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This Grad Student Worked Multiple Side Jobs to Pay Off Debt

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In this episode, Emily interviews Dr. Jeanelle Horcasitas, a PhD in Cultural Studies from UCSD who worked multiple jobs to stay afloat during grad school. Because of some financial events in her childhood and being a first-generation college student, Jeanelle was determined to do her PhD without accumulating any more student loan debt. In fact, she accomplished some major financial goals during graduate school, such as self-funding for a few months leading up to her defense after her dissertation fellowship ended. Don’t miss Jeanelle’s reflections on how her financial goals have changed since finishing grad school and how she’s now resisting hustle culture.

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Teaser

00:00 Jeanelle: Before, like I said, I felt very survival mode, hustle mode. Like I’ve just got to work hard, work, hard, work hard. And I was very burned out by the time I finished graduate school. But now I’m more of, you know, I’m doing the smart thing. I’m saving. I’m saving for my future and doing what I need to. So, I’ve backed up a little off of that and given myself more grace.

Introduction

00:23 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 3, and today my guest is Dr. Jeanelle Horcasitas, a PhD in Literature and Cultural Studies from UCSD who worked multiple jobs to stay afloat during grad school. Because of some financial events in her childhood and being a first-generation college student, Jeanelle was determined to do her PhD without accumulating any additional student loan debt. In fact, she accomplished some major financial goals during graduate school, including self-funding for a few months leading up to her defense after her dissertation fellowship ended. Don’t miss Jeanelle’s reflections on how her financial goals have changed since finishing grad school and how she’s now resisting hustle culture.

01:14 Emily: Jeanelle and I first connected way back in 2015 when she was working as the Grad Life intern at UCSD. I had very recently launched Personal Finance for PhDs. I reached out to her cold and pitched her The Graduate Student and Postdoc’s Guide to Personal Finance, which was my only seminar offering at that time. She liked the idea and advocated for it within her office, but it didn’t go forward right away. I actually didn’t work with UCSD for the first time until 2020, but Jeanelle had planted the first seeds all those years before. If you are a fan of this podcast, would you please follow Jeanelle’s lead and request that your Graduate School, Graduate Student Association, Postdoc Office, etc. work with me in 2022? I offer a variety of live and pre-recorded seminars and workshops on topics from taxes to investing to cash flow management. My most popular seminar remains The Graduate Student and Postdoc’s Guide to Personal Finance, and although it’s changed a lot over the years, it still touches on a wide variety of personal finance topics so there’s something for everyone. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. And hey, even if they aren’t able to work with me this year, your recommendation could plant a seed for an engagement in a future year. Thank you very much! Without further ado, here’s my interview with Dr. Jeanelle Horcasitas.

Will You Please Introduce Yourself Further?

02:47 Emily: I am delighted to have joining me on the podcast today, Dr. Jeanelle Horcasitas. She was a graduate student at UCSD and has been finished with her PhD for about two years, moving on to the working world. And so we are going to talk about how graduate school went financially for her, how she funded it and so forth, and then also how her, you know, financial life is going now. So Jeanelle, thank you so much for joining me for the podcast. Thank you for volunteering for this interview. And would you please introduce yourself a little bit further for the audience?

03:13 Jeanelle: Yes! Thank you so much, Emily, for bringing me on. I’m excited to speak with you today. So, I went to undergrad at UCLA for English and I did my PhD at UC San Diego in literature and cultural studies. And, you know, since I’ve received my PhD, I did a multitude of jobs within my time at graduate school, but since graduating, I spent some time in graduate career and professional development for biomedical scientists for about a year and a half. And I’ve recently transitioned into the tech space for a company called Digital Ocean. And, you know, one of my biggest motivations for school and getting through it was the fact that I’m first generation. I also come from a low-income family. So a big part of that was the fact that I had to be the one to get myself through school, to pay for it. I knew that my parents were in a financial situation. And I learned that at about 18 when they got divorced, I experienced bankruptcy, foreclosure at the time. And that was very transformative for me at that age to just recognize the impact of financial decisions. And so part of, you know, why I wanted to complete my PhD completely debt-free was because of those reasons of just knowing what having that burden can do to you and how it can impact your future.

Undergrad Funding and Student Loans

04:51 Emily: Wow. Yeah, that’s such such an impressionable age to be going through something like that. So thank you for sharing that with us. Since you mentioned being 18, when you started college, did you also have that determination to do your undergrad debt-free?

05:06 Jeanelle: So when I was 18, I actually went to community college for a few years beforehand, which was really great because since I was low-income, I was able to receive very generous grants like the Pell Grant. And I did my FAFSA, and at that point I just really wanted to start my undergrad. And I remember saying the only thing I’ll go in debt for will be my student, like education and I’ll do student loans. So, I signed away, didn’t really know what I was doing. I did receive fellowships for my undergrad, but I was living in Westwood in Los Angeles next to Bel-Air. And as you know, the cost of living is very high, especially to live in the dorms. So I was only there for about two years, but I did come out of debt. And so at that moment, I hadn’t really felt you know, I need to do this degree debt-free, but I tried to keep the amount I was taking on pretty minimal. So I feel like I didn’t graduate with too much student loan debt, but I did have some.

06:15 Emily: And did you go directly from undergrad to grad school?

06:19 Jeanelle: No. I took a year off to work full-time and try to pay down some of the student loans. And then I went to graduate school after that for about five and a half years.

06:30 Emily: Okay. So entering graduate school, you have a new perspective and you want to do this whole thing debt-free. Were you still carrying any student loan debt at that point, or had you cleared all of it?

06:40 Jeanelle: No. So at the time of graduate school, I still had most of my student loans from my undergrad, and I also had a car payment and car loans. So I carried those two things, and I think the stress came from the fact that I wasn’t getting any younger. I was about to sign away five and a half to seven years of my life. And I knew that I wouldn’t be making a ton of money. I was given like a pretty decent fellowship, but living in San Diego, it still couldn’t cover everything. And so I think from the very beginning, I knew that I wanted to put some sort of plan into place that I was still going to graduate school, but that I would be paying off these loans simultaneously. So that by the time I graduated, I’d be in a better financial position to buy a home or just to not have that hanging over my head for longer than I would’ve liked it to be.

How Does Funding Work in Your Department?

07:53 Emily: Yeah. Very, very ambitious. But I can see how you got there. Tell me a bit about how your field, your department is typically funded. You mentioned you had a fellowship for two years. Is that something you were seeing offered at like multiple different schools? And how did you end up at UCSD in particular, I guess, and specifically related to the finances?

08:13 Jeanelle: That’s a great question. So for the most part, my specific department, they don’t receive a lot of funding. They actually, most of the graduate students have to do TAships and, you know, find a teaching assistant position. And that’s how they get it paid for. Mine was actually through nomination that someone at the literature department had to do for me, and the graduate school, they were the ones that, you know, went through candidates and selected and made that decision. And so, the reason I chose UCSD is because it was such a generous, like first two years will cover you with this stipend. And then the next two years, you’re kind of guaranteed that TAship. And then you figure it out from there. I had a couple of other offers from two other graduate schools, where one was just offering like a fellowship for one quarter, which wasn’t enough for me.

09:21 Jeanelle: And then the other was I think, just a year. And so, I was like, I don’t want to have to pay for this. And I’m going to choose where the money is for the most part. And it ended up being a good decision for that reason. And just for the folks that I got to work with. So I was happy with that, because it seems like it really varies. It’s interesting because it was all UCs where these offers came from. So they have different ways of, I guess, enticing students to come with what kind of money they might have or available for fellowships.

09:58 Emily: I think that’s a point that prospective graduate students really, really need to hear, like they need to investigate the typical funding path in their field. Is it usually from TAship, so that you know, if someone’s offering you a significant fellowship, that it’s really special and they’re really trying to recruit you. And yeah, you may have to do TAships after that ends, but when does it end? Is it two years? Is it one year? You know, how much money is being directed toward you, especially as a recruiting tool. So love that you were, you know, analyzing that at that point.

Sources of Income Beyond Fellowship

10:28 Emily: So you mentioned earlier that you worked like a lot of different jobs during your PhD. And so, what did you do beyond, okay. I have this fellowship for a couple years. I know that you had a fellowship again at the end. And also the TAing that you mentioned. Did you work other jobs in addition to those? And also were they through the university or like completely independent?

10:49 Jeanelle: I had the first two years covered from the fellowship. And the last two were for the TAship. And then my fifth year I got a dissertation fellowship. However, within that time I was working multiple jobs at different places. So for the first two, two and a half years, even though I was on fellowship and taking my, my graduate courses, I was also a graduate student researcher or GSR for the the Graduate Office at UCSD. And I did some freelance writing as well. And I also worked as a student worker for the county of San Diego’s housing office. And so, you know, some, they weren’t all at the same time, but at one point I think they were all happening at once, which was pretty overwhelming, but it was nice, especially for the county job because I could work full-time during the summer, which was great because the fellowship actually it was nice, but it wasn’t always enough to get you through the summer. And they didn’t offer summer fellowships during that time.

11:57 Jeanelle: They started doing it later on during my time at the program. And then during my TAship, I really wanted to focus on teaching, but I had an opportunity to adjunct at the community college as well. So, in addition to TAing a couple of classes, I also taught one to two classes at the community college, which was a great experience. And then during one summer I did an internship in Washington DC. So there were a lot of different jobs that I was doing both, you know, if I had to go in somewhere, or freelancing, mostly writing or editing with different folks.

Side Hustling Amongst Peers

12:40 Emily: I can totally understand your motivation to take on this extra work for extra money. Because of, you know, mentioning your goals about clearing the student loan debt and the car debt and so forth. If you had not had those extra circumstances in your life, not that they’re that extra, because a lot of people have those things. But was the stipend enough to live on, or was it like no, no, everybody has to be side hustling, even if they don’t have, you know, prior student loan debt or whatever? Like, were your peers all doing this greater degree of work as well?

13:09 Jeanelle: Oh, that’s a great question. I think it really comes down to the individual and, you know, what they can take. Personally, I didn’t feel that the stipend was enough living in San Diego. The only time that it felt like it was livable was my first couple years when I was in the graduate student subsidized housing, because it’s so much cheaper. Once I had to live outside of those bounds, the cost of living is just incredible. And, you know, you’re thinking about how am I going to live, but also how am I going to eat? I have, you know, my car, my gas, my car payment, insurance, all these things. Like I said, if you’re fully independent, which I was from my parents it could be a lot at once.

14:02 Jeanelle: And so, I had a mix of, I guess, observations of folks who, there were some people that were like me that were doing at least a couple of jobs at the same time. But then there were some that were just TAing and that was fine. They seemed to be okay, but they were also in graduate housing or they were living with many roommates, which is something else I didn’t really want, and luckily my partner came to move like halfway through my program. And that actually helped a lot as far as support. So, it really depends on the person, but from what I saw, you know, there was a big group that did have to do extra. And then some that they had to sacrifice in different ways, like living with many people or living really far away and commuting, et cetera.

Money Management and Keeping a Budget

14:56 Emily: Yeah. Thank you for sharing those observations as well. So with all these different sources of income and all the different expenses and goals that you had, how were you doing the money management part of things? Like, were you keeping a budget? How did that work?

15:11 Jeanelle: Yeah, so as far as budgeting, I tried the Mint app. And then I was trying this other app called EveryDollar. The issues with those apps that I found were, it captured like your monthly overview of what you were making, but the cash flow of, you know, when the bills come out versus when you get money in and what you actually have enough to pay for groceries that week, or, you know, gas, whatever it might be, it didn’t always line up. And so this was something that my partner and I, we were struggling a lot with, especially when we combined our finances after we got married. And so we found it easiest to create an Excel spreadsheet and it’s just day by day.

16:01 Jeanelle: And it has the categories to the left. But it’s really nice for us because we can really see where we are in real-time and know, okay, if you’re getting paid this Friday, maybe we could do a little more extra fun this weekend, or we know this is coming up. We have to put aside savings for this so that we can sequence it a bit better than these apps that are just, you have this much money for the month when it’s not necessarily true. You don’t have all that money like next week yet. Especially if you’re getting paid biweekly, which for some of my jobs I was.

16:38 Emily: Yeah, I can imagine working with, like, as you said, you had so many different jobs, all the different pay schedules that you must have been dealing with, and then, you know, like your fellowship stopped over the summer, for example, like you mentioned earlier, like it’s just a lot of moving parts. And I do agree that when you have a lot of moving parts, ultimately building your own spreadsheet is maybe the fastest way to a good solution that works for you. So thank you for sharing that with us.

Final PhD Year Funding

17:02 Emily: So you also mentioned earlier that you were funded in your fifth year by a dissertation fellowship, but you said you took five and a half years to finish graduate school. So let’s square that circle. What was your funding like for the last half year?

17:17 Jeanelle: So my last year was actually my fellowship, that was the highest amount I had received. And so, when I say it was a higher amount, it was only like $5,000, you know, more than what the other years had been. But that little bump did help. But, for that one year, I really wanted to finish my dissertation. And so, I had to say no to a lot of my extra jobs that I had. And, like I said, I have a spouse and it was nice to have you know, that support. He works full-time. And he could help with some of those extra, you know, expenses that couldn’t be covered by my stipend alone or anything like that. However, because I knew that I wanted to finish, I had planned, okay, you know, I’m not going to enroll the next year.

18:19 Jeanelle: I’m going to take leave of absence if I don’t finish at the exact year mark, but I know they’re not going to give me any more money after that. So we planned ahead and I decided to teach for one semester during that time. So, I just taught one class and then the rest of the time was dissertating. But all of that went into like a savings. We knew that that was going to be the gap of whatever time off extra I would need without getting my stipend. And so basically from January to August, or no, January to December, for about a year, I had worked on the dissertation, but the money stopped in the summer. So I didn’t have money coming in for about four months. And so I was able to be covered for about three months, and then I was starting to feel really stressed looking for jobs and seeing what we were going to do. So by that last month, when I knew I had my defense date, all those things, I was doing a lot of freelance extra work because by then the savings had run out. So I would say, from that extra time of teaching, I had saved about like a three month, like emergency fund as I wasn’t working during the summer.

19:41 Emily: That end of graduate school, getting to that defense date is such, such a busy period and such a stressful period. And you did as best you could, it sounds like to, you know, be doing the planning ahead financially, but it’s tough that, you know, at the very end there, when you’re applying for jobs, you’re preparing for the defense and all of that stuff that the financial stress had to come back in at that point. But I’m glad it didn’t go on for too long. You finished up very quickly. Yeah.

Starting Dissertation Debt-Free

20:06 Jeanelle: I just wanted to add one thing. I will say, at that time, like when I started my dissertation fellowship, we were debt-free. We didn’t have any more consumer debt. And we were actively saving for this time I would be off but also saving for our house. So the end of that summer was extra stressful because that’s when we bought our first town home condo. So that was an added layer of I need a job because we need to pay for this new place that we just got.

20:35 Emily: Wow. Yeah, that is a lot to put on one, you know, short few-month period, but it is really good to hear that you were done with the debt, especially the student loans, because you know, you mentioned taking a leave of absence. I would guess that, with not being a student anymore, your payments would’ve kicked back in, had you not already been finished with paying that off so that would’ve been like another thing to pay for during that time.

21:02 Jeanelle: The other thing is health insurance. They stop your health insurance. Like I said, luckily I could get on my spouse’s for that short amount of time, but I know that that’s not always the case for everyone. So I’m always like weary of just like, this is my experience, but that’s not always the case. And to think ahead of things like that, if you’re going to do that, like health insurance costs.

21:22 Emily: Yeah, for sure. I mean, it’s good just to know, like you sort of tick down all these boxes, I have to consider this. I have to consider this so that someone else can, if they don’t make the same decisions as you, they have different situation, whatever, that’s fine. But just the thought process is good to hear.

Commercial

21:37 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. The next live Q&A call for the annual tax return workshop, How to Complete Your Grad Student Tax Return (and Understand It, Too!), is coming up on Sunday, February 13th. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Setting Financial Goals

23:04 Emily: So you mentioned, you know, by the time you got to the end of graduate school, you had cleared the debt, you’re working on other financial goals. You were then, you got married at some point. And so you and your partner were able to work on these things together. Can you tell me more about those financial goals that you started setting at that point, whether that’s toward the end of graduate school or after graduate school?

23:24 Jeanelle: So when my husband and I got engaged, we were pretty, I would say hesitant to get married for a while because we both had parents that were divorced and a lot of it had to do with financial issues. And so that was a big factor in getting married and figuring out how we were going to do things together. And so before we had gotten engaged, we both were very motivated to pay off our car. We both had car loans and student loans. So at that point, when we got engaged, I had paid off my car, he had paid off his student loans and all we had were basically those reverse things remaining. But now we had this wedding, and these expectations. And so we had to make some pretty hard decisions as far as, you know, this is our budget.

24:17 Jeanelle: We’re not going to go beyond this. We’re going to have a small courthouse wedding, which is what we had with immediate family and we’re gonna have a small get together at a community center. And so, we budgeted at like $10K I would say, and it was probably like $8K that we ended up for everything. And so that was a motivating factor because we wanted to go into our marriage not with anything extra outside of our loan and our cars. And so, I would say like about five months after we got married is when we really combined everything and joined forces and got rid of all of that debt and then started thinking about a house. And so, that was like our main goal is let’s just help each other out.

25:08 Jeanelle: We’re in this together now. Let’s pay these things off, let’s put together what we can for our house. And then start thinking about other things like retirement, because I felt pretty stressed about the fact that I was almost 30. I hadn’t had put anything away for retirement. And they don’t really, they don’t do that for you in graduate school. And it’s just something I didn’t know. I didn’t come from a family that, you know, had made good financial decisions. And so, it felt really tough sometimes to know what was the right thing to do at times.

Internal Motivation for Working on Personal Finance

25:46 Emily: It sounds like you, even though you, you know, were approaching 30 and didn’t have anything in retirement savings, it sounds like you really had your head on straight though about like understanding your own internal motivations for working on personal finance, the budgeting, obviously you’ve been doing, the hustling. So like the elements, right, for financial success, I can easily see were there. And it was like, okay, you clear the debt, you get the house, you’re ready to go, right? You’re ready to hit the ground running. Is that how you felt about it since like getting your post-PhD jobs and the house and how are you doing now, I guess, with these financial goals and dreams?

26:21 Jeanelle: Thank you for that. I like to feel validated because there was just so much I didn’t know. There’s still a lot I don’t know. Since then, I feel like I’ve been able to detach myself a little bit from that tussle and survival mode that I think I’ve been raised on my whole life and experienced just growing up and seeing family struggle and my family struggle. And then just also what’s still happening especially to graduate students and the kind of, you know, these difficult situations that they might be in. So since then, you know, I feel motivated still to do the next thing. So the next thing I’d really love to do is pay off our house. I think that would be really great and would set us up really well.

27:21 Jeanelle: And that’s mostly because I’d to beef up my retirement and just be very aggressive with that because, like I said, I feel like I lost some time for the, you know, those 10 years, I didn’t really do anything since I had turned, you know, 18. And that’s one thing I really wish and regret. But, like I said, because I don’t know much I was a little nervous, but we started talking to a financial advisor and this was something like I said, no one in my family had, and I never really knew what to expect. So we spent some time interviewing folks and figuring out who would actually tell us, like, this is how this is how you invest. This is good because of X reason and someone who would explain those things to us.

