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Estimated Tax Workshop Advance Preparation

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Thank you for registering for How to Prevent a Large, Unexpected Tax Bill on Your Fellowship Income! Please complete the action items below prior to the date of the workshop so that you can receive the full benefits of the workshop.

  1. Bring your 2024 income- and tax-related records to the workshop. Bring your spouse’s records as well if you file a joint tax return. These records include any or all of:
    • Your fellowship offer letter,
    • Your recent fellowship paycheck amount(s) and date(s),
    • Your student account transactions,
    • Your final pay stub from a prior W-2 job, and
    • Your most recent pay stub for an ongoing W-2 job.
  1. Bring your 2023 federal income tax return, if you filed one, to the workshop.
  1. Watch this video (7 minutes) for background information so that we can jump right into the exercises during the workshop.

During the workshop, we’ll be working with spreadsheets and PDFs. If the workshop is in person, please bring your laptop or tablet. If the workshop is remote, please set your workspace up so that you can best juggle Zoom alongside the other programs.

I look forward to speaking with you during the workshop!

Dr. Emily Roberts, Personal Finance for PhDs

Investing 101 for Your Post-PhD Job

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In this episode, Emily interviews Dr. Scott Grissom, a full professor of computer science at Grand Valley State University and Certified Financial Planner with Socrates Financial Planning. Scott and Emily talk through the health insurance and retirement benefits options that may be available to PhDs in their first post-PhD jobs. Scott explains the tax benefits of investing via an HSA and/or a 401(k) or 403(b) and the factors that affect the choice of a Roth or traditional option. He also helps the listener overcome potential analysis paralysis by detailing the benefits of a target date retirement account.

Links mentioned in the Episode

Investing 101 for Your Post-PhD Job

Teaser

Scott (00:00): From day one. Let’s get that match and figure everything else around that. ‘Cause otherwise, as we know, we’re gonna be, have some inertia put in place and we say, I’ll do it later. I’ll do it next year. You probably won’t. So day one, do whatever you can to get that match would be what I recommend.

Introduction

Emily (00:27): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (00:57): This is Season 19, Episode 1, and today my guest is Dr. Scott Grissom, a full professor of computer science at Grand Valley State University and Certified Financial Planner with Socrates Financial Planning. Scott and I talk through the health insurance and retirement benefits options that may be available to PhDs in their first post-PhD jobs. Scott explains the tax benefits of investing via an HSA and/or a 401(k) or 403(b) and the factors that affect the choice of a Roth or traditional option. He will also help you overcome potential analysis paralysis by detailing the benefits of a target date retirement account.

Emily (01:37): My colleague, Dr. Toyin Alli, recently launched a new community called GRADBOSS. Toyin is an expert teacher of grad school productivity and time management through The Academic Society in addition to being a lecturer at an R1 university, so she knows of which she speaks! I’m honored that Toyin has invited me to facilitate a workshop within the community this month! Join the GRADBOSS community to attend my workshop Your Financial Orientation to Graduate School on Tuesday, August 27, 2024 at 4 PM PT as well as access all the other incredible resources! Go to theacademicsociety.com/gradboss/ to learn more and join the community. I hope to see you tomorrow at the workshop! You can find the show notes for this episode at PFforPhDs.com/s19e1/. Without further ado, here’s my interview with Dr. Scott Grissom of Socrates Financial Planning.

Will You Please Introduce Yourself Further?

Emily (02:48): I am delighted have joining me on the podcast today, Dr. Scott Grissom, who is at a really interesting point in his career where he has two jobs right now. He’s a full professor at Grand Valley State University and also a CFP with Socrates Financial Planning, his financial planning firm. So we’re gonna talk all things investing today, which is really exciting. So Scott, thank you so much for volunteering to come on the podcast, and would you please introduce yourself a little bit further?

Scott (03:11): Sure. Excited to be here. Um, so Scott Grissom, a little academic background for the PhD folks, if that’s okay. So, for my whole life, I wanted to be an architect. So I went to college at Texas a and m University, all set to be an architect and be the next Frank Lloyd Wright. And by the junior year or so, I had, uh, discovered two things. One is that I didn’t like architecture as much as I thought I did, and two is I discovered these new things at the time called computers. So I got enamored with computers and one of the professors that I admired a lot, I had taken several courses from him. I still remember where I was standing at the time. He says, Scott, have you ever considered graduate school? I’ve seen the way that you work with your fellow students and you tutor them and you help them, I think you’d be really good as a professor. Well, I had not considered that at all until that moment, but the light switch went off, changed my career path, went to graduate school for computer science with the sole purpose of getting a job as a professor. And 32 years later, I am still a professor. So it, it’s been a great choice. Highly recommend being a professor for the rest of your life, if, if that’s an option for you.

Emily (04:25): And yet you’ve decided to embark on an, an encore career. And so can you tell us how personal finance, how money became a passion for you alongside of your career as a, as a professor in computer science?

Scott (04:41): Yeah, so as long as I can remember, I’ve been interested in my own personal finances, whether it be investing and reading books. When I was in college myself, uh, I used to get this thing called a magazine in the mail each month on this physical piece of Paper magazine, uh, called Kiplinger’s. And I would read the, I would be so excited every month waiting to see what information they would have about saving and investing and all sorts of stuff. And one, one week there was this article about this designation called the Certified Financial Planner Planner, CFP. Ooh, that would be fun, at least for my own self education. I would like to take those two years of courses and see where that leads. So that was around 2005. And after taking classes for two years and then passing a pretty exhaustive exam, uh, I earned the CFP designation mainly as a hobby. Didn’t really, really know where that would go, but then I started helping friends and family with their financial questions and then started to work occasionally with some small financial planning firms. But, and that passion sort of peaked and valleyed through my, my 25 year career as a professor. And now I’m to the point where I’m ready to move on. I’ve enjoyed being a professor, but for the next x years of my life, I’m ready to transition to probably just part-time, uh, helping, educating others much like you do in terms of, of their finances and especially as they get close to retirement, uh, what changes do they need to make? What adjustments, what questions do they have? So I’ve got another year as a professor, and then I’ll be transitioning to this firm that I just created about, uh, six months ago called Socrates Financial Planning, Socrates building on the way that I like to teach in the classroom using the Socratic method. So I thought that was a fun, playful, uh, name for me.

Finance Related Employee Benefits

Emily (06:31): Yes, very eye-catching as well. I love it. Um, so we have a real, um, treat today, which is to employ your teaching skills in the subject of investing. And even though you just said that, you know, your typical financial planning client would be closer to retirement, you know, when we were prepping for this episode, we talked about how, um, the typical listener for this podcast is gonna be very early on in their career, maybe currently in graduate school, currently a postdoc, uh, maybe in in their first job post PhD. And so we were thinking it would be really great for them to have some insight into how to set up those initial investments with their new employer when they finally get that 401k or the 4 0 3 B or similar type of retirement account, um, access. So let’s go into it. So very good for that newly hired employee. Looking at the benefits package for the first time, it can be overwhelming. What are they probably looking at in terms of potential benefits related to their finances?

Scott (07:26): Yeah, so probably the, the biggest benefit most people have to struggle with initially is the health insurance. Now that applies to us because if they have an option for what’s called a high deductible plan, which mostly they do nowadays, uh, that will have an important financial option available for you called a health savings account. So maybe we’ll come back to that a moment. And then the second one is what kind of retirement account do you have? And in the private workplace, that’s generally called a 401k, uh, in the public space, whether it’s hospitals or my case a, a university, they’re called 4 0 3 Bs, pretty interchangeable. Uh, and then just personally you might have a thing called an IRA. So all three of these retirement accounts are virtually the same. They’re a place for you to invest for the future, and there are generally some tax advantages to each of those, depending on what choices you’re trying to make.

High Deductible Health Insurance Plans

Emily (08:19): Okay, let’s dive into that a little bit more. Let’s start with the health insurance component of it. Who is a good candidate for choosing a high deductible health plan versus like a PPO is probably gonna be their other option, I would imagine. Um, and, and for also using that HSA if it can come with that H-H-D-H-P

Scott (08:38): <laugh>. Yeah. So hard to de- describe o- over, over this broadcast on, on what makes the best choice. Uh, just recognize with a high deductible plan, depending on whether you’re single or a part of a family, you’re agreeing to pay the first $2,000 of your medical care, maybe the first 4,000 thousand that’s called the deductible. So you need to have, uh, an emergency fund I guess, or enough, uh, fees also depends on your, um, your health. So if you’re somebody that’s pretty healthy and don’t anticipate seeing the doctor much, therefore you don’t need to worry about paying that deductible, that might be a good rationale, justification for getting the high deductible plan. Uh, and then it also just depends on locally and you, if you’re moving to a new city, you may not know, but picking what, uh, doctor option doctor networks that you have sometimes make a difference. So there, I would say talk with your, uh, human resources department or a colleague that you’re about to work with or a supervisor to see what choices they’ve made and why.

Emily (09:38): Yeah. So the trade off there for those who don’t know is gonna be a, a premium difference. So the monthly premium that you pay for like a PPO plan, for example, is gonna be higher or at least let’s say the overall portion. We don’t know, uh, how much the employer is paying versus the employee in, in, you know, general. But that overall premium is gonna be higher for like a PPO. It’s gonna be lower for that high deductible health plan. But like you said, you have to be prepared to pay out of pocket for a higher deductible, $2,000, $4,000 versus maybe the PPO is 500 or a thousand, something lower than that. Um, and so you have to have some savings available to, uh, to do that in your own finances, should you need to access medical care. And that’s kind of where the idea of the HSA comes in. It, it sort of, um, nudges you in the direction of, oh, you have that high deductible health plan, well you better be saving in this HSA. But tell us more about how the HSA works.

