goes into that. And so that was actually helpful. We started that Mint account sort of, you know, as we were getting married and joining everything. So, for the things that were separate, that we didn’t like close down right away, they were all in Mint anyway. So, we could each see what was going on, even if like, you know, that random other account was still open for a little while. So, I liked that aspect of transparency a lot. To me, another feature of joint finances is that you have to agree on everything. But of course the corollary to that is that if you don’t agree, then there’s friction, then there are problems. As you were just saying, by keeping things separate, you really minimize kind of the, the level.

17:30 Emily: Like if you agree on the big picture, like the details, whatever it’s separate, who cares as long as you’re both adhering to the shared vision, I really liked how you phrased that. But for us, it’s sort of a feature that we have to agree about everything. Like I know other people view that as like a downside, but we do have to agree on everything or agree to disagree. Right? And agree to let one another have some autonomy in our decision making and just not care. And of course we’ll still see it. As I said, with the transparency. I think this was more important to us, or it was more of a factor like us having to agree on things earlier in our marriage, because we were both in graduate school. So, we weren’t earning as much money as we are now.

18:12 Emily: And our expenses, we were just a lot more like strict around budgeting and so forth. I mean, by necessity, right? We had to be, so the incomes were lower. So, we had to agree there wasn’t really, there wasn’t really a lot of fat in the budget. Right? And so everything had–not everything, because we agreed on a lot of things automatically–but if there were any points of disagreement, we had to force ourselves to come to an agreement. Or again, agree to disagree and just spend what we will.

Both Spending Models Encourage Conversations About Finances

18:36 Emily: So, I remember like early on in our marriage, I’m a bit of a natural spender. It’s something I’ve had to kind of curb over time, especially during graduate school. And my husband could not understand. We were going to all these weddings, right? Because we were in our mid twenties, we had just gotten married. We were going to a lot of weddings. My husband could not understand why I needed a new dress for, not like literally every event, but like a lot of events. I was like telling him, “I need to buy a new dress for this.” He was like, “I’m wearing the same suit to every single one of these events.” And I was like, “Well, this is a day wedding. And this is an evening wedding. You have to consider the season and the temperature and like the fanciness level.” And so I was trying to tell him all these reasons why I had to like buy all these new dresses. And he ultimately like, did not really understand it, but he just had to like, kind of accept it for a while. And so, that was an example of sort of an ongoing, not like fight, but just like sort of puzzlement on his side of why I was making these decisions.

19:27 Emily: But what that did though, is it kind of forced him, I think, to understand something about women and women’s fashion and the constraints and the expectations that we’re under. And it also forced me ultimately, you know, I didn’t keep up that dress-buying habit for more than a few years. And so, it also kind of forced me to be like, “Well,” rethink, like, “Do I really need all these new clothes for all these new events?” And so, it was a reason for us to kind of evolve our, I guess, thinking or understanding of each other and that kind of thing. So anyway, some short-term conflicts sometimes, but I liked that we are ultimately forced to agree and work things out. So to me, that’s a feature. And then the last feature, did you want to add anything there?

20:08 Michelle: I think just, as a counter perspective, by having separate accounts, it’s actually forced us to talk about finances more than if we had a joint–and maybe not more, but in a different way. So, I like you, Emily, am more of a spender and I have to really be conscientious about saving. Whereas my husband is very frugal and he would never spend money if he could get away with that. And so, it’s more like I’m talking to him as a confidant about money and, “Okay, so I’m really, I’m considering, you know, I love shoes and I think I need a new pair of tennis shoes,” and then he’ll reflect back and say, “Well, do you really? And how are these shoes going to help you with whatever?” And sometimes I’ll listen and I’ll say, “Okay, yeah, you’re right. I probably don’t need these shoes.” And it’s more of a partnership piece as opposed to a necessity. Like, I don’t need his opinion or his approval for me to buy this thing, but I I’m seeking it because I value his input. And in some ways that’s strengthened our relationship.

21:26 Emily: Yeah. So, even though you don’t have to, at the end of the day, you do choose to, I mean, you said earlier, you don’t talk about money much, but it sounds like maybe you talk around it a little bit. Like money affects a lot of things in our lives. And so, it’s kind of hard to go without discussing it at all, at least in an oblique manner. But what I like about what you’re saying is that like you’re still bringing it up and bringing whatever the decision is out into the open. And ultimately at the end of the day, it’s still your decision, but you are seeking his opinion or his counsel. Yeah. I really like that.

Advantage of Joint Finances: Navigating Income Disparities

21:57 Emily: The last advantage that I thought of for having joint finances is that it doesn’t matter who earns what. So, like when my husband and I were in graduate school, we earned about the same amount of money. So, not really huge concerns there. Right? Two people, two incomes that were pretty much the same feels like equal, right? After graduate school, I became self-employed. My income went down–right?–initially and then has risen over time. But his income increased because he got a proper job, a proper post-PhD job. And so, he saw an income jump, and I saw initially an income decrease. And it didn’t matter, like there wasn’t tension around that. And also the decisions that we had to make, like, for example, when you were saying earlier about, okay, you need to come to an agreement on where to live. So, like had we had separate finances under that situation, it would be like, well, I almost can’t contribute anything like to the household or very little, and he would be contributing a lot.

22:57 Emily: Under the joint model, we don’t concern ourselves with that because the money all just is shared. And so, whatever we can budget and afford on the completely combined income is what is going to happen, you know, for our family. And I guess I should say that basically, had we had separate finances and were committed to both contributing, for instance, equally to the household, then I just wouldn’t have started my business. It just, it wouldn’t have happened that way or wouldn’t have happened at that time. Like I would have gone and gotten a job and had an income more equal to what his was or close to. Yeah. And so, I think that the joint finances model has actually helped me like follow my dream. Right? As starting this business. And likewise for him, like he took a job at a startup, which we know at any point the ride could be over, right?

23:51 Emily: It’s an early-stage startup. And so, I guess of course he could have like saved maybe and provided for him self, I guess, in the event of job loss or something, if that’s what an emergency fund is for. But I guess we sort of have more like peace of mind knowing there’s like two incomes going into this pot and, you know, the expenses would be paid like from those two incomes. And again, it doesn’t really matter who’s earning what. So, that’s, again, our philosophy on that. And, I guess I should also mention, we have two children and especially early on in their lives, I was doing a lot more of the childcare. So, my income was lower. I was doing a lot more of the, sort of the work for the household. Right? That was unpaid.

