In this episode, Emily interviews Dr. Jed Kim, a recent PhD graduate in chemistry from the University of Wisconsin at Madison. Jed built a $35,000 Roth IRA by the time he finished his PhD due to consistent $500 per month contributions. Jed and Emily discuss what it took financially to maintain that savings rate, from applying for fellowships and bank bonuses to sharing food with multiple roommates to engaging in free and low-cost activities. Jed speaks openly about how spending too little at times hampered his mental health and how a family emergency caused him to rethink his approach. This interview illustrates the trade-offs graduate students have to navigate when striving to make the PhD less of a financial liability.
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Teaser
Jed (00:00): I have to do this in order to do my dream job of being a, being a researcher and a scientist. So how do I make this so that this PhD is no longer a liability but an asset for me, both financially and like career wise?
Introduction
Emily (00:22): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.
Emily (00:52): This is Season 23, Episode 9, and today my guest is Dr. Jed Kim, a recent PhD graduate in chemistry from the University of Wisconsin at Madison. Jed built a $35,000 Roth IRA by the time he finished his PhD due to consistent $500 per month contributions. Jed and I discuss what it took financially to maintain that savings rate, from applying for fellowships and bank bonuses to sharing food with multiple roommates to engaging in free and low-cost activities. Jed speaks openly about how spending too little at times hampered his mental health and how a family emergency caused him to rethink his approach. This interview illustrates the trade-offs graduate students have to navigate when striving to make the PhD less of a financial liability.
Emily (01:45): This time of year, mid-April to mid-June, is my reflection and planning season. I consider what types of financial education I want to offer my university clients in the upcoming academic year, and there may be a big shake-up in store for this one. When I pilot new workshops and programs, I typically offer them to my mailing list subscribers for free or at a steep discount so that I can work out the kinks and receive feedback. If you would like to be the first to know about these opportunities, please join my mailing list through PFforPhDs.com/advice/. As a bonus, you’ll receive a document that catalogs all of the financial advice given by my podcast guests at the end of our interviews. You can find the show notes for this episode at PFforPhDs.com/s23e9/. Without further ado, here’s my interview with Dr. Jed Kim.
Will You Please Introduce Yourself Further?
Emily (02:55): I am delighted to have joining me on the podcast today, Dr. Jed Kim. He graduated with a PhD in chemistry from UW Madison, um, in June, 2025. And we’re gonna be hearing today mostly about his financial journey through graduate school and specifically what he did to build up a $35,000 balance in a Roth IRA by the time he finished. So that’s really exciting. So Jed, welcome to the podcast. Will you please introduce yourself a little bit further for the audience?
Jed (03:23): Yeah. Hi. Um, I’m Jed. I got my PhD from UW Madison. As you just said, um, I was an avid, uh, runner. I, um, I liked, we have two cats right now, so a big animal lover and for the most part I like going out in nature, which is why I went to UW Madison as well.
Emily (03:40): I have had the pleasure of visiting in the summer, and I found it quite lovely. Um, I don’t know about the rest of the year.
Jed (03:48): Yeah, summer’s probably one of, personally, I think it’s one of the best and worst times ’cause that’s when all the mosquitoes come out, but also like the lakes are just so beautiful. Um, and if you go like, uh, fishing at the, at either Monona or uh, Mendota, it’s just great. Also, like all the wilderness, all the trees. It’s super nice.
Financial Position at the Beginning of Grad School
Emily (04:09): Well, that’s wonderful. Let’s take it back to the beginning of graduate school. I wanna know kind of what your financial position was and also your mindset was going into graduate school. So can you tell us, like, you know, did you have any assets at that point? Did you have any liabilities and what were you thinking about money when you first started graduate school?