28:14 Jeanelle: So I think since then, I feel like I’ve been able to hone in a little bit better on what I want to do financially for my future, in a way that I feel more confident. Before, like I said, I felt very survival mode, hustle mode. Like I’ve just got to work hard, work, hard, work hard. And I was very burned out by the time I finished graduate school. And when I finished, and I defended, I worked right away, and I’ve always been working. And even so, I was still doing freelance stuff. I just felt like I couldn’t say no. I felt like I always needed to keep money flowing in. But now I’m more of, you know, I’m doing the smart thing. I’m saving. I’m saving for my future and doing what I need to do. So, I’ve backed up a little off of that and given myself more grace, because I am making good choices as far as, you know, what the future holds and what I can be doing with investing and retirement and hopefully paying off my home.

29:18 Emily: That’s fantastic to hear. I’m so glad that you’re, you know, on that journey with your money mindset, right? Away from hustling, because it is interesting, like you had to hustle for a long time. It was necessary for survival. It was necessary to meet the sort of just baseline financial goals of getting debt paid off. But now, you know, presumably you’re making a much better income from your primary job. Now you can switch to thinking about investing and how money can be generated and come from work and income you’ve earned in the past and not completely from income you’re earning in the day to day. And eventually of course, when you reach financial independence, when you’re retired or whatever, all of your income will be coming from those, you know, previous investments. So I just love to hear that. Just hearing that transition point is really interesting.

Best Financial Advice for Another Early-Career PhD

30:08 Emily: Well, this has been absolutely fascinating, Jeanelle, and thank you so much for volunteering to come on the podcast. I always end my interviews by asking my guests, what is your best financial advice for another early-career PhD? And that could be something that we have touched on already in the interview, or it could be something completely different.

30:26 Jeanelle: So, this advice I would give especially for folks who are just finishing their PhD, and are not sure, you know, what comes next, or, you know, maybe they have these residual effects or trauma, I would say, and feel like I did. Like you always need to catch up. I felt like all my friends around me were getting promotions. They were buying houses, they had retirement, you know, saved and I felt really behind and it made me feel bad. So I would say, you know, go at your own pace. Everyone is at a different point in their life and you will get there as long as you come up with a plan. And I would say like the most powerful plan you can have is your budget and really reckoning with what you have and what you can do with that.

31:20 Jeanelle: So you know, when I first started, I wasn’t getting a lot of money, but I still made it work within my budget. I lived within my means and what I could do. And now that I have a little bit more flexibility because your income usually goes up a lot more from a grad student stipend, is just to know, just because it’s gone up more, prioritize what you really want for kind of like those future financial goals that you might have. Like think about those things first. Because a lot of times those other things are just temporary satisfaction that we’re trying to get, and it’s okay to do once in a while. You know, it’s nice to splurge once in a while. So I would say, you know, don’t compare yourself. Give yourself some patience with where you’re progressing.

32:13 Jeanelle: And definitely, you know, create that budget. Know that it’s not probably going to work for the first few months. You’re going to have to take some time to get it right. And then once you’re in a place where you feel really good, if you’re like me and you don’t know much, I recommend talking to a financial advisor and expert who can lead you and teach you in a way of, you know, things like investing and what will suit you, and what are good goals to think about. Because if you’ve never learned it, you’ll just never know. And there could be something that unlocks for you. So, that’s what I would say is just, you know, keep going, don’t compare yourself and, you know, go at your own pace. Everyone’s running their own race.

33:02 Emily: I love those thoughts. I actually want to ask you a bonus follow-up question, which is, I really like the advice actually of speaking with a financial advisor once you’re ready for that. I actually am working with a financial advisor myself for the first time in 2021. And it’s actually been really good because I wouldn’t say that I’ve gained necessarily any new knowledge, because of course I am very well informed in this area. Although there have been a few, like really, really detailed questions we’ve asked. What’s been important for me is the behavior change of involving someone else in our picture, asking for advice, and then being like, Ooh, I need to act on this else. Or else this person’s going to follow up with me and I’m going to have to say I didn’t do it. So like, that’s what really, really ultimately matters in finances.

Personal Finance Resources

33:47 Emily: It doesn’t matter actually how much you know, it matters what you do, the action that you take. So like, I love that even though you’re saying, I didn’t know much, I don’t know much. As you’ve learned, you’ve done what you’ve learned about. And that’s really the most important thing, right? Is to just take the action. So, anyway, I love that advice, but the question that I wanted to ask you was, prior maybe to starting to meet with this financial advisor, did you have any personal finance resources, like media, like other podcasts or like books or anything that you consumed that helped you along that way?

34:18 Jeanelle: Yes, you know, one, one of the most helpful books for me was The Total Money Makeover. I don’t know if anyone has heard of Dave Ramsey. I won’t get into like his political stance and some of those problematic things, but I will say the baby step plan that he has is very solid. It’s, you know, I’ve tried to read other books, like How to, I think it’s How to be rich or something like that. And it talks a lot about investing and it just really went over my head. And I liked that it was like, step one, do this step two, do this step three, do this. So that really helped me, at least, and my husband just feel like we could follow a plan that we understood. It was very straightforward. And then later on, when it got to the more complex stuff, like the financial advising and investing, that’s when we were like, okay, let’s get some expertise.

35:13 Jeanelle: There’s no shame. I will say culturally, money just wasn’t talked about in my family. And I wish it was because I feel like that transparency would’ve helped me instead of seeing it in different ways. But you know, it’s nice, like you said, to have that outside person who can give you actionable things that you can do that are really making an impact on your finances and helping you grow you know, to have hopefully a good nest egg. So that was the biggest resource is probably The Total Money Makeover and then the financial advisor. And we have a San Diego financial literacy clinic. I learned about this through working with the county. And so I actually met with a pro bono financial advisor several years ago for that as well. So there are great resources like that too, where you can just talk to someone and have this neutral person listen to you and give you advice.

36:20 Emily: That’s a great, great tip. And it’s great that you found that resource that you knew about through your work. I would say also, you know, of course, anyone listening check for similar resources in your area. Check with like a local credit union. If they don’t offer something like that themselves, they probably know where to refer you for that kind of help. And I’m sure, if you’re below a certain income level, you know, they’ll have some kind of like pro bono sliding scale sort of thing going on. So thank you so much that. Jeanelle, it’s been great catching up with you and thank you again so much for giving this interview.

36:51 Jeanelle: Thank you!

Outtro

36:57 Emily: 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? I have 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/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC.

This Grad Student Interrogated Her Budget and Worked on the Side to Financially Thrive

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In this episode, Emily interviews Alyce Viens, a 4th-year PhD student in communications at the University of Connecticut. On the eve of her defense, Alyce looks back over her time in graduate school to share the strategies that have help her pay off her student loans, invest for retirement, and save a down payment on a home. We discuss how Alyce budgeted, practiced frugality (including with conference travel), and supplemented her stipend.

Links Mentioned in this Episode

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Teaser

00:00 Alyce: You know, I was able to just not have to wait until I graduated and got, you know, quote unquote, a real job to start my financial journey. You know, not having to delay those things, you know, having that healthy emergency fund, but also being able to, you know, build up investments and, you know, have the down payment for a house and no debt. It’s just, it’s been very, very freeing and liberating.

Introduction

00:31 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 2, and today my guest is Alyce Viens, a 4th-year PhD student in communications at the University of Connecticut. On the eve of her defense, Alyce looks back over her time in graduate school to share the strategies that have helped her pay off her student loans, invest for retirement, and save a down payment on a home. We discuss how Alyce budgeted, practiced frugality (including with conference travel), and supplemented her stipend. I have a gift for you if you’re not yet subscribed to the Personal Finance for PhDs mailing list. At the end of every interview, I ask my guest for their best financial advice for another early-career PhD. 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. The document is even organized by topic so you can easily see which type of advice is most popular. I invite you to join the mailing list to receive access to this document through PFforPhDs.com/advice/. I hope this quick, powerful resource will help you up-level your finances in this new year! Without further ado, here’s my interview with Alyce Viens.

Will You Please Introduce Yourself Further?

02:02 Emily: I am delighted to have joining me on the podcast today Alyce Viens. She is wrapping up her time in graduate school, finishing up her PhD very soon. And she’s here to give us a retrospective on the finances of her PhD. Where she was when she started, where she is now, what she did in between. So Alyce, thank you so much for coming on the podcast. And welcome, please tell the listeners a little bit more about yourself.

02:24 Alyce: Yeah, thank you for having me. I’m really excited to be here. So I am, I guess now a fourth-and-a-half year PhD finishing up. I’ll be defending two weeks from today, actually. So I’m very excited about that. My PhD will be in Mass Communication from the University of Connecticut. So I’ve been studying media effects and things like that for the last four plus years. But I now work as a market researcher for a consumer and brand research company that’s based in DC, but I work remotely. I live in upstate New York. So that’s what I’ve been doing for the last six months is going on to the industry side, the dark side, as I know some people in academia call it.

Budgeting Lessons for Grad Students: Tracking Spending

03:12 Emily: I do want to circle back and hear more about that decision to take that job prior to actually finishing up. But we’ll save that for the end of the interview. What lessons would you like to impart on the grad students and PhDs listening about budgeting, particularly during grad school or maybe in general?

03:28 Alyce: Yeah, so I mean, the reality is that as grad students we’re just not making a ton of money, but we still have a lot of the expenses that we would consider to be sort of adult expenses. We still have to pay for our housing, potentially cars, and we have to buy our food and all of those things that we have to pay for now that we’re adults. But we don’t have income necessarily to match all of those things. So the one thing that I would recommend to anybody, whether you’re a grad student or not, is to spend your first month before you ever build a budget and just look at any time money is leaving your pocket, whether it’s cash or debit card or an automatic subscription, a student loan payment, regardless of what it is, write it down, categorize it.

04:14 Alyce: Like don’t just say I spent, you know, $10 on food today. Well, did you spend $10 at the grocery store, or did you spend $10 at Starbucks on food? And then do that for a month. Don’t change your habits, just make it a regular month. And I think that’s the best place to start because you can really start to see, where am I spending all my money? I find that when I had less income, it wasn’t the large expenditures that I was doing. Like I wasn’t going out and buying myself a new iPhone every few months. Like I wasn’t making any large purchases. It was those little ones that time where, you know, I forgot to pack myself lunch and I had to go to a restaurant to get it. Or I had to go to the grocery store to buy something quickly. You know, it’s a lot of those really little things that can catch up with you. And as grad students with that limited income, that has to be the first place I think that you start is looking where you’re spending your money, and then we can start to assess where you can maybe make some cuts.

05:17 Emily: Did you use like software or an app? Or do you like to do things manually, and what do you recommend to other people?

05:23 Alyce: Yeah, so I would just have like a notes file going in my phone just to kind of, so for those moments where, you know, you kind of spontaneously spend money, I would throw all my receipts in my wallet for those times that I forgot to write it down. And then I would honestly just put them into an Excel sheet because you know, it makes it nice and easy, you know, when all is said and done for you to just kind of group them and see what those totals are.

Frugality is Worth it to Avoid Debt

05:53 Emily: Is there anything else that you want to add about budgeting?

05:58 Alyce: I would say, you know, I fully recognize that that 30% housing threshold may be very hard to reach. And so, you know, reach it as much as you can, get those housing costs down as much as you can, but also recognize if you spend a little bit more on housing. Okay. Well that just means we maybe need to make a little bit extra side income, or we need to just adjust our budget accordingly and maybe we spend less on something else. So I think, you know, there are opportunities, you know, depending on where you end up. Sometimes your graduate school is going to be in Southern California and you’re gonna be paying a fortune in housing. But where can you cut? Or where can you add as much as possible? And the same thing goes with really any aspect of your budget.

06:50 Alyce: You’re going to have to cut somewhere. You know, frugality and, you know, really making it as being financially well and not putting yourself further into debt as a grad student, it is going to involve some small sacrifices. I’m not going to lie and say, it’s all sunshine and rainbows all the time. There are going to be times where you have to say no to yourself, or you have to maybe get something that’s a little bit less than what you maybe wanted to. But it’s all about finding the balance. And it doesn’t have to be this miserable existence where you, you know, live in a tiny, tiny room and live on ramen noodles, but there are ways to make it work. You have to be willing to put in the work to find out where those places are. Because it’s easier to just fall into debt.

Strategies for Minimizing Expenses

07:40 Emily: Okay. So you mentioned earlier, like, okay, cutting expenses and also increasing income. And I want to ask you about both of those things. So, what are some strategies that you used in terms of decreasing expenses or minimizing expenses?

07:52 Alyce: Yeah. So the first thing that you have to do is just, like I said, cut those small unnecessary expenses. You’re going to have to buy gas for your car. You’re going to have to pay for insurance. You’re going to have to pay rent. But what you don’t have to do is buy lunch on campus every day, because you didn’t have lunch. What you don’t have to do is order pizza because you got home late. Those are things that you don’t have to spend money on. So look for opportunities to not do that. So I always kept snacks in my my drawer just, or like a loaf of bread and some peanut butter or like Graham crackers and peanut butter or something that I could kind of default to when I was on campus longer than I intended, or I didn’t have anything at home that I could make as a lunch or a dinner. You know, we’re there sometimes for a long time, I get it.

08:44 Alyce: You run out of meals. So have those emergency meals in your desk at work or in your backpack or in your car, wherever you need to keep them. Also, I like to make emergency meals for my house. So I always, like I’ll, you know, make a lot of something, you know, if I cook chicken, I’ll cook two or three extra pieces of it. So it’s done, freeze them in the individual packages, and then it’s just a microwave away. Or have emergency kind of food ready. So when you do get home late and you don’t feel like cooking, you always have that can of soup in the pantry. You always have something that you don’t have to spend money on. You can, you know, evaluate things that you are spending your money on that you do need to, or, you know, you would like to, but are there ways that you can reduce it?

09:33 Alyce: You know, do you need the, the fanciest Wi-Fi plan for your home internet? Probably not. I can tell you, I have a very cheap one now and it works just as well as any other one. Just don’t have seven devices going at a time. You know, do you have a subscription to Netflix, Hulu, Spotify? Do you have all of these and are you actually using them? Can you share expenses with somebody else? You know, I know it’s only, you know, $12 a month, but you know, those things they add up when you’re talking about how they compound on each other. So I think it’s just realistically looking at what are you spending your money on and are there ways that you could reduce that spending if not eliminate it completely?

10:21 Emily: Yeah. I like the process that you’re outlining here, like first tracking all expenses, and then interrogating each one of those expenses. I would say even, you know, the necessary expenses are also worth interrogating. There are a little bit of, well, for example, you mentioned gas in your car. Okay. So like figure out what’s the station that you’re always going to go to that consistently has like the cheapest price that’s not too far out of your way or whatever. Like just figure that out, make the decision one time, and then you’re always gonna be getting gas from that station. It’s always at the best price that you know about. So anyway, the necessary expenses are worth interrogating. You just like go down your entire list. Like you were saying, ask yourself for every one, how can I reduce this? How can I share this? Can I go without this? I really like that strategy. And it does matter, like you said, even those small few dollar expenses per month, they do matter in a grad student budget, whereas they might not in a normal salary kind of budget.

Know What’s a Good Sale Price

11:14 Alyce: Yeah, certainly. And I think I worked at a grocery store when I was in college and it was by far probably, you know, it’s retail, so it’s miserable. But in terms of life lessons, probably the best experience that I had in terms of life lessons of learning how much things should cost. Because the reality is, if you walk into a grocery store willy nilly just to buy whatever you want that day, whatever you decide that you need that week, you’re going to end up spending more than you should. You know, know what chicken breast should cost. I’ll give you an example. You should never spend more than $1.99 a pound on chicken breast. That might vary if you live in a really more expensive state. And I know we’re in inflation right now, but knowing, you know, what’s a good sale price and being willing to, you know, freeze something because you can have it later.

12:09 Alyce: Buying in bulk. You know, if that’s applicable to you. If you have roommates, there’s no reason why you can’t buy, you know, the Costco size toilet paper, you’re probably going to use it. And you’re probably going to save a lot of money in doing so. So learn how much things should cost. You know, look at the sales fires, use coupons. I’m a big proponent of coupons and people think they’re, you know, it’s challenging and you have to be like the TLC coupon moms. You really don’t. Every grocery store now has an app that you can load the coupons right onto your app, or right onto your store card. Coupons.com is a really great place. You know, if you’re going to spend the money anyway, why not save the money on it?

12:56 Emily: I love that you brought up couponing because it’s actually not something I don’t think we’ve discussed in detail on the podcast before. But as you said, I found it also like, I coupon at a very minor level. Like what my grocery store sends me, my grocery store learns my spending patterns because of whatever I’ve signed up for with them. And then they send me coupons on the stuff I actually buy, which is awesome. And then double awesome is when you can pair a coupon with like something already being on sale and that being, you know, you’re able to like stack that or whatever. Give me another like more advanced strategy. Like for instance, how are you using coupons.com?

Advanced Couponing Strategies

13:29 Alyce: Yeah. So I will check coupons.com anytime before I go shopping just to see what is available. And the trick with coupons is don’t buy something just because you have a coupon for it, because chances are, you’re probably not getting a deal. Just because you, you know, save 55 cents on that, doesn’t mean it was necessarily a good deal, especially if it’s something that you weren’t going to buy anyway. So it’s important you only use it on things that you were intending to buy, but also, you know, compare to, you know, maybe the store brand, if that’s applicable. Sometimes, you know, if it’s not on sale, you know, using a coupon on a brand name, it’s still not going to save you anymore than if you had just bought the generic brand of it. So I’ll check coupons.com just to kind of see what’s available and take the ones that I want.

14:21 Alyce: And again, only using on things that you’re going to. I’ll check the app of the store that I’m going to be shopping at to see, do they have coupons that I might want to use? I also will Google. So sometimes like, you know, P&G might have their own separate coupons that they don’t publish on like a public platform like coupons.com, and it might just be linked to their website. And you just have to put in an email. I have a burner email just for specifically that purpose. Like I don’t ever check it. It’s just for putting in to get any kind of special codes and deals. And that’s really for everything. It’s not just for for groceries. Like Kohl’s, for example, if you need to go buy new conference clothes or whatever you might need to get at Kohl’s, almost always, if you go on their website, they have at least a 15% off coupon that you can print out or show on your phone.

15:18 Alyce: You know, stores are desperate to get people actually in stores now because you know, we’re moving so much to online. So, I find that coupons are more often available than not. So if you need something, just do a little bit of searching. The other thing I would recommend is an app it’s called Ibotta. I B O T T A. And you go onto this app, and you just select what store you’re shopping at. And it will show you just a plethora of coupons available that you’ll get cash back on. And you just add it to your list. You upload your receipt afterwards, and they put this money into your kind of Ibotta account and you can withdraw that money once you reach, I think it’s $20. So I’ve saved over two, probably over $300, by using this app. And it’s often for things that, again, I’m already buying. So if I’m going to buy that box of pasta, I’m gonna buy it and save a dollar on it because I can.

16:20 Emily: All right, I have homework now. Great ideas for me to implement.

Commercial

16:25 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. The first live Q&A call for the annual tax return workshop is coming up on Sunday, January 23rd. For fellowship and training grant recipients, please be aware that the deadline to make your quarter 4 payment, if applicable, is January 18th if you are not planning to file your tax return by the end of January. It would be my pleasure to help you save time and potentially money this tax season, so don’t hesitate to reach out. Now, back to our interview.