Scott (10:26): Yeah, so it’s, it’s one of, it’s a very unique, um, savings plan in terms of what the federal government allows for you. So it allows you to save money going into the account, uh, tax free going in, but it’s also tax free coming out, which is highly unusual. So that doesn’t apply to the 4 0 1 Ks and the IRAs or even the Roths. So I really like the HSAs, the potential advantage, advantage that you have to save on your taxes from day one in your career. And so what that means is for every dollar that you put into this account, and it’s earmarked to be used for medical, so for healthcare to be spent this year or next year or 10 years from now, but all of that money is tax deductible off of your current income. And as we know, every dollar that you can shave off of your current income is gonna reduce your taxes. So that’s great for now, which is the way a lot of the retirement accounts work. But then later on, when you start to pull money out to pay for those qualified medical expenses, it’s not taxed there either. And that’s what’s different about the HSA. So HSA saves you now, it saves you later. It’s just a, a win win win when it comes to taxes at least. And as you said, there is this sort of incentive to put that money into this account because you know you’re going to have to spend it at some point this year, next year, five years from now on those deductible expenses. And so that’s why the federal government requires you to tie together. You first have to have this high deductible plan and then that allows you, it’s optional, but I would strongly encourage it to create this health savings account.

Emily (12:02): I’ve not had the, uh, reasonable option of signing up for a high deductible health plan with an HSA ever. So I’m, I’m sort of excited about this in a theoretical way. But, uh, my understanding is that if this comes through your employer, um, you actually save, not only on income tax going in, but also your, your FICA taxes, your payroll taxes, which is like, there’s like almost no other way you can reduce your payroll taxes. So that’s like really exciting as well. Um, in terms of more money in your pocket, more money in that account.

Scott (12:29): Yep. Once again. And you’re saving now and never taxed again on it, assuming you pull it out for medical expenses and it rolls over each year. So there, there’s another kind of a medical account called a flexible savings or flexible spending account that you might have options for. They’re probably a little antiquated now, but the potential concern with them used to be you had to spend it or lose it at the end of the year. So back in, in December then people started getting dental care and eye care and so forth to try to, to spend that money. But the HSA, you can literally, it let it run for 30 years. And so that’s why some financial advisors think of this as sort of a third retirement plan. ’cause we’re always going to have healthcare expenses. And so the longer you can invest it and let that build tax free, the more money in your pocket.

Emily (13:20): Yeah, I wanna kind of underline that point that you just made about the potential for the money inside the health savings account being invested for the long term, because that’s not something that I think people really did maybe 10 years ago with those flexible spending accounts that wasn’t an option. This is unique to the HSA, um, and so elaborate on that a little bit more, the power of of that option.

Scott (13:40): Yeah, and it’s something that I suspect a lot of people don’t take advantage of. So generally by default, you’re gonna put this into an HSA and it’s gonna be treated like a savings account or a checking account and probably not pay you much at all if, if even 1% and for money that you’re gonna spend three months from now, that makes perfect sense. You wouldn’t want to invest it because with investing, and let’s just generally talk about investing in stocks, there’s the concern that that money’s gonna go down in the short term. So, but if you are investing for the longer term, 4, 5, 8 years down the road, you’re convinced that you don’t really need that money out of the HSA that you can pay for these, these medical expenses out of pocket, then the longer horizon that you have, the more options it gives you. And then you can now invest in stocks and mutual funds in your HSA, just like you would in these other accounts such as the 4 0 3 B and 401k.

Emily (14:40): Yeah, it’s really like, I think you mentioned this earlier, like a supercharged form of an IRA, like an even better form of an IRA. But you have to be prepared to pay for those medical expenses and save it to the HSA on top of that. So it’s really a personal finance and budgeting kind of challenge, but a very, very powerful tool if you can harness it,

Scott (15:00): Right? So at the very least you would want to contribute enough for your deductible each year. So even if you don’t wanna invest in the future and your little leery of building a large account of 15, 20, $30,000 in this HSA, if nothing else, remember that very first dollar that you save is saving you permanently on taxes. So if you’ve got a, a deductible of $2,000 and you’re pretty predictable that you’re probably gonna spend about $2,000 this year on healthcare, then at least put that much into your HSA and if it hovers above and around close to zero because you’re putting money in it and taking money out, you’re still getting a great tax advantage from that.

Traditional Retirement Savings Vehicles: 401Ks and 403Bs

Emily (15:41): Yeah, I love it. Well let’s talk about those more traditional retirement savings vehicles, the 401k, the 4 0 3 B. Can you tell us generally like what’s the advantage of investing for your retirement through your employer? And then we’ll talk a little more about traditional versus Roth.

Scott (15:57): Okay. Uh, so as I said, 4 0 1 Ks are just the names generally for private companies and 4 0 3 Bs for public companies slash universities and healthcare. Uh, historically they’ve been what we call pre-tax. So I put money in and I get to remove that from my salary this year, which is gonna save on taxes this particular year. So let’s suppose I’m in the 20% tax bracket and I put in a thousand dollars. Well that’s gonna save me $200 this year on taxes, but eventually I’m gonna take that money out presumably during retirement and then it will be taxed then. So that’s one of the, the advantages is the tax advantage is that we’re going to have a tax advantage this year. It’s gonna build tax deferred and then eventually we pay our taxes. But one of the new features that these companies now are allowed to provide somewhat new is a Roth component to this 401k. And now we have the option of do we pay taxes now and put that into what’s called a Roth account or a 401k Roth, but it’s never taxed again, much like the HSA, so you can let that ride for the next 30 years and hopefully make lots and lots of money off of your investments and then they come out tax free. So that’s one of the choices you’re just gonna have to make is if I have a Roth option for my 401k, do I put my money in there now or do I use the more traditional approach? The second key I think, um, question is, is your employer providing a match or not? And they often do, uh, and it’s often tied to how much you put in. So they might say, we’re gonna match the first 2%. If you put in 2%, we’ll put in 2% or we’ll put in 50% of how much ever you put in of the first 6,000. So either way, whether you’re gonna put 2000 in on your behalf or 3000 or 8,000, you really wanna take advantage of that ’cause that’s in the business we call that free money. And then you’re going to invest that going forward. You’re not paying taxes on it now. Um, the employer’s putting the money in so it’s not coming outta your paycheck. So if your employer does provide a match, be aware of, put as much money as you can in that affects that match.

Emily (18:17): I have also noticed sometimes with these employer provided plans that have a match or maybe not even a match, but a baseline amount that they’ll put in for you. Sometimes universities do that sort of thing. Um, they’ll have like a vesting schedule. Can you explain how people should understand the vesting schedule?

Scott (18:33): Yeah, so normally what that means and, and it’s case of as you said, it’s the employer putting money in on your behalf less so of the money that you put in. And they’re going to as a way to try to keep you employed there as long as possible. Say we’re gonna put $10,000 in each year for you, but you can’t pull all that money out if you were to leave employment. So over the next four or five, six years, uh, on a sort of degrading uh, feature, we’re gonna decide how much of that money do you get. So you’ll have employers say, this year I’m vested. Well that means that this year if I were to leave or get fired or whatnot, then I would at least get all the money that’s in my account. Up until that point it might look like I’ve got $50,000, but 20,000 of that might not leave with me if I choose to leave. And general, as you said, it’s generally the what, the money that the employer puts in any money that you put in is generally what we would say 100% vested immediately.

Should You Ever Pass Up On The Employer Match?

Emily (19:34): Okay. And so I’m thinking about a person who is just starting out and they’re looking at this benefits package and they see that they have a match available to them, so exciting. Um, but maybe their personal finances are not totally in great shape yet. When should they pass up that free money and work on other areas of their finances? Is there ever a situation where that, where you would advise that?

Scott (19:57): I wouldn’t think so. I mean, so let’s suppose you’ve gotta put in 4% of your brand new paycheck that you’re excited to get and that’s going to entitle you to matching and you’re leery to say, but could I use that 4% for something else paying off student loans or paying off credit card debt? Well that might be an appropriate use of it, but I would be more inclined from the psychological perspective is let’s just commit to that 4% and then learn how to carve out additional savings from our new paycheck to pay for that other debt. I mean, debt would be the only reason. I could see why you wouldn’t want to get that initial match. And even then I would really encourage you to, from day one, let’s get that match and figure everything else around that. ’cause otherwise, as we know we’re gonna be have some inertia put in place and we say, I’ll do it later, I’ll do it next year, you probably won’t. So day one, do whatever you can to get that match would be what I recommend.

Emily (20:52): Yeah, I really like that advice. A great point about the inertia, like when are you really going to make that change if you don’t make it right from day one? Um, and if you are really excited about getting that match and you’re really hating, let’s say the credit card debt that you’re in, maybe because of your move to your new job or whatever the case is, um, just use all those, uh, well, they’re probably negative feelings, but use them to energize you <laugh> to get that debt paid off while you’re still contributing to that retirement account and getting the match. And hey, then once the debt is paid off, you can increase that retirement contribution rate above the match level, let’s say

Scott (21:26): After celebrating and going out to dinner or, or something that you paid off your debt. So

Roth Vs. Traditional Retirement Accounts

Emily (21:31): Yeah, that’s awesome. Okay, still thinking about that new post PhD employee, um, let’s say they have a Roth option and a traditional option within their retirement accounts, what are the factors that go into making that decision? Which way to go?