Jed (04:28): Yeah. Um, I guess we could, um, going into going into graduate school, I was very lucky where I got a lot of, uh, I guess it sort of like my financial journey starts in undergrad, right? Where I had a part-time job in undergrad, as well as my second part-time job was like applying to as many scholarships that were even remotely relatable to me as possible. So all throughout all that I was able to come out of, uh, undergrad debt free. So like, I had no assets, but also no debt. So there’s, there was a little toss up. So I pretty much started grad school at zero. I think I maybe had like a thousand dollars. Um, the outlook was, uh, when I first toured UW Madison, they said that it wasn’t really a place to like build wealth. It was just a place to like enough of a stipend to survive. And I was always an overachiever. So I was like, okay, how could I make this stretch as far as possible? Um, I got a, um, I got a minor in entrepreneurship and business, so I was really financially focused at that at that time. So I want to like really say, okay, I have to do this in order to do my dream job of being a, being a researcher and a scientist. So how do I make this so that this PhD is no longer a liability but an asset for me both financially and like career wise.
Emily (05:44): Oh, I love the way you put that and I love how, um, conscious of that fact you were going into it. Like it is, it is for most people, the financial reality is yeah, you’re just gonna be treading water, if that, during a PhD. But, um, I’m so curious now to find out how you went against that narrative. Um, especially that local narrative. ’cause it’s not the same everywhere, um, to start building wealth and as you said, not let the PhD be as much of a financial liability. Love it. Can you tell us what your stipend was at the start of grad school?
Jed (06:15): Um, I think it was, well, like it was high 20k, low 30k, and it stayed that way throughout the entirety. I think, I forget the exact numbers, but I think it started off at 28 and ended around like 32. But if, I could be wrong with a couple of thousand here or there, I don’t, I don’t think, I think it’s relatively reliable. I mean, you know, if you’ve had a lot of interviews, that’s pretty much just standard stipend for most PhDs.
Emily (06:42): Yeah. And I do know that UW Madison, at least from the previous interviews I’ve had, not a generous stipend. Definitely not.
Jed (06:48): Definitely not. Yeah.
Emily (06:50): Yeah. And what year did you start grad school?
Jed (06:52): Um, I started in 2020.
Emily (06:54): Okay. Uh, interesting time to start graduate school. Um, you moved, you were, you know, you were on campus the first year?
Housing Expenses During Grad School
Jed (07:02): Yep. No, no. So actually that’s the first way I, I started saving money. Um, before starting grad school, I, I made sure to message all of my incoming, um, grad school, you know, class. And I tried to get as big of a, um, number of people in one place as possible. So we found a house near near UW Madison. It was like a, still a 10, 15 minute walk. Uh, there was a bus that went straight to UW Madison, but I ended up spending only like six to $700 a month in rent. So that, that was like a, I really wanted to stay under like half a paycheck for, for that first year so that I could like, sort of get my, uh, um, feet under me when I first moved it.
Emily (07:47): Okay. This is an amazing tip already for both prospective and current graduate students. So how many, it sounds like you’re renting a single family home? And how many other people did you share it with?
Jed (07:57): So initially it was four, and then one, one person did end up dropping out it, in total, it was about three people. The rent though, was really, uh, we, it wasn’t the best first place. Obviously, as you stay longer and have it, um, in undergrad, you have no money <laugh>, like, pretty much all my money went into paying back, uh, paying back my, uh, student loans. But in the first year I was trying to stay, uh, as lean as possible. The rent, I think was like 1800 some, somewhere around that, maybe 18, 1900 for the whole house. Um, so it started off as four. When it was four, it was great, but, uh, we, like rent was super cheap, but then afterwards it got a little more expensive. Utilities, we kept it at as, at a minimum, I remember us trying to turn off the lights as much as po-. It was all the, all the things where you could scrounge as much as you can, as well as like splitting the internet bill, which was, which is a set cost. A lot of the set costs ended up being split among three, four ways. So that really reduced like the monthly expenses.
Emily (09:00): And did your roommates have a similar, oh, you also shared food. Oh, okay. Did your roommates have a similar mindset to you about wanting to be pretty frugal?
Jed (09:08): One of them did, the other did not. So there was a big room, a medium room, and a small room. The big room person, we just gave it to them. They paid, they paid like an extra 150 a month. The small room person paid like, like a hundred dollars less and I got the medium room. So I, I was considered like the base rent. I’m not sure how that worked out, but it ended up being pretty good. Uh, in the long run,
Emily (09:35): I’m spending some time on this because the housing decision for graduate students is honestly make or break for a grad student’s budget. And and you were so smart to know that going in, like knowing that as a prospective and rising first year, um, is that, was that the same housing that you kept throughout graduate school or did you end up moving?