Conference Travel Frugality

18:01 Emily: Now, you mentioned earlier, you had a lot of thoughts on conference travel. So how have you employed frugality in that area?

18:07 Alyce: Yeah, so conferences, you know, are the bane of grad students’ financial existence, because they are so expensive. So the first thing I would recommend is looking to funding sources. And these aren’t always going to be available, but you really never know. So ask your department, you know, hopefully you’re aware by that point if they have options, but just ask them. Sometimes they’ll pay your registration fee at the very minimum. Sometimes you’ll get a travel stipend, whatever it might be. So, you know, certainly look to your department, look to the university. Sometimes, I know my university one time during your PhD, you could apply for a travel grant and it was $750. You can only use it once. But it was nice because it paid for, you know, a bulk of one of the trips that I had to make. So starting there, and then look to the conference itself.

19:03 Alyce: Sometimes they give away money to graduate students. I know one that I was attending every year, all you had to do was just check off when you registered that you were interested in graduate student funding. And when you got to the conference, you got a check for $150. Sometimes certain like caucuses, I don’t know how every you know, conference in every field runs, but at least at the communication conferences, there were different caucuses. And sometimes they would offer travel funding of, you know, $75, $150, whatever they had available. So start with those funding sources. The next thing that I would recommend, and I will preach this until the ends of the earth, do not use the conference recommended hotel or the conference recommended airline, if you do have to travel by air, as we so often do. They almost always are more expensive.

20:02 Alyce: You know, you’ve got think, when a conference is picking a hotel, they’re picking something very nice that can accommodate a lot of people, has all the conference rooms, things like that. So the room and prices are going to be more expensive. So I always, when I went to conferences, stayed no more than a quarter mile, something I could easily walk to, down the street. There’s always going to be a cheaper hotel available for you to stay at. I even did the math once. It was cheaper, even if it was a little bit further to even like take an Uber back and forth every day than it was to stay at the conference hotel. So that’s a great option that you can save money. Same thing with airlines. You know, they give you the group code, certainly check it, but also, you know, use Orbitz, use Southwest, because they’re not linked to Orbitz, and they often have really cheap prices. You know, and find the best deal. There’s no reason that you have to go with Delta airlines because that’s what the conference said you should use. If there’s a better deal on a flight, then take it. There’s no reason you have to spend more money.

Have a Conference Buddy

21:13 Emily: That’s all great stuff. And another thing you mentioned to me in our prep for this interview was to have a conference buddy. So what does that mean?

21:21 Alyce: Yeah. And I also recommend having a conference buddy. So this was somebody in my department that I traveled with. I knew we were going to be attending the same conferences most of the time. So what we would do is we would book our flights together. We would always plan to share a hotel room. It was somebody I trusted and I knew, you know, wasn’t a random stranger that’s going to steal my stuff in the middle of the night. And then we would, you know, split the cost of transportation to and from the airport, you know, we’d share the Uber. We would split the cost of parking, whatever it was, pretty much everything was, you know, minus the flight because obviously we had to pay for our own tickets, but it was all cut in half. And that, you know, saved us so much money. There was one conference we went to, we were actually able to drive to, me and my conference buddy, we actually made money on the conference based on the amount of funding that we were able to get from the conference itself and us splitting our costs.

22:20 Alyce: I think we both ended up netting like $30 each. So definitely find a conference buddy as soon as you can, somebody who you are connected with in your department or even outside of your department, if you make a friend in another school. It’s really a great way to save some money. I will also add some kind of silly ways to save money at conferences. So one, book a hotel that offers free breakfast, because that covers one of your meals. One of the biggest expenses of conferences is you’ve got to buy all of your meals while you’re there. So get your free breakfast every day. That’s one less meal that you have to pay for. And it’s a meal you’re probably never going to sit down and eat with anybody anyway. And if, you know, that free breakfast, sometimes I would, you know, take a couple extra apples or something and put them in my bag and I would bring like single serve peanut butters or something.

23:20 Alyce: And then that covered me for a lunch as well that I didn’t have to pay for. Because again, you know, you’re going from you know, panel to panel. You don’t always have time to go sit and eat a lunch anyway. So, you know, instead of spending, you know, the $10 on a small sandwich, you know, eat the stuff from the free breakfast or pack protein bars. Pack things that you can have just as kind of a go-to, because you may have to, you know, go out to eat for dinners, for networking purposes. You’re going to have to spend money for meals at conferences, but cut it where you can. Also, attend the free receptions. There’s almost always food. It’s a great opportunity for networking, but there’s always going to be food at these things or, you know, our conferences, a lot of the bigger schools would host party receptions. You obviously shouldn’t go there and just like stuff your face and leave. Like, integrate it into a networking opportunity, but there’s food. And honestly that’s, you know, a big expense at conferences that I initially found when I first started going to them was how much money I was wasting on just eating out every meal. And so I just started packing my own food as much as I could and just found opportunities to cut those costs.

24:40 Emily: Those are great suggestions. And I love the way you kind of, the outline you just gave of, you know, finding funding at your university level, finding funding at the conference level. How can you frugalize these larger expenses within the conference? How do you frugalize the smaller expenses within the conference? So clearly again, you’re sort of interrogating every step of that process and finding how to optimize it. So I just love that. Is there anything else you want to add about frugal strategies used during grad at school?

Ask for Practical Gifts

25:08 Alyce: The other thing I think I would add is just to, when you know there are going to be things that you need to have, you know, you need to buy textbooks, you need, you know, those flights, use holidays and birthdays and things like that strategically. You know, you probably really don’t need, you know, a new bag or a new pair of shoes or whatever it is that you might normally ask for for Christmas, but you may need, you know, an American airlines gift card to help you get you to that conference. You know, your life’s not going to be less fulfilled without that pair of shoes, but your life might be a heck of a lot easier if you don’t have to pay hundreds of dollars for a flight. You know, if you’re going to have to buy textbooks, ask for an Amazon gift card because you’re going to be able to buy those books and share them. I can’t tell you how many times, you know, again, my conference buddy, you know, I had sort of class buddies too. We would just buy as a class one copy of the required textbook, and we would just pass it around and have designated days that we used it. You know, there are just, if you really interrogate, like I like that word, you keep using, interrogate your expenses, there are ways to find those cuts.

26:26 Emily: Yeah. And another thing that you’ve brought up a couple times, you know, the conference buddy, now the class and textbook buddies and so forth, like use your fellow graduate students as a resource. You know, they’re in the same spot as you, more or less, right?

26:37 Alyce: They’re just as broke.

26:39 Emily: Yeah. So whatever you can share, whatever tips you can, you know, share with them, maybe you’ve taught one of them how to coupon and they’re going to teach you how to do this other thing. You know, you all are kind of a wealth of resources, a wealth of knowledge, in terms of how to manage your finances during graduate school. And again, you’re coming on the podcast, you’re sharing with everybody. That’s awesome.

Increasing Your Income

26:57 Emily: Okay. Let’s move on to increasing income then. So what strategies did you use to bring in extra income, increase your stipend, during grad school?

27:07 Alyce: Yeah, so you know, I fully recognize, you know, while we’re in the thick of it, you know, sort of that nine-month span where you’re TAing or maybe you’re an RA, it’s hard to find those opportunities to increase income. So, I would try and always make the best of those three months that I did have off. So I really did a variety of things. So the one that was probably the most lucrative was I would grade AP exams. So they’re looking for subject matter experts in, you know, these AP subjects. And, you know, I did communication, so there’s not an AP communication course, but there is a course called seminar, which is basically they learn how to evaluate and write arguments and, you know, conduct research, you know, write a research paper. And so they needed people to grade those.

28:00 Alyce: So that was something I did for the last know, six years or so. And it was one week online. So I could work from my home and, you know, you just read paper after paper and you score them. It’s certainly not fun, but I can tell you, it pays like $26 an hour. And so, one week of work was able to cover me for almost all of my entire expenses for the summer where I had no income coming in. So that’s a really great opportunity. I think you go to readap.com I think is the website for it. Or if you just Google AP scoring opportunities, it should come up.

28:44 Emily: Yeah. That’s an amazing suggestion. I think it would be applicable, most graduate students are probably going to find some kind of AP exam that they’re qualified to grade.

28:52 Alyce: I mean, they love graduate students because we’re available. You know, they’re often recruiting college professors or high school teachers, but that’s, you know, it’s a little bit harder for them. But grad students, we’re readily available and we’re desperate for money. So they know they can squeeze a lot of hours out of us. So like I said, it’s not a fun week, but you know, you can knock it out and again, you can pay for most of your expenses. And, you know, as I did it more and more, I started to get promoted to leadership positions on it. So I was able to get more hours and make more money. So it is something you can stick with long-term. Unfortunately, now that I work full-time, I won’t be able to do it anymore. But it was a great opportunity.

Balancing Summer Research and Side Hustles

29:36 Emily: Okay. So you mentioned the one week of AP grading can cover your expenses, more or less, for the whole summer. How were you spending your summers, since you didn’t have a stipend during that time? Were you trying to focus on research, or did you get other jobs aside from this AP one?

29:51 Alyce: I would do a little bit of both. So I didn’t want to spend, you know, the entire summer working all of the time. You know, I think that’s, you know, such an important time for graduate students to recharge, but I also recognize this is an opportunity for me to make a little bit of extra money when I’m not as busy. You know, you’re not going to do research for, you know, 24 hours a day, every day during the summer. You’re just not. So you know, where I could, I tried to find, you know, those additional opportunities.

30:23 Emily: Yeah. So what were some things that you did during your summers that you would recommend to someone else, like the AP grading? And then also, did you do anything during the academic year?

30:32 Alyce: Yeah, so one summer, so it was about six weeks because obviously, you know, our summer is a little bit longer than the regular school year summer. I went and substitute taught at a middle school in my town, you know, especially in COVID right now. They’re really desperate for substitute teachers. And I actually really liked it because it was such an easy job because most of the time, you know, as a substitute teacher, you’re putting on a movie or you’re giving them a worksheet to do. And so I brought my laptop and I would do work, I would do my research. And so I think, you know, I probably would’ve even considered doing that during the year if I was able to, just because it didn’t require a ton of like cognitive effort on my part. And I still was able to kind of dedicate some time. Just make sure you check with your university first.

31:26 Alyce: They usually have a policy about working any kind of supplemental income as a graduate student. You do usually have to get it approved. So make sure you check with those policies. I know some people got burned by that. So I did that. I think those were the two main ones that I did. I also would just do like little things here and there, especially during the academic year, like I would take online surveys. You know, we know how much we pay people for research. And so I would, you know, find opportunities to take those. My fiancé and I ate many a free dinner based on these online surveys and just, you know, getting the free gift cards from those things of that nature. So those were kind of the main ones that I did. I knew some people who, you know, when grocery stores have to change over all of their price tags, there was somebody I knew who would go on Saturday night, they work from like 11:00 PM to 7:00 AM, just one night a week, changing over all of the price tags. And that was the only extra job that they had, but it was enough to kind of, you know, pay for, you know, maybe one week pays for your cell phone bill, the next week pays for your electric bill. You know, when you’re accumulating 50, 60, $70 for that one night, you know, you can then apply it to a specific thing.

Financial Accomplishments During Grad School

35:13 Emily: So we’ve talked about a ton of different strategies. But I want to know for your financial picture, what did this all amount to? You know, how much did, if you wanna express that as net worth, you want to express that as not going into debt or, you know, what did you sort of accomplish financially using these strategies over the course of graduate school?

35:32 Alyce: Yeah, so you know, I’m happy to say that because of that frugality and because I was so strategic with, you know, the money that I saved, you know, if we want to quantify this, I was able to pay off all of my student loans before I ever graduated. So I’m going to graduate completely debt-free. And I didn’t have an assistantship for my master’s. I didn’t know that a thing, if anybody’s listening to this as a potential master’s student, look into those funding options, I didn’t know that was even a thing. So I was able to graduate or will graduate completely debt-free. My fiancé and I were able to buy a house. So we actually just moved into our first house a few months ago, you know, again, before graduating, which was really exciting. And in terms of, you know, if I’m quantifying this on a net worth perspective, you know, I’m sitting pretty well.

36:27 Alyce: You know, probably over $60,000, you know, in investments or in sort of cash assets, not including, you know, obviously any equity we’re building in our house, but you know, I was able to just not have to wait until I graduated and got, you know, quote unquote, a real job to start my financial journey to start building, you know, that down payment towards a house or, you know, start building my retirement income. You know, it’s so, so important. You know, the more we delay our retirement savings, the less opportunity we have to make those grow. And so, you know, not having to delay those things, you know, having that healthy emergency fund, but also being able to, you know, build up investments and, you know, have the down payment for our house, no debt, it’s just, it’s been very, very freeing and liberating. And so, I certainly encourage everybody to, you know, strive to get to that place.

37:31 Emily: I love that. I’m really glad that it amounted to all of that for you. I mean sometimes graduate students need to do everything we’ve talked about out just to break even, right? The stipends are just that, you know, dismal. But I’m really glad that for you, all that effort added up to an actual net worth increase and, you know, paying off the student loans and all the great things you’ve been able to accomplish. It’s amazing. So congratulations! Congratulations also on the job, and the upcoming defense and the house and all these wonderful things that are going on. So where can listeners find you? And I understand that you have written a book.

38:05 Alyce: Yeah. So this was kind of just a little mini passion project that I wrote because I didn’t have enough to do with working full-time and writing a dissertation that I also decided to write a little bit of a book, it’s called Financial Wellness 101: Everything You Wish You Learned in School About Saving Money, Building a Budget, and Growing Wealth as a Young Professional. And I wrote it with the intention of it really just being for those people who are kind of fresh out of college or even out of graduate school who just, you know, don’t have any idea. It’s the first time we’re really managing our money on a large scale. We don’t understand what is a 401(k), what’s a Roth IRA? What do all these letters mean? Do I really need to be saving for retirement? How do I set up a budget?

38:51 Alyce: You know, where am I spending more money than I should be? So it’s a very, you know, no frills, it’s self-published so it’s not fancy, it’s not edited by any extent. But it is available. So users can find, or your listeners can find me on Twitter @Alyce_Viens, and on that, you’ll see the link for, it’ll take you to the ebook version. If that’s something you’re interested in. And I actually set up for your listeners, if they use code GRAD, G R A D, they’ll get $5 off the cost of the book. And I will also email you an additional section that I wrote of the book that’s specifically for graduate students and some of those ways that you can save money with conferences and funding and all kinds of things like that. So it’s sort of an added perk that you would get for free, and it is also available on Amazon if you prefer Amazon.

Best Financial Advice for Another Early-Career PhD

39:52 Emily: Okay. Yeah, we will put all of those links in the show notes, that is a great offer to get that additional chapter or whatever it is. Lovely. Well, Alyce, it was so good to have you on the podcast. I ask all of my guests one final question, which is what is your best financial advice for another early-career PhD? And it could be something that we have touched on already in the interview, or it could be something completely different.

40:15 Alyce: I would say, my piece of advice is to avoid accumulating any additional debt.

40:23 Emily: Yes, very simple and very powerful advice. So that is so great. Thank you so much for coming on the podcast!

40:28 Alyce: Thank you for having me! This was fun.

Outtro

40:35 Emily: 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? I have 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/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

This Grad Student’s Defensive Financial Planning Paid Off During the Pandemic

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In this episode, Emily interviews Maya Gosztyla, a third-year graduate student in biomedical sciences at the University of California at San Diego. Maya has experienced major financial ups and downs over the three years since her first podcast interview. Her husband was unemployed for over a year between moving with her to San Diego and pandemic hiring freezes. However, she managed to support both of them with her grad student stipend and freelance side income thanks to negotiating for a spot in her university’s subsidized housing program. Now that her husband is employed again, they are aggressively pursuing FIRE through investing and enjoying occasional splurges.

Links Mentioned in the Episode

This Grad Student’s Defensive Financial Planning Paid Off During the Pandemic

Teaser

00:00 Maya: My husband didn’t have a job lined up at that point. We weren’t too worried, because San Diego’s a pretty big biotech hub. And so we were doing pretty well on just my stipend end of 2019. We got to 2020, things changed a bit. And so what we thought was going to be just like maybe like, you know, worst case, a six month-unemployment period, turned out to be like over a year of unemployment for him. So it was at that point that I was really happy that I had made the decision to choose a school that I could pay for on just my stipend. Because if we didn’t do that, we would have had a lot of debt after paying for just us that year.

Introduction

00:34 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 1, and today my guest is Maya Gosztyla, a third-year graduate student in biomedical sciences at the University of California at San Diego. Maya has experienced major financial ups and downs over the three years since her first podcast interview. Her husband was unemployed for over a year between moving with her to San Diego and pandemic hiring freezes. However, she managed to support both of them with her grad student stipend and freelance side income thanks to negotiating for a spot in her university’s subsidized housing program. Now that her husband is employed again, they are aggressively pursuing FIRE through investing and enjoying occasional splurges.

It’s January now and you know what that means: Tax season is upon us! At some point in the next three or so months, you will prepare and submit your 2021 tax return, and I am here to help. I have just released the 2021 version of my annual tax return workshop for graduate students, which is titled How to Complete Your Grad Student Tax Return (and Understand It, Too!). The goal of the workshop is to assist you in calculating and reporting your grad student income and maximizing your higher education tax benefits using your qualified education expenses. It supports your federal tax return preparation process whether you use software, employ a human tax preparer, or fill out the IRS forms directly. The workshop comprises videos and worksheets, plus I will hold live Q&A calls throughout tax season for any follow-up questions you might have.

There is another upcoming deadline that graduate students, postbacs, and postdocs should be aware of. The 2021 quarter 4 estimated tax payment is due on January 18, 2022 unless you plan to file your tax return by the end of January. This payment deadline may apply to you if you were paid by a fellowship or training grant for part or all of 2021 and no income tax was withheld from your paychecks. You can find out if you are required to make this payment by filling out IRS Form 1040-ES. If you need some help with calculating your payment, please join my workshop, Quarterly Estimated Tax for Fellowship Recipients. It shows you how to fill out every line of the form and answers common questions from the PhD population, such as when to make these payments if you switch onto or off of fellowship in the course of the calendar year. The quarter 4 live Q&A call for this workshop is scheduled for January 9, 2022. You can find links to these two workshops plus all of my free tax resources at PFforPhDs.com/tax/. By the way, I license both of the workshops that I just mentioned to university clients at a discounted bulk rate, so it’s well worth asking your graduate school, graduate student association, postdoc office, etc. if they are willing to purchase either or both on behalf of yourself and your peers. I hope you will use my resources to ease much of the stress of tax season. Again, you can find everything linked from PFforPhDs.com/tax/. Without further ado, here’s my interview with Maya Gosztyla.

Will You Please Introduce Yourself Further?

04:12 Emily: I am delighted to have back on the podcast, Maya Gosztyla. She’s actually contributed to the podcast three times before. So back when she was a postbac fellow, we did a full interview and season two, episode four, that was mostly about her side hustle. We’re going to hear an update about that later on today. And then she’s also given us two short updates. So season seven, episode 16, she gave us a quick update on how her finances and life were going. And then in season eight, episode seven, she was one of my anonymous guests on the podcast episode on negotiating your grad student stipend and benefits. So, because, you know, we’ve been kind of loosely in touch over the past couple of years. I know that a lot of interesting things have happened in Maya’s finances since we did our full interview. So I asked her to come back on the podcast to talk about all these various developments. So, Maya it’s really great to have you! Would you please re-introduce yourself to the listeners?