Scott (21:46): So it generally comes down to taxes. And so as we said that traditional, um, contributions to 401k are tax, um, deducted this year. So you save on taxes this year, let’s suppose 20%, whereas the Roth contribution, you don’t save on taxes this year, but it goes in and you never pay taxes again. So the question becomes do I wanna save on taxes this year, maybe saving 20% depending on where my income is or at the, when I start to retire and I pull money out, do I want to pay taxes then do I have any insight 30 years from now that I’m gonna be paying less or more tax rates than I am now? And we don’t have a crystal ball, so we don’t know that for sure. But the general understanding is that the lower your tax rate is now probably a pretty good chances 30 years from now when you start pulling money out, your tax rate’s gonna be higher. So that puts you in favor of using a Roth. Now, uh, it’s less like, it’s less helpful to you to save 15% on taxes now, which is the Roth scenario, rather than to wait 30 years from now and pay 2020 5% coming out, which is the 401k option or the traditional 401k option. So I would say, what’s the general recommendation when you’re starting off, that’s generally the best time to do a Roth because you’re generally making less income than you will in the future. And it also give you a much longer runway the next 30, 40 years to invest that money and have it accrue, uh, tax free, which is a, a really great option.

Commercial

Emily (23:24): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, budgeting, investing, and goal-setting, each tailored specifically for graduate students and postdocs? I offer workshops on these topics and more in a variety of formats, and I’m now booking for the 2024-2025 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutes enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

Roth Vs. Traditional Retirement Accounts

Emily (24:42): Let’s project forward a few years, maybe 10 years. So this person is no longer a fresh new PhD graduate in their first job, but they have increased their income somewhat over time. Is there a tipping point that you would say or is it just for every individual? Where do you see your income potential going?

Scott (24:58): Yeah, that’s a much trickier. Um, but let, let’s play that, that scenario. So some, some of my colleagues will say, um, if collectively, because we’re talking about, I’ve been saying federal tax rates, but it also applies to state income tax, if that’s indeed, um, it, it, uh, applies to your state. So in my state of Michigan I pay about 4% and if I’m in the 24% tax right rate for a federal plus the four is 28% combined. That’s where I’m wondering am I gonna pay more or less than that when I retire 20 years now or 30 years from now? And so I hear people talk about this magic, not magic number, but just sort of rule of thumb about 30%, anything less than 30% taxes. Now it’s probably a pretty good bet that when you’re pulling money out later, you’re gonna end up paying more than that. So somewhere in that range, 25 to 30% is, is sort of this borderline category. Anything more than 30%. So if you’re very high income earner right now, you probably want to take advantage of saving taxes now because you might be in the, the 34% tax bracket or even higher and you’ll likely be taxed less than that 30 years from now. But we don’t know for sure. So all these choices, it just sort of depends. You make the best decision you can at the time and then don’t look back, don’t worry, you made your decision, it’s over and what happens, happens.

Emily (26:22): Yeah, definitely don’t use the uncertainty around where will my tax rate be in retirement as a reason to not get started, right? Like just jump in with whatever option you think is best at the moment. That’s okay, keep going at that. And my philosophy around it is kind of to want to get to retirement with a mix of Roth and traditional so that I can do some tax optimization on the backend. So as long as I have big pools of money in both of those types of accounts, by that point I’ll be pretty happy. I’ll add in one other anecdote, um, sort of about how I made this decision earlier on in my career when I could see, um, where my tax rates were going. So I post PhD was living in the state of Washington, which has no state income tax, but I knew that I aspired to move to California, which has could be a high state income tax rate. And so I used that view into my own personal aspirations in my future to say, okay, when I’m living in Washington, that’s a great time to use the Roth. And when I move to California, that’s a great time to switch to traditional assuming no other changes in my, you know, overall income.

Scott (27:22): Very good, good idea. Now let’s talk about those, that bucket that you mentioned. So when people retire, it’s nice to have options and so there’s considered, there’s sometimes considered three buckets of Roth, which has already been taxed, 4 0 1 Ks which have not yet been taxed. And then there’s a third category that we haven’t talked about. We call that a taxable account. And that’s just where you’re doing extra savings. So out aside from these retirement accounts, and if you have sizable amounts in all three of these buckets, they’re probably not gonna be equal and nor should you necessarily aspire to that. But if, if you’ve got some money in each of those, as you start to pull money out during retirement, as you said, that gives you some flexibility, uh, to control your tax rates so you can start pulling some money out of a Roth because it’s not gonna be taxed at all, some money out of your 401k ’cause it is gonna be taxed and then have some money in your taxable. So how do you manage that? How do you end up with three buckets? Well, we’ve talked about early on maybe you start with a Roth for retirement and then throughout your career maybe you start to transition it, there’s gonna be perhaps some tipping point, maybe not, maybe you just wanna do Roth all in and that’s perfectly fine as well. But in that mid category, that 15 years that we were talking about, you could get to the point where you put half in Roth and half in a 401k, so there is no right or wrong or it’s not a binary decision. And that would allow you to con uh, to continue to build in all three of those buckets.

What Exactly Should I Invest In?

Emily (28:49): Perfect. Let’s talk about another decision that has to be made when you’re contributing to that 401k or 4 0 3 B, which is what should I actually be invested in <laugh>? Because the 401k or the 4 0 3 B is not synonymous with the investments that could be inside of it, there’s gonna be some choice about what exactly you wanna be invested in. So help that you know, fresh PhD with that first job, help them think through that choice of what exactly should they be invested in.

Scott (29:17): Uh, well still first and foremost when we come to talk about investing, uh, the golden rule is called, um, diversification. So we don’t wanna put all of our eggs in one basket. So although it’d be really tempting to, to buy as much apple stock as you possibly could or as much Nvidia stock as you possibly could, uh, because that’s currently what’s hot, you want the risk of losing a lot as well. So how do we do diversification is we mainly, or most of us buy things called mutual funds, which are collections hundreds if not thousands of individual stocks for different companies. So that provides you that diversification and that’s what you will generally be given as an option. So for your 401k, normally you’re given a limited collection of choices for yourself. Those are often gonna be what we call mutual funds. And so you still have to make choices. So maybe it’s a choice outta 10 or it’s a choice out of 50, that can be pretty overwhelming. Uh, so my approach is to pick mutual funds that buy a little bit of everything. So these are called index funds and I know Emily, you’re, you’re a fan of passive investing as well. And so look for, uh, titles of these mutual funds that perhaps include index in the name, probably don’t call it passive, but they might say index. Uh, one of the keys when you’re picking out mutual funds is the expenses that they cost. So most people don’t realize, but you invest money in a mutual fund and each and every year the uh, management company takes a little bit out of that. Maybe it’s 1%, which would be super high or maybe it’s 0.1%, which would be pretty low. Sounds like pretty sounds like the same thing to most of us. 0.1% and 1%. What’s the difference? Well, it turns out 30 years from now, those build on themselves a lot. So when we’re given a choice of mutual funds, back to the original question is I wanna look for something that is an index slash called passive investing. And those generally have lower fees, which might be 0.1% or even less, uh, which is more money in your pocket, less money in their pocket, more money in your pocket. And that’s the win-win. So first choice, pick mutual funds that are indexes and then you might have to choose between, uh, do you want to buy stocks or do you wanna buy fixed income, which is, which is often called bonds. That’s probably a whole nother podcast. But, but the quick answer is most of us now have an option called a target date fund. And a target fund. Target date fund is perfect for somebody just getting started ’cause they don’t need to worry about the ins and outs of picking what percentage of stocks and what percentage of bonds someone else is doing that for you generally at a low cost. So if you have an option for a target date fund, they’re gonna have names associated with the year that you plan to retire. Now there’s nothing magical about it and nothing significant about it, but if you’re just getting into your career now and you’ve got at least another 30 years to work, 35 years to work, so adding that to 2025. So 2060 would be the name of a target fund that you might look for. Vanguard has these fidelity, uh, Schwab has all of these and all that tells you is somebody has decided what percentage of stocks and bonds. So I just looked up Vanguard’s 2060 target date fund and 90% is in stocks and 10% is in bonds. The longer that you have to invest the, uh, more volatility or the more ups and downs you might be able to stomach mentally stomach. So if you recognize, yeah, the stock market went down this year, it’s gonna go down. I can guarantee you that. I don’t know if it’s this year, I don’t know if it’s next year, but at some point the stock market’s gonna go down again. And if you’re okay with that, if you’re mentally prepared to say, I knew that was gonna happen, I’m gonna keep letting it ride, then because you have the luxury of going for the next 30 years, then it’s okay to have 90% in stocks. But as you get closer, uh, and this is what those target date funds do for you, is they start to reduce the stocks and increase the fixed income so that as you get closer to closer it might be a 60 40 split. So long-winded answer, sorry my professor is coming out on me, but what are your choices as a new employee? If you’ve got a target date fund, generally pick that.

“Safe” Investing Options

Emily (33:40): So sometimes I get questions when I teach about investing where the questionnaire says I want to start investing and I wanna use something safe. If one of your clients said that to you, I I’m nervous about the stock market, I wanna pick something safe, how, how would you coach them?

Scott (34:01): So safe generally means, um, lower return. So whether you’re buying bonds or treasury bonds, so safe means less likely to lose money, which is something that none of us want to do, but also less likely that you’re going to make much money. So over the next 10, 15, 30 years. Question is, can you afford to be conservative? Maybe you can, but I think there’s a bigger risk, a long term risk that if you’re too conservative, you put all your money. I mean the extreme would be you put all your money in a savings account making 0.1% and that’s gonna make you feel very safe. But 20 years from now, you’re gonna regret that because your money has not even kept up with inflation. So if inflation’s rising, if 3% every year, so it’s really a mental game, I understand that the concern about potentially losing money, but hopefully you overcome that and recognize that over the next 15, 20, 30 years you’re likely not going to lose money and you’re going to stay ahead of the game by investing in more what we would call more aggressive, not completely aggressive, but more aggressive investments as as, um, you pointed out.

