In this episode, Emily explores how to save money as a funded graduate student so that you aren’t in a constant state of financial stress. The first step is to open a savings account and establish a regular savings rate, even if it’s only $5 per month. Second, you must either increase your income or decrease your expenses. Both may seem impossible in your current circumstances, but Emily introduces numerous accessible options that grad students have used in the past for each approach, including the unique opportunities available to you as a graduate student.
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.
This is Season 24, Episode 1, and today’s solo episode, I explore how to save money as a funded graduate student so that you aren’t in a constant state of financial stress. The first step is to open a savings account and establish a regular savings rate, even if it’s only $5 per month. Second, you must either increase your income or decrease your expenses to increase that savings rate. Both may seem impossible in your current circumstances, but I introduce numerous accessible options that grad students have used in the past for each approach, including the unique opportunities available to you as a graduate student.
The day this episode is published—June 15, 2026—is the estimated tax payment deadline for quarter 2 of 2026. It’s a sneaky deadline because it comes a month earlier than you would expect it to. The whole estimated tax requirement is a sneaky process in itself because your university might not be super proactive about telling you that it might be required of you. But I will right now: If you’re a graduate student, postdoc, or postbac and you’re a US citizen, permanent resident, or resident for tax purposes and you’re not having income tax withheld from your paychecks, you might very well be required by the IRS and your state tax agency to make manual income tax payments throughout the calendar year. This is very common for PhD trainees who are funded by fellowships or certain federal grants. Basically, since your university is not withholding income tax on your behalf, you are required to send in those payments yourself unless you fall into an exception category. If this is the first you’re hearing about fellowships and estimated tax and you need help understanding whether you’re required to make the payments, in what amount, and how to do so, join my asynchronous tax workshop, Quarterly Estimated Tax for Fellowship Recipients through PFforPhDs.com/QEtax/. I’ll show you how to fill out every single line of the Estimated Tax Worksheet from IRS Form 1040-ES and address common scenarios like how to handle switching funding sources midway through the calendar year. I also answer your questions during live calls and via written submissions. For more information and to join the workshop, go to PFforPhDs.com/QEtax/. I would be happy to help you with this process today or whenever you’re hearing this episode.
You can find the show notes for this episode at PFforPhDs.com/s24e1/.
Without further ado, here’s my solo episode on how to save money as a funded graduate student.
Introduction
If funded graduate students want to be financially healthy during training, they must have access to cash savings to pay for unexpected expenses and emergencies. It’s all too common for graduate students to rely on credit cards or frantic, last-minute cuts to discretionary expenses to pay for unexpected expenses or emergencies when they arise. How many times have you heard of graduate students charging conference expenses to credit cards and paying a high rate of interest for months until they are reimbursed (or not)? And that’s only the tip of the iceberg when it comes to these kinds of expenses. In the course of a year, you can expect to encounter at least a few, such as university fees, car repairs or maintenance, tax payments, travel, medical bills, annual or semiannual insurance premiums, electronics replacements, and home furnishings purchases.
The financial chaos I described is due to managing finances reactively instead of proactively, which itself is a natural result of graduate students’ low income. When most of your income goes toward paying fixed and/or necessary expenses like rent, transportation, and food, you’ll almost certainly find yourself living paycheck-to-paycheck or accumulating credit card debt unless you put serious intention behind saving money and exerting control over your finances.
In my opinion, the real motivating reason to have healthy finances during graduate school is to keep your stress low and minimize the time you need to spend on making decisions about money. Your focus during your PhD needs to be on your research, publishing, and professional development. Experiencing financial stress impairs your ability to perform at the highest level in your scholarship. It’s in the best interest of your advisor and program to pay you enough to make healthy finances possible, but it’s also incumbent upon you to manage your money in such a way that you experience low stress. And that means saving money—both so that you have access to cash in the case of unexpected expenses and emergencies and so that you have flexibility and agency over how you use your money. Saving moves you from reactive to proactive in your finances.
How do you actually start to save as a graduate student or increase your savings rate? First, you must establish a location to house your savings that is separate from where you manage your regular cash flow. Second—and this is the reality of the math of personal finance—you must either increase your income or decrease your expenses to free up money to be saved. Neither is trivial for a graduate student, but one or both is necessary. When it comes to which to tackle first, I suggest exploring how to increase your income before trying to decrease your expenses. Frankly, most graduate students don’t have a spending problem, they have an income problem, and attempting to spend less is like getting blood from a stone. Therefore, in this piece, we’ll discuss increasing income before decreasing expenses.