05:01 Maya: Yeah, definitely. I’m excited to be back on here after a couple of years. There are some updates. So yeah, my name’s Maya, I’m currently in my third year of my PhD program at UC San Diego studying biomedical sciences. And before this, I did my undergrad at Ohio State. And then I did a one-year postbac at the NIH.

Freelance Side Hustling

05:20 Emily: Yes. And so, that earlier interview that we did was all about your side hustle. So can you fill us in a couple of details about that side hustle?

05:27 Maya: Sure. So I’ve been doing this since like senior year of undergrad. I do some freelance science writing. And since then, I’ve gotten a little bit into science consulting and some freelance programming as well. So I’ve been doing that for a while, and it’s just kind of a way to both supplement my income and also to get some connections with various industries that I might not have met otherwise through my main research.

05:47 Emily: Yeah. I love that you started this side hustle so well in advance of grad school. So it was kind of already established. It’s really kind of hard to get something off the ground as a grad student, but I love that, you know, you already had it going and just had to maintain it.

How Taxes Played a Role in the Decision to Get Married

06:00 Emily: Okay. So we’re just kind of going to step through the last couple of years, since we published our interview. We conducted the interview in maybe like late 2018, early 2019, you were applying to grad school that year, or in that academic year. So things that have happened since then: one, I know that you got married, and I know that the timing of your marriage was influenced by tax matters. So can you explain how taxes played a role in when you decided to get married?

06:26 Maya: Yeah, definitely. So my husband and I, we actually, for a long time, were just like not planning to get married. We’d been together for close to 10 years at this point, like since high school, but, you know, neither of us is religious. We don’t really have any interest in children. So we just didn’t really see much of a need to do the whole legal marriage thing. But then as I started to research more about the kind of financial benefits of marriage, it started to become a lot more useful for us to get married, basically for like kind of a cynical my point, not very romantic view of marriage. And especially as I was going into grad school, as you mentioned, this was kind of the ideal time for us to get married. Partly because I was asking my husband to like move across the country with me and he didn’t have a job lined up yet.

07:04 Maya: So I thought that was kind of a big financial risk for him. And I wanted him to have a little legal protection, I guess. But as you said, the tax reasons were kind of the main thing. Probably most people know that when you’re married filing jointly, your overall tax rate usually goes down somewhat. That can vary depending on your exact incomes. But for us, the thing that kind of made us get married at that point was because I was still eligible for the kiddie tax from my first year of grad school, which is basically, I think it was established so that it was like people who were rich used to kind of give their adult children some of their stocks and like use that to kind of avoid taxes on their part. And so to avoid that if you’re under age 26 and you have unearned income which includes capital gains, but unfortunately also includes a lot of grad school fellowships and scholarships.

The Kiddie Tax

07:50 Maya: Your taxes are like really high on that. Like, I don’t know the exact number, but it was like 20% or something ridiculous like that. So for that first year of grad school, I was only 25. So, I think I was actually 24 going in. So like, I didn’t want to have to pay that crazy tax rate. And if you’re married, you don’t have to pay the kiddie tax. So that right there probably saved us a few thousand dollars. And it also ended up saving us more money that year because we qualified for the retirement savers’ credit which normally, you know, if it was just me, my income would have been a little bit above the limit to get like the maximum benefit. But because we were both below the limit, because my husband didn’t have a job during that first year, which we’ll get into later. Our combined income was low enough that we basically each got a thousand dollars back for that tax credit. So $2,000 plus the kiddie tax savings just for getting married that year.

08:37 Emily: Yeah. I’m sure it’s something that most people don’t think about, especially at the age that you were, you know, 23, 24, that kind of age. So yeah, people want to learn more about the kiddie tax like issue, I have an article on my website it’s linked from PFforPhDs.com/tax. You can find it linked from there. But basically, it’s pretty little known, but as you said, it’s meant to tax unearned income, but unfortunately fellowship income is defined in the same way. It’s defined as unearned income. And so yeah, grad students and postbacs like you were, can get into this strange, like potentially higher tax situation. Now around the time that you were like getting married, making these decisions, the kiddie tax was going through a little bit of a shift. So I think maybe in the year that you got married, it was the worst that it ever got because it was yeah, like the Tax Cuts and Jobs Act, which was passed, I guess at the end of 2017, so effective in 2018, it increased the kiddie tax rates up to the like trust rates.

09:38 Emily: But then after a year or two, they realized what a problem that was, especially for low-income college students. And so they brought it back down to like your parents’ tax rate, which is what it was before. Which is great if your parents are low income and that’s the reason you’re receiving grants and stuff. But like for a lot of graduate students, we received this kind of aid for merit reasons, and not necessarily because your parents have this or that kind of income. And so it can hit students and postbacs and stuff who are not dependents of their parents. So not necessarily even receiving support from their parents, but their parents’ tax rate is considered in their tax rates. So it’s really messed up. But as you said, marriage gets you out of this. It’s like the get out of jail free card for the kiddie tax, and for some other matters like this. So yeah, as you said, not very romantic, but a very practical reason. If you’re already set on being together long-term to have the legal protections, as you said, of marriage in place, and having these kind of extra weird tax benefits, like you mentioned the retirement saver’s credit as well for your husband, presumably.

10:35 Maya: Yeah, it ended up being really important, especially during my husband’s unemployment period, because one of the things that came with marriage was that he can be on my health insurance. And when he aged out of his parents’ health insurance, we would have had to pay much higher rates if we were not married. So it was a benefit that I wasn’t like even thinking about going in, but things like health insurance, also the ability to like open an IRA and contribute for each other. Like since I don’t have any earned income during grad school, I normally wouldn’t be able to use an IRA, but being married lets us do that. And there’s probably even other financial benefits I haven’t figured out yet. So I think it’s a good thing to be aware of that even if you don’t really have like romantic or religious reasons to get married, it’s sometimes still useful just for the financial reasons.

Marriage Penalty or Benefit

11:12 Emily: Yeah. I want to say actually a small correction because it was the case that you couldn’t contribute to an IRA, but that law has changed as of 2020. So even with fellowship income. But for your husband, now, if your husband, as we’ll get into, he went through a period of unemployment. As a spouse, he can still contribute to an IRA based on your earned income. So it’s like anyway, double benefit there. But yeah, it’s really interesting. I’ll try to link it from the show notes. There’s like a graphic, it’s probably from the New York Times or something, where it shows you where there’s a marriage benefit and where there’s a marriage penalty in terms of does having, you know, this income range mean lower tax rates or higher tax rates if you’re married.

11:49 Emily: And depending on where you are, it can either have no effect, there can be a benefit, here can be a penalty, I think down where I’m assuming your tax rates are, it’s neutral, there’s no benefit or penalty. But as you get into like higher incomes and more disparate income, sometimes those things can come into effect. Super interesting. So thank you for telling us about the kiddie tax. Ah, good to be reminded, especially in tax season. Okay. So that affected the timing, the fact that you got married, the timing of it and so forth, and then okay.

Role of Finances in Grad School Selection

12:15 Emily: Going into like application season, admission season, this is kind of just after we did our interview. Did finances come into play for you in considering your various offers or your selection of where to attend graduate school?

12:27 Maya: Yeah. Finances are definitely like probably in my top five or maybe even three criteria for choosing a grad program. I think everyone knows you’re not going to be like living large on a grad stipend, but I at least wanted to not have to have finances be like something else I’d have to worry about on top of my research. And I think some people, especially if you’re going into grad school in a long-term relationship, or if you’re married, you might think that maybe it doesn’t matter quite so much, because you could rely on your spouse’s income. But especially if your spouse works in a field where jobs aren’t always long-term, it’s common for people to like get laid off quickly or switch around jobs. I think it’s really important to be able to support not just yourself, but also both of you for at least a short period of time on just your grad stipend, and not think like, “Oh, I have a spouse, so therefore I don’t have to worry about it too much.”

13:12 Maya: So like for example, in our case, I really wanted somewhere where maybe we won’t be living like with anything extra really, but at least we can survive and like pay the rent and buy food on just my income. Which is like just barely the case where I am at UC San Diego. That’s kind of like right on the border of like slowly losing money over time. But there were definitely some other schools like I’ll mention like the Bay Area, several schools in that area where their stipends are a little higher than here in San Diego, but definitely not enough to cover like the difference in cost of living. And that made me really hesitant to choose any of those schools.

Subsidized Housing

13:43 Emily: Yeah. I really appreciate your mindset going into this. “Okay. I want to be able to support two adults, if necessary, for a short period of time.” And I know this is a situation that often comes up for international students who are bringing spouses along with them who don’t have, you know, the clearance to work in the U.S. And so that’s a major, major consideration for them. I’m really glad you brought that up. And I’m glad that you mentioned like other schools, California, different areas. Now some schools, like ones in the Bay Area maybe, and I know at UCSD, offer subsidized housing. So how did that come into play with your decision-making?

14:16 Maya: Yeah, housing is like, I think for most people, their biggest expense. So any way I could bring down my housing costs was a big plus for me. One of the schools I interviewed at was UCSF and they do have subsidized housing. But it’s not guaranteed, like you’re not guaranteed a slot in grad housing. And in general you only get to stay there like one year, sometimes two. So that was kind of like, made me a little nervous that I might have to pay full Bay Area rent for most, if not all, of my grad school. Here in San Diego, we also have subsidized grad housing. For us it’s a two-year limit. But I was able to, as I talked about in that negotiation video, I was able to negotiate into this program at UCSD, which is designed to recruit grad students to school, where they basically guarantee you a spot in grad housing as soon as you get there, and you get to stay until you graduate. So you don’t have to move out after two years. So basically once I got into that program, that kind of like sealed the deal for UC San Diego for me. It just made it like, like much more comfortably affordable and it just like gave me a lot of peace of mind to not have to worry about rent increases as much.

15:14 Emily: Yeah. That is incredible. Okay. So did you know about that program? Or was it something that you kind of inquired about housing, and then they told you about it? Like how did the conversation go?

15:26 Maya: Yeah, it was kind of actually something that my student host who was the one like driving me around to interviews told me about, because she was also in that program. It’s kind of a weird word of mouth thing. Like the university doesn’t really advertise it, but it’s also the kind of thing where like, if you bring it up, you’re much more likely to get it. So it can be helpful if you interview at a school, you know, even if no, one’s like really mentioned any subsidized housing, maybe some don’t even know about it because they’re not in like the subsidized housing, you know, special program, just like ask around. Because sometimes just knowing about it can really help your odds of finding something like that.

Negotiation Often Starts with a Simple Question

15:55 Emily: That’s incredible. And I think that negotiation often starts that way just like by inquiring sort of innocently like, “Oh, are there any like benefits I should know about? Any special programs I should apply for?” And how did you end up actually getting it? Like, was there an application process? Or how did you know that you secured the spot?

16:13 Maya: Yeah, so basically right after I got my official acceptance to the program and they wanted to know like, was there anything else that could answer my questions or things to basically convince me to join? And at that point, I basically sent them an email saying, “I’m really interested in the program. I also got accepted to this other school, which has a similar stipend, but is in a much lower cost of living city. If there was anything that UC to do to lower my housing costs, such as this subsidized housing program, I would basically commit to UCSD right now,” is what I told them. And then I just sent that email to the grad program. They went back for like a week or two to, I don’t know, discuss something. And then they just emailed me back and said, you have a slot in the program. There was no formal application or anything like that. So it was a very informal thing. I think other people who don’t ask about the program, just get that in their initial offer letter. Like if they’re just a really competitive candidate, they might get that off the bat. So I think it varies between people, but that was how it was for me. It was a pretty informal process.

17:06 Emily: It’s amazing, I won’t say everywhere, but at some kinds of programs, what recruitment strings administrators have to pull on that you would not know about if you weren’t really just like, kind of openly communicating with them. And I think it’s really smart to just say like, “Hey, like I have financial concerns right now. I’m looking at other offers, and what can we do here to like sweeten the pot?” Because as you said, you know, you’re obviously interested in the program, you know, passionate about the program and wanted to go, but like, there’s just this one thing holding you back. And that’s honesty, but it’s also a negotiation tactic. So I’m really, really happy to like hear that story again. Were there any other ways you wanted to mention that finances played a role in your decision of where to go to grad school?

[Addendum: After the conclusion of the interview, Maya shared that UCSD is increasing the rent for on-campus housing for new tenants. Maya’s apartment would rent to a new tenant for over double the price she currently pays. Therefore, subsidized housing at UCSD for grad students matriculating in 2022 may not be a deal compared with unaffiliated housing. More info here.]

Stipend and TA Requirement

17:50 Maya: The stipend was definitely the biggest thing. The other thing to look at, I think, was whether you have to TA to get that stipend. There are some programs, especially with things that are more like a biology program, as opposed to like a biomedical program, where you sometimes have to TA multiple quarters to basically get that stipend, which can really extend your time to graduation. So even if you’re making the same amount, like if you have to be an extra year in grad school, that could cost you like a year of entry-level industry salary, that could be a six-figure difference. So having a program where you may have to TA like one quarter, or like maybe not at all, can make a really big difference to not have to like extend your graduation time, which my program, we only have to TA one quarter. So as soon as that’s done, you can just focus on research. So that’s a big help as well.

18:31 Emily: Yeah. Super, super good point. And I cover this in my course inside the Personal Finance for PhDs Community called like Decipher Your Grad Student Offer Letters or something like that. And that’s one of the points that I go into is like, what is the reason that you are receiving this stipend? What do you have to do to receive it? And if you’re receiving a stipend because you’re TAing, then that is a time commitment. It’s at a part-time employment time commitment of you that doesn’t necessarily exist at all if you’re on fellowship or if you have a research assistantship where, you know, you’re working towards your dissertation the whole time. So really, really important point for any prospective graduate students to consider. So thank you for that.

Commercial

19:09 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. The 2021 quarter 4 live Q&A call for the quarterly estimated tax workshop is this coming Sunday, January 9th. Please be aware that the deadline to make your quarter 4 payment, if applicable, is January 18th if you are not planning to file your tax return by the end of January. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Financial Transition at the Start of Grad School

20:45 Emily: Okay. So let’s kind of fast forward. You’ve chosen UCSD, you’ve gotten married, you’re starting the school year. Tell me about the move, the transition to graduate school, especially financially.

20:56 Maya: Yeah, so we moved, I think basically the day after my fellowship at the NIH ended. We just like moved right to San Diego and started getting moved in. My husband didn’t have a job lined up at that point. He has a bioengineering just bachelor’s degree. We weren’t too worried at that point because San Diego is a pretty big like biotech hub, and he was already like getting some interviews after we moved there. And so we were doing pretty well on just my stipend end of 2019. Obviously, we got to 2020 things changed a bit. He’d been getting a lot of interviews and actually already had an offer in hand. But as soon as the pandemic hit, that offer got rescinded. Companies started going remote only and didn’t really want to train any new kind of biology, tech positions like that. And so what we thought was going to be just like, maybe like you know, worst case, six-month unemployment period turned out to be like over a year of unemployment for him. So it was at that point that I was really happy that I had made the decision to choose a school that I could pay for on just my stipend. Because if we didn’t do that, we would have had a lot of debt after paying for just us that year.

21:52 Emily: Yeah. That’s I mean, you couldn’t have seen what was coming, but like your just general emergency worst case scenario like planning really kicked in there. So that’s great. I can’t imagine it was very pleasant. Do you want to share anything about how, I mean, I guess everyone was kind of not really doing anything for most of 2020, like how did it go for you in terms of like actually living on that one stipend?

Managing Living on One Stipend

22:17 Maya: Yeah. I mean, one thing that definitely helped a lot with, I think I mentioned in my original interview that I had been saving really aggressively during my postbac to get kind of an emergency fund built up. And I still had that during grad school and that was super helpful. We ended up not really needing to touch that. We didn’t have any major emergencies, but just knowing that, if something came up, like, especially, you know, what if one of us had to go to the hospital or something, we would have that cushion was really helpful. But on the other hand, with like zero cashflow every month, like I was just really hesitant to spend at all beyond my stipend. Like, you know, if we had to use some of that emergency fund, we’d have no way to replenish it at all. So we had to be kind of like kind of hermits for the whole year.

22:54 Maya: Having subsidized housing definitely helps. One of the things that helped were, like, for example, we share a really old used car that we bought in cash before we moved here. It was very cheap. And I actually don’t even use that car. I bike to lab every day. So there’s basically no like gas maintenance costs at all. We just have that for like buying groceries once a week. So that definitely lowered the cost a lot. Parking is also really expensive in San Diego, so that saved us I’m sure several hundred a month easily. And also things that weren’t really within our control, like for example, loan forbearance, like, you didn’t have to make any loan payments. If we had to make those payments, we probably would have been like bleeding money a little bit during that year, for sure.

23:30 Maya: And then also my side hustle, which we mentioned, I kind of like cranked that up a little bit during that year for obvious reasons, and my husband did some of that too, while he was applying for jobs which, you know, it doesn’t bring in that much money. You only have so much time as a full time grad student to side hustle. But having that extra couple of hundred a month was like really helpful, allowed us to kind of like, maybe once a month we’d like get some takeout and like that money would come from my side hustle. So just like those, you know, occasional things where we’re just really tired and just want some cheap Chinese food or something. Like we could actually do that without having to be super anxious about just like taking from our emergency fund for that kind of thing.

Dual-Income Household

24:02 Emily: Yeah. Thank you so much for sharing that. It sounds like a difficult time, like not really having any outlets, like sort of literally, and also financially. But, eventually the corner turned and he did get a position. And when did he get his full-time job?

24:19 Maya: He first started at the beginning of this year, so just like January 2021, making very little money, like basically the same as my stipend, which is like pretty low. But then like a month or two after that, he got a new job at a different company paying quite a bit more. So we actually have some like positive cashflow, which is like a very welcome change after more than a year of having very little money.

24:39 Emily: Yeah. That’s awesome to hear. And I guess there’s been sort of a sea change with employment generally in that time. And so he probably has a lot, I don’t know, it’s actually a good time to be getting jobs like now, or, you know, earlier this year. That sounds really good.

24:52 Emily: So finally, you had a dual income household. Did you make any changes to your finances? Aside from maybe having a little bit of, you know, loosening up on the purse strings a bit. Did you have any like financial goals that you were working towards, or anything like that?

Financial Goals with Dual Income

25:05 Maya: Yeah, definitely. It was definitely like a pretty slow process. Like I think probably for the first six months of this year, we kind of still lived like hermits, because we just didn’t know like, you know, what if he loses this job again? Like what if like there’s another resurgence in the pandemic and things close down? Like we just didn’t know what’s going to happen. But I just started getting into summer and like things were kind of semi getting back to normal, we did a couple of things to kind of like actually start not just like saving money but investing it. So we’re both really interested in like FIRE, like financial independence retire early. And we had basically had been making zero progress on that, because obviously we just didn’t have any money to invest. But now we actually are able to do things like take some of our savings and put that into our IRAs.

25:40 Maya: And we’re able to max those out this year for the first time. We also had some just for our actual emergency savings, we converted some of that into I bonds, which pay a little bit more interest, like something, I think they’re like five or 6% right now just to keep up with inflation which we couldn’t do before, because you can’t touch them for a year after you put them in I bonds. But now that we have like a bit more of a buffer, we felt comfortable doing that. So we get a little more interest there. And the other thing was that I still do my side hustle, but I’m much more selective now. I’m not just like working crazy hours all weekend. And I’m able to basically just take the jobs that like pay really well per hour and are also interesting to me. And now that money, instead of being like spent every month, I just put it all into a solo 401(k). So that’s all just kind of extra money that our budget never sees. It just goes right into our investments.