Different Fee Structures of Financial Advisors

Emily (35:14): So something that I learned in our prep for this interview, um, is in your financial planning practice, how your fee structure works, which I really appreciated, but I want you to explain it, um, and explain why you think it’s advantageous both for you and for your clients.

Scott (35:30): Okay, well let’s back up and recognize that there are hundreds of thousands of people that call themselves financial advisors in the us. Uh, that’s not a regulated term. And so almost anybody can call themselves a financial advisor and they generally make money from three ways. Now we all need to make money so there’s no harm in that. Uh, one of them is that they make commissions. So they sell you products whether they be what are called annuities or insurance or stock plans and they make a commission off of that, whether that be 2% or 3% or 10%, perfectly fine, assuming that they disclose that to you and they’re recognizing, you know, I’m gonna make 10% off of you buying this $100,000 investment, but I think it’s best for you and that very well may be best for you. Then there’s a category called called fee only advisors. So they wanna avoid commissions with the potential of there being a conflict or at least the perception that there might be a conflict. And they’re generally gonna charge you for ongoing what we call asset management. And so the going rate is generally 1%. Now these are people that already have established accounts, maybe a million dollars. And so they’re going to pay their, um, fee only advisor 1% of that each and every year to manage their money and give them good advice and, and keep them on the straight and narrow. And then there’s a relatively new category that we call flat fee planning where we’re not interested in managing the money for that client, but we want to just give them some objective solid education advice and then the person can go back on their own for the next 2, 3, 5 years and then maybe come back for a refresher and say, how am I doing? What advice do you have me now? So I’m in that category, it’s called flat fee. So for a particular fee I offer a financial plan to clients that says if they’re starting out and or getting close to retirement and says, let’s take a look at all your finances, not just your investments, but let’s take a look at your insurance and your estate planning documents and a variety of other aspects. Let’s take a look at your goals and just do an assessment and objective assessment to see if you’re on track or not. So, so flat fee advising or flat fee expenses is the way I model my business useful for people especially just getting into investing because they don’t have a lot of money yet. And so the fee only advisors that charge 1% probably aren’t going to see you anyways. So that would be an advantage.

Emily (38:06): Hmm, yeah, especially if, um, you may have zero in assets under management to offer if you only have your 401k plan, for example, if you don’t even have an IRA that, that an advisor could even work with. So I really appreciate that flat fee, um, model. It’s actually when I sought out financial advising a few years ago, that’s the model that I went with for the advisor that I chose. So, um, I’m a believer in it now. It’s a little harder to stomach maybe upfront because you have to come up with hundreds or a couple thousand dollars maybe, depending on the advisor and the type of, um, package that you’re getting versus going to someone who makes money off commissions. Well, it seems like it’s free, but it’s really not free. And so just to recognize as you said that everybody in this industry is getting paid in some way or another, as long as you’re upfront about it, fine, then the client can choose how they want to pay for the service that they’re getting and their advantages and disadvantages to each of those models. But I really appreciate the model that you’ve chosen, so it’s great.

Socrates Financial Planning

Emily (39:01): And if someone listening, um, really likes your style, likes how you’ve taught us through this episode, wants to work with you or maybe wants to recommend you to someone else, how would they get in contact with you?

Scott (39:12): Yeah, so the name of the company is Socrates Financial Planning. So Socrates, because that’s the way I always taught in the classroom using the Socratic method. So Socrates financial planning, socratesfp.com is the website address and from there you can get an email or schedule a call with me or, or find more information about me, but socratesfp.com is the place to go.

Best Financial Advice for Another Early-Career PhD

Emily (39:36): Well thank you so much Scott, and I wanna conclude by asking you the question that I ask of all of my guests, which is, what is your best financial advice for an early career PhD? And that could be something that we’ve touched on already in the interview or it could be something completely new.

Scott (39:50): Yeah, I would come back to that notion of day one, start contributing to whatever plan you have, whether it’s the Roth or or the, the traditional plan certainly to, um, achieve that employer match that we talked about. 10% might sound like a lot to start saving right away, but I would recommend you, you strive for that if not higher, set that up from day one so that you just learn to get by on 90% of your salary. And that’s gonna do such wonders for you. 30 years from now, you will be so glad looking back that that was the best decision you ever made.

Emily (40:26): Well, Thank you so much Scott for volunteering to come on the podcast. It’s been a pleasure speaking with you.

Scott (40:31): Very good. Thank you very much.

Outtro

Emily (40:41): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

What You Should Know about Money Early in Your PhD Career

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In this episode, Emily shares the microinterviews she recorded at two higher education conferences this summer. The conference attendees, virtually all of whom work at universities and most of whom have PhDs themselves, responded to this prompt: “What do you wish you had known about money earlier in your career?” Listen through the episode for insights into the financial steps for which, should you take them now, your future self will thank you.

Links mentioned in the Episode

What You Should Know about Money Early in Your PhD Career

Teaser

Lyndsi B (00:00): You don’t have to make one decision and have it be the right decision for the rest of your life. Like you can make changes at any point along the way and you are allowed to fail and like you can recover from failure.

Introduction

Emily (00:20): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (00:50): This is Season 18, Episode 5, and today I’m sharing the microinterviews I recorded at two higher education conferences this summer. The conference attendees, virtually all of whom work at universities and most of whom have PhDs themselves, responded to this prompt: “What do you wish you had known about money earlier in your career?” Listen through the episode for insights into the financial steps for which, should you take them now, your future self will thank you.

Emily (01:20): The two conferences I attended were the Graduate Career Consortium Annual Meeting or GCC and the Higher Education Financial Wellness Alliance Summit or HEFWA. GCC is primarily attended by university staff members working with PhD students and postdocs in career and professional development. HEFWA is attended by university staff members working in financial wellness across undergraduate and graduate populations. These two conferences were excellent networking opportunities for me on top of the built-in professional development. However, there are plenty of universities who were not represented at these conferences. Would you please consider recommending my financial education seminars and workshops at your university? My most popularly requested events for the upcoming academic year are Your Financial Orientation to Graduate School, How to Prevent a Large, Unexpected Tax Bill on Your Fellowship Income, Expert-Level Budgeting for Graduate Students and Postdocs, and Demystifying Taxes for Graduate Students. Please direct an appropriate potential host within your graduate school, postdoc office, grad student association, etc. to PFforPhDs.com/financial-education/ where they can learn more. Thank you in advance! You can find the show notes for this episode at PFforPhDs.com/s18e5/. Without further ado, here are the microinterviews recorded at GCC and HEFWA.

What Do You Wish You Had Known About Money Earlier In Your Career?

Amy (03:03): Hi, I am Amy from Princeton and when I was in graduate school I wish I had learned more about investing and saving for retirement and sort of how all that works early in your career to benefit you later.

Sharon F (03:18): Hi, my name is Sharon Fleshman. I’m a senior associate director at Career Services at University of Pennsylvania. I think coming out of undergrad I basically took the salary, I was pitched <laugh> and that was it. So I wish I knew the implications of a starting salary across the years.

Evan W (03:34): My name is Evan Walsh. I’m a career advisor at Harvard Medical School. I really wish I knew that it only takes a little bit each week to put towards something. So every week I put money away into a travel fund. Each week I put money away towards retirement. Each money I put a little bit away towards just miscellaneous fees that I may incur and it’s all within my master budget that I now wish I would’ve known earlier that I like to do and that’s really helped me sort of save for trips and things for my future, things that I wanna prioritize, how I utilize my money. So I wish I knew earlier that your money is yours to spend the way that you want to.

Laura S (04:11): Hi, my name is Laura Stark and I work for Harvard University. I got my PhD many, many years ago and I wish that I had known that I should start saving for retirement even as a graduate student.

Briana M (04:26): I’m Briana Mohan, I am a program manager at MD Anderson Cancer Center. A lot of times we feel, I have felt that money is tied to worth and my value as a professional and there actually is no correlation at all so far as I can see. So I think that decoupling those two things so that then it’s a little bit more feasible to work with money and money questions and speak about them and grapple with them and not have it so tied to how much I’m valued or how much I am worth, I wish I would’ve known that earlier.

Alla M (05:03): So my name is Alla Mirzoyan and I’m from Florida International University and I wish I had known about credit in the United States and not to sign up for credit cards without really understanding the implications. I was an international student so I knew very little about how credit works, but I know better now.

Gina B (05:25): I’m Gina Bellavia from the University at Buffalo and what I wish I’d known about money earlier in my career is, well, particularly because I got a PhD but then I went a non-traditional route. I didn’t go into academia, so I guess it would’ve been good for me to know going that route that I might have to kind of go down in pay to, to then start a new trajectory and then work my way up again, which I guess it makes sense if you think about it, but I didn’t really think about it that way. So it’s taken a little longer to to build up I think by taking that less traditional route, but, but I’ve also had greater career satisfaction.

Manali G (06:03): I’m Manali Ghosh. I’m a senior academic recruiter at St. Jude Children’s Research Hospital and I wish I had known sooner to invest in stocks like s and p 500 earlier in my career.

Ivonne V P (06:16): My name is Ivonne Vidal Pizarro. I’m at the University of Tennessee in Knoxville. I’m the research consultant in the graduate school supporting postdocs and I wish that I’d known that if I could save more money when I was younger, I’d have more in my 401k now.

David C-B (06:30): Hi, David Cota-Buckhout. I am the assistant director of Alumni Engagement and Career Support at the University of Rochester’s Graduate Education Postdoctoral affairs office. I wish I knew that I should have paid off my private student loans earlier so that way the compounded interest wouldn’t have backed me with so much debt. And just recently I was able to get rid of those student loans and then free up over $13,000 of interest that I can now put towards other things.