24:29 Emily: And he was doing more of the earning, like outside the household. And that situation has changed now, like my income has risen and we have more childcare now. So, we might be able to handle things differently if we wanted to. But I feel like at that time joint finances were really necessary because the contributions that I was making the household were not reflected in income as much. So yeah, I guess it depends also on like sort of life stage and if both people are working or what decisions are around that, but there’s, I feel like extreme advantages to the joint finances model in certain configurations of income disparities. Right?

25:04 Michelle: Yeah. And I think it might be helpful to know. So, with every transition and are, and new we’ve always moved for my career. And so, the move I was able to start working and earning right away. My husband has followed me. So, every move he’s had to find a job. And so there’s been periods of time at every step where he’d been unemployed and was living on savings until he found a job. And that is currently true for us as we just moved two months ago. So, he’s still he’s looking and does not have a job. And so, knowing that, you know, he’s set up savings, and also this piece of this transition has been around, “Okay, now my income is a lot higher than what his will be when he gets a job. And so then how do we balance bills?” Yes, jointly we have more money, but what he can contribute is less than what I could contribute. And so, we’ve talked about paying a percentage of whatever our bills are. So, if we’re going for right now, our finances are exactly the same as they were on postdoc. And so it’s easy to do what we were doing previously, but as we transition in the next few years to basically growing and towards home ownership, we might be able to afford a house that he wouldn’t be able to afford on his income alone. And so, then that’ll be a discussion of like how we’re going to handle that.

Commercial

26:52 Emily: Emily here, for a brief interlude. I bet you and your peers are hungry for financial information right now, especially if it’s tailored for your unique PhD experience. I offer seminars, webinars, and workshops on personal finance for early-career PhDs that can be billed as professional development or personal wellness programming. My events cover a wide range of personal finance topics, or take a deep dive into the financial topics that matter most to PhDs like taxes, investing, career transitions, and frugality. If you’re interested in having me speak to your group or recommending me to a potential host, you can find more information and ways to contact me at pfforphds.com/speaking. We can absolutely find a way to get this great content to you and your peers, even while social distancing. Now, back to our interview.

Disadvantages of Joint and Separate Finances

27:51 Emily: So, that was kind of the end of my list of advantages that I see in joint finances. Was there anything that you wanted to add as like maybe disadvantages of your system? Disadvantages of my system, except if they haven’t already been covered by highlighting advantages of one or the other?

28:07 Michelle: I mean, the disadvantage of the separate model is around these transitions when your finances change substantially. And now it’s a matter of us having this discussion. Whereas, like you said, with the joint model, you wouldn’t have to do that if it’s built in.

28:28 Emily: One disadvantage of joint finances that I often see brought up. I don’t personally experience it, but a lot of people will bring up, what do you do about gifts? You know, what do you want to do when you want some secrecy, but it’s for the benefit right, of the other person and for that joy of gift giving? And I don’t experience this as an issue myself and I have some like, ideas about workarounds, basically. Like, sort of in my mind, if your only hangup about joint finances is gifts, there are easy ways to get around that and still have the totally joint model. If gifts are among other reasons why you don’t like the model, then that that’s fine. That can factor in. But like after I receive the gift and I was like, “How did you pull that off?” He’s like, “Oh, I know you check Mint. So, I did it on this random card that I just didn’t update from Mint.” So, that’s very tricky. I think an easier solution is just to use cash. Just take out cash and say, “Oh, I need some cash for some reason, don’t inquire too hard.” Or, “Oh, I’m buying you a gift, but you don’t know what it is yet.”

29:31 Emily: Or go to a place like Target or Amazon where you might be buying any kind of thing and let it be a secret for the time being. So, you might need to get a little bit tricky around gift-giving or at least having an agreement of like, you know, “I won’t look at that for a little while, while you’re getting me a gift.” But to me it seems like a pretty minor, I guess, speed bump in the model for joint finance. But it’s one that comes up a lot. So, I wanted to kind of address that.

29:57 Michelle: Unless, of course, your love language is gift giving and then it’s a very big deal. And so, I could see that being more important or more impactful to defining whether to have a joint account.

30:13 Emily: Yeah, I think that’s probably where, if it was something you were doing on a very regular basis, like every month or something like that, I can see–so, there’s sort of a subset of joint finances which is like joint with allowances. And so, your allowance could come out in cash so the other person doesn’t know what you do with it. Or it could even be two separate checking accounts, but your income goes into joint account. And then the separate account gets the, whatever it is, a hundred dollars a month, whatever your allowance is. And so, that’s a way that you can regularly keep some money from your spouse seeing it while still maintaining the spirit of the joint model. But of course, yeah, the bigger the component of your life this is, the more it argues that you need to have a specific system around figuring this out, which we obviously do not.

Unique Situations for Money Management as PhDs in a Relationship

31:02 Emily: One of the last questions here, Michelle, are there any attributes or situations unique to PhDs that might inform the choice of how to manage money in a relationship? So, I thought about living apart, which I mentioned earlier, my husband and I lived apart only for about three months. So, it was very short period of time a few years ago. But I have had friends, PhDs, sometimes two PhD couples, sometimes just one PhD couple, that have been living apart for years at a time because of training and stuff. You’ve been very fortunate and very supported that your husband has been following you around. Not everyone is able or willing to do that. So yeah, I guess I can see that this might inform the decision, right? Because the more, I guess separation you have like living in one place versus another, I think the more that supports the separate, or at least partially joint, partially separate models. Because as you were saying earlier, like you don’t have to, you do, but you don’t have to consult with your husband on decisions. That doesn’t really affect him, what you do with your own finances.

32:07 Emily: So to me, that model makes a lot of sense when the day-to-day decisions don’t really involve both of you. Right? And only involves one of you. And so, I felt that a little bit. I mean, again, I was only apart from my husband for a few months, but yeah, like what I did on a daily basis, the shopping or the eating out or whatever, like he wasn’t involved in any of that. So, it was a little bit odd that, you know, the money was still coming from our joint account. And so, I think that we did have a little bit less like sort of communication around what was going on. Like he just sort of was like, well, basically by that point, like we knew each other’s spending habits. And as long as we weren’t going outside of that, it didn’t really need to come up that much. But yeah, it was kind of odd to be like living in it in a different place and still withdrawing from that joint bank account. But you know, it was just a short period of time. So for us, it wasn’t, it didn’t warrant like changing the model, but yeah, I can see how there’s a reason to be a little bit more separate if your lives are kind of separate.