Establish a Savings Rate
This first point may seem trivial, but don’t skip past it. Your first step is to open a savings account if you don’t already have one. If you try to save money inside your checking account, into which your paychecks are deposited and from which you pay all your expenses and credit card bills, you will find it almost impossible. Vanishingly few people who earn at the level of graduate students will see their checking account balances gradually increase with time no matter how good their intentions.
Your new savings account could be at the same bank as your checking account or not, but it is imperative that the bank does not charge any fees for it. You cannot afford to pay banking fees on a stipend, and in my opinion the mental load required to avoid potential fees is also too taxing. The most common type of fee on a savings account is a maintenance charge that is waived if a minimum balance is maintained. However, if you’re just starting to save, you are unlikely to be able to maintain a minimum balance. The purpose of the cash savings is to be available to you in its entirety when you need it. And if you’re only able to save $5 per month, as I’m about to suggest as a starting point, that savings rate will be more than negated by typical banking fees of $5 to 25 per month. (If you’re currently paying banking fees for checking or savings, you have an immediate opportunity to change banks and establish your savings rate!)
Once you have your savings account open, create an autotransfer between your checking account and savings account for near the start of each month (or right after your paychecks are deposited). This is the ‘pay yourself first’ principle: Before you send your money to everyone else—your landlord, your debtors, the grocery store, the gas pump—set aside money for yourself in your savings account. If you’ve never saved before and you’re currently spending all of your income, start with an amount you don’t think you’ll miss, such as $5 or 1% of your income. It may seem like a trivial amount of money, and that’s kind of the point. Right now we’re focused on setting up the infrastructure for you to save and training your mind to believe that saving is possible. By following the tactical suggestions in the rest of this piece, you can increase that rate over time, but you have to start somewhere.
When you successfully increase your income or decrease your expenses, you have to actually save that money. In our culture, we often use the term “save” to mean “spend less,” such as “I saved $10 using that promo code!” In that scenario, you spent $10 less than you could have, but the money wasn’t saved unless you moved $10 into your savings account. If you set up a recurring revenue stream or decrease a fixed expense, follow through on the process by increasing your autotransfer to your savings account by the same amount (or a fraction of it). If you receive a one-time influx of cash or decrease a non-recurring expense, make a manual transfer to your savings account.
Emotionally prepare yourself that you will need to draw down your savings account from time to time. The purpose of the money is to be available to you for emergencies or irregular expenses to reduce your stress and mental load, which means you should actually use it if the circumstances call for it! Over time, hopefully the balance will grow, but there will be some ups and downs along the way, and that’s to be expected.
Increase Income
The necessary first step to increasing your income is believing it is possible. Graduate students face more obstacles to increasing their incomes than the average person, but it is virtually always possible to do so: where there is a will, there is a way.
I want to first acknowledge some of the barriers to increasing income:
1) Student visas. International students are incredibly restricted in the manner in which they may work or generate income in the US. Violating these restrictions puts your status in the US and your degree at risk—not worth it!
2) Contractual prohibitions. Sometimes the terms of a graduate student’s funding, whether an assistantship or fellowship, prohibit or limit outside work.
3) Departmental or advisor expectations. Some advisors and mentors seem to believe that any income-generating activities would detract from your ability to pursue your graduate degree, and therefore implicitly or explicitly ban them for their students.
4) Workload and other obligations. Some graduate students have little to no time or energy available to increase their income between the demands of their programs and the demands of their personal lives.
I know that sounded like a lot of barriers, but I’m naming them explicitly because I want you to take an honest look at the barriers you actually face or don’t face, and those are going to be different for every individual. When I was in graduate school, I had the general impression that outside work was ‘frowned upon.’ And maybe it was frowned upon, but frowning does not create a contractual obligation. As I went through graduate school I discovered more and more of my peers who had side hustles or businesses or otherwise found ways to increase their incomes. A lot of these were kept quiet from advisors, but sometimes advisors were aware and supportive.
At a high level, you can pursue increasing your income within the academic system or outside of it. The more of the barriers that I just listed that you have in place in your life, the more you should lean into strategies for increasing your income inside the academic system or outside the academic system via passive income. The fewer of the barriers there are for you, the more options there are for you outside of the academic system. I’m going to take each of these categories, within the academic system and outside the academic system, in turn.
