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Pursue Career Success

April 8, 2015 by Emily

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Keep general savings to supplement your emergency fund for conference expenses (even if they will be reimbursed), research expenses, career counseling, travel, relocation costs for summer work, etc. If you are facing one of these opportunities without accessible funds, you will have the choice between not pursuing the opportunity and going into debt.

It’s reasonable to keep some amount of general savings on hand just for flexibility. However, the sooner you can anticipate the opportunity, the sooner you can set a savings goal to help you take it.

Travel

April 8, 2015 by Emily

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Grad students, like other young people, often have a desire to travel, whether it is to visit far-flung family and friends, to experience new adventures, or to immerse themselves in other cultures. While some grad students have a great amount of time flexibility to travel if they want to, they usually don’t have a lot of money to spare for this purpose. Fortunately, there are many low-cost or even free ways for graduate students to indulge their wanderlust.

Further reading: How to Spend Less When Attending Out-of-Town Weddings; 33 Travel Tips For Seeing the World on a Budget; How to Travel on a Budget and Still Have the Time of Your Life

Plan Combined Trips

One of the least expensive ways to vacate is to add a side activity to an already planned trip.

Grad students should attend at least a few conferences while they pursue their degrees, and these trips are often partially or fully paid from research grants, departmental funds, or conference scholarships. You can ask your advisor for the flexibility to extend your trip to more fully experience the city or country that the conference is in; in this case, you would likely only have to pay for the additional lodging, food, and entertainment costs as the transit itself is already paid for. You can employ the same strategy for other research-related travel you might need to do, such as visiting collaborators or accessing remote resources.

Even if you are paying for a trip yourself, look for ways that you can get the best value out of your stay. You may not be able to choose your destination for obligation travel, such as to weddings, but you can make the most of the trip by planning extra activities in the city you are visiting or traveling to a nearby attraction.

Spend Less on Transit

Getting to and from your destination is sometimes the largest cost when booking travel, but flexibility can help you reduce the price quite a bit. Slower forms of transit are usually less expensive than faster ones, so if you can take extra time away from work or work remotely you may be able to reduce your overall trip cost enormously. Look for carpooling options when your destination is within driving distance to avoid paying for individual seats. You can consider discount companies such as Spirit Airlines and Frontier Airlines; just be sure you calibrate your expectations for the lack of amenities and unusual fee structure.

Transit is also usually cheaper off of peak times, so consider weekday, holiday, and overnight travel. When you book your travel also can affect the price you pay. Booking well in advance (but not too far!) usually gets you a better price, and Tuesdays or Wednesdays are often rumored to be the cheapest days to book flights. Companies like MegaBus offer heavily discounted fares for the first people to book when a trip is listed.

Further reading: Secrets to Booking Cheap Flights: 12 Dos and Don’ts; Cheapest Days to Fly and Best Time to Buy Airline Tickets

Spend Less on Lodging

Once you arrive at your destination, you will have to find somewhere to lay your head. Crashing with friends or family is a great option if they are willing to host you as it is generally free and you get quality time with enjoyable company. Couchsurfing with strangers is also a free option, often facilitated by hospitality websites, but comes with risk. If you have to pay for lodging, look to lower-cost alternatives like hostels, camping, and individual renters like AirBnB or VRBO. If you want to stay in a hotel, book early and shop around for the best price. Booking hotels judiciously may help you spend less money in other areas of your trip, such as food (complimentary breakfasts) and local transportation (airport and nearby shuttles).

Further reading: Ditch the Hotel: 10 Cheaper Ways to Stay; 14 Ways to Save Money on Hotels for Your Next Vacation

Play the Rewards Game

If you are a frequent traveler, especially one who is brand-loyal, there is no harm in signing up for the rewards programs associated with the airlines or hotel chains that you use. You can build up rewards over time and ultimately score a free flight or free night’s stay.

If you are a responsible credit card user and have good credit, you may consider using travel rewards credit cards. There are general cards that give travel benefits of many types and also branded cards available for specific airline networks or hotel chains. Using these types of credit cards for travel purchases and sometimes everyday purchases helps you accumulate points or miles that you can redeem for free flights or lodging. Maximizing your rewards while minimizing your costs can be very time-consuming and tricky, requiring a lot of research and careful planning, but it becomes like a hobby for many enthusiasts. The rewards potential is there, even for graduate students who are often low spenders, but recognize the downsides of the time investment necessary and the potential for messing up.

Why should I save and invest?

April 8, 2015 by Emily

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Everyone knows that they are supposed to save money, but not necessarily why. If you are accustomed to living paycheck-to-paycheck, you may not even realize how much peace of mind having savings can give you. In addition, investing your money properly for the long term is one of the best ways to build wealth.

The utility of accessible funds.

The power of compound interest.