33:05 Michelle: I would say that’s pretty true for us. My husband’s not a PhD, not an academic by any means. And the culture around being a PhD and, you know, having to go to conferences and networking and sort of the things we spend money on that we wouldn’t spend money on if we weren’t PhDs, that’s very real for us. Because there are many times where I’m like, “Okay, so every November I have these two conferences and I know I’m going to be spending more money around that time.’ He doesn’t have to think about that at all. And if we had a joint account, we would always have to talk about that. And because we don’t, it’s not a thing that we need to discuss. He just knows that I go on these conferences and I’m still able to pay the bills. And it’s just made things a little bit smoother, I think. And he hasn’t needed to learn the culture of being a PhD because we have these separate accounts around money.

34:08 Emily: Yeah. That’s a really good point that like, especially PhD training and even, I guess, could be as a professor to some degree as well, there are certain demands that are made of your personal finances that would not be made if you were not a trainee or an academic. And that’s super unfortunate, but the reality. And so, like you said, he doesn’t need to be fully indoctrinated in the way that we are into how academia affects your personal finances because you have things separate. Yeah, that makes sense. I didn’t think about that. That we do have to pay for more things out of pocket than maybe somebody else would in another kind of career, wow.

34:53 Michelle: Conferences, memberships for different societies and things like that. But, you know, I can only imagine if we were to actually have a joint account, he would be like, “Why do you need to spend a hundred dollars on this membership, tell me how that’s going to benefit you in your everyday life? And the answer is, “It doesn’t really, but it does help me network and that will help advance my career.” And, you know, we don’t have to have that conversation.

PhD Finances: Handling Changes in Income

35:22 Emily: Yeah. Very, very interesting. The other one that I thought of regarding PhD finances is changes in income. So you, for example, have gone from needing to take out student loan debt and so forth to having a very nice salary, presumably now, and maybe other PhDs have less dramatic swings, but usually the completion of PhD training does involve hopefully a pay raise at some point, probably a big one. So that’s just been, I don’t know how that would maybe affect advantages of one model or another, but it just does affect how you handle your finances in general. And you mentioned earlier living like a postdoc, which is a great sort of mantra to live like a college student, live like a graduate student, live like a postdoc, live like a resident. These are all meaning the same thing of live well below your means and maintaining your prior lifestyle even through income increases.

36:12 Emily: So, it’s just a good kind of personal finance strategy in general. I guess this might play a little bit into what I was mentioning earlier about income disparity. Like between me and my husband, we went from being more equal incomes to be more, at a time, more disparate. And yeah. So, if PhD do experience, let’s say hopefully a jump in income, having the joint model can be helpful, I guess, in the sense that like, you’re, I guess you’re kind of in it to gather because at a point when maybe one person isn’t contributing as much to the household, that can be sort of smoothed out, I guess over time by the other person’s income being more like stable or something like that. And the other thing is that there is an upside usually to PhD finances, which is that jump in income later. And so both people benefit from the upside, like you were talking about earlier, like you’re talking about how you and your husband together, the household might benefit from your now great increase in income by perhaps splitting the percentage a little bit differently with the joint model that sort of comes baked in, right?

37:18 Emily: Like both people enjoy the upside, but they also are together on the downside. So there’s, yeah. There are two parts of that. Just something to think about, I guess, with PhDs and those income swings is what you would prefer. I wouldn’t necessarily say it argues more for one or the other, but just something to consider.

37:36 Michelle: For us, my debt is a detriment to us buying a house, but my income increase is the asset. And so, the way that we’ve kind of balanced that is pay down my debt, which I’m doing and I’m taking ownership of, right? Because it’s mine, it’s, you know, our separate accounts, and he doesn’t ever have to think about that necessarily. While at the same time I’m paying down debt, he can take his income and stack it away in savings. And so, eventually what he’s been able to save will help us buy a house and my income level will help us buy a house.

Would You Consider Changing Your Finance Model?

38:18 Emily: Gotcha. Yeah. So, you’re contributing, but it’s in like different ways kind of in the future. Yeah. That’s interesting. So, Michelle, do you see your model changing at any point? Do you foresee any circumstances that might cause you to reconsider this?

38:33 Michelle: I don’t think so. I don’t think so. It’s been working so well for 15 years that it’s hard to imagine a time when we would need to do something different.

38:46 Emily: Yeah. You guys have you have it down pat now, right?

38:49 Michelle: Yeah.

38:50 Emily: Yeah. I think on our side as I said, kind of earlier, as our income has increased as a household, we have more flexibility. Like, I sort of phrase it as when we had a lower income, we were much more strict about our budgeting and we had to agree a lot more. Now we have a little bit more autonomy because our income is higher. Like, if we want to do more discretionary spending. So, my husband’s really into buying electronics. Before we had sort of a strict budget on that. And I didn’t really care as long as he stayed within the budget, but it was kind of a low budget. Now, it’s more like, “Okay, you want to buy something?” He’ll talk to me about it. But ultimately I’m just like, “Well, if you want it, go ahead and get it.” We have much more flexibility now. And so that’s kind of, I guess, changed like our attitudes about it. I mean, everything is still joint and it’s still sort of a decision, but we just have a lot more freedom, I guess, both of us do to do more spending, should we choose to, or should we desire to.

39:48 Emily: I think that we will probably stick with the joint model because philosophically, it’s kind of like, we’re married, so we’re going to be joint. I’m not really opposed to the yours, mine and ours thing if it’s under the allowance model that I mentioned earlier. If maybe like, “Okay, you have a few hundred dollars a month, you can do whatever you want with and go ahead and I don’t need to know about it.” Like I can maybe see us moving to that at some point, but I don’t know necessarily why it would happen because it’s not something that causes friction for us right now. So, I don’t think it would in the future. But if it did, I’m okay with that allowance sort of system of it. I definitely don’t see us moving to being fully separate at any point, or even to the point where we would have our incomes be like deposited separately.

40:31 Emily: Because I just think, especially now that we have kids, it’s just the family, it’s just the household, like everything’s together. So yeah, I think the model will more or less stay as it is. Yeah. So, you know, Michelle, I appreciate you having this discussion with me so much and I hope the listeners have heard something that they resonated with for your model or for the model that I use or something that they disagree with and it’ll help them decide how things are going. It seems like things are really working well for you. So, I’m super happy about that. And obviously I feel that way about how things are working for us too. So, it just shows that, you know, people are different, relationships are different and how you handle your finances. It might look different. Like we, you know, we started off saying, okay, you do separate an I do joint. This is like, these are extremes on a spectrum. But really we can see that in both cases, the relationship has a shared vision of where we’re going in the future and agrees to a great deal, whether talked about or not, generally is an agreement with how things need to go. And yeah, the mechanics of it look a little bit different, but there’s a lot of commonality here as well. So, I was really happy to hear that. Any concluding thoughts from you?

41:34 Michelle: I would agree. I think both models can be effective and I think it ultimately will come down to what you value in your relationship. And as a person, that’s what’s going to drive your decision-making about what model you choose.