Within the Academic System
I sometimes call methods of increasing your income inside the academic system ‘advisor-approved’ because it’s quite likely that your advisor will have either no objection to you pursuing these methods or will actively encourage them. These methods are usually quite compatible with student visa restrictions, although you must verify that before engaging in them.
The following are ideas for increasing your income inside the academic system.
1) Apply for fellowships, scholarships, and grants, everything from multi-year full funding packages down to poster awards and travel stipends. Regularly applying for funding should be in the official job description of a graduate student. If you end up winning an award, your advisor will definitely be pleased and you can add it to your CV. Honestly, even when you don’t win awards, the experience of writing the applications is great professional development. However, if your primary goal is to increase your income, you should selectively apply for awards that will actually affect your bottom line. Some awards will go to your advisor or program and simply replace the funding they were already providing to you. It’s worth an extra few minutes of investigation to figure out whether an award will actually increase your stipend or be sent directly to your bank account. You can ask your advisor while applying or after winning an award to provide you with a real increase in pay so that you can share in the benefit of receiving the award. I’ve discussed increasing income by this method many, many times with podcast guests, and some great interviews to listen to are Season 8 Episode 3 with Dr. Sam McDonald, Season 10 Episode 4 with Dr. Alana Rister, and Season 4 Episode 3 with Dr. Vicki Johnson.
2) Increase your pay rate for your assistantship. Setting aside the prospect of being funded by a fellowship, you might have the option to change the type or amount of your assistantship work to increase your pay. You have to look into your own university’s policies carefully here. Sometimes different assistantship titles have different pay rates, so 20 hours of work as a research assistant might result in a bigger paycheck than 20 hours of work as a teaching assistant. You might also be able to increase your overall appointment percentage, even going above 50% with special permission. Podcast episodes that discuss these matters include Season 5 Episode 6 with Dr. Sarah Frank, Season 5 Episode 16 with Dr. Kelsey Wood, and Season 19 Episodes 5 and 6 with Elle Rathbun.
3) Do an internship or professional fellowship, either a classic full-time summer internship or a part-time internship in any season. This method also has the added benefit of augmenting your CV and making you more competitive for post-PhD jobs. Like with the suggestion to apply for funding, if your primary goal is to increase your income and you are going to forgo receiving your stipend for a season, make sure that the internship pays more than your stipend plus your extra incurred costs for that period of time. Podcast episodes that discuss internships include Season 6 Episode 6 with Dr. Gillian Hayes and Season 7 Episode 7 with Anonymous.
4) Negotiate—collectively or individually or both. I’ve been so pleased to see the increases to minimum stipends that have been won by graduate student unions and unionization movements across the US in the last handful of years. If there is a union or unionization movement at your university, please lend your support. This is the best way to achieve permanent and widespread improvements in stipends and benefits, especially for your less privileged peers. Even informally banding together with other grad students in your department and asking for a stipend increase can sometimes be effective. In terms of individual negotiation, which I also encourage, this is most effective when you have a point of leverage. The first point of leverage is as a prospective graduate student when you are being recruited. After committing to a program, your remaining point of leverage is when you win outside funding. Grad students often receive stipend increases above their previous level or the level specified by the fellowship, a one-time bonus, or agreement to pay the higher fellowship stipend in non-fellowship years. Effective arguments I’ve seen for both collective and individual negotiation include affordability or cost of living in the university’s city and comparisons with what peer institutions pay. Podcast episodes that discuss collective negotiation include Season 12 Episode 7 with Dr. Alex Parry and Season 20 Episode 6 with Garrett Dunne. Podcast episodes that discuss individual negotiation include Season 2 Episode 2 with Dr. John Vsetecka, Season 19 Episode 7 with Dr. Wen, Season 11 Episode 1 with Maya Gosztyla, and Season 8 Episode 7 with various contributors. I also have one crossover episode that discusses both approaches with various contributors, which is Season 15 Episode 4.
Outside the Academic System
There is a great deal more variety in methods for increasing your income outside of the academic system. Broadly speaking, you can 1) have a side hustle that involves working for someone else, 2) start a business, or 3) generate passive income. I’m quite partial to the latter two options, but I’ll go through them in turn. No matter which method you pursue, try to chase either high pay rates so that you can minimize hours spent or activities that will do double duty to enhance your CV or resume.