Side Hustle Balancing Act

26:27 Emily: Yeah, I want to follow up on that a little bit. So that’s cool that you’ve been able to make these extra moves in your finances, like especially doing the IRAs in 2021. That’s awesome to hear that. Yeah. Talk to me a little bit more about the side hustle. So now that you, you know, feel like you don’t to have the money coming in because you’re depending on it, you said you’re more selective. Does that mean that you’ve increased your pay rate either what you’re asking for, or just you only select jobs that pay more?

26:53 Maya: Yeah, so basically, there’s kind of a balancing act, right? So if you increase your pay, you get fewer customers, but you also like maybe you don’t need as many because you’re making more. So during the pandemic, I kind of had a certain balance where like I wanted to just like maximize money per month, regardless of like hours. But now that I’m limiting myself to closer to like five hours max per week, oftentimes less, I’m definitely cranking up the pay. Like these days, since I have a good bit of experience, I charge a hundred dollars an hour or more sometimes to offer these clients. And they’re all things that I like personally enjoy. They’re not just like boring articles that I’m slugging through. So that’s been helpful, both to just like keep me motivated, like I think I would’ve started to hate it if I had to keep doing it for just any job that would come in. Now it’s more of just like a hobby that I happen to get paid for.

27:35 Emily: Okay. Hold up. So you just said that you work about five hours a week and are looking at a hundred plus dollars per hour. So that’s 2000 a month, if you work consistently. Now that’s rivaling your stipend. I mean, I’m sure your stipend’s a little bit higher, but we’re in the same, like ballpark now. That’s incredible. And so you are, as I understand, you’re not incorporating any of that income into your budget, it’s just going straight into your individual or solo 401(k), right?

28:01 Maya: Yeah, definitely. I mean, I don’t always do five hours a week. It’s kind of the upper limit, but yeah, it’s kind of tough. Sometimes I’m even tempted. I’m like, why am I working extra hours in my lab when I could be making like 10 times this hourly rate on my side hustle? So yeah, it’s like very tempting to work more at it. Honestly, I’ve had to kind of like restrain myself.

Networking via Science Writing

28:17 Emily: That’s something that’s really, really good to be thoughtful about. Because like, so for you, does this freelance writing play into your ultimate career goals? Or is this just something you do for the time being?

28:28 Maya: It’s something I’m just trying to keep open as a door. I don’t think I’d want to be like a full-time science writer, but it’s more just like I’m meeting a lot of people at companies. Like I’m more interested in like a research biotech type position. But a lot of the jobs I do, even though they’re writing, are for like biotech and pharma companies. I’ve even had people like offer me like jobs as like maybe like if you drop out of grad school, we’ll give you this job. And I’m obviously not going to do that, but be great to follow up within a few years and be like, “Hey, I actually graduated. Can I get a job there now?” So it’s more just like those connections that I think are really valuable rather than the actual, like specific writing experience that I’m doing.

29:00 Emily: That is amazing that it can serve as a networking tool as well for your future position. But yeah, I do think it’s smart to limit the number of hours you spend on this because obviously the graduate degree and how well you do with that and how much you publish, whatever, it’s still going to matter for getting your next position. So yeah, don’t leave grad school to do your side hustle full-time. But yeah, that’s an amazing rate. I’m so, I mean, like you said, you’ve been doing it for several years, it’s been what, like four years now or something? So like you’ve built up the skills and the networks and so forth. But like, that’s awesome. So that’s rivaling your stipend, but it’s all going into investments. You’re pursuing FIRE. I do want to mention, I have, again a course inside the Personal Finance for PhDs Community called, the title is like Best Financial Practices for Your Self-Employment Side Hustle.

29:45 Emily: And it goes into the choice of what retirement account to use. If you have, it’s like basically for exactly your situation: you’re in grad school or a postdoc or whatever. You have a side income, you’re self-employed, you’re already maxing out your IRA. What do you do next? And you know, not being offered a 403(b) or whatever through your primary position. Well, because you’re, self-employed, you have the opportunity to open up a self-employment retirement account. You chose the solo 401(k). I did the same thing for my business, so I know what an incredible tool it is. But that is like, if your goal is FIRE, that is really supercharging your progress compared to what you would be doing, you know, just as a grad student who’s not side hustling, so wow.

Being Selective with Clients

30:23 Emily: How are you, I don’t know, like, it seems like there are so many benefits doing it. Like you said, the money you needed it. Now it’s more of an elective thing. And the networking. How do you stay motivated to do that work?

30:36 Maya: Yeah, I think it helps that I’m just very selective in clients. And like, for example, even if the work is interesting, if the client is even kind of like slightly annoying, like if they don’t respond quickly or they like ask for a bunch of edits and don’t want to pay you extra for it, I just like don’t have a reason to take them. So I think it helps to kind of value yourself and to charge what you’re actually valued. And I would encourage people, even if they, like, I started out like, I think like 10 or $20 an hour when I first started. But every single time I got a new client, I would ratchet up that rate just a little bit. And I was expecting like, there to be kind of a cliff when no one would hire me anymore. But like, people kept hiring me.

31:09 Maya: I think some companies like, you know, even if they’re paying me a hundred dollars an hour, if I’m only doing like one or two hours of work for them, like that’s like nothing to their company budget. So even if it feels like a really high rate to you and it makes a big difference in your budget, oftentimes companies will just like take your high rate as a sign like that you must be good at what you do, and they’re willing to pay it. So I would encourage people if you’re doing any kind of side hustle to like slowly increase it until you start to like lose clients and then you can kind of back off.

Advice for Starting Freelancing

31:35 Emily: That’s really, really good advice. And do you have any advice for someone who wants to get started with this line of work? Thinking back to when you were doing it in college, like how did you get your first few clients?

31:44 Maya: Yeah, that’s definitely the hardest part is getting your foot in the door. It helps to use Upwork and those kinds of freelancing websites. Just because if you don’t have any way to like find clients, it’s pretty hard to like get them to hire you. Thos sites, you take a pretty big kind of your pay. It’s something like 20% usually, which can feel kind of painful, especially when you have to pay like 30% ish self-employment tax on top of that. But it helps to start out there. And then sometimes if you have a long-term client, you could go just like bill them directly after you’ve established yourself on there. So using those sites is helpful. And also just kind of networking. If you know like anybody in your lab or anybody else who has some experience in the area that you’re trying to get into, they’re almost always willing to help you find the job. Like I’ve given other people who I’m friends with science writing jobs. Like sometimes if I don’t have time for a client, I’ll like send them to one of my friends who wants to get started and like, they don’t have any experience yet, but because I recommended them and they trust my opinion, they’ll get that job. So those two things together, like being on the website and getting help from other people who are in that network are really helpful.

32:45 Emily: Amazing, amazing advice. And I do want to add, we did a podcast interview with Courtney Danyel in season six, episode 17. Courtney has a business called Endless Freelance Income. So she’s a freelancer herself, plus she teaches other people how to do this. So that’s a great interview also, if you want to get started with not just freelance writing, but like a variety of sort of services that you could do on a freelancing basis. So that’s incredible.

Breaking Away from the Poverty Mindset

33:07 Emily: Maya, it’s been so wonderful to catch up with you! Is there anything else that you want to add about what’s been going on with you financially over the last couple of years?

33:14 Maya: Yeah, I think it’s just definitely been a big time of transition. We’ve gone from just like being pretty much broke, like not really broke because we had an emergency fund, but feeling very broke to actually having like more than double the income we had last year. So yeah, it’s been really nice to be able to not only work toward our investment goals, but actually be able to like, as you said, buy some things that actually improve our life a little bit. Like even just small things we never would have bought last year. Like for example, we have to carry out groceries like about quarter mile from our car to our house. And so we finally bought like a wagon, like it was like a hundred dollars to buy this wagon and like, it is the best purchase we made.

33:46 Maya: Like we never would have bought that last year, but just that’s like now it seems like a small expense. It’s like, well worth it. Like recognizing those things that like, okay, now you can actually afford these things like greatly improve your life and like probably our health so that we’re not like breaking our backs with like tons of groceries. Like that’s really nice to have. So I think it’s good to recognize, like, even while you’re pursuing your investment goals, like still save a little bit to like, not be like having that poverty mindset and trying to actually improve your life a little bit too.

Financial Independence, Early Retirement (FIRE)

34:12 Emily: Totally, totally agree. And I’ll just add another question in here. Your motivation for pursuing FIRE, financial independence and early retirement. You’re in grad school, it seems like you’re planning for a long and wonderful career. How does FIRE play or not play with your career goals?

34:30 Maya: Yeah, it’s kind of a weird thing for people to say in grad school. I think sometimes it’s like, why would you go to school for this long if you don’t want to like work your career for much longer after that? I personally don’t think I would necessarily want to fully retire once I hit that number. Partly for me, it’s just a security thing. Like, you know, if I’m in a job I don’t like, and I want to maybe take a year off and go on sabbatical and then come back and maybe it’ll take me a while to find a new job. I want to be able to do that. And even if I think for now that I really love doing what I do, maybe when I’m 45, I won’t like it anymore. Maybe I’ll never want to look at a pipette ever again, who knows.

35:01 Maya: And also just the freedom for like, for example I’m really interested in the idea of working less than 40 hours a week someday. Maybe even as a freelance basis, like not necessarily in writing but maybe as a consultant or something like that, like maybe just a freelance bioinformatician. I don’t know having the freedom to do that as well is nice. So I don’t necessarily plan to do the traditional, like I hit 45 and I have X dollars, so I’m just going to retire. I have like a lot of options available to me now.

Best Financial Advice for Another Early-Career PhD

35:26 Emily: That’s great to hear. I’m actually, well, by the time this is out, by the time we publish this, this will be out again inside the Personal Finance for PhDs Community. I’m currently working on writing an e-book. It’s going to be titled something like How to Pursue FIRE in Grad School. And so I just love it when I get to meet someone who is doing that and get their like reasoning behind it and how they’re doing it. And the strategies that you’re using are now going to be kind of featured in that e-book. So that’s awesome. If the listener is interested, you can check it out, PFforPhDs.Community. Maya, again, it’s been so wonderful to talk with you. Would you please answer, I don’t think you got to answer this the last time we talked, share with the listener your best financial advice for another early-career PhD?

36:04 Maya: Yeah. So I’d say kind of like a three-pronged approach with it. I think, I don’t remember who, some professor told me this like a long time ago, which was like invest aggressively in your future, and then invest aggressively in your current self. And then everything that isn’t those two things, like cut out pretty ruthlessly. So I think what he meant by that was basically, you know, even if you can only invest $50 a month in your IRA, like do that and commit to it. Also invest in your current self, like, you know, these are my twenties, like I’m not going to be 25 again. So like if someone’s like going whale watching this weekend and it’s a hundred dollars, like if I can make that work, I’m going to do it. I’m not going to be like, “Oh, that could have been going into my retirement.”

36:39 Maya: So it kind of balance those things and be pretty aggressive about doing the things that are really important for your current self and your development as a human. But everything that isn’t those things, like just cut out. Like, you know, I could buy a car, it would make my life mildly more convenient to not have to bike every day. But that’s not something that I feel like really enriches me as a person, or it makes me that much happier. So I don’t do that. So I think that’d be my advice is to figure out like, what is really important to you now and in the future. And don’t feel any hesitation about having to cut out things that aren’t in those two categories.

37:08 Emily: I have never heard it put that way before, but that really resonates with me in my like current mindset towards money. So I’m really glad that you shared that with us. Maya, thank you again for joining us! It’s been wonderful to catch up with you!

37:20 Maya: It’s good to talk to you! It’s been a good three years overall, despite the rocky start.

Outtro

37:29 Emily: 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? I have 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/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Catching Up with Prior Guests: 2021 Edition

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Emily published the first episode of this podcast in July 2018. This is the one hundred and fiftieth episode, and over the last three and a half years, the podcast has featured 134 unique voices in addition to Emily’s. The last episode in 2021 catches up with the guests from Seasons 4 through 6. The guests were invited to submit short audio updates on how their lives and careers have evolved since the time of their interview. They also included their best financial advice for an early-career PhD if their answer has changed since the initial interview.

Link Mentioned in this Episode

Episode image of Dr. Emily Roberts with the title "Catching Up with Prior Guests: 2021 Edition" and the subtitle "Money Stories with Various Contributors"

Teaser

00:00 John: You know, life doesn’t wait and you can still be financially sound while in graduate school.

Introduction

00:10 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts.

00:19 Emily: This is Season 10, Episode 20, and today I am featuring many guest voices! I published the first episode of this podcast in July 2018. This is the one hundred and fiftieth episode, and over the last three and a half years, the podcast has featured 134 unique voices in addition to my own.

00:41 Emily: For our last episode in 2021, I thought it would be fun to catch up with the guests from Seasons 4 through 6, and a couple from earlier seasons as well. I invited them to submit short audio clips to update us on how their lives and careers have evolved since the time of our interview, as well as to provide their best financial advice if that has changed since our initial interview.

01:03 Emily: The audio clips in this episode are ordered by when the original episode was published. If you’d like to circle back and listen to any of the previous interviews, you can do so in your podcatcher app or at my website, PFforPhDs.com/podcast. To keep up with future episodes, please hit subscribe on that podcatcher and/or join my mailing list at PFforPhDs.com/subscribe.

01:28 Emily: You’ll hear an update from me first, followed by the rest of the guests. Happy listening, and I am wishing all good things for you in 2022!

Dr. Emily Roberts

01:43 Emily: Hi! This is Emily Roberts from Personal Finance for PhDs. I am of course the host of this podcast and you hear from me every week!

01:52 Emily: It seems strange to say, but 2021 was a banner year for me and my family.

01:59 Emily: On the personal side, my husband and I bought our first home, which I discussed in great detail in Season 8 Episode 18. We now live in the San Diego area, which has been our dream for over a decade. Our children are in kindergarten and preschool, and after being out of school for over a year due to the pandemic, it’s really wonderful for our family to be in a routine and for them to be around their peers. We are loving playing tourist in San Diego and enjoying the incredible weather and wealth of outdoor activities.

02:32 Emily: As for my business, Personal Finance for PhDs, I am so grateful that it has grown quite a lot in the last year. I’ve simplified my paid offerings so that I can focus on what seems to be in highest demand: 1) my personal finance seminars, both live and pre-recorded, which are hosted by universities; 2) my tax workshops, which can be purchased by individuals or in bulk by universities; and 3) the Personal Finance for PhDs Community, which individuals can join. To each of you who have joined the Community or one of my workshops in 2021 or recommended me within your university, you have my sincere thanks. The reason I can continue to create this podcast and all of my free resources is the revenue that I generate in these other areas.

03:20 Emily: I’m really looking forward to starting 2022 off strong with tax season and admissions season. If you know any PhDs-to-be who need help in either of those areas, please send them my way!

03:32 Emily: Thanks for listening to my update! If you want to get in touch, you can visit my website at PFforPhDs.com or find me on Twitter @PFforPhDs.

John Vsetecka

03:49 John: Hi everyone. It’s John Vsetecka from Season 2, Episode 2 on the personal finance for PhDs podcast. Several years ago, I got to talk with Dr. Emily Roberts about negotiating PhD offers and I wanted to just offer a quick update on how I think that has benefited me up until this day. So since that time, many things have happened. I got married during this time. I’ve moved and now I’m actually living outside of the US. I am currently in Kiev, Ukraine working on the last stages of my research for my dissertation, so I am now at the tail end of my graduate career.

04:29 John: When I last spoke to Dr. Roberts, we discussed how to go about negotiating PhD offers and I want to offer an update now about why I still think you should this. When I was applying to programs prior to 2017, I was able to successfully negotiate offers at several universities. This has really, I think benefited me to this day because I was able to choose the school, not only with a great funding package, but also great benefits that I’ll talk about in just to second. I know things have changed since the pandemic and many programs last year halted admissions, and this has made many programs and departments more competitive, and so you might be a little hesitant to negotiate an offer if you receive one, but I still think you should. If you receive a funded offer and you should absolutely make sure that any offer you receive is funded, this is really important, I think you should still ask if there’s anything else that that department or program can do for you.

05:29 John: Now, this can mean more money. This can mean insurance benefits. This can mean grant money, travel money, or any other resources that they have. See if there’s anything else that they can tack onto your package to help you be more successful in your program. And if you’re fortunate enough to have multiple offers, you should still negotiate these and see which one is the best one for you. And this might not be the one with the most money, but I think the ones that tend to offer the most money and the most incentives tend to be the best bet for your graduate career because life doesn’t wait and you can still be financially sound while in graduate school, if you can start by looking at what your department can offer you so you can plan ahead and make the best of your earning while you’re in graduate school.

06:18 John: So my advice remains the same. Again, if you receive multiple offers, don’t be afraid to ask. In some ways this is just like a job offer. It’s okay to negotiate. It’s okay to ask what else they can do for you. You’re going to do a lot for them. Don’t be afraid to reach out to the director of graduate studies or whoever’s in charge in your department and see what else they can do for you, if your package sort of insinuates that maybe there’s more that is available. I’ll leave you with that and of course, if you have any other questions about graduate school or negotiating offers, you can always get in touch with me on Twitter. My handle is @JohnVsetecka, or you can feel free to email me, it’s [email protected]. Best of luck to those of you who are applying and I hope you have successful negotiations.

Dr. Lourdes Bobbio Smith

07:22 Lourdes: Hi listeners. My name is Dr. Lourdes Bobbio Smith and I’ve been on a few episodes of the podcast. I was first on Season 3, Episode 11, where I gave a budget breakdown as an NDSEG fellowship recipient at Penn State University. I was also on Season 5, Bonus Episode 1, where I discussed my life as we entered social distancing in early 2020, and on Season 6, Episode 18, where I discussed some best practices as a side-hustling graduate school. Since those episodes, I have defended my PhD, started a business and gotten married.

07:55 Lourdes: In my first episode I spoke about how I use targeted savings accounts to save for various mid- and long-term financial savings goals, which hasn’t changed. My husband and I were able to fund our wedding with a combination of the wedding targeted savings fund I discussed in the episode, as well as savings my now husband had, and some generous gifts from our parents.

08:15 Lourdes: Since getting married and joining finances with my husband, we still use the target savings accounts, but we’ve modified what those different savings buckets are. Buying a house, which was previously a long term goal, has now become a more short to mid-term goal as we are looking to settle down in a house of our own. We also recently adopted a cat and my husband’s car is on the older side, so we are making sure to keep a pet fund and a car fund well funded as part of our monthly targeted savings. Investing is also a big priority in our household, and we’ve been able to max out our Roth IRA for 2021 and invest outside of the Roth in taxable brokerage accounts.

08:52 Lourdes: Post-PhD I’m working on a few different things. I have a job as a research associate at Penn State, I continue to work with Emily on this podcast, and I’ve also started a wedding stationery business this year. It’s been a fun adventure to learn both the management and financial sides of owning a business. I initially invested some of my own money, but it’s been self-sustaining for the last few months and I will even be turning a profit in my first year in business. 