41:52 Emily: Yup, definitely. So, thank you so much Michelle.

41:54 Michelle: You’re welcome. Thank you.

Outtro

41:58 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This Postdoc from a Low-Income Family Evolved Her Financial Attitudes and Practices During Her PhD Training

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In this episode, Emily interviews Dr. Fushcia Hoover, a postdoc at the National Socio-Environmental Synthesis Center. Fushcia grew up in a low-income family and graduated from college in 2009. Unable to find full-time work, she accelerated her plans to pursue graduate school, ultimately earning a PhD from Purdue University and winning an NSF Graduate Research Fellowship. Fuschia’s background imparted her with certain financial attitudes and skills that influenced her financial journey through her PhD and postdocs. On the positive side, she already knew how to keep her expenses low and she had enough discretionary income from her stipend to pay off her undergrad student loans, even while sending money home to her mother. On the negative side, she was unfamiliar with investing and understandably gun-shy after witnessing the stock market crash. Fushcia and Emily discuss how her financial attitudes and practices evolved during her PhD and first postdoc and why and how she negotiated her salary for her second postdoc position.

Links Mentioned in the Episode

Teaser

00:00 Fushcia: As a graduate student, postdoc, there’s this expectation that we just kind of have to accept things as they are. And, certainly in some cases, yes, that’s true. But I think in a lot of cases, there are always things that are negotiable and that are malleable. And I think a lot of that comes down to recognizing how valuable you are, not just as a person, but also as the work and your contribution.

Introduction

00:35 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode two, and today my guest is Dr. Fushcia Hoover, a postdoc at the National Socio-Environmental Synthesis Center. Fuschia grew up in a low income family and graduated from college into the depths of the great recession. Those experiences, and parted her with certain financial attitudes and skills that influenced her financial journey through her PhD and postdocs. On the positive side, she already knew how to keep her expenses low, and she had enough discretionary income from her stipend to pay off her undergrad student loans. On the negative side, she was unfamiliar with investing and understandably gun shy after witnessing the stock market crash. Fushcia and I discuss how her financial attitudes and practices evolved during her PhD and first postdoc, and why and how she negotiated her salary for her second postdoc position. You absolutely do not want to miss her concluding words of encouragement for all PhDs, but especially those in marginalized groups. By the way we recorded this interview in October, 2019. Without further ado. Here’s my interview with Dr. Fushcia Hoover.

Will You Please Introduce Yourself Further?

01:54 Emily: I have joining me on the podcast today, Dr. Fushcia Hoover, tnd she’s going to be Talking to us about her background, coming from a low income family and ultimately entering graduate school and a couple of different postdocs. And what she has picked up and learned about finances along the way and the work she’s done on her own mindset. I’m really excited about this episode. Fushcia, thank you so much for joining me, and will you tell the audience a little bit more about yourself please?

02:17 Fushcia: Thank you so much for having me I’m happy to be here. I am a engineer by training. My graduate degrees are all from Purdue University, Ag and Bioengineering, but I actually got my degrees from an interdisciplinary program, the ecological sciences and engineering program at Purdue. And so a lot of my research that I do now, as well as my dissertation work, looks at both social and ecological aspects of storm water management and the way green spaces and green infrastructure can be used to reduce runoff during rainfall events, but then what are the different environmental justice potential impacts. Then recently I have also started incorporating black geography theory, which looks a bit more at the way that people and places are connected and the historical and cultural connections between those two, and what that means in terms of storm water management planning and where we place green spaces and green infrastructure. That’s kind of where I’m at now, so I like to call myself, well, it always changes, but currently I call myself a socio-ecological systems hydrologist.

03:45 Emily: That is so fascinating, that the arc of your work has gone in that direction, from the technological to the more sociological. Okay, great. And so you said you have your all degrees from Purdue, bachelors through PhD, is that right?

04:00 Fushcia: No. My bachelor’s is actually from the University of St. Thomas, which is based in Saint Paul, Minnesota, where I originally am from and grew up. That degree was mechanical engineering, as my bachelor’s. And then I also had a minor in Middle Eastern studies. I’ve always been interested in balancing my science and the technical work that I do with more social and cultural components. That’s where I started and I’ve just been traveling the Midwest sense, but now I’m on the East coast.

04:34 Emily: Yeah. So tell us about your positions that you’ve had since you’ve finished.

04:39 Fushcia: Yeah, so I finished in 2017. My first postdoc was through the National Academy of Sciences. And that’s called National Research Council graduate fellowship, or post graduate fellowship, I believe. That was based at the Environmental Protection Agency in Cincinnati, Ohio. I was there for a year and eight months, so almost two years. Then, my contract for that ended, and my boss and I weren’t sure if there was going to be additional funding, so I had been applying to other postdocs, one of which is the one I’m currently in, which is with the, this is very long, so bear with me, the National Socio-Environmental Synthesis Center, um, or SESYNC for short, and that’s in Annapolis, Maryland. So both very research focused. All I do is research. At the time I wasn’t interested in going into academia. Things have changed since. Then I worked in this position with Sarah Moreau, who is a faculty at Arizona State University.

05:52 Emily: Gotcha. So interesting that you just dropped in there that you’re now more interested in academia than you were before. People don’t usually go in that direction, but not the subject of our interview today. I’ll have to follow-up about that another time.

Growing up in a Low-Income Family

06:05 Emily: Let’s take a step back even further to your childhood and then basically your time going through college and up until you entered graduate school. Just really briefly, what was your financial experience during that time?

06:18 Fushcia: My mom is a single parent and I have a twin sister as well, so it was the two of us and our mom. We grew up in a single parent households and we had been low income for the duration of my childhood into early adulthood. Certainly for anyone that is from, I think either one of those demographics, there was a lot of like coupons and buying things either on sale or clearance or discount. On and off throughout growing up, we would have access to food stamps, depending on what my mom’s specific financial situation was at the time. The great thing about growing up in Minnesota was that there were and are amazing social services. In terms of basic needs like healthcare, we were on the free and reduced lunch program, we always had all those things. So it actually took me a very long time to realize that we were low income because of that. It was, I think until seventh grade, when I realized that lunch wasn’t free. I just thought that was a service everybody got and people who brought their lunch, that was just a preference. I really grew up in that environment of saving and being very conscious about spending.

07:53 Fushcia: My mom was also very open with us in terms of explaining why we could only get things on sale, but I think the child, part of me was still like, well, if she wanted to, we could get this, but she’s just being a mom. You know, “parents are mean” type of childhood mentality. It wasn’t until I got older, I was like, “Oh yeah, that makes sense.”