1) A side hustle working for someone else. In this scenario, you would be a part-time employee of a business. The advantages of working for someone else are that the work is teed up for you to perform and the pay rate and hours are most likely reliable. The disadvantages are possible rigidity in schedule or volume of work, which might be incompatible with your role as a graduate student, and that the pay rate is not set by you and probably on the lower side.
2) Your own business. This is not as intense as it sounds. It basically means that you determine the work that you perform, with whom you work, and your pay rate, of course depending on what the market is for your skills. Think freelancing or the gig economy to start out and perhaps becoming more formal with time. The advantage of having a business as a grad student is that you can set your hours and modulate them to complement your workload at the moment. The disadvantage of this route is that you have to spend time attracting and landing every client or customer. Honestly, a lot of academics are self-employed on the side of their main appointments, so this is not an unusual model. Selling services is the fastest way to get started. Season 3 Episode 12 with Dr. Toyin Alli is a great primer.
3) Passive income. This is a very popular method among graduate students, even those facing the most extreme barriers to increasing their income. You may be able to generate passive income without working at all through credit card and banking rewards. Of course, perfect behavior with your credit and finances is a prerequisite for this method. Podcast episodes that detail credit card and banking rewards include Season 2 Episode 9 with Seonwoo Lee, Season 7 Episode 8 with Dr. Julie Chang, Season 20 Episode 8 with Brendan Henrique, and Season 20 Episode 3 with Kyle Smith. A crossover method with business ownership is generating passive income within your business, such as by selling digital products, which Dr. Toyin Alli and I discuss in Season 11 Episode 8.
The most ideal way of increasing your income outside of academia, in my opinion, is to be paid at a high rate to work what I call a career-advancing side hustle. This is a side hustle that you can put on your CV that helps you gain new skills or demonstrate the skills you already have, expands your network, adds a new mentor or recommender to your circle, or otherwise increases your employability post-graduate school. You’re most likely going to be paid a high rate if you take the rare and valuable skills and knowledge that you are developing inside academia and apply them in a non-academic setting.
Let’s assume that you’ve found a way to increase your income. Fantastic! How do you actually translate that into an increase in your savings rate? I suggest creating a rule that you automatically save a set percentage of your net income—that’s your income after business expenses, if applicable, and taxes. It could be 100% if you’re quite aggressive, or perhaps 50% or another compromise fraction if you would like to both save and reward yourself for your great efforts. It’s going to be really tempting to just let your extra income go into your checking account and mix with everything else, but this is a recipe for lifestyle inflation. That money will be spent before you know it! Instead, if possible, automatically deposit all or a fraction of your additional income into a savings account or set up an autodraft that moves the correct amount of money from your checking account into your savings account. If your additional income varies, you’ll probably need to carry out these actions manually, so add it to your task management tool or tie it habit-wise with another action that happens around that date.
My Season 1 Episode 5 podcast interview with Dr. Jenni Rinker illustrates a different approach that can be quite effective. Jenni set a goal to pay off her undergraduate student loans during grad school. She used her stipend income for her necessary living expenses and student loan payment and paid for discretionary expenses with her side income. By funding her discretionary expenses with her side income, she incentivized herself to work more so she could spend more but did not put her basic expenses or financial goal in jeopardy if she was not able to work on the side for a period of time.
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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, budgeting, or designing your financial life, each tailored specifically for graduate students and postdocs? I offer live workshops, asynchronous online courses, and cohort-based programs on these topics, and I’m now booking for the 2026-2027 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, medical school, postdoc office, or postdoc association? My workshops are usually slated as professional development or personal wellness. Orientations, postdoc appreciation week, or close to the start of the academic year would be a perfect time for tax education or general personal finance content. 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.
Decrease Expenses
When I was in graduate school and trying to increase my savings rate, I turned to decreasing my expenses through frugal tactics. Certain of these tactics made a big difference and greatly increased my savings rate, while others had only a small effect. In retrospect, I realize that the most effective tactics were the ones that took relatively little time and effort, while the tactics that were most time-consuming and tedious to carry out tended to only have a marginal effect on my savings rate.