Further reading: 2 Good Reasons to Start Investing Now, No Matter How Much Money You Have

Accessible Funds

April 8, 2015 by Emily

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Living paycheck to paycheck is truly unsustainable. If you spend all the money that comes in and never build up any savings, you are unable to adapt when life throws you a curveball and it is almost impossible to plan for the future. Eventually, you will want or need to make a purchase that you did not anticipate. The expenditure could be for a true emergency, such as a health crisis, or simply a high-value purchase than you are able to cash flow, such as a laptop.

Building up accessible funds will likely reduce the anxiety you may feel about money. You can use the savings in the case of an emergency, for planned or anticipated purchases, to achieve goals, and to build wealth over time.

Further reading: In Defense of Savings Accounts

Compound Interest

April 8, 2015 by Emily

Even though it’s doubtful that Einstein ever said that compound interest is the most powerful force in the universe, it’s indisputable that it is an incredible tool that can work for or against you.

Compound Interest for Investing

When compound interest works in your favor, an asset that you own earns a return and increases in value. Then that increased asset earns a return and increases by even more. The growth is exponential.

compound interest equation

 

As an example, see how a one-time investment of $5,500 will grow over time if invested with an average rate of return of 8%. After 30 years, the investment balance has grown to over $60,000, with over half of that growth occurring in the last 10 years.

investment one time

 

Investing on a regular basis is how Millennials are likely to provide for their own retirements now that pensions have all but disappeared and Social Security is uncertain. If you max out a 401(k) every year for 30 years with an 8% average rate of return, over 30 years you will have contributed $524,880 but your investment balance at the end will be $2,172,944.

investment continuous

 

You can create your own projects of the effect of compound interest using Illuminations.

GSF Reader Post: My Realistic Career Earnings Expectations Push Me to Save Aggressively

Compound Interest in Debt

Compound interest can work against you in the case of debt. When you owe a given amount at a certain interest rate, the amount you owe will also increase exponentially unless you make payments that more than keep up with the growth.

Compound Interest in Inflation Risk

One great reason to invest that most people don’t consider is inflation risk. The average historical inflation rate is around 3-4% per year. That means that every year your money goes 3-4% less far in terms of real purchasing power and the prices will double approximately every 20 years. If you don’t invest at a rate that at least keeps pace with inflation, the value of your money decreases with time. To build wealth through investing, you must earn a return that exceeds the average rate of inflation.

Entertainment

April 7, 2015 by Emily

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Some young people can find themselves spending tens or hundreds of dollars on entertainment on a regular monthly basis, yet it is a truly discretionary expense. Your entertainment budget is therefore one you can rather easily expand or contract based on your values and your other expenses. Use these frugal practices to get the best of both worlds – lots of entertainment for free or low cost.

Further reading: Give Yourself a Raise: Find Inexpensive Entertainment on or near Campus

Local Events

Most cities host free or low-cost events throughout the year, and with a higher density of events in the summer. These events include concerts, outdoor movies, festivals, theater, sports, etc. Find a comprehensive calendar of events for your city and check it regularly for new additions. You can also ask other grad students what their favorite yearly free public events are.

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On-Campus

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One of the benefits of being a grad student is that your university and department provide free or subsidized entertainment options throughout the school year. From sports to theater to concerts to celebrations to happy hours to movies, you should be able to find something to do just about every week on campus if you like.

Graduate student organizations on campus also may host social events off-campus and subsidize the cost to attendees.

Student Discounts

Check for student discounts and free days at movie theaters, museums, performing arts centers, and other local establishments.

Television

Millennials are forgoing cable TV at an unprecedented rate in favor of alternative video delivery. If you do want to watch television, only buy as much as you’re really going to use and reevaluate frequently as new options come available.

  • Netflix/Hulu Plus/Amazon Prime: There are many options for subscription video services with slightly different catalogues. You probably don’t need more than one!
  • Single-network packages: The cable goliath is starting to fall. You can now purchase access to single channels or sports packages such as HBO Go and Sling TV.
  • Viewing parties: If you’re willing to leave your home, you can join other people to watch popular TV shows or sports for free. Find a friend with a similar obsession who is willing to let you crash or .
  • Bunny ears: Don’t forget that TV is still available for free over the air in very high digital quality. All you need is the one-time purchase of an antennae and you will have indefinite access to a number of stations.

Further Reading: How to Cancel Your Cable When You’re Addicted to a Show; Our Best (Pain-Free) Money-Saving Moves

Library

As a graduate student, you should have access to both your university library and your local public library. These days, you can check out a lot more than books from libraries. Instead of paying for Redbox or Netflix, you can get movies and TV shows for free from the library.

Further Reading: Why Are We Spending $155.76 with Netflix When Our Queue Is Available for Free?; 10 Library Freebies You Might Not have Known (or Forgot) About

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