Jed (09:53): So, um, in grad school I moved every single year. Um, mostly because every single year for some reason, rents kept going up. So I was trying to find a way to, uh, to minimize that. The first year, first first two years, we stayed in that place. Second year, um, we tr I tried to get another roommate, but that sort of fell through. So I found a, uh, uh, apartment that I rented on my own that was the most expense I spent on rent. And then the last two years I actually moved in with my now wife, then fiance. Um, so that ended up splitting rent as well. Um, but rent usually stayed around that when I lived by myself, it was like a thousand dollars, which was a lot. It was. But luckily at that time the, the stipend ran- randomly increased in UW Madison. So there was like a sort of cost of living adjustment, I guess. But, um, yeah, so it was like around that six to thousand dollars mark throughout the entirety.
Transportation Expenses During Grad School
Emily (10:56): Okay. Yeah. So good to know. And I really hope people are taking this message to heart. Um, I also moved a couple, maybe three times during graduate school. Um, a couple of those times were motivated by rent increases that I was like, I, no, I, we can do better elsewhere. Um, what about your transportation situation? Did you have a car? Did you not?
Jed (11:16): Yeah, so that was actually like a deliberate decision. My parents really were, were badgering me. Like, oh, you’re in America. You had to get a car. You have to get a car. I’m like, a car is a monthly expense. I just cannot, I could afford Right? Like a car payments. The car payments is one thing, but the car insurance was something else, something else. And as well as if you get a car in Madison, you have to have it covered. Otherwise it’s gonna like snow over you and ruin the car. So, um, I just took the bus everywhere. It was definitely a time drain, but it was just something that I had to do in order to like not go into debt while in grad school.
Emily (11:55): And what about your peers? Did a lot of them have cars or a lot of them made the same decision as you
Jed (12:00): Most took the bus. Um, the ci- the bus, luckily the bus system in Madison were, was actually quite robust. So, uh, whether you lived like 30 minutes away or an hour away, there’s usually some sort of bus line that gets you through. Um, for instance, like I lived, I didn’t live in Madison City, I lived in Fitchburg, which really saved a lot of money at in that way. Um, there was a direct bus line that went straight from our apartment to the ma- uh, to Madison. And that really helped.
Emily (12:25): So, uh, I managed to live car free for exactly one year of my life, and it was glorious <laugh> and I have not achieved it since. Um, but I know like the questions for some people who maybe they have a car currently, but it, it is expensive and they’re not using it like that much. Like, talk to me about, okay, let’s say someone has like the daily commute solved around town. They know how to do that. What about those really outlier things where like you would really, it would be very convenient to have a car for X reason, like when you’re traveling or something like that. Like how did you solve those? Like, very rare but acute needs for a car.
Jed (13:01): So it really helps to have friends. First of all, <laugh>, if you have friends, um, um, outside the graduate school program, I found that that really helped me. Um, usually, uh, every grad school has some sort of like big industry, like industry company nearby, and that usually employs some people that aren’t in a PhD program. Um, I remember, uh, in Madison usually we go to Chicago or something like that for a trip, um, for a day trip or weekend trip. And usually the people that work at Epic or or in the U- University it’s entirely would sometimes like schedule like a road trip. And we, and that way I would avoid that flight, uh, that, that trip. The renting a car situation is actually not too terrible, especially if you know that you’re not gonna be in the, uh, in the city. So, and you try to plan as much as you can to not travel in the winter, and that way you don’t have to worry about the over, like the covered parking situation that you really had to worry about.
Investing $35,000 in a Roth IRA During Grad School
Emily (14:05): Gotcha. Thank you so much for those, um, insights. Okay. We’ve gotten a picture into your largest fixed expenses, right? Housing and transportation. And we also got a picture into your mindset, which was don’t let the PhD be as much of a financial liability as usual. And so, you know, I mentioned up top that you managed to build up a Roth IRA of $35,000 by the time you finished graduate school, which is incredible. So I wanna hear kind of some things that went into it that, did you do anything on the income side? Did you do anything on the expenses side aside from in housing or transportation that we’ve already covered? So kind of take this where you will, like how did you manage to, you know, save and invest that much?