With your limited time and energy as a graduate student, I want you to generate the greatest effect possible. To that end, you should focus your expense decreasing efforts on 1) your large, fixed expenses, 2) the remainder of your fixed expenses, 3) your large, variable expenses, and 4) the remainder of your variable expenses. Your budget game is honestly won or lost on your large, fixed expenses. If those are not properly scaled for your income, it’s going to be incredibly difficult to save much of anything, so definitely evaluate those first.
However, before we dive into various frugal tactics that you can implement personally, I first want you to check into any benefits you might be eligible for as a graduate student and/or low-income individual or household. Getting a product or service for free or at a reduced rate that you otherwise would have paid for fully is the first and best way to decrease your expenses. These benefits might come through your university; the local, state, or federal governments; or your community.
I won’t exhaustively list all the benefits you may be eligible for, but I will mention the most common ones that graduate students use:
- Subsidized housing from your university. If it’s offered and you’re not already in it, get on the list ASAP. People already in such a lease may need a roommate, so search for that opportunity. It can be life-changing.
- Resident advisor positions and similar titles. This is a combination of a benefit and a side work opportunity. Basically, you help facilitate housing for the university and in exchange they reduce your rent. Among my podcast interviewees, I’ve commonly seen a 50% rent reduction, but Dr. Adrian Gallo in Season 1 Episode 3 received completely free housing and a meal plan from a fraternity.
- Childcare subsidies and grants from your university or the state or free drop-in childcare. I have a forthcoming podcast interview with Madeline Hebert in which she details how she receives completely free daycare for her two children thanks to subsidies from a state program and a grant from her grad student union.
- The Supplemental Nutrition Assistance Program aka SNAP or food stamps and Women, Infants, and Children aka WIC.
- Free food at seminars and events on campus. Not a joke. You can replace multiple meals per week if not daily if you keep your ear to the ground.
- Food pantries on campus and in your local community.
- Emergency grants and loans from your university.
- Subsidized personal travel when you pair it with work travel, such as paying to stay an extra couple of days after a conference when your airfare was paid on your behalf.
If you’re not sure what benefits might be available at your university and in your state at your income level and household size, please make an appointment with your university’s financial wellness office. They can point you to relevant resources and perhaps even help you apply.
I trust that you will look into all these possible benefits and more as your first step toward decreasing your expenses to increase your savings rate! Having done that, we can discuss the more conventional method of decreasing your expenses through your own decisions and efforts.
I’ll go through in the priority order that I mentioned earlier the various strategies for reducing each category of expense:
- Your large, fixed expenses. For virtually everyone, that means housing. If you have a young child, childcare qualifies. If you own a car, your car payment, if applicable, and car insurance likely also qualify. This is the most difficult and daunting category to make changes in, but like I said earlier, it’s pretty much the ball game right here. If you are looking to increase your savings rate by reducing your expenses, do not skip this category unless the sum of all of your necessary expenses is already less than 50% of your after-tax income. Yes, it will take time, research, effort, and probably money to reduce one of these large fixed expenses, but if you manage to reduce one, that is money that stays in your pocket month after month in perpetuity without you needing to expend any additional effort. So for each of these large, fixed expenses, research its market thoroughly and re-evaluate your needs as they may have changed since the last time you made a choice. There will of course be reasons to stick with the status quo, but if you truly want to increase your savings rate by reducing your expenses, you owe it to yourself to honestly evaluate your current options. Almost invariably, when I interview someone on my podcast who is paying below market rent or owns a very inexpensive car, they cite the legwork and patience they put in up front when deciding on that purchase.
- Your other fixed expenses. That’s everything from renter’s insurance to fixed-price utilities to your memberships and subscriptions, and don’t forget those that are paid less frequently than monthly. The first question should always be whether the expense is a need, and if it’s discretionary, if it’s more valuable to you than increasing your savings rate. The second question is whether what you’re receiving exceeds your need or want and how to downgrade if so. For example, on your insurance policies, check that you’re not over-insured and consider raising your deductibles. The third question, if you’ve decided to keep the expense and have right-sized it, is whether you can get a better price through another provider.
