Personal Finance for PhDs

Live a financially balanced life - no Real Job required

Emily

University Fitness Instructor

by

Today’s post is from an anonymous contributor. Her side job was very convenient for her based on its location and nature!

source
source

1.     What was your side or temporary job?

Fitness instructor at my university

2.     How much did you earn?

~$16/hr

Increase Your Income

Join the mailing list to receive our 7-part video series, "How to Increase Your Income as a Graduate Student," including side hustles and passive income.

We won't send you spam. Unsubscribe at any time. Powered by Kit

3.     How did you balance your job with your graduate work?

I work out anyway, so this was just like getting paid for something that I would do anyway!

4.     Did your job complement your graduate work or advance your career?

It did not complement my graduate work, but it helped me keep my sanity!  Exercise is a huge stress reliever for me and I got to meet some really amazing people who frequented my class, so I made new friends, too.

5.     How did you get started with your job?

One of my friends in the same graduate program started being a fitness instructor before me and I would attend her classes.  She mentioned that I would probably enjoy teaching as well, so I talked to the coordinator at the university gym.  She had a few teaching time slots that weren’t filled, so she asked me if I wanted to teach those slots.  I got certified through online training and started teaching the following semester.

Zoo Consultant, Online Professor, and Piano Teacher

by

The grad student featured in today’s side job series is a true hustler! Kathayoon balanced her graduate work with THREE side jobs that furthered her career, lined her pockets, and gave her a much-needed break. She even used her consulting network to get her first post-PhD job. It’s truly amazing how much she was able to do in addition to her PhD.

Name: Kathayoon Khalil

Graduate Institution: Stanford University

Department/Program: Graduate School of Education

Kathayoon while consulting at the San Diego Zoo.
Kathayoon while consulting at the San Diego Zoo.

1.     What was your side or temporary job?

I taught classes for the Miami University of Ohio’s online program Project Dragonfly, taught piano lessons to local kids, and did evaluation consulting for zoos and aquariums.

2.     How much did you earn?

Miami offers a stipend of $750 per class, so I would do two classes per term. I charged $30/hour for piano lessons and $70/hr for consulting.

Increase Your Income

Join the mailing list to receive our 7-part video series, "How to Increase Your Income as a Graduate Student," including side hustles and passive income.

We won't send you spam. Unsubscribe at any time. Powered by Kit

3.     How did you balance your job with your graduate work?

I tried to keep a strict 8-5:30 schedule in grad school so I would stay efficient – plus I don’t work well at night. The course instructing and consulting was in the same line of work (zoo and aquarium education) as my graduate work, and I love hanging out with kids and playing music so teaching piano lessons was like a breath of fresh air for an hour every day!

4.     Does/did your job complement your graduate work or advance your career?

I got to build a lot of important skills by consulting, and teaching online courses allowed me to travel and both allowed me to make connections to people in my field who acted as study subjects for my dissertation, and eventually helped me get a job after graduation.

5.     How did you get started with your job?

With Miami, I had a friend at the Cincinnati Zoo (where the program is based) who introduced me to the staff.

With consulting, a mentor of mine connected me with a colleague in the Bay Area who needed help evaluating an exhibit. Once it got out that I was providing that service, several other people in our field – both in California and elsewhere in the country – offered me projects at their institutions.

With piano lessons, I signed up on care.com to be a babysitter and at my first interview, I mentioned being a pianist and the parents asked me to teach their children. Friends of the family heard that I taught lessons, and asked me to take on their children as students.

6.     Is there anything else you would like to share about your experience?

Honestly, it kept me sane to have other things going on, even though sometimes I was so busy I had no time to eat until dinner. But I wouldn’t do anything differently! I needed the money, but I also needed the distraction to some extent. Having these other things going on helped me to finish my dissertation more quickly because I was more focused on the time I had, instead of having lots of unstructured time to work.

Research Analyst for an Investor Relations Firm

by

research analyst at investor relations firmToday’s post is by Adam Evertts on the part-time job he took in his last year of grad school that positioned him for his transition into the work force. He also includes a great reminder about the proper place of of side jobs in graduate school.