Jed (14:43): Yeah, I mean, the lar- the fact that my largest expense, um, monthly was $600 really helped. Right? So, um, I was able to sort of squirrel away around $500 a month every month for my entire PhD. Um, and that comes to around like 6K, $6,000 a year, right? Um, luckily I started in, well, okay, I don’t wanna say luckily, but I started investing around, uh, 2020. And there the, uh, the, uh, s- like I mostly focused on like ETFs like, um, international and local ETFs, and those did pretty well. So that really helped with the growing, but the majority of the Roth IRA is still my own contributions, which I’m hoping won’t happen too for too much longer. But right now that’s kind of where it’ll, it’ll stuck.
Emily (15:33): Yeah. So let’s, um, talk a little bit about on the income side. Now, as you know, you mentioned during your undergrad that you applied for so, so many scholarships. Did that continue during graduate school or how did you apply those lessons in grad school?
Jed (15:45): Yeah. Um, first three years, no. Um, but then af- because the first three years is the first year it was mostly like COVID really hard to like sort of get acclimated to the university. Um, second year, uh, there’s these quals called, uh, TBEs that UW Madison has you take. So I was focusing on that. Third year there’s another qual called the RP research proposal, um, that you have to take as well. So those three years pretty much I was just trying to survive <laugh>. Um, um, but then in my fourth and fifth year I was really looking at like external fellowships. Um, I was lucky enough to get one that was, uh, tangentially related to the research I was doing. So the A-C-S Medi, um, I, if you are in the medicinal chemistry or in the organic chemistry field, I highly recommend that you do apply to that one. Um, it’s a very generous fellowship as well as, uh, a allows you to go, they pay for an entire trip to the Gordon Research Conference, which is a really good networking opportunity. Well, it was for me. Um, and then other fellowships I applied to that were a lot smaller were like, um, some scholarships I previously applied to in, um, in undergrad, but you know, in grad school format, um, there’s a grad school, uh, or post undergrad, uh, program as well.
Emily (17:03): And did these fellowships actually increase your stipend or was Madison just like, thank you very much for the money. Your stipend stays the same
Jed (17:11): That, for the ACS Medi? Yeah, it was pretty much your stipend stays the same. Um, they did give me a little bit, I think like four or $500 extra, but it was pretty much, I mean, if you talk to someone from UW Madison, you kind of know that there’s like a whole internal process where all the fellowship money goes into the university, they take the taxes out and then, um, and then they, uh, get give you the rest. That’s actually how I found you because I was, look, I got my first fellowship and I was like, what is going on? How do I use this money? Like what, how do I, like, do I get extra money for doing this? Because technically the stipend was more than I was making, uh, sorry. The fellowship was more than I was getting from the stipend, so I was like, do I get a bonus or, but it was pretty much they get it, use it to pay for my insurance, and then I could get like maybe two, 300 extra dollars extra. Which was a little bit disappointing. But
Emily (18:02): Yeah, it can be. And that’s something where I definitely want grad students to be aware that that could be the outcome. And so you have to know your motivation when you apply to fellowships, is it purely I want to increase my stipend, or is it also I want the prestige, I want this on my cv, I wanna get to go to a Gordon conference? You know, you have to know your reasons, because if you’re applying purely for the money and then your university just absorbs the money, that will be very, very disappointing. I, but it sounds like some of the smaller ones were able to stack.
Jed (18:27): Yeah, the smaller ones was able to stack a little bit, but again, they were so small that when I asked the university, they were like, yeah, it’s fine. Just it went directly to me. Yeah.
Emily (18:38): So you did have a conversation about it, you like disclosed it and yeah.
Jed (18:42): Um, I talked with our, uh, our advisor and she was like, yeah, it’s fine.
Emily (18:47): Um, and then when you won the larger fellowship from ACS did you ask about receiving more of a bonus than a few hundred dollars? Like did they turn you down? How did that work?