Katie H (07:07): I’m Katie Homar from University of Pittsburgh and what I wish I knew about money earlier in my career was the importance of researching salaries and negotiation.

Alex Y (07:18): Hi, this is Alex Yen, a second year postdoc at Boston University’s professional development and postdoctoral affairs office. The thing I wish I had known about money earlier in my career, and I think especially in graduate school, is that open a high yield savings account as soon as you can and put just a little bit of money, even if it’s 20 bucks, 30 bucks a month. Just having that and knowing that it can, it’s a long term sort of savings space that will continue to accrue interest, will make you feel less anxious and look forward to a time when you can save more

Dan O-B (07:56): Dan Olson-Bang, Syracuse University. If I had known this, I would’ve been grateful. Uh, don’t take out loans during your PhD.

Ryan U (08:05): My name is Ryan Udan. I’m director of the office for postdocs at UTM, the Anderson Cancer Center. As a long time trainee that did not make a lot of money, who navigated into a career path that I was ultimately happy in, it did take too long of a time to get to that career path that for me, I wish I knew about other career options that I would’ve been happy with earlier that paid better and earlier. So now I have a better understanding of all the other diverse career options that are available to people, not just for people with their PhDs, but for other types of professional degree programs that would’ve gotten me to a space where I was happy with my job and that I was making a lot of money more quickly. For example, I didn’t know about optometry field, I didn’t know about radiological careers and you know, the flexibility you have for, uh, uh, obtaining jobs more easily and, and many different places from small towns to big cities. And again, immediately after you get sometimes an associate’s degree, that stuff for me was a black box when I was training.

Giovanna G-M (09:14): Hi, my name is Giovanna Guerrero-Medina and I’m director of Diversity programs at the Yale School of Medicine and the Wu Tsai Institute. One thing I would’ve liked to know about money earlier in my career has to do with how much life costs and how there are gonna be times in your life when you will need to have extra cash because of health emergencies. Because you have to take care of family members who are sick. You have an emergency trip that you have to plan and so it’s important to have a, a fund or a a some money that is liquid that you can use in an emergency at some point in, in my life after my graduate school, my family had some emergencies and I also had some healthcare costs and it was really important for me to have that extra cash that I had saved and separated.

Bill M (10:15): Bill Mahoney. I’m the Associate Dean of graduate student postdoc affairs at the University of Washington. I’m also faculty in the School of medicine and I wish I understood a little bit better that making career decisions based on the next paycheck, the most money, it’s only part of the decision. You have to make it on what you love doing, the people you’re gonna support. And if you choose to stay in higher ed, you’re probably gonna not make as much money, but you’re gonna have a bigger impact on training the next generation of scientists and students to go on and do bigger and better things in uh, and improve the world.

Meredith O (10:44): Meredith Okenquist, Director of Career Management Villanova University. What I wish I knew more about was retirement planning at the very onset of my career and investing the full maximum percentage for my 401k.

Kirsten R (10:59): My name is Kirsten Ronald. I am the program manager of advanced degree career management at UT Austin. I wish I had known that you don’t need to go back to school to make a massive career change and I also wish someone had talked with me about the ROI of going back to school before I did it.

Colleen G (11:13): My name is Colleen Gleeson and I work at the University of Texas at Austin as an associate director for advanced degree employer integration. One thing I wish I had known about money earlier in my career is thinking about careers and jobs and salary packages and benefits in a way that like evaluates in the total compensation package and how invaluable it is to have employer paid health insurance and to have things like pay time off and something that forces you to invest in a retirement account or a pension to make you think about the future.

Marlene B (11:51): So my name is, uh, Marlene Brito, Dr. Marlene Brito and I’m the associate director of DEI at NYU Career Development Center. And what I wish I had known before I started a PhD was that you self-fund a lot of your activities as a doctorate student, especially if you’re a professional who’s going to school part-time, but sometimes even as a full-time student. So like save money for conferences, save money for research expenses because all of that cost thousands of dollars.

Melissa K (12:21): Melissa King, University of Mississippi, the best advice I ever received about money was when my husband and I married 13 years ago and my mother-in-law told us it doesn’t matter how much money you make if you spend all of it right? So knowing how to spend and how to save is by far the best piece of advice. It doesn’t matter if you make six figures if you’re, you’re spending all of it, right? Mm-Hmm. <affirmative>.

Lee T (12:46): Hi, my name is Lee Tacliad. I’m a manager of alumni and employer engagement at Scripps Research and what I wish I knew about money earlier was the magical effect of compound interest.

MaKenna C (13:00): Hi, I’m MaKenna Cealie. I am a graduate student at the University of Rochester. What do I wish I had known about money earlier in my career. So I had some great advice about learning to save and invest, but I think sometimes I took that too far. So I think it would also be important to kinda spend your money too as sometimes and enjoy your life. I read this great book Die With Zero and I think that was very helpful for me.

Dan E (13:26): Hi there. My name’s Dan Emmans. I am senior coordinator for student development and engagement at Harvard Medical School. Early on, get into the habit of putting 20% away and you’ll never go wrong.

Tamar G-C (13:36): Hi, I am Tamar Gaffin-Cahn. I’m the assistant director for graduate students at the Career Development Center at Emerson College. And one thing I wish I had known about money earlier in my career is put money away. Invest really early on, even if it’s just 20 bucks a month, invest early ’cause it will grow. I would also say to diversify where you’re investing and there are lots of opportunities of how to invest in uh, that’s connected to your values as well. So there are opportunities to invest in green energy, invest in programs that are good for the environment and good technology and things like that so it your money isn’t going to corporations that do harm to this world.

Bryan M (14:12): Hi, my name is Bryan McGrath. I do employer engagement over at Harvard Medical School. What do I wish? I had known about money earlier in my career that credit cards accrue interests and you should be paying more than the minimum each time.

Linda L (14:24): My name is Linda Louie. I work at the Lawrence Berkeley National Lab and I wish that earlier in my career I had known that retirement was a thing you needed to plan for <laugh>.

Jessica R (14:35): My name’s Jessica Roman, I’m the Assistant director of Graduate career Services at Stony Brook University and something I wish I would’ve known about money earlier in my career is how private loans and their interest works because I thought it was like public loans where you have the same principal and then I graduated and I got the bill and it was very shocking and I’m still paying that off, so I wish I would’ve known how that works so I would’ve made payments while in college.

Breanna G (15:06): My name’s Breanna Gallagher and I am a career coordinator at Oklahoma State University and what I wish I would’ve known about money earlier in my career is literally just the lingo of all of the money talk, being able to understand my benefits, being able to understand 401ks and medical insurance and being able to just understand what I was reading and signing, especially in a really tight window when you’re required to do your benefits in like 24 hours.

Aimzhan I (15:39): My name is, Aimzhan Iztayeva. I work as a program associate at the graduate School of the University of Minnesota. What I wish I had known about money earlier in my career is how investment works and also how taxes work with regard to money that you gain through investment.

Natalie C (15:56): My name is Natalie Chernets, I’m director of postdoctoral affairs and professional development at Drexel University. What I wish I knew about money early on is that higher education doesn’t necessarily mean more money in your salary, especially if you are an immigrant coming from another country. There are other barriers you have to think through to earn that salary.

Rowena W (16:14): Hi, I’m Dr. Rowena Winkler. I work for the University of Maryland, Baltimore County or UMBC in their career center as the assistant director for graduate student career development. So what I wish I had known about money earlier in my career is, especially as a graduate student, I, I’m an immigrant child, so my parents came here from the Philippines and I didn’t really know good personal finance and money management practices. I wish I had taken out loans or looked for more scholarships because as a graduate student in particular, I went into a lot of credit card debt just trying to finance my way through school. And so I wish I had known more about personal finance resources or funding options as a graduate student.

Mearah Q-B (16:56): My name is Mearah Quinn-Brauner. I work at Northwestern University. I wish I had known that sometimes it’s a good idea to spend money in order to have more money later in your life. When I was in graduate school, my mom tried to convince me to buy a house and I thought that that was insane. It was a crazy idea given how much money I had at the time, but it would’ve been worth figuring out so that I would have a house in Philadelphia now.

Diane S (17:24): Hi, my name is Diane Safer. I’m the director of career and Professional Development at the Albert Einstein College of Medicine where I work with PhDs and postdocs. I wish I would’ve taken the advice that I give to my students and postdocs right now and really negotiated for higher salaries and higher starting salaries right when I got the job because you can never really make it up once you’ve started a job and you’ve lost all your negotiating power once you’re in.

Mallory F-L (17:49): Hi, my name’s Mallory Fix-Lopez. I’m with Language ConnectED. I wish I would’ve known to charge for my work earlier in my career. I’ve done a lot of work for free <laugh>.

Emily S (17:59): So my name is Emily Sferra. I am the coordinator for career and Professional Development at the University of Michigan Medical School. If given the option to contribute to a retirement account you should contribute to a retirement account.

David B (18:19): Hi, I’m David Blancha. I’m a program manager at the OCPD at University of San Francisco. The thing that I wish I had known about money earlier, especially when I was a graduate student, is that when I was doing all of the math on my finances and what I might like need to live while I was in graduate school, all of those numbers would be wrong. Eight years later when I graduated I had no, I, no sense of adjusting for inflation or markets changing or anything like that. So I assumed the math I had done to live in a one bedroom apartment <laugh> in New York in 2015 is what I was going to need in 2022 and that’s absolutely not, not right. <laugh>.

Commercial

Emily (19:09): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2024-2025 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Orientations or very close to the start of the academic year would be a perfect time for tax education or general personal finance content. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

What Do You Wish You Had Known About Money Earlier In Your Career?