Name: Adam Evertts

Institution: Princeton University

Department: Molecular Biology

1. What was your side or temporary job?

In my final year I started working hourly at a NYC-based investor relations firm as a research analyst. It was a way for the company to test me out, and for me to test out of the company prior to them offering me a full-time position. For my role I would either write initiation reports or update notes. The initiations are anywhere from 20-50 pages and describe everything a potential investor may want to know about the company. The update notes are smaller documents, 2-6 pages in length that provide short updates on a company’s progress. I would spend a lot of time reading primary literature, company reports, and other materials.

2. How much did you earn?

I earned $25/hour. Not a huge amount of money, but more than I was making as a graduate student. I didn’t work part-time for the financial rewards, but I can say that it was very helpful in the end. Having a few hundred extra dollars around each week allowed me to take a vacation in San Diego after graduation and then immediately move to NYC. It also made me realize how underpaid I was as a grad student.

Increase Your Income

Join the mailing list to receive our 7-part video series, "How to Increase Your Income as a Graduate Student," including side hustles and passive income.

We won't send you spam. Unsubscribe at any time. Powered by Kit

3. How did you balance your job with your graduate work?

It was a tough balance for me. I don’t think I could have pulled it off earlier in my grad career. I still had a lot of obligations as a student and was working 10-12 hours/day during the work week plus 4+ hours on Saturday. They were intense hours too, no more 2 hour lunch breaks like I did as a 3rd year. The key is that I continued to satisfy my obligations in the lab and graduated on time.

4. Did your job complement your graduate work or advance your career?

This experience was critical for my transition out of graduate school. I ended up getting a full-time offer at the same company after maybe 2 months of hourly work and have been there for almost 2 years now. The best part was that I had an opportunity to try out my job before starting full-time. How else do you know if you want to launch a career in a certain field? I actually thought of my part-time work as a right instead of a privilege. Just my opinion. I don’t think the NIH spends money to educate PhDs without any interest in their future. I may not be doing primary research now, but I still play a role in advancing human health for the country.

5. How did you get started with your job?

I actually found the company using a google search and reached out saying that I wanted some equity research experience and would be happy to work for free. It turned out that someone at the company had just quit and they were short staffed. They also insisted on paying me since it was and still is a profitable business, meaning that they don’t need to exploit free labor. You’d be surprised how many profitable companies love free interns. We also love interns, but we pay them. I tried some other standard paths to getting full-time jobs, but with little success. Applying on websites and through job sites is infinitely less personal and your resume starts to blend in. It can be useful to take a creative path and just reach out to a company and ask for some experience.

6. Is there anything else you would like to share about your experience?

My personal feeling is that you should have a very clear purpose for working part-time during graduate school. It should never get in the way of producing high quality research or extend your graduation time.

My Realistic Career Earnings Expectations Push Me to Save Aggressively

by

This post is by Tiffany, a PhD student at Harvard University.

As an undergraduate, my parents pushed for me to become a pharmacist. They had good reason to: I had good grades and loved biology and chemistry. However, after volunteering in a lab, I decided I wanted to become a scientist. My dad was initially against this decision: he made many “personal finance” arguments against it. He warned me about the long hours and comparatively low pay to other advanced degrees, and shared articles about the current “glut of Ph.D.s”. He was worried I wouldn’t be able to find a stable job. He argued that as a pharmacist, I would have a stable, high paying salary (though this is now disputed as well). My undergraduate adviser gave similar advice, “You will not make much money if you go into science: the job market is also tricky depending on what you want. Take your time to decide what you want to do.” I thought about these arguments throughout undergrad and during my two years as a technician. In the end, I decided to go to graduate school anyways.

source
source

Their arguments have given me a strong motivation to save as much as possible for the future. First, it is uncertain what will happen after I graduate. Most biology PhDs continue on to work as postdocs, but the starting salary for a postdoctoral fellow based on the NIH guidelines is only $42,840/year. I could move into other fields outside of academia; however, unlike academia, there is no clear map on how to get training and experience for these “alternative careers” outside your dissertation work. Second, compounding works better if I start saving earlier. Any money I put into investments now will likely do more for me later on in life. Unfortunately, scientists are at a disadvantage since their earning power does not increase substantially until after graduate school and postdoctoral fellowships. By then, a scientist is likely into their 30s. Unfortunately, many major expenses – such as weddings, cars, homes, and kids – rack up during your 20s and 30s.