Loans and Scholarships During Undergrad

08:21 Emily: Yeah. Thanks for telling us about that. Then, when you got to college, what was the situation then? You mentioned the school that you went to, but was it private or public, and how did you fund it?

08:34 Fushcia: It’s the largest private university in the state of Minnesota, and I was fortunate there was a college access program and I was part of in high school called College Possible. I made my sister join as well, so we were both part of the program and it helped teach us about scholarships, applying for college, doing college visits, as well as like practicing the ACT, which is what most of the Midwest takes as the college entrance exam. I think I had applied to between 20 and 30 scholarships as a senior, and then the ones that I was awarded, combined with, I received a full tuition scholarship from the University of St. Thomas based on my academic record and I’d done a lot of community service as a high school student as well. So through that, I was actually receiving refund checks, which is pretty rare.

09:45 Fushcia: A big part of the conversation my mom had with us in terms of college was that she could not afford to send us to college and she could not afford to co-sign on a loan. So my sister and I were very diligent about then seeking out money and applying for scholarships and finding resources that could help us pay our way, or in my case get paid, through college. I took out two loans, one for my last semester of college, and then for a January term study abroad. When I finished, I had about $7,000 in debt and that was all within Sallie Mae at the time, so one was subsidized and one was un-subsidized.

10:40 Emily: That is really good. I mean, to have access to that program, first of all, maybe that was part and parcel with the general great services you had access to in Minnesota, but yeah, that set you up amazingly and to of course then put in the work and get the scores and do the scholarships and everything that, I mean, it’s clear why that happened and why you ended up in that position. So your tuition, you had a scholarship. You had enough scholarships coming in to cover the room and board and so forth, so that you’re actually receiving at sometimes a little bit of money back. Then you took out some small student loans for part of that experience. So coming out of college, about $7,000 worth of student loans and you didn’t go immediately to graduate school, is that right?

11:19 Fushcia: Yeah, that’s correct. And I actually forgot, I did have, I think it was maybe like a $3,000 loan from Wells Fargo, which, well, maybe I can save this for the end as one of my pieces of advice, but at the time I didn’t know about kind of self-loans or just the loan system. My checking and savings were through Wells Fargo, and I was like, “okay”, not knowing that that doesn’t allow you to defer your loan and that the rates are higher.

11:52 Fushcia: When I graduated, in 2009, which if you remember, was kind of the peak of the financial crisis.

12:03 Emily: Yeah, the worst year to be graduating.

12:05 Fushcia: Yes, it was a horrible year to graduate. I didn’t have a job. I had started working part time for a program that I was a part of while at St. Thomas. And then I had transitioned into working for a program called AVID or the Advancement Via Individual Determination, which was located in the public — well, it’s a national program, but I specifically worked within the Saint Paul public school system. Tthat was part time as well. So I was doing that, I had moved back home, I was living with my mom and barely able to pay my $50 a month minimum for my Wells Fargo loan. I had been able to put it into forbearance for six months. That was the only thing that they would allow me to do. It was actually a very…I was very stressed. Thankfully, living with my mom helped cut down on a lot of expenses, but it was a lot of penny pinching. I think my income was maybe $500 a month, before taxes. So, trying to give my mom something and then basically pay for my cell phone and basic expenses and then this loan. That was my financial situation upon graduating.

Starting Graduate School in the Midst of the Great Recession

13:39 Emily: And did the difficulty in finding work of that year, the peak year, did that play in your decision to go to graduate school or had that always been the plan?

13:48 Fushcia: I’d always wanted to go to graduate school. I did not want to go right away. I was really mentally and emotionally exhausted after undergrad.

13:59 Emily: I know that feeling.

14:01 Fushcia: Yes, and I think a lot of us have those feelings even after grad school as well. I think the only difference was that I went to grad school sooner than if I would have had a full time job. I worked part time for almost two years before going back to grad school, because I also wanted to make sure that I wanted to go back and I didn’t know what I wanted to go back for quite yet. I knew I wanted to stay within engineering, but I didn’t know…I knew a lot of what I didn’t want to do. I took that time to figure out the programs and the schools of interest and what my potential research interests could be.

14:49 Emily: Gotcha. So when you entered graduate school, was that actually an increase in your income from working, I guess it’s still part time technically in graduate school, but was your income higher than at that point?

15:02 Fushcia: It was. It’s funny, a lot of people talk about how poor graduate students are and how we’re going to pay, and we are. I certainly agree that for the work that we’re doing, all graduate students should be paid more. But it was such a jump in income for me. I think especially going into an engineering program at Purdue, I think my monthly income was about $2,500 per month. All of a sudden, not only did I have a higher income, but I also had a dependable income. And it was an income that I was going to be getting, regardless of my hours that I put it in. That was the first time being on a salary, and having something that I was like, “okay, wow, I can pay my bills, I can pay my loans, and that’s not something that I’m going to have to worry about. Where’s this money going to come from? Am I going to make my minimum payment this month?” It was a big relief for me in a lot of ways.

16:13 Emily: Yeah. And I would imagine that stipend goes pretty far in Lafayette, Indiana, does it not?

Employing Frugal Strategies in Grad School

16:19 Fushcia: Oh yes, it does. And I very much…I had two roommates, I didn’t have a car either. I had a bicycle, so I was pretty much biking or Lafayette, if you’re a student, or basically if you are affiliated with Purdue and you have a Purdue ID, then you get to take the public transportation system for free, so I wasn’t having to spend money there. It was really just groceries and utilities and rent split between three people. I found a lot of ways to reduce the amount of expenses that I had because then I had also then started sending money back to my mom. I was sending her about $300 every month. Definitely trying to funnel resources and reduce costs.

17:09 Emily: Yeah. It sounds like you took a lot of the the strategies that you’d been using prior to that point, and also some of the mindsets you’d had to that point. That was what you applied right then. You found the low cost living situation, you used the public transit instead of owning a car, so you really reduce your expenses right off. But it sounds like still, even with sending your mom money, you probably had a good bit of discretionary money to be working with, above the bills that needed to be paid. What did you start doing in your personal finances at that point? What did you have to learn about since you now finally have this discretionary money to do what you want with? What did you learn about what did you apply in your life?

Paying off Student Loans During Graduate School

17:49 Fushcia: It’s funny, I had taken a financial literacy workshop before I started graduate school, and that was more focused on like budgeting and saving and negotiating whether you pay off credit card debt first, or if you have student loans and how you prioritize your debts. The biggest thing, aside from sending money home to my mom was that I started making monthly payments on the undergraduate loans that I had. I targeted the Wells Fargo private loan first, and then —

18:28 Emily: I just have a follow up about that. Were those loans, at least maybe the federal ones, in deferment at that point?