Jed (18:58): I did, and then they sat me down and said, here’s all your expenses that we pay for health insurance. You’re not getting that. I was like, okay, that’s fine. And then, okay, <laugh>, I, I kind of just left at that. It was, it was a, uh, in the end it was like a great experience for me anyway ’cause again, they paid for the Gordon conference as well as, um, it’s a, it was a huge boost to my cv. Um, it was a particularly, um, uh, prestigious fellowship, so it was more, I guess prestige wise, but yeah, in the moment I was like, ah, $38,000 extra will be great. And then didn’t happen.
Emily (19:32): Yeah. Um, okay. So that sounds like that about sums it up on the income side.
Commercial
Emily (19:39): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats. This is a perfect time to book me for a workshop at the end of the current fiscal year or at the beginning of the upcoming academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.
Reducing Expenses with Roommates, Costco, Sharing Food, and Low-Cost Experiences
Emily (21:04): Do you wanna talk about how you sort of managed or even maybe, you know, reduced your expenses over time in these non housing, non transportation areas?
Jed (21:12): Yeah, of course. So both. Mostly I if stay with roommates for as long as you can, that’s the best advice I could give because not only does it split the rent, but it really like, I don’t know how, how, how it is for you, but utilities are kind of expensive, especially Madison, where it’s like sometimes the utilities could go up to like 150, $200. Those are severe months. But, um, paying that by yourself, it it beco-, it ends up adding up to becoming an extra rent payment. And, um, if you split it among everyone, it becomes way more manageable. Where, where even the expensive months, like it ranges from like 30 to $60 instead of like 50 to $200 and that makes, that makes life a lot easier.
Emily (21:57): Now you mentioned earlier that you all shared food. Can you tell me about that?
Jed (22:01): Yeah, so we usually go, we, um, so conventional, uh, grocery stores, if you go weekly, ends up being really expensive. So what we did was we, we would go to Costco together and we’d get like those bulk deals, like the bulk beef, the bulk pork, um, giant trays of like eggs. And then we’d all just like split the, split the expenses, uh, which, you know, economically fa favorable, but also those meats could be frozen and we could, we usually like use them for like hot pot or like Korean barbecue nights. And then it was like really financially feasible. Um, Wisconsin also has like weirdly cheap beef and pork, so it was like really helpful there. But if we bought ’em individually from the package, I did the math, I think it would’ve been like two, three times more expensive. So I was like, that’s not gonna happen. We, we literally bought yeah, bags of like meat
Emily (22:52): I distinctly remember like discovering Costco when I was in graduate school and realizing, like you just said, like, you don’t have to go through six pounds of meat in a week, like just freeze it. So like if you have an operating freezer, like you can buy in bulk, even if you’re just, even if it’s just one or two people, you know? And it’s still, it’s still pretty feasible. So I was not, of course you might not buy, you know, 48 ounces of ketchup or whatever, but there are definitely things at Costco that you can buy and manage to consume, um, you know, in a timely manner. Uh, so were you all only shopping together or were you also like cooking, like preparing food together?
Jed (23:28): So one of my roommates were, was in the same lab as me, so we did cook together. Um, someti, uh, I’m like, I love cooking. So usually what I do is I would cook for the entire group, um, and then like everyone could just eat what they want. Um, I would meal prep and then, and then we’d sort of split. I mean, the costs are all split and I actually do enjoy cooking, so it, it would end up working out. Um, sometimes people would, uh, in order to like pay me back for that, sometimes pay me back. Not really money-wise, but like they would make dinners. Um, so we would sort of not eat together per se, but still eat the same food. If that makes sense.
Emily (24:08): I honestly have never tried that cooperative relationship with anyone other than my, like family. It sounds to me it sounds challenging, but like, I guess it, for you, it seemed like it was working out, especially since you were willing to do a lot of that labor upfront as like a service to the household.
Jed (24:22): Yeah, like Sundays it was pretty much like for me cooking, a lot of the dishes I cooked are like Asian, right? And like if you have a giant pot, it doesn’t really matter whether you’re cooking for six people or one person, it’s gonna take the same amount of time, like a stew needs a stew for cer-a certain period of time. So I would just turn it on, it would be ready and then people would just take it as they need.