Alexis B (20:37): My name’s Alexis Boyer. I’m assistant director of Graduate student career services at MIT. And I wish I had known the difference between a 1099 and a W2 and I wish that I had known that the skills that I was developing were worthy of being paid.

RC S (20:54): RC Stabile, uh, Vanderbilt University, director of trainee engagement and wellbeing. I wish I knew about investing, putting money in target date index funds and I wish I knew about high yield savings accounts earlier.

John M (21:10): Hi, my name’s John Miles. I’m the Chief Executive officer of Inkpath, uh, the professional development platform. I wish earlier that I had known that by spending my time working on Shakespeare and taking a very academic direction that I wasn’t counting myself out of decent salaries later on that I should be confident that time will reward you and, uh, you can indulge those academic perspectives, uh, without feeling like you are narrowing down your options for the future.

Zarna P (21:42): Hi, I’m Zarna Pala. I am the assistant director of the Biological Sciences graduate program at the University of Maryland. And I wish I knew, uh, more about investment and investing money in the right direction or any sort of like small investments which I, which I could have started early on, uh, as a graduate student, as a postdoc fellow, that would’ve been really helpful.

Anne-Charlotte M (22:08): Hi, I’m Anne-Charlotte Mecklenburg. I am the postdoctoral associate for academic support at the University of Maryland College Park. And I think something that I wish that I knew about money earlier in my career was just all of the different ways of like saving money and organizing money that I would need later in my career as a graduate student it was kind of like, okay, I have a stipend and it covers all my living expenses and I can’t really do anything else with it, so I just spend it until I don’t have it anymore. And now that I’m sort of moving into more of a mid-career moment, it’s like, oh, I have a retirement account through my university and I don’t really know how that works. All that kind of stuff that I feel like in other careers people kind of learn that kind of stuff closer to right af out of college. It’s something that now feels like a little bit delayed for me and now I feel like I’m a little bit behind. So something I wish I was thinking about before I needed it so that I’d be ready when I did need it.

Amy A (23:00): I’m Amy Aines and I’m with Championing Science. What I would’ve loved to have known more about is how to invest. I think I was conservative and I was okay with a 401k with someone else thinking about it, but it would’ve been nice to know for myself what that was about and how I could take advantage of the opportunity.

Gina D (23:18): Gina Delgado, director of doctoral and post-doctoral life design and what I wish I’d known earlier about money in general is not just knowing about money but not being afraid of being broke because I’m not afraid of being broke.

Beka L (23:32): This is Beka Layton. I am the director of professional development at UNC Chapel Hill and thinking back to when I was a graduate student, I think benefits life insurance 401ks and kind of how to balance life expenses with long-term goals and budgeting. I think that whole like black box of like, I don’t know any of those things was mystifying to me. So things I learned by accident along the way and wish I knew then.

Aurora W (24:02): I’m Aurora Washington. I am currently a postdoctoral research fellow at the University of North Carolina in Chapel Hill. And something that I wish I knew about finance when I was a graduate student is how to budget a little bit better and to manage my expectations because I’m a postdoc, postdoc don’t get paid well and so I wish I knew a little bit more about benefits in negotiating in Texas.

Sam R (24:29): Hi, um, this is Sam Ramosevac, I’m director, um, at the office of Postdoctoral and Mentor trainee program at Emory University. Uh, I wish I actually negotiated my salary and I think it’s really important at least to attempt to negotiate and get more money for the level of experience you have and you know, just at least to try.

Ian K (24:57): I’m Ian Krout. I am a postdoctoral fellow at Emory University. For me, being a postdoc, I went on a training grant and realized that I was losing some benefits that I had gotten as being an employee at the university. And so I actually began to ask questions to both my PI and the postdoctoral office about if this needed to be the case and if there was any way to get benefits and advocating for myself was enough to get those benefits brought back through a workaround at the university, which was really positive for my experience and helped me to still be able to save for retirement and not pay into my health insurance myself.

Jessica T (25:35): My name is Jessica Taylor. I’m a research fellow at ACLS and I wish I had known when I was a graduate student that you’re supposed to tip in hotels.

Natalia (25:44): My name is Natalia, I work for the University of Pittsburgh as a career advisor. Yeah, and I wish I, I had known that money would be able to buy me freedom of choice.

Autumn A (25:55): Well, my name is Autumn Anthony. I manage the office for graduate student assistantships and fellowships at GW. I think it would’ve been really important for me to realize earlier that if you are looking to make more money, then you have to go to the organizations that actually have more money <laugh> and that when you are committed to the work that you’re doing and working hard and looking for opportunities to succeed in your work, just because of your commitment and just because of your hard work doesn’t mean you’re going to make more money. So you have to go where the money is.

Jessica V (26:33): My name is Jessica Vélez. I am the membership engagement and early career programs manager for the Genetic Society of America. And I definitely wish I had known that I do actually make more money than I think I do. And by creating a budget, that’s how I learned that I made more money than I thought I did and I signed up for a budgeting app at some point in my graduate career. Because of that, when I finished my PhD, I wasn’t able to immediately get a job, but I had enough money saved up from the budgeting I had done on a graduate school stipend to survive for two or three months without having to worry about unemployment because you can’t apply for unemployment as a graduate student <laugh>. So that was extremely beneficial and I’m glad that I finally learned that, but I wish I had learned that earlier for sure.

Melissa B (27:20): This is Melissa Bostrom. I’m assistant Dean for Graduate Student Professional Development at Duke University and I wish I would’ve known that investing for retirement didn’t have to be perfect. It didn’t have to be the best. I just had to get started with a small amount on a regular basis.

Chris S (27:35): Okay, my name is Chris Smith. I manage the Office of Postdoc Affairs at Virginia Tech. The importance of investing in special retirement vehicles, whether that be a Roth IRA or traditional IRA that have different benefits in terms of tax purposes, whether you pay them now or later. And it might be real benefit when you’re in your lower paying years to be in investing in or Roth where you’re paying the taxes now and then when you eventually retire, you don’t know taxes on that and all the compounding that happens over those 30 plus years of your career.

Jason H (28:06): I’m Jason Heustis, assistant Dean for Student Development Evaluation at Harvard Medical School. I’d say one of the things that would’ve been helpful to know in graduate school, similar decisions you’d make when you start getting a real paycheck, things like allocations for insurances, the different types of saving options, that type of thing would’ve been helpful for me to know earlier, right? Or to be prepared for those decisions so that I can do as much research at the time. That would’ve been helpful.

Anne X (28:30): Hi, my name is Anne Xiong. I’m from UC Berkeley Center for Financial Wellness. I wish I know that no matter how much money you have, you can start investing early.

Kelli W (28:41): I’m Kelli Wright from Wayne State University. I’m the financial wellness advisor there. I’ve been there since March of 2023. I’m an accounting background, so I’m really excited about this space and what I wish I would’ve known is the importance of saving, creating that healthy habit, of saving even $10 a month just where I would be at financially if I would’ve known that.

Charah C (29:07): Yes, my name is Charah Coleman. I work for University of California Merced, and I am the Financial Wellness Center program manager on that campus. I would say the time value of money. I don’t have any regrets with how I spent my money in my undergrad or even early grad school, but I wish I really would’ve invested earlier and given myself a leg up a lot earlier. Now I definitely have to invest a lot more aggressively and I have to cut a lot more expenses now than when I was starting off in my career. I, I definitely think having that awareness of the time value of money being aggressive at the front end, I think would’ve behoove me a lot better.

Beth H (29:49): Beth Hunsaker, MS. Uh, associate Director, financial Wellness Center, university of Utah. After my graduate work, I did take some time off to have kids and although that was a wonderful chapter of my life, I really wish I would’ve taken time to keep my network strong, to keep working on my skills because when it was time to come back for my career, which has to do with money, it was a little harder for that on ramping. And I think that there is a way to balance and do both, and I wish I would’ve focused a little more on that.

Roland K (30:27): Roland Keller Jr associate director of financial aid at Tulane University in New Orleans, Louisiana. One thing that I wish I would’ve known about a little sooner is the importance of credit. Credit is very important. It literally is life or death. So I would’ve wished I would’ve been more educated about credit

Darrel S (30:45): Darrel Stufflebeam, uh, a doctor in education from KU and I’m the new assistant director for Jayhawk Finances at ku. Uh, I wish I’d have known about the importance of starting early and compound interest and I did not have a financial background and my parents didn’t really have advice. So if I would’ve started a little earlier then I’d be much happier now, but I’m just spreading the word as part of my current job.

Khalilah L (31:12): My name is Dr. Khalilah Lauderdale. I am the Associate Athletic Director for student services at the University of Southern California. And earlier in my career, I wish I had known, um, concerning money more about how to buy a home. I was very green in our process and very reliant on my realtor resources, so that would’ve been helpful.

Nafisah G-B (31:35): My name is Nafisah Graham-Brown. I am a program administrator of a financial coaching program at SUNY WCC, that’s Westchester Community College. What I wish I had known about money earlier in my career was the value of retirement savings. Uh, unfortunately I was in a job where we were discouraged from taking part in the pension and retirement program mainly because the people that were talking to us also didn’t have much information or knowledge. So I guess the value of it wasn’t seen by most of us. And I guess the lesson is make sure you’re getting your information from someone who knows.

Aly B (32:13): My name is Aly Blakeney. I am an instructor of economics at Phillips Academy Andover. What I wish I had known about money earlier was honestly how important it is to talk with any significant other. If you have like a very serious prospect with them to talk with them and be like, Hey, where are we at in terms of money and debt? I think that will cause stress quicker than anything. And setting yourself up for future means also taking care of your financial wellness via your emotional intimacy wellness as well.