- Your large, variable expenses. The trouble with variable expenses, and the reason I want you to address your fixed expenses first, is that the amount you spend on your variable expenses depends on your consumption behavior. Yes, it is easy to reduce spending on certain variable expenses. It is even easier to resume spending at the higher level, because nothing contractual or structural changed to lock in the lower spending rate. To sustainably reduce your variable expenses, you must change your habits, which takes consistent and conscious effort at the beginning. Your largest variable expense is likely your groceries, especially if coupled with other household consumables. There are many ways that you can reduce your grocery spend, and I suggest picking one method at a time to test out and develop into a habit before moving on to the next one. Here are just five ideas of dozens: 1) Shift where you primarily grocery shop to a lower-priced alternative like ALDI, Costco, Walmart, BJ’s, or a local discount store. 2) Meal plan and meal prep to reduce waste, buy in bulk, and save time. 3) Eat less of the highest-cost food items, typically meat, seafood, dairy, and/or nuts. 4) Shop sales and use coupons. 5) Buy less processed foods and do more processing and cooking in your own kitchen, for example buying base ingredients instead of a partially or fully pre-made meal. If you have other variable expenses that come close to your grocery category, such as travel or a certain utility, search up ideas for how to spend less in that category and try them out gradually, making the most effective ones into habits.
- Your other variable expenses. The smaller variable expenses tend to be categories like eating out, certain utilities, transportation aside from what I mentioned before, home furnishings, entertainment, clothing and shoes, personal care, etc. Honestly, if you’ve done the work to reduce or try to reduce all of your fixed expenses and your largest variable expenses, you will have transformed your perspective on your expenses and built the skills to adjust your spending in these categories, if you think you need to. Examining your behaviors and creating new habits will be the key. Frankly, though, these expenses by definition don’t make a big difference to your overall spending, so it’s fine to not really consciously address them unless they sum to more than 25% of your after-tax income. If you’ve moved in with roommates, changed your cell phone provider, negotiated all your insurance policies, and become a Costco member, you’ve either created enough room in your budget that you don’t have to worry about your spending in these categories or you’ve so thoroughly changed your mindset about your spending that you will naturally adjust it down in these areas. I do not recommend attempting to reduce your spending by focusing only on this category and neglecting the others, although that is the most common approach.
How do you actually translate decreasing an expense into increasing your savings rate? If you decrease a fixed expense, you can increase your automated savings rate by exactly the amount of the expense reduction or a fraction thereof. For example, if you reduce a fixed-price utility by $25 per month, increase your savings rate by $25 per month. If you are developing a new habit to reduce a variable expense, try it out first to see what the consistent expense reduction is and then increase your savings rate by a conservative reflection of that amount. For example, if with a new frugal habit you have decreased your grocery spending by $10-20 per week, increase your automated savings rate by $40 per month. Another option is to increase your savings rate by a certain amount and challenge yourself to stay within spending limits across a few categories to facilitate that savings rate—basically, stick to a budget. However, if you challenge yourself in this way, do so by choosing a few categories in which you can effect immediate change in your spending like eating out, entertainment, personal care, and shopping. Don’t do this for categories like your utilities for which your actions only affect your next billing cycle.
One final strategy I’ll leave you with, and this applies to increasing your savings rate whether through increasing income or decreasing expenses, is to pay yourself first and last. I emphasized pay yourself first in the first section of this piece. Pay yourself first is great for the savings that you can absolutely for sure commit to on a monthly basis. However, sometimes your month or budgeting cycle goes better than you think it will—you bring in more income or decrease your expenses further than your baseline expectations. This is where pay yourself last comes in. You still pay yourself first with an automated transfer from your checking account to your savings account at the beginning of the month. Then, at the end of the month, when you have a higher balance in your checking account than you expected, you make a second, manual transfer from your checking account to your savings account. You can’t necessarily commit to that higher, combined savings rate, but it definitely helped in that month. This strategy is pretty intense, but if you’re working on an urgent financial goal like saving up the first few thousand dollars in an emergency fund, those extra dollars at the end of the month can really speed your progress.
Conclusion
Graduate school is too long a period of time to try to skate by without access to cash savings. Unexpected expenses and emergencies will crop up, probably a few times per year, and if you don’t have savings ready to meet those expenses, you’ll quickly find yourself in credit card debt or scrambling to reduce your spending in other ways. This cycle is stressful and will detract from your performance in your coursework, research, and professional development. Instead, intentionally cultivate a savings rate so you will have cash available to you when you need it. To do so, open a savings account and set up an automated transfer for the beginning of the month and then increase that savings rate by deliberately increasing your income or decreasing your expenses.
Listeners, thank you for joining me for this episode!
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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.