Emily (24:46): And would you like to share any other kind of areas in your budget where you kept a lid on expenses or managed to reduce expenses? Like what did you try during the course of grad school?
Jed (24:55): Oh, well, in grad school, I mean, you know, this like, there’s not really that much free time. So, but when you do have free time, um, you want to ch- uh, I chose experiences and things that I found like very fulfilling that didn’t cost too much. I mentioned fishing, I loved fishing. It was pretty, I mean, you just need a fishing pool and sometimes you can rent those from a friend. Um, you would go ice fishing at the on the lake, which is free <laugh>. Um, you would, we did a lot of like, uh, if you know, lake Monona and Lake Mendota, it’s actually a beautiful walk. So I would, I would run that. Um, I trained for a bunch of like marathons and, um, half marathons, a 5K. And again, all you need are like really good running shoes for those. Um, there was a new rock climbing gym <laugh> in Madison. So in order to advertise for that, I tried to go to as many free events as possible. So like I would still be experiencing the city, um, and still experiencing what, what, uh, what what can be done in the city, but also not pay too much. I did end up spending some money on some activities, but, um, for the most part, I try to keep costs to a minimum. ‘Cause I knew that after grad school I would have more disposable income.
Emily (26:07): I mean, that makes so much sense to me that, you know, in graduate school for need or for want, like you’re gonna choose activities that are pretty low cost, unless you really are roll rolling in the dough, it doesn’t make sense to pick up like an expensive gym membership when you could just be running outside, you know, that kind of thing. Um, so that absolutely makes sense to me. Like I know one of my big activities in graduate school was like watching basketball games, which it’s not free to attend, but it’s free to watch them. Like if you have a watch party at your friend’s house and I’ll bring a little bit of food, like, it’s very, very low cost. Um, so that was like a really enjoyable thing that I did. And yeah, my activities are different like on the other side of graduate school. Um, okay. So you mentioned to me before we started that you were a fastidious budgeter. Can you tell us a little bit more about that?
Tracking Expenses and Budgeting as a Grad Student
Jed (26:54): Yeah, so, um, I had an Excel sheet that I made in undergrad, sort of budget for how much I spend in everything from rent, health insurance, phone bills, food, fun activities. Um, I used, I, I play, I play, oh, video games is how is a lot, was also an activity I have. So like how much I spend on video games, how much I spend on computer stuff, accessories, things like that. Um, clothes, like every category you could think of, I have, I have it. And basically anytime I do anything, I just, I log it into the Excel sheet and then move on. Um, that, that first, oh, um, that first month where I first started was what I called my baseline pay, baseline spend. And I was eating out a lot more than I thought I was. So I, I went to USC in undergrad and USC if, you know, is very close to K-Town. So we would drive to K-Town a lot and spend a lot on Korean barbecue. I didn’t realize how much I was spending until I, I did this, did this exercise. So the first month was just tracking. The second month was using that tracked data. I would extrapolate what can I really give up and what can I actively see, use that money that I’ve given up into something more what I consider to be more, uh, rewarding. For instance, like instead of going to Korean barbecue, which is very expensive, maybe we go someplace cheaper, but also save that money to go on like a trip. Um, ’cause of that I was able to do a lot of things in undergrad that I normally, but that’s not really normal for an undergrad experience. And also like, was able to sort of carry on that mindset and, and sort of modify it. So instead of going on trips ’cause a PhD, you don’t really have time to go on trips that often. Um, you, I would use, uh, divert all of that excess spend, excess spend from my initial first month into, um, into savings.
Emily (28:48): Yeah, it sounds like an incredible approach. Can you tell us a little bit more about how you actually did the budgeting? I think you said you used a spreadsheet. Um, but any details about, like, did you also use software or like how many different accounts were you tracking?