09:17 Lourdes: I was asked to give my best financial advice for early-career PhDs and I would say, invest as early as you can, even if it doesn’t seem like you can contribute a lot. When I was first on the podcast, I was early in my own investing journey, only able to contribute a little each month, and it seemed like the progress was slow growing. But even in the two years since then, I’ve been able to see how powerful compound interest can be when it comes to growing your money.

09:44 Lourdes: If you’d like to connect online, you can find me on Twitter @lourdesb1012, that’s l o u r d e s b 1 0 1 2. You can also find my business on Instagram @cardsmithdesignstudio. Thanks for listening and have a good new year!

Jane CoomberSewell

10:08 Jane: Hi Emily! It’s Jane CoomberSewell of CoomberSewell Enterprises here, and we last chatted back in Season 2 (editors note: this should be Season 4), Episode 8, and we talked a lot about working on a budget, and self-sufficiency when you have a family and you’re doing a PhD and you’re also running a business. We talked a lot about menus, budgeting, gardening, both for practical reasons and for your mental health. And in terms of early career financial advice, none of that’s really changed except remember to have some fun. So occasionally after you’ve obviously dealt with all the bills, go and have a drink with friends, or have a meal out, or go and do what we did at the weekend, which was go and have a game of bowling, but only with adults, no children in tow. It was lovely.

11:03 Jane: Thanks so much for the timing of this as well. I finally got to my graduation yesterday. Within the business, Joyce, my other half has very much rebranded herself as an autism advocate and that’s going really well. And for me, I’m concentrating on research, but not in the academic sense. So at the moment I have two family biographies that I’m writing that people are paying me, have commissioned me to write, as well as attempting to turn my thesis into something slightly less theoretical for the commercial market. That’s my update. Everybody take good care and if you want to get in touch, it’s [email protected].

Abigail Dove

11:53 Abigail: My name Is Abigail Dove, and I was on Season 4, Episode 9, where Emily and I discussed the graduate Student Savings Act of 2019. I spearheaded the endorsement of this bill by the Federation of American Societies for the Advancement of Science, also known as FASAS, as part of a science policy fellowship. The graduate student savings act is a bi-partisan bill that allows graduate students and postdocs to be able to contribute income from a fellowship stipend to an individual retirement account or IRA. Previous IRS wording prevented contributions from fellowships as they were considered unearned income.

12:27 Abigail: Since we recorded that episode, I have a few big updates on the personal side. I have a daughter who is 18 months old, and I will be defending my PhD in a couple weeks and looking forward to the post-graduate student life.

12:40 Abigail: The big update in relation to the episode where I appeared on is that trainees can now contribute to IRAs while receiving fellowship stipends. The language from the Graduate Student Savings Act was added to an omnibus spending bill HR 1865, and was passed into law at the end of 2019. Emily did touch on this update after our interview to share the good news with everyone in a bonus episode in season four, for more information, be sure to check out that episode. But this is really fantastic news for anyone on fellowship stipends and wants a say for retirement.

13:11 Abigail: My updated financial advice has thus changed a result of the new laws. Since everyone is now allowed to contribute to an IRA, I highly recommend that if you have the financial ability to do so, do it. There’s a maximum contribution cap for IRA accounts and right now that cap is set at $6,000 for anyone under the age of 50. Additionally, there are income caps, but graduate student stipends are unfortunately well below those income caps so not something that we often have to worry about. That $6,000 cap may sound intimidating, so contribute what you can or put aside a fraction of your paycheck towards an IRA contribution. It’s never too early to start contributing to a retirement account, and it’s a good spending habit to start. And no amount is too little.

Commercial

13:57 Emily: Emily here for a brief interlude! Are you a graduate student, postdoc, or early-career PhD considering buying your first home in the foreseeable future? If so, I invite you to join the Personal Finance for PhDs Community for a Book Club discussion of First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes by Scott Trench and Mindy Jensen of BiggerPockets. I and all the Book Club participants will read the book and come together for a one-time live discussion in January 2022. This is perfect timing for anyone with an eye on the spring or summer 2022 peak buying season. Since it might be hard to find this book in a public library, I will give you a copy of the book after you join the Community. If you want to join the Book Club for First-Time Home Buyer, please fill out the survey, including your availability for the discussion, at PFforPhDs.com/BookClub/. That’s P F f o r P h D s dot com slash B o o k C l u b. Now back to our interview.

Patrice French

15:03 Patrice: Hi my name is Patrice French, I was interviewed on Personal Finance for PhDs on November 25th, 2019 Season 4, Episode 15. I am still a full-time employee and am near the end of my doctoral program. I will defend and graduate in spring 2022. Since then I have made some major financial changes. I’ve sold my house, given the strong seller’s market. I have paid off all of my debt except for my student loans and will be eligible for a student loan forgiveness in March of 2022. I plan to transition to a career outside of higher education, in industry, and will likely relocate. As far as the best financial advice I can give for early career PhD is really create some clear goals in mind and create a plan from which to meet those goals. But don’t put a lot of pressure on yourself if things come up. Save, save, save! I have multiple savings accounts for things so that it doesn’t really dip into my income. So if I have car repairs, I have a car repair savings account and things of that nature. And definitely don’t pay for an educational program if you don’t have to. I can be reach on Twitter at @FrenchieMSW. And that’s it.

Dr. Zach Taylor

16:44 Zach: Hey everyone. This is Zach Taylor. I was on Season 5, Episodes 10 and 11. I’d like to give a little bit of an update. I’ve taken a new position. I’m now the assistant director of admissions for communication at Texas State University. It’s the first institutional position that I’ve had after having my PhD because I graduated into the pandemic and that was a very tough job field. But I wanted to give a few updates about how I think a little bit of my advice has changed since COVID 19 has happened and has really changed the landscape, especially of graduate education in the social sciences.

17:27 Zach: I know a lot of the harder sciences like your chemistry or engineering requires graduate students to be in a lab, working with physical materials, but a lot of social sciences PhDs, things like higher education where I came from, sociology, psychology at times, does not require you to be physically in a classroom. And I think people aspiring to earn a PhD, people in graduate school right now need to think how important is the on campus, in the classroom environment? How important is that physicality? And can you save money by taking online classes or taking hybrid classes. Think to yourselves about how much time and money is spent on commuting, especially in urban areas, coming from an Austin perspective. If I was still going to school living where I live now, I would have at least an hour long commute, including a car ride, a bus ride, and a walk. And that hour could be used to make money, could be used to do academic work.

18:29 Zach: So I think that might really change my perspective on the advice that I would give for an early career PhD is really considering online options, in addition to everything else I spoke about — the cost of living in your area, what you’re willing to go without and how you can side hustle to make a little bit extra cash. If anyone has anything that they want to reach out to me, please do so. My email is [email protected], just my initial ZT at U Texas dot edu. Thanks everyone.

Dr. Rachel Blackburn

19:08 Rachel: Hi, this is Rachel Blackburn and here is my update. So since I last recorded the episode of personal finance for PhDs (Season 5, Episode 12), I actually got thinking about finance quite a bit. I was in a tenure track position, teaching as a professor, but I decided that the thought of not getting tenure, and that forthcoming potential instability was a little bit much for me. And I also considered what if I do get tenure and then I’m committing to this place for the long term and is that what I really want? And the thought hit me, when’s the last time I got to choose where I lived? I also took a look at the finances because I was teaching at a public university, I was able to take a look at salaries and I could see that even by the time I might get full professor, if that was what was in the cards for me, that my salary would not go up by a whole lot. It occurred to me that I really wouldn’t reach my financial goals. So I decided to leave academia.

20:18 Rachel: I’m still researching and publishing and writing, but I have left teaching and I’m now a learning consultant for a public company. In leaving my position as a professor and moving on to this company, I gave myself a 70% raise. I’m now making more than I would be if I were a full professor at my previous university. Now I’m learning all kinds of things about employee stock purchase plans and things like that. So that’s actually where I’m at now. I’m saving more money than I ever thought I would. And I feel like I’m meeting my goals a lot faster, so it’s great. And I’m still teaching, I just do it now on behalf of developing training material for a company. That’s where I’m at and thank you again. Good luck everyone! Bye!

Courtney Danyel

21:19 Courtney: Hi! This is Courtney Danyel. I was on (Season 6) Episode 17 of Personal Finance for PhDs, and my topic was how freelancing can take your career from academia to affluence. And that’s my brand AcademiaToAffluence.com, where I teach other people with an academic background how they can learn to freelance and grow their online income like I did. We talked about how I actually only work maybe 15 or 20 hours a week, but I earn full-time income as a freelance writer. And the reason I’m able to do that is because I find writing gigs that are highly specialized in my niche and so I’m able to earn higher income for work that takes me less time to do.

22:04 Courtney: We also talked about how freelancing gave me the freedom to travel around the world and live wherever I want and so I’ve been spending the past seven years actually living in Africa, in Ethiopia. Since that episode, which was back in August, 2020, I’ve actually immigrated back to the United States, where I continue to freelance and I continue to work maybe 15 or 20 hours a week on that, but now actually have another part-time job here in the United States also. Another great thing about freelancing is that it gives you the flexibility if you wanna have multiple careers you can have them, and you can earn full-time wage as a part-time influencer and pursue a career in academia or elsewhere, which is really nice. That’s something that’s changed in life since I was first on the podcast.

22:53 Courtney: My best financial advice for any early career PhD is to diversify your income. Give yourself options. Be a freelancer, be an academic, have your own business, do something on the side, but never put all your eggs in one basket and always have options for yourself so that when life changes or you want to make a change, like I have recently, you can do that. If anyone has questions about applying your skills from academia to a freelance career like I have done, please do shoot me an email. You can contact me at [email protected]. Thank you!

Meryem Ok

23:36 Meryem: Hi everyone, this is Meryem Ok recording on Friday, November 26, 2021. While I typically work behind the scenes as an editor for the podcast, I was featured in Season 6, Episode 18, along with fellow Virtual Assistant Lourdes Bobbio, for an episode about Best Practices in Side Hustling During Graduate School. As I mentioned in that episode, one of the reasons that I’m grateful for my side hustle is that the extra income provides me with a cushion for those occasional purchases that might happen outside of my usual spending habits. This really comes in handy especially around this time of year when there are a lot of birthdays in my family, in addition to the holiday season, so my spending on gifts and eating out tends to spike up a bit.

24:24 Meryem: This past semester, one of the financial adjustments that I made was when my university moved from paying fellowship recipients on a monthly basis to a once-per-term model. At first, I was pretty uneasy about the change, but after talking to Emily and sitting in on some town halls, I felt more prepared and ready to strategize. When that first lump sum arrived in August, I immediately contributed part of it to my Roth IRA and moved most of the remainder into a high-yield savings account. If you want to learn more strategies, check out Emily’s blog post, “How to Financially Manage a Once-Per-Term Fellowship Paycheck.”

25:06 Meryem: As a personal and professional update, I recently changed my Twitter username, so it’s now @Meryem_T_Ok, if anyone is curious to learn more about my MD-PhD journey and intestinal stem cell research. Shoutout to all my fellow grad students on the research grind – I’m rooting for you and hope you have some time to recharge in the coming weeks. 

Outtro

25:37 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved!

Emily: If you’ve been enjoying the podcast, here are 4 ways you can help it grow: (1) Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. (2) Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. (3) Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. (4) Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps!

Emily: The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

How to Pursue FIRE in Graduate School

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In this episode, Emily shares the first section of a written guide she recently added to the Personal Finance for PhDs Community, titled How to Pursue FIRE in Graduate School. FIRE stands for Financial Independence / Retire Early, and it’s a big movement among personal finance enthusiasts right now. At first, Emily didn’t believe graduate school and the pursuit of FIRE were compatible, but the many interviewees she’s had on the podcast who are pursuing a PhD and FIRE simultaneously changed her mind. In the introduction, Emily introduces FIRE and the general ways people pursue it and lists the four biggest levers a graduate student could pull to pursue FIRE right away.

Links Mentioned in the Episode

Introduction

Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts.

This is Season 10, Episode 19, and today I’m going to read to you the introduction to a written guide that I recently added to the Personal Finance for PhDs Community, titled How to Pursue FIRE in Graduate School. FIRE stands for Financial Independence / Retire Early, and it’s a big movement among personal finance enthusiasts right now. I have to admit that at first I didn’t think graduate school and the pursuit of FIRE were compatible, but the many interviewees I’ve had on the podcast who are pursuing a PhD and FIRE simultaneously changed my mind. In the introduction, which I’ll read to you momentarily, I introduce FIRE and the general ways people pursue it and list what I think are the four biggest levers a graduate student could pull to pursue FIRE right away.

If you are pursuing FIRE or are interested in it, I’d love to hear from you. Please join the Personal Finance for PhDs Community at PFforPhDs.community right now, today. Once you’re a member, you can do two things:

  1. Read the rest of the guide, which goes into detail about all the financial opportunities graduate students have to pursue FIRE, from increasing their incomes to building assets to mindset work.
  2. Join me and other Community members for a special live discussion and Q&A call on Wednesday, December 15, 2021 at 5:30 PM Pacific Time. We have live calls like this once per month, and this month’s is dedicated to the topic of FIRE. I really want to hear from you. I’m going to continue to expand and edit the guide based on the ideas and experiences of Community members and future podcast interviewees.

In case you’re listening to this after December 2021, no worries. You can still join the Community to read the current incarnation of the guide and chat with us about FIRE in the Forum or the next upcoming monthly call. Again, go to PFforPhDs.community to sign up!

One last note. I reference a bunch of previous podcast episodes in the introduction. All these episodes are linked in the show notes, which you can find linked from PFforPhDs.com/podcast/.
Without further ado, here’s the introduction to How to Pursue FIRE in Graduate School.

How to Pursue FIRE in Graduate School: Introduction

I was in graduate school when the current incarnation of the FIRE movement started picking up steam. At that time, the acronym FIRE (financial independence / retire early) was not yet in use, and people focused mostly on the “retire early” goal—not retiring at 55 like some Boomers had, but retiring by 30 or 40. Pete Adeney of Mr. Money Mustache was one of the leading voices, having achieved early retirement at age 30 by combining a well-paid engineering career with rigorous frugality.

At first, I found the idea of early retirement to be largely unappealing. The chief reason was that graduate school was supposed to be the foundation for a long, meaningful, fulfilling career… Why would I plan to retire early from that already? Why would any PhD (a group I was growing more interested in creating content for)? I couldn’t get behind that idea.

Thankfully, my disinterest in FIRE in my mid-20s didn’t diminish my passion for personal finance writ large, and I still invested, practiced frugality, and attempted to increase my income to the best of my ability and knowledge at that time.

My view is different now, a decade later. While I still don’t consider myself part of the FIRE movement, I do see its appeal, even for PhDs.

1) I’ve changed: I’m ten years older. I have children now. I’ve switched careers, and I’m a business owner. I earn and spend much more money than I did during graduate school. My and my husband’s parents have retired (at a traditional age). I better understand why having the financial ability to downshift, change, or stop active work before age 70 is attractive.

2) The FIRE movement has changed: There’s a greater emphasis on financial independence rather than early retirement. The featured voices are more diverse. There are numerous well-documented paths to achieve FIRE, not just the earn-a-lot/spend-very-little model from Mr. Money Mustache.

3) Most importantly, I’ve met numerous graduate students and PhDs who do identify as part of the FIRE movement. They don’t see a contradiction between pursuing a PhD-type career and financial independence simultaneously. I’ve learned from their philosophies and methods. The Personal Finance for PhDs Podcast interviews I’ve published that touch on FIRE have been with:

In this guide, I won’t attempt to convince you to pursue FIRE—because I haven’t fully convinced myself. I will show you how you can pursue FIRE as a funded PhD student. We will explore multiple potential strategies, and I am confident that you will be able to adopt at least one of them.

How you pursue FIRE during graduate school will look different than how you pursue it when you have a post-PhD “Real Job,” but you can get started right here, right now.

What is FIRE?

FIRE stands for Financial Independence / Retire Early. FIRE is a movement within the broader personal finance community that has gained popularity in the last decade, roughly coinciding with the long bull stock market post-Great Recession.

Being financially independent (FI) means that you no longer need to work for an income to maintain your lifestyle and that you expect to maintain this status until your death. Once you cease working to generate an income, you have retired. The early part of the name refers to achieving financial independence earlier than the typical retirement age of 70-ish. Some superstars in this movement reach FI by age 30, while others set their sights on age 40 or 50.

Broadly speaking, there are three common ways to achieve FIRE, and some people use a combination:

  1. Purchase a portfolio of paper assets (e.g., stocks and bonds) from which you can draw an income
  2. Buy or build an asset or set of assets that generate income, such as a business or real estate portfolio
  3. Qualify for a pension, e.g., after 20 years of military service

I’m going to omit the option of a pension from the remainder of my discussion because 1) it’s not common for people in my audience to qualify for one, 2) within the FIRE movement it’s typically combined with another strategy as well, and 3) there are other good resources on pensions specifically.

How you determine that you have achieved FI is beyond the scope of this guide. Our focus is on the start of the journey, the pursuit of FI, and how to do it during graduate school.

However, to give you a rough idea, to know that you are FI you must have a good grasp on how much money it takes to sustain your lifestyle, i.e., how much you spend yearly. For example, FatFIRE is considered a yearly spend of $100,000 or more, while LeanFIRE is considered a yearly spend of $40,000 or less.

If you have a pension or own a business or real estate portfolio, the amount of income it generates should be more than the amount of money you spend for you to be considered FI. With respect to paper assets, a popular rule of thumb based on the Trinity Study is to have a portfolio of twenty-five times your yearly spend. For example, if you want to live on $40,000 per year indefinitely, adjusted for inflation, your portfolio should be valued at $1,000,000 or more.

How do you pursue FIRE?

How exactly you will pursue FIRE depends a great deal on your personality, career goals, and lifestyle desires.

At some point, you must create or purchase assets of the type I listed above. While you can start on that during grad school, creating or purchasing assets does not have to be the first step on your journey to FIRE, depending on the rest of your financial picture. If you are in debt, your first step may be to repay debt. If you have no savings or little savings, your first step might be to save up cash. If your income is low or unreliable, your first step might be to increase your income so that you don’t rack up any debt.

I recommend following the eight-step Financial Framework that I developed for use by graduate students and early-career PhDs. It will help you decide which financial goal is best to pursue at any given stage in your financial journey. You can find this Framework detailed in several resources inside the Personal Finance for PhDs Community, including the ebook The Wealthy PhD and the recorded workshop Optimized Financial Goal-Setting for Early-Career PhDs.

In brief, the Framework Steps are to:

  1. Save a starter emergency fund
  2. Pay off all high-priority debt
  3. Prepare for irregular expenses
  4. Invest a minimum percent of your income for retirement
  5. Pay off all medium-priority debt
  6. Save a full emergency fund
  7. Invest more for retirement and/or other goals
  8. Pay off all low-priority debt

The Framework is fully compatible with the pursuit of FIRE, though a FIRE adherent will likely move through the Framework steps faster than the average and may pursue additional financial goals such as purchasing real estate.

There are two less tangible but no less important ways that I recommend that you pursue FIRE starting in graduate school, both of which involve your own development.

1) Your career. I am confident that one of the major reasons you entered graduate school was for career development. Using your time in graduate school to set yourself up for a fulfilling and well-paying career is vital. Do not lose sight of this goal in your pursuit of FIRE. Your future, higher income is going to play a major role in how fast you will achieve FIRE. On the flip side, if a PhD no longer figures into your vision for your future, do not stay in graduate school; jump ship for a higher-paying job.