18:34 Fushcia: They were, yes.

18:36 Emily: And what about the Wells Fargo one? Was that in deferment?

18:38 Fushcia: No, the Wells Fargo, my forbearance had ended after the first six months, from me finishing my undergrad degree. I had only been making $50 a month payments, so you can imagine on a $3,000 loan, that’s not very much. So I kicked that up and I think I started making either between $150 and $200 loan payments every month. So about $500 every month was going to this one particular loan and then my mom. Then the rest that was remaining after bills and rent, I was just putting into savings or using for other expenses like going out to eat or going home for the holidays, things like that.

19:34 Emily: What I like to call irregular expenses.

19:37 Fushcia: Yes, irregular expenses.

19:38 Emily: The ones that can really mess up your cashflow if you try to pay for them in just one month. How long did it take you then? Did you just keep working in paying down those loans straight before adding any other goals to the picture and how long did it take you to pay them off?

19:50 Fushcia: I did. I had paid off my Wells Fargo loan by the end of my masters, so just under two years, and then my government loans, it took about two and a half. I don’t remember if it was two and a half or three years. I think part of the decision why, even though those loans were in deferment, one of them was unsubsidized, so it was gaining interest. And I think because of coming from low income background, and even though I was in this position where I had a steady paycheck, I was still really worried that it would end. Certainly, I knew the degree would end and I wasn’t sure what my income would look like after that, and I didn’t want to have that stress. I think I might’ve been the only one I knew of my friends with loans from undergrad who was actively paying it down.

20:54 Fushcia: That was my goal, was to have zero debt by the time I graduated from Purdue. Pretty much all of the focus was on paying off those loans. Then I would typically have anywhere from like $200 to $400 that I would just put into savings every month.

21:17 Emily: I will say, in my contact with graduate students, some people do, but it’s on the rare side to be working on paying down student loans while in graduate school. I think yours because they’re relatively small, might…I think some people get really defeatist about student loans. Especially if you have more than a hundred thousand dollars or multiple tens of thousands of dollars of student loans, it can feel really, really daunting, and why even bother like getting started on your low salary during graduate school. But I think yours, they were a fraction of what you made in a given year, and so it felt like something that you could tackle, probably. And like you were saying, you had that fear of, well, what if your program ends for whatever reason? Well, then the loans are coming out of deferment, you have to make at least minimum payments, and then what’s your income going to be? You don’t know. That decision definitely makes sense to me.

Commercial

22:12 Emily: Hey, social distancers, Emily here. I hope you’re doing okay. It took a few weeks, but I think I have my bearings about me in my new normal. There is a lot of uncertainty and fear right now about our public and personal health and our economy. I would like to help you feel more secure in your personal finances and plan and prepare for whatever financial future may come. You can schedule a free 15 minute call with me at PFforPhDs.com/coaching to determine if financial coaching with me is right for you at this time, I hope you will reach out, if only to speak with someone new for a few minutes. Take care. Now back to our interview.

Personal Finance Mindset Shift During and Post-PhD

22:58 Emily: Did you do anything else within your personal finances during graduate school, aside from paying off those loans and then also building up savings?

23:06 Fushcia: No. I had conversations, I talked with a couple of friends who were working about IRAs and investments, but it was all very intimidating. I think for me, at the time, it was easier to just put my money in savings and then I could also see it, and there wasn’t like a fear of losing it. With investments, I think particularly because of being an adult through the stock market crash, and also remembering when Enron went under and people’s entire pensions were lost. I have a, I wouldn’t say a strong distrust, but I would say I’m very kind of apathetic and very wary of different financial institutions. Even Sallie Mae and Freddie Mac and all of those. For me, I was like, “nope, I want to have my money with me, so I’m putting it in my savings account.” By then I had also transferred to a credit union, so I felt a lot more secure about credit unions as financial institutions, int that I’m an owner in this. And I have amplified checking, so then I was getting, I don’t remember what the return is, but it’s a couple percent return. I was like, “okay, I like this. I can make money from my own money.” Even though I had those conversations with a lot of friends who had higher income backgrounds or whose families did, and so these were conversations that they had. It still wasn’t something I felt comfortable really digging into because I think part of me still felt like I didn’t have the financial security yet to start investing.

25:05 Emily: Yeah. It’s interesting. I graduated from college in 2007, so two years before you did, so before the crisis hit and I was safely in graduate school, by the time everything went down. But I took away like a different kind of financial trauma from that whole period, which is that I’m very gun shy about the housing market. I’ve still always been a renter. I have yet to buy my first home. And that’s partially because, while I didn’t personally experience, all the media coverage is about people losing their homes and foreclosures. So while I was very gung ho about getting into the stock market and I was able to experience the rise right after the crash, it’s still is something that lingers with me regarding the housing. It’s just interesting to talk to someone near a similar age who had some witnessing and some stake in everything that happened and what’s lingering.

Investing

25:58 Emily: Actually, maybe you’ve turned this around since then. You were talking about during graduate school, you were nervous to start investing. And I think it actually is really smart to build up the cash savings to get the debt paid off before embarking on that. At what point did you, or have you started to invest?

26:14 Fushcia: I started a few months, maybe six months into my first postdoc. By the time I finished at Purdue, I had about a four month break where I was job searching and then preparing for a move, and I had saved up about maybe $5,000 to $6,000 in savings. One of things that I did start doing was also using credit cards as a way to prepare for high cost expenses. I had opened a card, um, just before I graduated so that it allowed me to have 18 months of 0% APR because I knew I’m not going to have a job. I was at a part time job that I got to cover basic things, but in terms of, I have to move, that card held all of those expenses. Then once I started my postdoc and getting paid, I worked on paying that down, and since I had 18 months, there was no rush. But then, because I was like, “Okay, I have a job.” As an engineer coming in for an NRC, my stipend was $69,000 for the year, which certainly is very high compared to a lot of postdocs, but I think most of the federal agencies, you’re going to see a higher salary, that’s closer to what a full time federal employee would be making

27:55 Emily: And for you in particular that’s over double what you had been making her in graduate school.