Tony F (32:45): My name is Tony Froelich. I am the financial literacy coordinator at the University of Tennessee at Chattanooga. What I wish I’d known earlier in my career about money is the power of investing in yourself. I always thought of saving as taking what was left after the month and that was my savings. So whether that was $10 or negative $50, pulling outta my savings account, but learning the lesson of taking that savings out of my paycheck first and putting that away and then spending the rest has been life changing.

Zach T (33:19): Yes, Zach Taylor, assistant professor at the University of Southern Mississippi, and what I wish I had known about money earlier in my career is saving it earlier in my career would facilitate a lot more time and that as I’ve gotten older, time is money and I’m now realizing how much more time money can buy you. And that has become so important as my parents have aged and as I have continued in my career where I feel like I have enough money now, but I don’t have the time, but if I had more money, I know I would have more time. So I think the relationship between time and money is what I wish I had known earlier in my career.

Lyndsi B (34:04): I am Lyndsi Burcham. I am the financial Wellness Program manager at the University of Pennsylvania. I think what I wish I had known about money earlier in my career isn’t even necessarily about money. It’s the fact that like you don’t have to make one decision and have it be the right decision for the rest of your life. Like you can make changes at any point along the way. And I think a lot of times when we’re having conversations about money with students, they’re so caught up in the fact that they have to do the right thing first. And oftentimes there is no right thing. And even if there is a right thing, it’s gonna change depending on your life circumstances. There’s a lot I could say about tactical information about like what is a credit score versus a credit report and, and knowing those kinds of things, but like the psychological component of it, which is you are allowed to fail and like you can recover from failure. I, I don’t think we talk about that enough and instead we instill fear in students that they have to do things the best way.

Peter B (34:59): Hi, I am Peter Bye. I am a doctor of music student at Indiana University and what I wish I had known about money earlier in my career is that sometimes it works out well and sometimes it doesn’t work out well and you kind of gotta roll with the punches and make adjustments constantly. It’s never something you figure out. You can’t solve it unless you’re like super rich, but you can make changes and slowly affect your, your situation hopefully in a positive way. Uh, so you kind of just have to roll with the punches until you hopefully get to the place you wanna get to.

Outtro

Emily (35:41): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

Unveiling the Hidden Curriculum of Grad School Funding for First-Gen BIPOC Students

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In this episode, Emily interviews Dra. Yvette Martínez-Vu and Dr. Miroslava Chavez-Garcia, the co-authors of the recent book Is Grad School for Me? Demystifying the Application Process for First-Gen BIPOC Students. Yvette, Miroslava, and Emily dive into the financial aspects of the grad school application and admissions process, from applying for external fellowships to negotiating funding offers to preparing financially to start graduate school. Yvette and Miroslava share their personal experiences as well as their insights from prospective students involved with Yvette’s Grad School Femtoring coaching and podcast and Miroslava’s McNair program at UCSB. This episode is a must-listen for prospective PhD students, especially those who come from underrepresented backgrounds.

Links mentioned in the Episode

Uncovering the Hidden Curriculum of Grad School Funding for First-Gen BIPOC Students

Teaser

Yvette (00:00): One year, there was one student who was really, really struggling financially, had gotten into his top choice, had to move from California to the Midwest, and he couldn’t even afford his airfare. So he contacted his soon to be advisor, told that person his situation like, look, I, you know, I’m really trying to make it things work. I’m trying to work, I, but I, I just can’t afford my flight. And that advisor, without even thinking twice, bought him the flight.

Introduction

Emily (00:37): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (01:06): This is Season 18, Episode 4, and today my guests are Dra. Yvette Martínez-Vu and Dr. Miroslava Chavez-Garcia, the co-authors of the recent book Is Grad School for Me? Demystifying the Application Process for First-Gen BIPOC Students. Yvette, Miroslava, and I dive into the financial aspects of the grad school application and admissions process, from applying for external fellowships to negotiating funding offers to preparing financially to start graduate school. Yvette and Miroslava share their personal experiences as well as their insights from prospective students involved with Yvette’s Grad School Femtoring coaching and podcast and Miroslava’s McNair program at UCSB. This episode is a must-listen for prospective PhD students, especially those who come from underrepresented backgrounds. In fact, I think Is Grad School for Me? is a must-read as well, so I’m giving away three copies of this book to listeners of this podcast. If you are applying to PhD programs in fall 2024 and are in the target audience for this book, i.e., a person of color who is a first-generation, low-income, and or non-traditional student, you can enter the giveaway at PFforPhDs.com/isgradschoolforme/. I would also appreciate you sharing this episode with any prospective graduate students in your life. You can find the show notes for this episode at PFforPhDs.com/s18e4/. Without further ado, here’s my interview with Dra. Yvette Martínez-Vu and Dr. Miroslava Chavez-Garcia, the co-authors of Is Grad School for Me?

Will You Please Introduce Yourself Further?

Emily (02:56): I am delighted to have joining me on the podcast today, Dr. Yvette Martínez-Vu and Dr. Miroslava Chavez-Garcia, who are the authors of the recent book Is Grad School for Me? Demystifying the Application Process for First-Gen BIPOC Students. And as you might imagine, well this guide is incredible for this population and frankly, any prospective graduate student, I highly recommend the book. I just finished it a couple of weeks ago and there’s a lot of financial content within this, as you might imagine. So I was really excited to reach out to these authors and get them on the podcast so we can dive even further into the financial aspects of the application and the admissions process for graduate school. So, Yvette, Miroslava, again, welcome to the podcast. Would you please introduce yourselves a little bit further for the listeners? Yvette, why don’t you go first?

Yvette (03:41): Yes, of course. Hi everyone, my name is Dra. Yvette Martínez-Vu. I’m a first gen Chicana, chronically ill neurodivergent productivity and grad school coach, consultant, author, speaker. Um, I do a lot of things. I have a PhD in theater and performance studies. I worked in higher ed for over 10 years supporting predominantly low income first gen students of color. That’s actually how I met Miros a few years back. Actually, at the start of the pandemic, she became my supervisor. And since then we’ve developed and nurtured a great relationship, which has manifested in US publishing and co-authoring this book together. So that’s a little bit more about me and what I do.

Miroslava (04:25): Great. Yeah. Hi. So I’m Miroslava Chavez-Garcia and I’m a professor of history and I’m also the faculty director of the UCSB McNair Scholars Program. So I’ve been at UCSB probably for the last 10 years, and before that I was at UC Davis, and then I had another job before that. So I’ve been in the game for a little while. Um, also a product from UCLA PhD Yvette and I have that in common as well. And what else about myself? So I’m also a mom juggling with children and a little needy dog. So life just keeps happening no matter what phase you are.

Grad School for Me? Demystifying the Application Process for First-Gen BIPOC Students

Emily (04:59): Fantastic. So let’s hear more about the book. Um, who is the intended audience for the book and why did you write it

Yvette (05:05): As referenced in the title of the book, uh, Is Grad School for Me? Demystifying the Application Process for First-Gen BIPOC students. The book is predominantly, um, catered to first gen bipoc students. But then, um, more broadly, we also address concerns for anyone who fits the quote unquote low income category or also non-traditional categories. So we’re thinking here of, you know, folks from working class backgrounds, we’re thinking of folks who, uh, maybe ages 25 and older. We know that more and more college campuses are no longer having what we may consider traditional students. A lot more of the, uh, student population is going back, they’re older, they have dependents, they have other commitments, and we wanted to meet, be able to address those other factors that individuals consider when they’re thinking about whether or not they want to pursue graduate school.

Miroslava (06:02): Yeah, definitely. I think that we were really interested in this, these folks who had not seen themselves reflected in all the literature that’s out there. So in looking at what’s been written, um, it’s all kind of cookie cutter in some ways. And they imagine maybe they don’t even imagine who, but we imagine it’s not us, right? When we’re looking at these books. And so we were very much with that intention to be able to provide a guide to all those folks who perhaps didn’t see themselves, um, you know, reflected and, and, um, and that was really important to us. And initially, I would have to say for myself, and I’m not sure if that had this thought, I was thought like, what, is there enough? Are there enough of an, is there enough of an audience for this? And, and yes, there is, you know, it’s, it’s that sort of, um, audience that we don’t hear from, but they’re definitely there. And the press was very, um, supportive of, of this, um, of, of, of the approach of the book. So we’re really happy that we were able to, um, target this population that’s been overlooked for so long.

Yvette (06:56): I have had the idea for this book since I was an undergrad. I was part of the inaugural cohort of Mellon May Fellows at UCLA. And despite the fact that I was in a very privileged position of getting into this prestigious graduate school preparation program, despite receiving ample support, I still was stumbling so much along the way. There was still so much information that I was missing out on. I still struggled to find mentors femtors, and I felt really frustrated and I found myself constantly pulling, you know, trying to find from the weeds as many resources as I could and then sharing them. And every year I was always surprised like, why is there not a book like this? Why is there not a book like this? I don’t see myself represented, not just, um, among the faculty, among my department. I was an English, uh, literature major at the time, but even within the literature, the research, the books I was running into, I didn’t, again, I didn’t see anyone like me a First Gen Chicana represented. And I wish that I had had that how to book. So that was, you know, an idea that I had many, many years ago. Of course, it didn’t come into fruition until Miros literally asked me when I’m gonna be writing a book. I never took it seriously until she approached me. And I thank her for her Femtorship and for her support and guidance, even through this publication process. This work wouldn’t have happened if it hadn’t been for the two of us coming together.