2) Your mindset and systems. To achieve FIRE, you must have a certain kind of money mindset and well-established systems and habits. You will continually develop these in your pursuit of FIRE. Even if you are unable to increase your net worth much during graduate school, pursuing your career and mindset development now is worthwhile to pay major dividends later.

What makes grad school different?

Your pursuit of FIRE during grad school is likely to look quite different from how you would pursue it if you were not in grad school or how you will pursue it post-PhD.

Generally speaking, PhD students accept a low stipend in exchange for training that—we hope—will qualify them for more lucrative jobs later on. They could be making more money right now in another job, but graduate school is a long-term career investment. Blanket personal finance advice to switch jobs or negotiate to increase your income does not apply well for graduate students (although there are many ways to increase your income, which I cover later in this guide).

In non-pandemic times, most graduate students are required to live in close proximity to the university they attend, although some may be permitted to finish their degrees remotely. For the former group, geographic arbitrage is not available. Geographic arbitrage, a common FIRE strategy, is when you choose to live in a low cost-of-living area while maintaining an income more suited for a high cost-of-living area so that you can boost your savings rate.

Finally, graduate school is a major time commitment. Few PhD students consistently cap their work weeks at 40 hours. You may have less time for outside income-increasing or asset-creating pursuits during grad school in comparison with other times of life.

My Personal Favorite Steps

In the second half of this guide, I will explore numerous possible strategies to further your FIRE journey during grad school. Some of them are what I call “big levers,” which are strategies that are virtually guaranteed to greatly increase your available cash flow and are possibly unusual choices for a graduate student. This increased cash flow can then be saved, invested, or used to repay debt. In your pursuit of FIRE during grad school, I think it will be very helpful for your psychology to pull one of these big levers if you’re able to. It will be clear to you that you are serious about your commitment to FIRE, which will help keep you on the path.

I want to give you a quick preview here as to what I believe these big levers are before we go through all the strategies in much more detail.

Big lever #1 is to choose a graduate program that provides a 12-month stipend that is well above the local living wage. If you’re a prospective graduate student, simply don’t consider any offers that fail to meet that bar, even if they are good fit for you otherwise.

Big lever #2 is to commit to applying for awards like it’s your part-time job—everything from multi-year, full-stipend fellowships to small poster competitions.

Big lever #3 is to radically reduce or eliminate your housing expense. Two potential ways you can achieve that are to house hack or serve as a resident advisor.

Big lever #4 is to start a side business with the potential, at least, to pay you a high hourly rate. You’re most likely to generate a high pay rate by employing the skills and knowledge you’ve developed during your graduate program.

If you can’t pull one of these big levers in your remaining time in graduate school, that’s fine. Put in place one of the smaller strategies from this guide, and if possible keep stacking those up throughout your time in graduate school.

Personally, even though I hadn’t committed to FIRE when I was a graduate student, I was putting a lot of effort into my personal finances. I didn’t know about these big levers or most of the other strategies I’ll discuss in the second half of the guide. I pulled just one big lever by accident, which was to attend Duke for my PhD in biomedical engineering. I wasn’t at all considering the stipend when I made that decision, but I realized later what a boon it was. My stipend was approximately 30% higher than the local living wage, which meant that with careful budgeting I could sustain a decent savings rate.

Over our seven years of PhD training, my husband and I increased our combined net worth by over $100,000. You can hear all about how we did that in Season 1 Episode 1 of the Personal Finance for PhDs Podcast. Now, seven years removed from when we defended, I can clearly see that the time value of money continues to honor those early efforts, even though we earn and save much more post-PhD. That money forms the bedrock of our current financial security.

By applying just one of the big levers or a few of the smaller strategies in this guide, I firmly believe that you also will accelerate your progress toward FIRE, even as a graduate student. Many of the people I’ve interviewed on the Personal Finance for PhDs Podcast have far exceeded my own degree of financial success using the strategies I’ll share with you next.

Conclusion

It’s Emily again! That is the end of the introduction to How to Pursue FIRE in Graduate School. If you liked what you heard and want to read about all the strategies and join the live call on Wednesday, December 15, 2021, please join the Personal Finance for PhDs Community at PFforPhDs.community. I look forward to hearing your thoughts!

Outro

Listeners, thank you for joining me for this episode!

pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved!

If you’ve been enjoying the podcast, here are 4 ways you can help it grow:

  1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use.
  2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website.
  3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes.
  4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs.

See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps!

The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC.

Podcast editing and show notes creation by me, Emily Roberts.

This Grad Student Purchased a House with a Friend

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In this episode, Emily interviews Courtney Beringer, a second-year PhD student in civil engineering at Oregon State. Courtney joined the Personal Finance for PhDs Community near the start of grad school; the Community taught and encouraged her to create an emergency fund, open and fund a Roth IRA, file an accurate tax return, and calculate and pay her quarterly estimated tax on her NSF GRFP income. When Courtney started grad school, she was curious about the possibility of buying a home, and over time decided to purchase a house with a fellow grad student. By renting out two of the bedrooms in their house, Courtney and her friend have nearly completely eliminated their housing expense, even in a market where it wasn’t possible to buy on a single grad student income. Listen through the end of the episode for short bonus interview with Sam Hogan, a mortgage originator specializing in graduate students and PhDs, for his take on Courtney’s co-borrowing strategy.

Links Mentioned in the Episode

This Grad Student Purchased a House with a Friend

Teaser

00:00 Courtney: I know some people might be wondering, like, why would I buy a house in somewhere where I’m only going to live for four or five years? But like, I’m not paying rent or a mortgage right now. And I also get to hopefully sell my house in three to four or five years and make money off of its appreciation. And maybe I don’t sell in four to five years and I could actually move away and I can hire a management company to manage tenants. So there are possibilities beyond just the time where you’re physically in that city to use your house hack.

Introduction

00:40 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 18, and today my guest is Courtney Beringer, a second-year PhD student in civil engineering at Oregon State. Courtney joined the Personal Finance for PhDs Community near the start of grad school; the Community taught and encouraged her to create an emergency fund, open and fund a Roth IRA, file an accurate tax return, and calculate and pay her quarterly estimated tax on her NSF GRFP income. When Courtney started grad school, she was curious about the possibility of buying a home, and over time decided to purchase a house with a fellow grad student. By renting out two of the bedrooms in their house, Courtney and her friend have nearly completely eliminated their housing expense, even in a market where it wasn’t possible to buy on a single grad student income. Listen through the end of the episode for a short bonus interview with Sam Hogan, a mortgage originator specializing in graduate students and PhDs, for his take on Courtney’s co-borrowing strategy. You’ll be able to hear in the course of this interview just how excited I am to bring Courtney’s story to you. I am quite bullish on house hacking for graduate students, and I believe Courtney’s strategy can make it accessible to far more graduate students.

02:01 Emily: If you get excited about home ownership during this episode, whether as part of a house hack or not, I have two special upcoming events to invite you to. First, on December 16, 2021, Sam Hogan and I will hold a free live Q&A call where we answer any and all questions pertaining to becoming a first-time homebuyer. This is a perfect event to attend if you’re getting your finances prepared to purchase a home next spring or summer. Go to PFforPhDs.com/mortgage/ to sign up for the call. Second, I am hosting a live Book Club conversation in January 2022 on First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes by Scott Trench and Mindy Jensen inside the Personal Finance for PhDs Community. I’ll even buy you a copy of the book after you join the Community. Fill out the short form at PFforPhDs.com/bookclub/ to indicate your interest in the conversation and I’ll be in touch about scheduling! Without further ado, here’s my interview with Courtney Beringer.

Will You Please Introduce Yourself Further?

03:13 Emily: I am very pleased to have joining me on the podcast today, Courtney Beringer. She is a second-year graduate student at Oregon State in civil engineering, and she is a founding member of the Personal Finance for PhDs Community, which you can find at pfforphds.community. So, what we’re going to discuss in today’s episode is how the Community has helped helped advanced, help shape Courtney’s finances in this first year of graduate school. And in particular, we’re going to focus a lot on Courtney’s house hack, which I’m really, really excited to learn more about and tell you more about. So, Courtney, thank you so much for joining me on the podcast. And will you please tell the audience a little bit more about yourself?

03:53 Courtney: Yeah, thanks for having me, Emily. I’m happy to be here. Yeah. As she said, my name is Courtney. I’m from Iowa, but moved to Oregon for grad school. I have an undergraduate degree in mechanical engineering and I’m here for civil engineering. And yeah, in my second year of my PhD, I have a few more left, looking to do a postdoc after that and become a faculty member.

Finances Before Grad School

04:16 Emily: Awesome. Well, take us back to like when you were not yet enrolled in graduate school, but thinking about graduate school. What were your finances like at that time? And also what was your outlook about finances in graduate school?

04:31 Courtney: Yeah. Overall, I felt comfortable in my finances. I’d worked a lot of jobs in undergrad, and I actually took a year and a half break between undergrad and grad school and worked a full-time engineering job, which paid pretty well. I already had a really decent savings and I had mutual funds, but I basically knew nothing about retirement or buying a house or perhaps how I knew I was going to go to a lower income going to graduate stipend and how that might affect my change in lifestyle as well.

Finding and Joining the PF for PhDs Community

05:07 Emily: And so tell us about how you, I guess, came to find me and Personal Finance for PhDs and why you joined the community.

05:15 Courtney: Yeah, so about two years ago now, I applied for grad school and started getting offer letters coming in and wanting to understand how to compare them. And I was applying for a lot of different fellowships and wondering how that could be leveraged in my offer letters. And then I found Personal Finance for PhDs, I believe on just by Google searching and finding the website and then finding Emily’s resources and reaching out for that like 15-minute call. And feeling like this Community, it was really somewhere where I needed to be in order to grow and understand my finances as a PhD student.

05:57 Emily: Yeah. So it sounds like you had some solid basis in terms of like a little bit of savings in place and so forth, but really needed more like of that grad school-specific, what is going on with fellowships what’s going on in academia, like kinds of questions, which is exactly what I try to offer. Okay. So we have a picture of, of where you are financially when you started graduate school, what was one of the first like actions that you took within your finances having joined the Community?

Open a High-Yield Savings Account

06:24 Courtney: Yeah. So going through your like step-by-step framework, I had savings, but I didn’t necessarily have a specific amount set aside that I should have in savings, or I hadn’t thought about it in a more critical way. So the first thing I did was look at putting a chunk of money that supports me over X amount of months in a high-yield savings account, because the one that I had always used was not that high. So I went through the videos, I chose my savings account, and based on the Community, I was able to keep myself accountable and was able to put in, like I chose the savings account and I just transferred my money in, and here’s an accountability step where I can tell other people that I did that. And yeah, now I get to check my savings out and see it grow more than it was before.

07:20 Emily: Awesome. I’m so glad to hear that. So, the framework that you mentioned is this eight-step financial framework that I teach in a few different places around the Community. I have kind of a series called The Wealthy PhD, which is both an e-book and now a video series, although that didn’t exist when you first joined. So I’m curious, is your emergency fund, that sounds like a step six emergency fund, is that right?

07:43 Courtney: Yes. Yes.

07:47 Emily: And so, did you also work through the steps prior to that point? Or was it just like, I have some cash, so I need to define this as emergency savings and put it in a more optimal place as you did? Like, did you go through all the other steps as well?

07:59 Courtney: I think, based on where I was at in my finances, a lot of the other steps had been covered, so I’d already paid off all my school debt, I didn’t have any credit card debt. I worked through a lot of that. So that was really like the next step that I had not tried to do yet, or even thought about.

Invest in an IRA

08:20 Emily: So step four in the framework is starting to invest. And you mentioned earlier, you didn’t really know anything about retirement accounts. So, did you also start investing, or have you been focusing on other financial goals?

08:30 Courtney: Yeah, kind of around the same time as making that emergency savings, I also looked into the IRA investing and watched those videos. And then in a similar manner, was held accountable by the Community and started my IRA, which I contributed fully to in 2021 and then already contributing to as well again. So yeah, that was around the same time where I was like, I have a decent savings, and I need to be doing something with it.

09:03 Emily: It sounds fantastic. Obviously you are an exemplary member of the Community in terms of like actually following through on the stuff that you learn inside there. We’ve run this a couple of times in the Community, maybe we’ll run it again soon, this challenge that I call like open your first IRA which people can learn more about that at pfforphds.com/openIRA. But basically- I just lay out like the seven step process for, okay, these are decisions you have to make, you know, to get from where you are to having your IRA open and funded. These decisions, these are the steps you have to follow through on. And I believe you went through that challenge. Is that right?

09:38 Courtney: Yeah, I did. Honestly those videos are so helpful. It helps you understand the verbiage and all the language that goes along with it. And I felt like I was making my own decision, but it was a very informed decision on it.

09:52 Emily: I’m glad it reached that tone with you because that’s exactly how I want it to be. It’s like, you know, I can’t tell people what to do. Like legally, I’m not like licensed to tell you what to do with your investments. But I can kind of give you the lay of the land, and then within that you figure out like what’s best for you. So I’m really glad it struck you that way.

Evolution of Courtney’s House Hacking Strategy

10:09 Emily: Well, I’m excited to talk about your house hack. So when did buying a house and even the potential of house hacking kind of come onto your radar?

10:19 Courtney: I feel like there were some conversations in the Community, actually, before I moved to grad school, I feel like maybe there were conversations in the Community, or I was talking to people outside of this Community as well about home-buying. And I was really excited to buy a home in Oregon before I moved here, but that was very hard to do during the pandemic and virtually and not knowing the area. So, I ended up moving here and renting for the first year. But then yeah, with the help of the Community amd reading through our book club, I felt like I started to learn a lot more about the house-hacking strategy and wanting to pursue that.

11:05 Emily: Yeah. So when you first thought about buying a house, were you thinking of it as you would live by yourself? Or were you thinking that you would be renting to roommates? Which I haven’t defined it yet, that’s what house hacking is, owning a house and renting at least one room out to somebody else.

11:18 Courtney: Yeah, actually at first I was like, oh, I’m in grad school. I want to live alone. I’m like becoming more of an adult. But then when I looked more at just the cost of living in this area, it was not as feasible as I thought it might be. And my first year living with roommates went really well. And I was like, I think this could continue. And I’m okay with roommates in grad school. So, then my mindset transitioned to more of the house hacking rather than living alone.

The House Hacking Strategy

11:53 Emily: And so, I did time our reading in our book club of The House Hacking Strategy for when people would be thinking about, you know, there’s a seasonality to buying a home. So we were reading that in like maybe Februaryish, 2021. So anyway, the book is The House Hacking Strategy by Craig Curelop. I learned a lot from reading that book. Apparently, you did as well. How did that book influence the decisions that you made after that point?

12:20 Courtney: It lays out a lot of different house hacking strategies based on your level of comfort. And so I found the one that I was looking for, which was, you know, I buy a house and I rent out maybe one, two, or three of the rooms, and I have my own room, and my tenants could maybe be my friends or maybe not. And that was my level of comfort. It also influenced me to talk to my other good friend in grad school about buying a house, and we were both looking at buying separately. But then we compared our finances and realized that we actually wanted to buy a house together.

13:02 Emily: Yeah, this was, I mean, to be frank, I was a little concerned when you first brought this up inside the Community, like can this be done in a safe and responsible manner that is buying a house with someone else who frankly, you know, you’re not legally married to, which is the kind of easiest scenario under which to buy a house. Of course, many people do this with a romantic partner without being married, but then you’re taking that a step further and buying it with a friend. And so it’s very unusual, and you have to be careful about it. So I really want to understand better about how you did that. But like, I mean, you’ll explain it to us, but if other people are thinking that this might be, you know, feasible for them to buy with a friend and still be able to house hack and rent out additional rooms so it’s still a source of income for you. Like, I mean, that is a complete game changer in being able to buy in many, many more housing markets than a single graduate student stipend would support, you know, right now. So tell us more about that, like partnership that you formed.

14:00 Courtney: Yeah. So there was another first-year grad student in my program and we became friends pretty quickly. And then when we started talking about buying a house, I was basically able to convince her that it’s a pretty good idea to buy a house. And then looking at the market in Oregon, it’s just, especially if we wanted to be even within a half an hour drive of our university, it was not doable with the down-payment and with just our overall debt-to-income ratio alone. And so then, one day a realtor mentioned like, “Oh yeah, I actually just showed a house to like someone your age. And there were these two women that were looking to buy it together.” And I was like, “Dang, okay. I cannot afford really anything here by myself. But I can perhaps talk to my friend about this.” And so we had a lot of long conversations about our finances and getting to know each other and really putting it all out on the table. We made a lot of documents together, a lot of like signed contracts between ourselves because we wanted that in writing.

Co-Owning a 4-Bedroom

15:17 Emily: So this is amazing that this idea came from your realtor and, you know, you had a person kind of in mind as a candidate, and then you’re able to work out all the things you need to work out. It’s actually not that unusual in the real estate investing space to have a partner. But like you have done with the person that you bought with, like, you guys have to have some legal kind of protections and some things planned out and worked out in advance to make this work. But that’s amazing. So, would you feel comfortable telling us about the house that you bought? Like some of the numbers around it?

15:51 Courtney: Yeah. So we were actually looking at three-bedroom houses, but ended up with a nice four-bedroom that is only like a five-minute drive from the university. We, I think, got a pretty good deal on it. These sellers wanted to move out really quickly. And the house I think was asking for like 250,000, but we offered nearly 270,000 because that’s where the market was at now. And then additionally, we offered more percent down, and that’s what finally sealed the deal for us to get our offer accepted. Yeah. So now we are able to rent out two of our rooms. So of course, if you did this alone, you’d be able to rent out more rooms rather than having a co-owner, but it actually works out really nicely to have a co-owner for a lot of reasons.

16:50 Courtney: We were able to split the down payment, which was very nice. Our two renters actually pay our mortgage basically fully. So we don’t pay any portion of the mortgage. We really only pay a fourth of the utilities for our home. And then we are able to put more money towards improvement of the home and sweat equity and yeah, it’s worked out really well. Another reason that having a co-owner has been awesome is that if one of us leaves, one of us is still there to manage everything. And we actually split a lot of tasks. And there are so many tasks to do as a homeowner, right? And having someone to split them with is really nice.

17:32 Emily: Yeah. I think that there is a degree of work involved with being a landlord. And I think especially as like a first-time landlord, having a partner there with you to help you like figure out like, what’s the right course of action? Like, how should we be screening tenants? Like, what kinds of house rules should we set up? Especially for you, like your case, living in the same living space with your tenants, there’s much more kind of like roommate interpersonal stuff going on as well as the layer of like the legal stuff. So I think that’d be actually really helpful to have someone going through that journey alongside you.

Setting Up a Joint Bank Account

18:04 Emily: So those numbers sound amazing that the mortgage is pretty much paid by those the rental income. Of course you still have some additional costs, like you had just mentioned home improvements, and so forth. Do you have any like structure in terms of like each of you like maybe saves a certain amount of money or contributes to a common fund that you’re buying from? Or are you kind of like winging it as you go forward?

18:25 Courtney: Yeah, we actually set up a joint bank account, which is like yeah, a whole other thing to do with a friend, but it was super easy. We have both of our names on our home insurance. And out of our joint bank account is basically where we process all of our rental income and where we process all of our home purchases. Because one thing we haven’t done yet is talk to a tax consultant about what home expenses could mean for tax write-offs. And so we want to have that all in one place. And then we actually both contribute to our joint account every month, a few hundred dollars to basically invest our home, to put towards emergency home repairs, and just make up the differences of utilities and such like that.