27:59 Fushcia: Yes. Well, and I should say that my first year of my master’s I applied for and was awarded a National Science Foundation GRFP, so I think that also really allowed me to focus on my debt because then I was making $30K. I still had to account for the taxes, which was not fun, but compared to my friends in college of liberal arts, who were in English or social science making $13K, that’s a big difference. One of the things that I actually learned from you was while I was in my first postdoc, I joined the National Postdoc Association, and you were a guest. This would have been a couple of years now. I watched your webinar, when you gave a presentation. From that point, I looked more into kind of the difference between an IRA and a independent tax account and figuring out, okay, with NRC, it’s the same thing. They don’t take out taxes. And so then —

29:19 Emily: I’ll jump in there and say, because you were on fellowship, because you were not technically an employee, I’m just explaining for the listener, you wouldn’t have had access to the workplace based retirement account, whatever that would be, that they would offer to their full time employees. So you’re still dealing with a stipend, you still have to handle the taxes manually, and you’re really only tax advantaged retirement option would be an IRA. Nothing was being offered through your employer, because you didn’t have an employer.

29:47 Fushcia: Yes. I was a contractor. I did a little bit of…well, I should say I did a lot of research trying to figure out then where I wanted to open an account. I actually ended up going with an online system called Betterment because I did not have the time to actually look into managing my own investments. I think because so much stuff is online, it also made it easy for me, so then I didn’t have to find an office location to go into. In my postdoc now we are considered faculty of the University of Maryland and the University of Maryland is a state run system, so we actually have mandatory investment portfolios and the portfolio that I chose is through the I don’t remember the, the full meaning, but it’s TIAA.

30:53 Emily: Yeah. I don’t know what it stands for either, but TIAA or TIAA CREF.

30:57 Fushcia: I still have my betterment accounts and I haven’t decided how much I’ll be putting into it. They take out just over 7% from my salary for the TIAA account, so I need to figure out what that balance is going to look like. Now I was like, okay, it’s probably about time. I was a little bit nervous about being older, like 31, and just starting to invest. But I think because I don’t have any debts and because, well I have a little bit of credit card debt, but I also just moved for this postdoc. I think that’s why I was finally at a point where I feel confident that I will have a job and I will continue to have income and that’s not going to be something I’ll be lacking anymore. And so now I can fully invest having confidence in, well the system is still problematic, but I at least have confidence that I’m not going to wake up and be without a job.

Learning Debt Management Strategies

32:12 Emily: You said earlier there were maybe some things that you brought out of your childhood that you had an aversion towards debt. A smart one. But you also maybe weren’t exposed to conversations around investing and IRAs, maybe like some of your peers were. Was there anything else that you kind of felt maybe you were a little bit out of step with other people during graduate school, or during your postdocs regarding personal finance. And anything you had to learn or mindsets to change or overcome?

32:44 Fushcia: I think I definitely learned about the healthy ways that you can use credit cards to manage certain debts. I think that that came from conversations with a close friend when I moved for my postdoc. I opened a card to buffer that, and a lot of that helped and realizing that all debt doesn’t have to be bad. That it can help you create a credit score and debt management techniques and strategies, and build out this financial portfolio that can actually then make you have a higher score and more competitive for other loans and things like that. A lot of that came from conversations with friends who had either taught themselves that, or they learned it by proxy from their parents. Just asking about their debt and how they managed it, and then also asking, are you afraid that you won’t pay it off or are you afraid that it’s going to be there forever? Certainly, I remember an ex of mine, she was like, “Yeah, it’s just going be there, and it’s just this thing that I have, and I’ll make payments, and it sucks, but also I have the education that I wanted to get and I’m in the job that I I think through those conversations, it definitely helps release some of the anxiety and like intense fear around debt.

34:48 Fushcia: Listening to webinars or reading your blog, for example, and just trying to educate myself more, so that I’m more informed and that’s definitely alleviated a lot of the fear and anxiety, but I think I still like coupons, I still like things on sale. It’s still really hard for me to pay full price for clothing or a pair of shoes that’s a hundred dollars. I’m like, no, can’t do that. Like you, I’ve been a renter this whole time and I don’t know if I want to buy property or a home. I did buy a car when I moved to Cincinnati, and so I’m making those monthly payments now. Part of it is also okay, well, I’m going to make these payments and pay off my car and then maybe see where I’m at in terms of, if I’m in a permanent position that then I feel more comfortable buying a home. I think some of the approaches I still have to managing that is to have one type of debt at a time. Take on debt, pay it off and take on a new debt, pay it off.

36:10 Emily: Yeah, it sounds like you really have learned much more about, as you were saying earlier, debt management or how you can use debt as a tool, especially to avoid large expenditures of cash. Because it sounds like you still have cash savings to a degree, but it’s more about not wanting to let go of that and using debt to help you basically just hold both to have the cash and to have the debt, so that you can feel, feel more secure around it. Is that right?

36:39 Fushcia: Yeah. I think that’s a really good way of kind of summing that up.

Negotiating a Post-Doc Salary

36:44 Emily: Yeah. And then the other thing that you mentioned that you wanted to talk about in this interview was negotiating your salary, which is also kind of another mindset leap, right? Like not only, maybe from someone coming from the kind of background that you have, but also just being in academia where like with your first postdoc, negotiation is not really an option, but it sounds like you did at your first opportunity, negotiate. Can you tell us how that worked?

37:09 Fushcia: Yeah. To be honest, a lot of it was just like, I know I need to practice this because I know I’ll have to do it at some point, so let me just practice it now because it’s lower stakes.

37:21 Emily: Yeah. Good point.

37:25 Fushcia: Part of that came from in your webinar you had been talking about kind of how you plan for transitions. So either going from your degree to a postdoc, postdoc to a full time permanent position, and managing the moving costs and change in expenses. I had sat down and looked at essentially the cost of living for Annapolis and estimating what my costs are now, and what’s expected to grow. The majority of that, it’s about a 300% increase in housing expenses from Cincinnati to Annapolis. I started there and then looked at how much would I want in savings or investments, and then worked with the business office at SESYNC to then figure out is there a parking cost? Learning about the exact percentage rate that they take out for retirement or investments. Trying to find what are all the other hidden costs and expenses that come with this position so that I could factor that into my budget and then know what would my minimum salary need to be, because I know my minimum payments for my car. I know my cell phone payments. Those are things that I know and then wanting to make sure that it had wiggle room.

38:54 Fushcia: Then I think on top of that, I also wanted to try and stay as close as possible to what I was already making. Certainly, it can be challenging to do that with a different type of postdoc, particularly because this one’s affiliated with the University of Maryland, academic post docs are much slower. But I didn’t want to have this $20,000 drop, because the great thing about the NRC was that they gave a $1,500 increase every year. I came in at $69,000, but then the next year I was making $70,500. So it’s like, okay, well, how close can we get to this?