Below, I’ve tried to illustrate these points using my brother and me as an example.

My brother graduated is an engineer. He currently makes $58,700/year in Alabama. His after tax take-home pay is $3800/month. He manages to put away ~$1500/month into his investment accounts. I started my PhD in 2012 and get $36,800/year for my stipend in Boston, Massachusetts. My after tax take-home pay is $2300/month. I manage to put away ~$600/month into my investment accounts. Assuming that no major life events happen, we can calculate how much our income, savings, and investment accounts will turn out.

In the below chart, I’ve assumed that:

For the engineer:

  • He will consistently get a 10% raise every 4 years.
  • He will consistently save about $1500*12/$58700 ~ 30% of his salary.
  • All of these savings will compound at 7% annually, using the formula FV = P(1 + r)y, where y = # of years it compounds, P = the amount saved that year, and r = rate (7%), and FV = future value at age 65.

For the tenure track scientist:

  • I am using my graduate stipend as the PhD student’s salary.
  • Savings as a graduate student and postdoc will be roughly $600*12/$37,000 ~ 20% of her salary, which is what I try to save now.
  • Once the scientist reaches assistant/associated/tenure professorship, she will save ~30% of her salary.
  • All of these savings will compound at 7% annually.

Please note that these numbers are based off myself and my brother. They also do not take into account major life events or raises or changes in investment portfolio. Please also note that I am NOT a financial adviser and that you should seek a professional for financial advice. This article is based purely on my personal experience and hypothetical projections.

savings_comparison

Looking at the charts above, you can see that the scientist makes about 1 million dollars less in a lifetime, but by saving aggressively, only saves $350,000 less. Still, the largest difference is in the amount compounded by age 65. The $1500/month that the engineer puts away in the first 4 years of his career can potentially become over $1 million by age 65 if the annual rate of return is 7%. Although the engineer consistently saves 30% of income, the amounts saved later in life do not yield as much. In contrast, the scientist cannot put away $1500/month until she is 32, after she has finished her postdoctoral fellowship. Her salary grows much more slowly than the engineer’s: she cannot afford to put more away until later. This results in this difference: although the engineer and the scientist have only a $350,000 in total savings, they have a $2.4 million dollar difference in what is compounded. It’s this point that makes me want to save as much as possible now!

Seonwoo, Georgia Tech, electrical and computer engineering – Moving credit card due dates

by

I have eleven credit cards. I also maintain about 45 active accounts in You Need a Budget (great budgeting software you should check out – it’s free for students!), so I’m no stranger to managing multiple accounts. But even though I can manage all of those accounts without undue burden on myself, even I would drive myself crazy if I didn’t consolidate my credit card due dates to be on or around the same day, and in all likelihood I’d probably miss a payment. It makes your cash flow management easier when you have one consolidated outflow. Some banks let you change this online, but most of them will require a phone call. Typically you end up with one longer statement cycle when you do this, as opposed to one normal length cycle and one short cycle.

Buying a Home

by

source
source

Some graduate students may have the option of buying a home instead of renting. A graduate student in this position must weigh all the typical factors that any prospective homeowner would, plus additional considerations due to her student status.

All prospective homeowners must assess how long they plan to stay in the home, whether the property is intended for living or for investment, and whether they can afford the down payment, mortgage, and maintenance.

Further reading: Can You Afford to Buy a House Right Now?

On top of the typical concerns of someone considering buying a home, graduate students must ask themselves an additional set of questions because of their unique life circumstances.

Not many graduate students are logistically and financially prepared to become homeowners without outside help due to their low income, typical lack of liquid savings, and plans to leave their cities within a few years. However, some graduate students are capable of buying homes on their own, and others will receive mortgage payment or down payment assistance from a family member (spouse, parent).

For those students who can buy in a financially responsible manner and are a bit lucky, their homes could be great financial boons by the end of grad school if they have built equity or at least kept ahead of renting costs. In particular, graduate students who rent to roommates may have quite low ongoing housing costs, though they will have capital tied up in the property and must keep a large emergency fund for maintenance and vacancy.

Further reading: 5 Reasons Why Home Ownership Can Be a Financial Disaster