19:19 Emily: Yeah. Thanks for clarifying that. If anybody is interested in hearing other grad students and PhDs talk about this like house hacking strategy, I’ve actually done two previous sort of in-depth interviews on house hacking. One with Dr. Matt Hotze, and one with Jonathan Sun. Well, the one with Jonathan Sun is actually more about getting a mortgage when you have fellowship income, which is another wrinkle in that whole thing. But we’ll link those two episodes in the show notes. And another episode that may be of interest to the listeners is that I purchased my first home around the same time you did this past spring in 2021. And so I tell the story of how we made that happen. And a lot of the sort of technical things that go into this, like the down payment and like the interest rate on your loan and verifying your income and all these kinds of things. So we’ll link that from the show notes as well.

Navigating a Home Loan with Grad Student Stipends

20:06 Emily: Did you run into any like hiccups with getting the loan or getting to closing like that were related to either, you know, the partnership aspect of this or the fact that you are graduate students?

20:20 Courtney: Yes. There are a lot of confusing things with income, and know that the title company is going to be kind of confused by grad student income. And like our loan officer, like she helped us a lot, but there still was confusion about like, how are you funded this summer versus the fall? Why is it changing? Like submit all the documentation for, you know, both types of income that are coming in. And then there’s just, you know, a whole other person that has to submit all their bank information and all their financial information. So that just means like more room for, you know, missing a document here, there things being delayed. It wasn’t a huge deal, it’s just more paperwork and more people to coordinate.

21:12 Emily: Yeah. I noticed with my own journey to homeownership that like, there’s so much attention paid to the, getting to an accepted offer part of the process. And it’s very dramatic and all of that, especially this past spring, it was yeah, a very dramatic time to be buying a home. But then all the stuff that happens after, you know, you go under contract. All that paperwork, all those details, it’s not sexy at all, but there’s a lot of work that happens in that period of time. A lot of work by your real estate agent, a lot of work by you and all the other professionals involved in this process. So I was kind of impressed in a new way with the whole industry and how it works and just, yeah, how much work there is that goes into that stage.

Sam Hogan, Mortgage Originator

21:50 Emily: I will say for anyone listening, you did not use my brother, Sam Hogan as your loan originator. But other people may be interested and we will link all the episodes that Sam has been on the podcast in the show notes as well. But basically, through our relationship, like I’ve been referring business to my brother Sam Hogan, because he is now very, very intimately familiar with all the weird kinds of income that graduate students and postdocs may have, and how to present a case to the underwriters that work with his company, that you are a great person to lend to. I mean, he’s not a miracle worker. So in some cases, funding is structured in such a way that it’s not going to go forward, but basically he knows like how far he can like push it to get things accepted that may be not familiar, not accepted by other mortgage originators. So I’m glad yours went through, okay. But if anybody’s having trouble or just wants to have a smooth like process from the beginning, please contact Sam. You can find his contact information in the show notes for this episode.

22:50 Courtney: I think, another thing I’ll add is that a lot of times when people buy houses together, they’re perhaps married or have a different end goal for the house. So, there were a lot of assumptions in just documentation, like by the title company and in our loan that, you know, if one of me and my friend, if one of us were to die, like what happens to the house? And a lot of that assumes that it will just totally go to the other person, or there are a few different ways that you can co-borrow alone. And those are things that you definitely need to talk through. We actually ended up buying like a $15 legal help guide basically for co-borrowers of houses. And that was so helpful and helped us make our contracts with each other.

23:39 Emily: Yeah. That’s awesome. What kind of loan did you get by the way? Was it conventional or a different type?

23:45 Courtney: We did end up doing conventional, yeah.

23:46 Emily: Okay. And do you each have a 50% stake in this, or is there some kind of other equity arrangement?

23:52 Courtney: We both have 50%.

23:55 Emily: Amazing. Anything else you want to say about how this is working out now that you’ve been in the house for a few months, and you’ve had your tenants for a few months?

24:03 Courtney: We’ve been in it for three months. We started with two tenants who are friends who only needed a month somewhere to live, which was really great to practice with people who are a little bit lenient and understand your situation. And now we have our two tenants that are going to be in here for a year, and it’s going really well. And we’re already making updates and improvements on the house. Yeah, overall, it’s working out really nicely.

Commercial

24:35 Emily: Emily here for a brief interlude! Are you a graduate student, postdoc, or early-career PhD considering buying your first home in the foreseeable future? If so, I invite you to join the Personal Finance for PhDs Community for a Book Club discussion of First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes by Scott Trench and Mindy Jensen of BiggerPockets. I and all the Book Club participants will read the book and come together for a one-time live discussion in January 2022. This is perfect timing for anyone with an eye on the spring or summer 2022 peak buying season. Since it might be hard to find this book in a public library, I will give you a copy of the book after you join the Community. If you want to join the Book Club for First-Time Home Buyer, please fill out the survey, including your availability for the discussion, at PFforPhDs.com/BookClub/. That’s P F f o r P h D s dot com slash B o o k C l u b. Now back to our interview.

Considering a Second Home for More House Hacking

25:39 Emily: Recently, when we spoke at one of our, by the way, inside the Community, we have monthly live calls where people can just show up and ask questions and talk about whatever people want to talk about with me and whoever else wants to come. You brought up the possibility of buying another home. What are your thoughts around that?

26:00 Courtney: I did yeah, me and my friend had been talking about it because once you do it once, it’s really tempting to house hack again, which is actually what the book recommends. And now that we have this house, I mean, I still need to do a lot of learning in what a home equity line of credit is, and maybe what a second house could mean. But essentially, if we bought a second house, then we could rent out all four bedrooms in our current one, and that would actually cover both mortgages and perhaps even rent out another room in a second house. So as you can see, it could just start stacking up and and improve our financial situation even more.

26:48 Emily: That’s what’s really amazing to me about these like big levers that you can pull in your finances, even as a graduate student. I’m not suggesting that this is possible in every housing market in the U.S. Definitely a graduate student stipend would not even be within striking distance in many areas. But if you happen to find yourself where you happened to choose one of these areas, owning your own place, especially when it’s combined with house hacking is one of these big levers you can pull to massively change your financial situation. And I would say actually that investing is another one. That’s the one that I focused on when I was in graduate school. I wish I knew about house hacking, I wish I had read The House Hacking Strategy if it had been published back at that time, because Durham was another place where that was possible for two graduate student stipends to do that.

27:31 Emily: But instead, I focused more on investing and that’s been a huge lever, not to immediately realize cashflow the way that you can with real estate, but in terms of like growing my net worth over the decade or so since I started graduate school, it’s been incredible. And so, if you can just get like a toehold into real estate or investing, or one of these other levers that we’ve talked about on the podcast, it can really dramatically change your finances over a relatively short period of time. And it’s just amazing. That’s part of the reason why this podcast exists is that I just want people to know the possibilities, even if you don’t want to follow through that’s okay. But just know the possibilities that are out there. Even for someone like a graduate student. So I’m so happy to have you on here because especially this new wrinkle to your story of buying with a partner, instead of on your own or with someone you’re married to or et cetera, of buying with a friend like this is an amazing solution that never would’ve occurred to me. And I’m so glad that, you know, you introduced me to it.

Final Thoughts on Real Estate

28:26 Emily: Is there anything more that you want to say about real estate or the house hack?

28:31 Courtney: Now that I’ve had more conversations about real estate and been listening to more podcasts in general about real estate, I’m realizing how good of an investment it is. And I know some people might be wondering, like why would I buy a house in somewhere where I’m only going to live for four or five years? But like, I’m not paying rent or a mortgage right now. And I also get to hopefully sell my house in three to four or five years and make money off of its appreciation. And maybe I don’t sell in four to five years and I could actually move away and I can hire a management company to manage tenants at this place that I I don’t even live in Oregon maybe anymore. So there’s possibilities beyond just the time where you’re physically in that city to use your house hack.

The Community and Quarterly Estimated Taxes

29:24 Emily: I think that’s an excellent point because that’s definitely something that I got hung up with. I talked about this in my episode on making our first home purchase that I have a bit of like regret that we didn’t buy earlier, because one of the things that was holding me up about it was thinking I’m only planning on being in this city for three, four, five more years. Does it make sense to buy? And that’s a very valid question to be asking, but you have to know again about these other possibilities of one, house hacking, which completely changes the math of, you know, the break even point of renting versus buying. And two, the possibility of holding onto that property longer, if you still think that it’s a good investment at the time that you leave the city. So I’m really glad that you brought those points up. Something else that I know that you’ve used the Community for is your tax return slash your quarterly estimated taxes. So can you just let us know how that resource has helped you?

30:16 Courtney: Yeah. My parents had always sort of handled my taxes and sent it off to some tax person and I was just sending W2s places. And the tax workshop through the Community helped me understand what’s actually going on, what numbers matter, and how I could do them on my own based on getting a graduate assistantship sort of stipend. And now that I have a fellowship that just started one month ago, I’ll be making quarterly estimated taxes on that. And so, additionally, that workshop is so helpful in understanding how to go through that process as well. So I feel way more informed about taxes and how to do them on my own. And I think I ended up filing my taxes for free this past year. So that was really awesome.

Emily’s Tax Workshops

31:08 Emily: That is awesome. Yeah. Specifically, the two workshops you’re referencing are, I have one during tax season for graduate students called How to Complete Your Grad Student Tax Return (and Understand It, Too!). If you’re interested in learning about just that workshop, you can find it at pfforphds.com/taxworkshop. So, that’s during tax season for your annual tax return. And like you said, it explains a lot around like how the types of income that graduate students have, and graduate students tend to have more income types than they think they do, how that all fits in with like the IRS language. And my goal is really to kind of teach you enough so that you can either prepare your taxes on your own, which sounds like probably is what you did, or interface with tax software or a professional tax preparer in such a way that they understand what you’re talking about and your sources of income and expenses and what’s relevant, and what’s not. Yes, you can speak their language. And so you can get an accurate tax return prepared that minimizes, ideally, your tax liability.

32:02 Emily: And then the other one is for fellowship income, and by that, I mean, non-W2 income at the postbac, grad student, or postdoc levels. And that’s at PFforPhds.com/QETax, QE for quarterly estimated. And yeah, all the things that we’ve mentioned so far are available inside the Community PFforPhDs.community for just a monthly subscription fee. That’s actually pretty much equivalent to, if you bought one tax workshop, you may as well be in the Community for a month. If you buy the other one, may as well be in the Community for a month. So that’s kind of how the pricing works. Anything else you’d like to add about the tax journey that you’ve been on? Actually, I’ll add something first, if you don’t mind. I love that you figured out the grad student part of your tax return in 2020, or rather for your 2020 taxes, because now your 2021 is going to be a lot more complicated with the real estate stuff. And so at least at this point, I’m assuming you’ll use a professional tax preparer, but you already have a good understanding of this aspect of your situation. You can rely on that person to do the real estate part, right? And come together and have an accurate tax return together.

33:04 Courtney: Yeah, definitely going to have a different tax situation this year, but certainly go through that quarterly estimated tax workshop. And I feel like I can talk to a tax preparer in a lot more informed ways and say exactly what my situation is and what I need. So that’s been really helpful.

33:22 Emily: Yeah. Any closing comments about being part of the Community or anything else that you’ve gained from it?

33:29 Courtney: I would say the conversations with other PhD students and what they’ve tried and what they liked and what they didn’t, just even talking to people like what tax preparing software did you use? What did you like about it? What didn’t you? You know, like how has preparing your quarterly estimated taxes been? How much time does that take you, or how much time should it even take me? All those sort of questions are really nice to be able to talk to other grad students about, and that’s what I get from being in the Community.

Best Financial Advice for Another Early-Career PhD

33:55 Emily: Yeah. Thank you so much. It’s been absolutely wonderful to have you in the Community. And we’ve really gotten to know each other through these, as I said, monthly live calls, especially. Okay. Last question that I end, all my interviews on is what is your best financial advice for another early-career PhD? It could be something that we’ve touched on in the interview, or it could be something completely new.

34:17 Courtney: I would say, for me at least starting out earlier was, or even pre-PhD, was applying to a lot of fellowships. And if you’re someone who’s applying for their PhD programs, having a fellowship as a leveraging tool is a great way to get into the school you want to get into, work with the professor you want to work with. And also I mean at Oregon State, at least, my graduate research assistantship is a decent amount, but my fellowship definitely is more than that and helps support my personal finances better. I am a recipient of the National Science Foundation Graduate Research Fellowship, and that’s been an awesome tool to get into the places I want to get into and make more money as a grad student.

35:15 Emily: Yeah. So the advice is apply, apply, apply, and apply well. And I would say, you know, that’s awesome advice for people entering graduate school. It’s great advice for people still in graduate school and so forth. There are a lot of fellowships available for first year, second years. Less so a little bit later on, but they’re still there and you can still keep applying. Especially if you already have the feather in your cap of having the NSFGRP, for example, that’s going to go on your CV, it’s going to make it, you know, you’ll be that much more of a standout candidate for whatever awards you apply for after this point. So that’s amazing, Courtney, thank you so much for volunteering to be on this episode. It’s been lovely to have you!

35:51 Courtney: Yeah, thanks, Emily!

Addendum with Sam Hogan

35:59 Emily: Welcome to the addendum to the Courtney Beringer episode. Thanks for sticking around. I have with me Sam Hogan, who is a mortgage originator with Prime Lending (Note: Sam now works at Movement Mortgage). He is an advertiser with Personal Finance for PhDs and my brother. And Sam has been on the podcast multiple times before. The chief episodes to listen to are season eight, episode four, where we discussed house hacking in great detail. So if you like the strategy that Courtney used, check that one out. There’s also season five, episode 17, where we specifically discussed qualifying for a mortgage with fellowship income. Although there have been updates since then. So if you want some updates, I actually have some on my YouTube channel from some previous Q&As that we did with Sam. So Personal Finance for PhDs is the name of my YouTube channel. Anyway, long-winded intro, Sam, please reintroduce yourself to the audience.

36:48 Sam: Thank you for having me Emily. Yes. I’m Sam Hogan and I work with Prime Lending (Note: Sam now works at Movement Mortgage). We’re a national lender. My NMLS ID is 1 4 9 1 7 8 6.

Sam Hogan’s Contact Info

36:59 Emily: How can people get in touch with you if they want to learn more about getting a mortgage for themselves?

37:05 Sam: The best way to reach me is definitely by text. My cell phone is (540) 478-5803. Standard data message rates apply. And if that doesn’t work, my email is [email protected].

37:24 Emily: Perfect. And I should also mention that Sam, because of our sibling relationship, Sam has been actually kind of specializing in graduate students and postdocs and early-career PhDs within the mortgage industry for the past several years. He has lots of experience in this area. So, Sam, you know, I kind of briefed you on what this interview with Courtney was about. And her, to me, very unusual and very interesting strategy of buying a home with a friend. I never talked to anyone who did that before, but it definitely seems to me that if you’re careful about it, this could be a really game-changing strategy for people who could not otherwise, you know, buy a home on their own in their own housing markets. So I wanted to know from you, strictly from a lender’s perspective, now we’re not talking about from a legal perspective about whether this is a good idea or not, but strictly from a lender’s perspective, are there any issues that are posed by putting two, like unmarried or otherwise unrelated, people together on a mortgage?

Lender’s Perspective on (Unrelated) Co-Borrowers

38:19 Sam: There’s not. It’s the same simple steps as having another co-borrower even if you’re related to them. So, normal process, like Courtney touched on, you know, just double the paperwork. And there’s no shame in bringing on a co-borrower even if you’re unrelated or a friend, to jump on a mortgage and then, you know, as long as everyone can stay responsible and consistent, then it’s very little risk.

38:47 Emily: Is it pretty common for there to be co-borrowers on a mortgage? Let’s say, aside from a married couple, is it pretty common to have a parent or another relative or a sibling or a friend or something like that going on?

38:59 Sam: I would say about 50% of the loans we originate have co-borrowers on them.

Exit Strategies for Co-Borrowers

39:07 Emily: Can you just kind of at a high level go over what are the exit strategies? Not for Courtney, specifically, but let’s say we had another person listening who’s like, “Oh wow, my best friend and I would love to buy together, but of course we don’t want to be in a house together indefinitely.” So how, if you enter into this kind of relationship, how can you later on dissolve it?

39:27 Sam: Refinancing off is one. You can obviously sell the property and pay off the mortgage. You could turn the property into a rental. That would allow you to cover the mortgage, maybe some extra income. But that would actually keep both borrowers on the loan. If one borrower wanted to move away, recoup what they’ve gained from home ownership and moved on to their next goal. The borrower that’s still living in the property could take a key lock, a home equity line of credit against the home, which is not refinancing. It’s just basically a line of credit given to you in cash for however much you need. Obviously you’d have to meet the regulations and rules for loan to value, but you can’t take 100% of the value of your home out, for example. But they would take a line of credit.

40:23 Sam: You would be able to pay out your original co-borrower that got you into the loan. Say, “Hey, this is 50% of the equity we’ve gained over the last X amount of years.” And just on top of that money being sent, just have something in writing. I’m not an attorney or anything, but just disclosing that, “Hey, we, we made an agreement. You know, I’m going to have full ownership and take you off the title and have a put claim deed filed. So you’re off the title, then we’re going to pay you some equity from the home.” That would be the easiest way to do it. Yeah. It’s not as complicated as people would think. Like you’re not signing your life away forever. You’re just signing to get into it. And if you want it to, you know, change your living scenario year later, it’s definitely possible.

41:07 Emily: Okay. Yeah. Thank you for that insight. So I just want to say again, the message that I want to get across here from Sam is like that this is not that unusual, not that complicated. You can get out of it in a variety of ways once you want to. But of course, we’re talking with a mortgage originator. We’re not talking with a lawyer. So like there’s other perhaps documents and like official contracts and things that have to be filed that’s sort of beyond the scope of our conversation, but from your perspective, this is not really a big deal from a lending perspective.

41:39 Sam: No, I mean, title companies even have ways to state this that are common, right? That is, two tenants having 50% ownership of this property. So it’s not abnormal. I wish it would become a little bit more mainstream with some of our, you know, younger renters, people who want to be in home ownership but just either don’t know or don’t know how, or are just a little nervous to execute.

Live Q&A with Emily and Sam

42:07 Emily: We have something else exciting to announce, which is that Sam and I are doing another live Q&A call. So we’ve done, we did a couple of these earlier in 2021 during the, you know, peak of the buying season. We’re doing another one on December 16th, 2021 at 5:00 PM Pacific. So basically with this kind of session, you sign up, you can sign up at PFforPhDs.com/mortgage, and just show up with your questions. And Sam, or I might be able to contribute something as well. Mostly Sam, will answer those questions to the best of his ability. And yeah, this is a great way to kind of get prepped. If you are thinking about buying in spring 2022, or maybe shortly after that, this is a great time to be like, sort of getting your ducks in a row and Sam can help you figure out the steps that you need to take to do that. So again, if you want to sign up, PFforPhDs.com/mortgage for the event on December 16th at 5:00 PM. Sam and I will both be in attendance and happy to answer your questions. So thanks so much Sam, for giving this additional insight into Courtney’s fantastic idea.

43:10 Sam: Yes. Thank you for having me! And as always, let me know if you have any questions.

Outtro

43:19 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.