39:38 Fushcia: Again, a lot of it was using my network, and talking to in particular, a good friend who is now at Cornell. She had just finished her PhD, and she had negotiated her position. Asking her for advice and resources and how you frame what you’re negotiating for and the language that you use so that it’s still appropriate and respectful, but that you’re still firm, in terms of, these are my skills, particularly because I was coming out of a postdoc. I already have almost two years of experience post-PhD, and I’ll have all these other publications, and knowing different questions to ask.

40:22 Fushcia: I wrote up this letter, had a few people review it. Ironically, when I asked my former PhD advisor, she was like, “We don’t do that. If someone were to do that, maybe I’d give like a two to 3000 increase.” But when I had looked up other negotiation strategies on Inside Higher Ed, I used a lot of their articles. They mentioned, I think it’s 15% to 22% is typically what you negotiate as your range, particularly if it’s not a lateral position, if you’re moving up. So I was like, “Okay, we’re going to go for 15%.” And they did not give it to me, but they came close. From there I went back and said, “Okay, based on this salary, could I make it work?” And I could. It’s going to be tight, which is a bit frustrating to have a point where you have more flexibility and you have more expendable income and now it feels a little bit more like being a grad student again where it’s a smaller salary. I have to be more conscious of where my money is going and not spending as much as I was, particularly now that I have a car and all the expenses that are associated with that. But I know that I have the skills to make it work. And at this point I’m also looking for a permanent position after this postdoc. I don’t anticipate after this two year position, being in a situation where I have to kind of penny pinch and reduce costs elsewhere.

42:23 Emily: Yeah. It sounds like you approach that — I mean, it’s clear that you did a lot of research and preparation through that process, not only taking what you learned from the webinar that I gave, but also this research you did with the articles in Inside Higher Ed and in speaking with your friend. You really prepared for that and kind of the best way possible, so it’s a great, it’s a great model for the listeners to hear, especially because you knew that you were going into an almost guaranteed income drop and also a cost of living increase. Both of those factors just highlight the need for being really careful around this. And if your academic advisor said, well, this isn’t done, I mean, it is, it is done sometimes, in some places. Maybe no one’s ever attempted it with her.

43:06 Emily: I want to point the listeners to one of my resources, which is postdocsalaries.com. And there’s also another one PhDstipends.com, for those in graduate school. It’s kind of like a Glassdoor, but for those types of positions, for postdocs and for grad student positions. That’s just another resource out there, if people want to get benchmarks on what is reasonable to be paid for different kinds of postdocs in different areas of the country. And I also ask questions about negotiation on that survey. I think the last time I looked in the database, it was around 25% or maybe a third of the people who had answered the questions had said, yes, I at least attempted to negotiate salary or benefits for the postdoc position. I think it’s becoming more and more popular, as people realize that this is a standard thing you do in most jobs, and why don’t we at least try it in these academic or nonacademic postdocs. That was great story.

43:58 Fushcia: Well, and I think too, salary, while I think it is very important, isn’t the only thing that you can negotiate. You can negotiate moving expenses and you can negotiate time off. I also negotiated my start time because I wanted to finish through my contract at the EPA before coming to SESYNC. That was something that I successfully negotiated. I had picked my top three things of these are the things that I would like, so we’ll see where they can meet me. There’s another postdoc who negotiated because he also was coming out of a previous postdoc and then everyone else who we’ve talked to, we were having a conversation and they were like, I didn’t know that you could do that. And we were like, all they can say is no, especially once they offer you a position, if they want you. If you don’t ask, you’ll never know.

45:02 Fushcia: I would also say for all the listeners that if you are going to any type of public institution, you can look up everyone’s salary, that’s all publicly accessible information. And that was something that I did to give me a sense of what are the ranges for the people that are employed within the center. I had an idea of what their budget is to figure out do I ask for the 15% or I do I ask for the 20% to 25%.

45:29 Emily: Yeah, that’s a great advantage when you’re going to those types of places, that there’s a large degree of transparency around salary there. That’s an amazing thing to look up, if that’s where you’re applying.

Best Financial Advice for an Early Career PhD

45:41 Emily: Last question here, Fushcia, as we wrap up — what is your best financial advice for another early career PhD? And that could be something that we have touched on in this interview, or it could be something completely else.

45:53 Fushcia: I think my first piece of advice would be to do as much research as you can. As grad students, we’re training basically how to do research and conduct research. I think we already have a lot of the skills to be able to access these resources and information and find ways or people to help us get there. I would say that most of the way that I have navigated my finances has been through talking to friends, talking to people who are in positions where I see myself going, and just doing the research and using the academic online journals that are available or financial journals, blogs, anything, and everything that you can capture to try and help inform what the decision that will be best for you, or rather the best decision for you.

47:00 Fushcia: The second thing that I would say is to give yourself more value and credit than what you would default to. I think as a graduate student, postdoc, there’s this expectation that we just kind of have to accept things as they are. And certainly in some cases, yes, that’s true. But I think in a lot of cases, there are always things that are negotiable and that are malleable. I think a lot of that comes down to recognizing how valuable you are, not just as a person, but also as the work and your contributions and that the majority of the people in this country do not have PhDs, so you’re bringing in a very valuable skillset, which, when you’re going into a space where everybody has PhDs, it may not seem like that, but I think it’s important to remind yourself of that.

48:05 Fushcia: I think especially, I say this to women postdocs, women of color, black women postdocs, we are already underestimated in many way. We are already underpaid in many ways, thinking about your initial salary offer or associated benefits. I think because of all the work that’s coming out from the national academies and other research centers about this still huge discrepancy across all fields, I think I use that as a way to empower me to ask for more. Because now it’s not just valuing my work and what I bring, but also recognizing that I’m already going to be undervalued, because of what I look like when I come in the room. I think that would be the last piece of advice that I would say for all the postdocs out there. And this includes folks who are femme or femme-identified. If you’re any type of on the marginalized periphery, ask for more, because again, all they can say is no. And if they take back that offer, then that’s probably not a place you want to go in the first place. Because you want to go where you’re going to be celebrated and valued. Give yourself more value than what you default to.

49:39 Emily: I think you put that so well. That was great. I have nothing to add there. Just everybody go back and listen to that again, listen to it a few more times, especially if you’re in one of these groups that Fuschia just identified. Absolutely.

49:50 Emily: Well, thank you so much for this wonderful interview and it was really a pleasure to speak with you today.

49:54 Fushcia: Yes. Thank you so much. This was really fun. I hope that whoever’s listening has been able to take something away, even if it’s just to know that you’re not the only one that’s in grad school who’s from a low income background or is having anxiety or fear around debt or salary. That’s that’s normal and also you will be okay. Everything will be fine.

50:23 Emily: Love that. Thank you so much.

50:25 Fushcia: Yes. Thank you.

Outtro

50:27 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.