Jed (29:03): Um, so I, if you open a, if you open different bank accounts, they do give you bonuses, right? So, um, I use that spreadsheet to sort of track among the different account that I opened in order to get the bonuses and then close them as, as the times as as as I didn’t need them or if, or if the burden became too high. Um, mostly it was three to four accounts at a time. Anything above that, I was completely overwhelmed. Um, four, I remember I tried to do five accounts at one point and that was just too much ju- money juggling and just ended up, I’ve ended up making some mistakes when I had five accounts, which is how I knew that five accounts is the end, four is my limit. So, um, that’s what, um, I also experimented with like how much money I can spend in each category without becoming too depressed. Like there’s a, when you’re making a budget, you’re like, oh, I could be super, uh, super, uh, militant and I could live this like nomadic lifestyle, but af after living a nomadic li like after living that very like Buddhist monk-like lifestyle for six months on top of doing all the work that’s required of you in grad school and really just like hamper you mentally. So I found like a how much I’m comfortable with spending while also not me-, uh, hinder like, um, hurting my mental too much.
How Investing Beyond Your Means Impacts Well-Being
Emily (30:27): Yeah, that makes total sense. And I think it’s also, again, a good message for like prospective graduate students or early on graduate students that, and I’m saying especially for those who set them up for, set themselves up with high fixed expenses, they might think, oh yeah, I’ll be totally fine spending 80% of my income between my housing and transportation. No problem. I’ll just be really frugal everywhere else that gets old very, very fast. It’s very hard to sustain that. So you were in the fortunate position that you had those low, you know, relatively low fixed expenses. Um, and so, but you have these high savings goals and that was what you were navigating with, like the rest of it. So, um, I’m really glad that you, you know, set those fixed expenses up to be on the moderate side, uh, from the beginning because you had that choice really, like it was okay to increase your discretionary spending once you realized that your budget was unrealistic.
Jed (31:16): Yeah, yeah. Um, there was, there were some times where I was sort of for-, I did, I was not doing well mentally, but I still had to do a on the lower side. Um, for some reason I was really obsessed with that $500 mark, um, in grad school. So if I, like, I did that first and then once it’s really hard to get money out of the Roth, IRA, so it was just like, uh, I paid myself first and then if I was suppo-, if I had to scrimp and save for the rest of the month in order to make sure that I could live, that’s kind of what I just did.
Emily (31:46): I see. Yeah. I don’t necessarily advocate taking it to an extreme that, you know, you’re kind of suffering under it, but, but I do really appreciate that approach of like, this is my savings goal and I’m gonna make the other numbers work so that my savings goal happened. Right. Because you paid yourself first. So like, I did it. I’m not taking the money back out. Like, you know, we gotta go forward with this. So I do appreciate that approach even though it sounds like you were pushing yourself at times.
Jed (32:10): Oh yeah. No, no. I do not recommend what I did. Um, I, if, if, if I were to give myself advice from back then, I’d be like, instead of moving it to the Roth ira, just put into a savings account. That way if you need to use the money, you don’t have to like, uh, pray that next day you have enough like milk, uh, to make cereal. So like, it was, it’s like really, like there were some months where it was like I was playing within like margins of like $10. That was completely, completely reckless of me. It was definitely, I was definitely, um, on the too far end of the, um, contributing.
Emily (32:46): I, I, that kind of takes me back to like my first couple years of graduate school where I really played like chicken with the bottom of my checking account. And, and I also, not as much as you were, but I was also investing into a Roth IRA at that time and like yeah could have just done less of that and had more cash on hand. And I, you know, I learned that lesson over time. So like over time I still kind of found a way to do the investing and also built up savings so that there was something there that I could dip into if it was an unusual month.
Jed (33:11): Yeah, I, that is, I really wish I did that. Um, the first couple years of grad school were really hard because for some I was like so militant on that number and I don’t know why I was so set on that number.
Dealing with Irregular and Unexpected Expenses During Grad School
Emily (33:25): How did you ultimately deal with like, irregular expenses? Because that was the thing that pushed me to have more cash savings was to be a- ready to pay for irregular expenses.
Jed (33:33): There was like a family emergency at one point, um, that I had to go back to California for. Um, and it was like the tickets were like $600 and for me that was like a lot of money, um, that month. I luckily it happened in the beginning of the month before I did my stupid thing and did that. Um, but after that event I realized, oh, shoot, I would’ve missed this if I, um, didn’t have that. So that’s when I started building a three, like building an actual savings account first and then start contributing back into the Roth IRA that year I contributed a little bit less, but I think it, like, I built like a thousand dollars, $2,000 savings account. Um, and that really helped with the money anxiety for sure.
Emily (34:17): Yeah. And like, I mean, what you just said, you saved a little bit less that year. But it bought you so much peace of mind for like every year going forward, right? So like, it’s so worth it. Like I, again, I did not do that myself at the beginning grad school, but that is what I teach now. I do teach at least a small emergency fund first before you do anything else. Um, and it, it just, it honestly makes such a big difference to your stress, even if you never have an emergency that causes you to need to use it. Like, you know that it’s there, you have that peace of mind. You can sleep better at night and so just delaying your investing by like a few months, you know, four months or whatever it was. Yeah. It bought you a lot.
Jed (34:56): Yeah, no, that’s, I, I wish I did that early in my grad school ’cause so that I wouldn’t have to be so stressed for the first three years. But luckily at the third year, I, I, um, some like family emergency happened and I was sorta like able to wake up
Emily (35:10): And hopefully some of the listeners will take this advice to heart and not have to have that experience before they make, you know, their own change. Um, well how did it feel, you know, when you got to your defense or your graduation and you had that Roth IRA balance, like did you feel accomplished?
Jed (35:27): I, um, I mean, I’m not sure how you feel about a Roth ira, but for me it’s just like a number. Um, I, I felt like it was something that I had to do in order to retire. So this is this, um, the way I felt was like it was, oh, I’m paying future Jed this this amount of money so that he doesn’t have to worry about too much. Also, something that really inspired me was, um, like a money, the money money multiplier effect, right? So early investing, um, in your early career ends up like multiplying by 32x, um, 32 to 48x and I was like, okay, I have, I put 35K in. So that means th- uh, that means if I multiply that by 32, I’m close to a million dollars. Okay. Jed has a, future Jed has a million dollars to play with next time. I suffered a lot, but I hope he’s able to use it pretty well.
Emily (36:22): Yeah, I mean, time will tell <laugh>, I certainly can also, like, I’m very glad that I did the investing I did during graduate school and I’m far enough out that I’ve seen, you know, that compound interest growth in a significant way. Um, but there were also things I missed out on. So like, it’s definitely a mixed bag and I don’t know, I, I’m sort of a more like a no regrets kind of person. So I think it was a good decision. But yeah, there were some things we didn’t do that, you know, were one time opportunities and they, they don’t come around again. So it’s all, there’s always trade offs.
Jed (36:52): Yep. Yeah. That’s how, that’s how I felt. But I graduated, I got a job, so I was pretty happy. I guess things were looking up
Best Financial Advice for Another Early-Career PhD
Emily (37:02): Good. Um, well let’s end on, I, you know, we’ve learned, we’ve learned so much from this interview you’ve shared so openly. I really appreciate that, um, to, you know, learn honestly about your financial journey through graduate school. Um, why don’t you leave us with, uh, the answer to the question I ask all of my guests at the end of interviews, which is, what is your best financial advice for another early career PhD? And that could be something that we’ve touched on in the interview already, or it could be something completely new.
Jed (37:28): Yeah. Number one rule number one advice is to get, get roommates for as long as you can. Um, I feel like I felt, I felt that even though I was playing on the riskier side of my finances in the first three years, because I had roommates, I had that check, like that ability to like mess up a little bit. We were able to rely on each other when we had really bad bumps. And if you live by yourself, yes, you still have your friends, they’re still your friends, you’re still gonna talk to them. But it’s really hard to have the same kind of relationship when you’re living with someone and asking someone for help that’s not inside the house.
Emily (38:05): Yeah, it is. I mean, it’s a different level of community that you have when you have roommates versus just friends you don’t live with. So, um, thank you so much for sharing that. Thank you again for volunteering to come on the podcast.
Jed (38:17): Of course. Thank you so much, Emily.
Outro
Emily (38:28): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by me and show notes creation by Dr. Jill Hoffman.