Miroslava (08:26): Like Yvette, most of my career has been focused on doing this kind of work, right? The hidden cur- un- unraveling or uncovering the hidden curriculum, addressing all of those isms, all these things that we feel, but we can’t quite put our finger on it. And so, um, when I was in grad school, there were some guides, but nothing like in the last that has been produced in the last 10, 15 years. And I didn’t even think we could encapsulate. And, and granted, this is not all about grad school. This is about just applying, right? So, but we’ve, it’s a pretty hefty book and we’ve top- tackled one topic. I think there’s many more that can be tackled, um, in the future. There’s other books out there as well. But definitely, um, it’s nice that we’re able to bring so many things together. I, with my more years in academia, but Yvette, with all of our up to date since, you know, things get really quickly, get out of date in academia and there’s new things, new trends, new um, approaches, um, especially we see right now a lot of changes happening. But yeah, it would just worked really well actually.

Emily (09:21): And if someone is convinced already that they need to get their hands on this book, where can they find it?

Yvette (09:26): Yeah, you can get it at IsGradSchoolForMe.com, and you can also find it at most major bookstores and even, um, a good number of independent bookstores have it too.

Miroslava (09:36): And definitely the press. And there is, um, if, if, if, uh, listeners are interested, they can contact us. We have, there’s a, there’s a discount code for now as well. It should probably be there for a while. That makes it more accessible to our, our population

Yvette (09:48): Yeah, you, you can go to the UC press website and this code should work it’s ucpsave30. So again, ucpsave30, it should work as far as we know. We don’t, it doesn’t have an expiration. So if you wanna get it and get it 30% off, um, go ahead and, um, get your copy directly from uc press.

Financial Support During Grad School and It’s Impact on Student Success

Emily (10:10): Perfect. And I definitely learned from reading the book that you all, uh, have an aligned position with mine that having, um, sufficient financial support during graduate school is very important to the students’ overall academic and personal success throughout that time period. Um, can you elaborate on that idea a little bit more? Um, how important is this? I mean, I know you said in the book like, you know, we discourage taking out student loans for our graduate degree and so forth. So just tell me a little bit more about how you came to that position.

Yvette (10:40): I mean, I think a, a big part of it is our experience, uh, both personal experience, experience working with student- with this population in particular for a lot of low income first gen students of color. The question of can I afford it and will I have adequate fund- funding is a very, very important question. And without it, some of them are even willing to go the extra mile of pursuing graduate school. So yeah, getting an advanced degree, especially pursuing a PhD is a significant investment in time, effort, resources. And for some, it’s not even an option without having at least some funding. So that’s why for us, it’s important for them to know, you know, what are the differences in funding options is between PhD programs, between master’s programs, what are these funding options packages even look like? That’s why we provided samples in the book because, um, the more financial burdens you have, if you don’t come in with generational wealth or trust funds or a savings account, just some sort of support, that means that a lot of people end up taking on insurmountable amounts of debt, debt that holds them back from reaching other major life milestones, or they end up staying one too many years in graduate school, they’re having to juggle multiple jobs to make ends meet. Or for a lot of people, they end up getting pushed out. We know that 50% of folks who go into PhD programs don’t actually make it and get to finish. And that’s a problem. And I wouldn’t be surprised if sometimes funding plays a factor in that. So we do think it’s important to, to consider the funding aspects of it, um, when you’re thinking about grad school as your next step in your career.

Miroslava (12:24): Yeah, definitely. One thing that we tackle a lot throughout the book is this idea of fit. Like is this program or this, you know, university institution for me, and one of the, I would say one of the main, you know, sort of categories of that would be around funding. I know my department does not take any PhD students. We can talk about master’s program that’s a little bit different or could be quite different. But PhD programs, we will not take anybody without funding. I mean, we have to bring in people who have support them. So that’s been going on for a while now. And I think lots of programs run that way. Uh, the PhD programs, at least in the humanities where, you know, there’s so much upfront and then no guarantee on the other end that you’re gonna be able to make up pay off that loan and, and, you know, thrive if you’re able to do that, the STEM fields might be a little bit different, but I know that in humanities, um, institutions are a little more cognizant of that, um, disconnect. Sometimes it happens.

Emily (13:13): This is something that I point out when I speak with, um, prospective graduate students. Current undergraduate students is like the funding mechanism for your undergraduate degree and professional graduate degrees is just completely different from, you know, the PhD or the, the research based graduate degrees. And while it may be perfectly okay, um, to take out debt for, um, an MD or a JD or a similar type of degree like that, it’s because the salaries on the other side of that justify taking out that debt. And depending on the PhD field that you’re in, as you just said, Mirsolava, you don’t really know what kind of career you’re going to have or what that salary is going to be on the other side. So it’s that much more important to make sure that your, um, PhD is, um, uh, you’re not, um, leveraging your future <laugh>, uh, when you’re doing that PhD, you’re only building into the future. And so in your book, one of the, one of the sections is about, um, applying for external fellowships in particular. And so why did you take the time in the book to encourage prospective graduate students to apply for that type of fellowship?

Yvette (14:14): You know, I’ll, I’ll share a personal anecdote in relation to this question. When I went into my PhD program, I was awarded a prestigious fellowship. It was a departmental fellowship, and everybody told me, oh, you got full funding, you’re good to go. You don’t have to worry about applying for anything else. And I remember my advisor at the time discouraging me from applying to external fellowships and only later on finding out about fellowships that covered multiple years that could have provided me with additional years of being on a fellowship could have minimized my teaching burden and could have even increased my chances of getting more competitive dissertation year fellowships later on. So for me, I do think it’s important, it’s not just the financial advantage of having another offer that you can then use to leverage your funding package and to shift things around as best as you can, depending on your department and their flexibility, but also access to a network. So for instance, when I became a four dissertation year fellow, I was, you know, I, I entered this space of networking, I joined the national conferences, I started meeting up with people for networking meetings, and I realized, wow, there’s like this whole world of Ford fellows out there that I didn’t know that I could have been exposed to earlier if I had known to apply to the Ford Predoctoral Fellowship if I had been encouraged. So I do think that it, it only increases your chances of, um, having access to more opportunities, having access to bigger networks. So why not do that? Why, like, don’t put all your eggs in one basket and expect to only get funding from your department or even from your program.

Miroslava (16:02): Yeah, and I would definitely agree. I’m also a Ford postdoctoral fellow. I tried the pre-doc and the dissertation, um, but the postdoc was fortunate to get that. And so Yvette’s talking about the networks, like you can’t put a dollar price on those because they’ll stay with you throughout your career. Particularly with the Ford, they always talk about us being a family and people, um, you know, in a good way, <laugh>, I don’t, so families, uh, you know, uh, but those relationships are there. They reach out to you for networking. So it’s, that’s really valuable. I think another thing to think about as well is that they bring prestige. I hate to, you know, I’m not a big, you know, showy kind of person, but nevertheless institution, it brings prestige to the, you know, value to you. Um, it shows that other institutions also value what you’re doing and it also brings more hum umph to your, the significance of your work. And I think that anytime that happens, you know, it’s, it’s for the, for the work, it’s for your subject, it’s for your project, your research, and that’s a win-win. So

Emily (16:56): I think all those reasons are so fantastic to apply for fellowships, apply for fellowships throughout your PhD, not just early on. As you said before, you aren’t when you aren’t sure what your funding is going to be. Um, but I particularly like them for prospective graduate students because, um, during admission season, it can be quite an advantage to have already been awarded an external fellowship. You can come to your program and say, Hey, I’m actually, you thought you were gonna fund me, but I’m actually bringing in X amount of dollars from this other fellowship that, that I just won. Um, can you speak more about the, um, advantages to, to that situation for that perspective graduate student?

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Negotiating as a Prospective Grad Student

Miroslava (19:03): I, I will, if it’s okay, I’m gonna jump in. I’ll give a specific example of one of our, our McNair scholars who, um, had applied to many institutions and, um, a prestigious one UCLA. She would I think she applied in the STEM fields and she got an NSF and that decision happened like overnight. I mean that they, the door was open quickly at UCLA for her to come in. They’re like, oh, come step right in. And, and so she took that position, but she had been, wait, not waitlisted, but I think she hadn’t heard. Um, and so that really granted her that, um, you know, provided I say the ticket to make her own decisions and choices. And so, um, that’s the example I like to share.

Yvette (19:40): I’ve seen the same scenario, so I was gonna say almost an identical scenario, but with a different student <laugh>. Yeah.

Emily (19:48): Yeah, because sometimes the reason for a rejection is not anything lacking in the candidate, it’s just the funding is not gonna go far enough to accept as many people as we would like, or, you know, this particular advisor didn’t have funding, but if you come with it, then you can work with that person. Um, and so it can reverse those decisions or get you off a wait list or whatever that, um, you know, situation might be. And it also provides you leverage for negotiation <laugh>.

Emily (20:12): So let’s talk about that next. I loved that you included information about negotiation in this book. I think a few years ago I didn’t really hear that many people talking about it, but it’s been, I’ve just heard more and more people familiar, like prospective graduate students when I bring up negotiation, they’re like, oh yeah, I, someone already told me I was able to do that, or at least able to attempt it. Right. So let’s talk about that, um, a little bit further. Like, how have you seen prospective graduate students successfully negotiated their funding packages? Do you have any tips about how they should do so?

Yvette (20:40): I think that it’s always important to tread the waters carefully, right? When it comes to negotiating. And it’s also good to have all of your information available. So you wanna know, don’t start to negotiate before you know, you know, what is even feasible. So, um, I’ve, I’ve seen a lot of different scenarios. Uh, one of the most successful scenario that I’ve seen work time and time again is where when someone gets multiple offers and then they send their best offer to their top choice school who maybe may is offering less, and they ask if they can match or increase their offer. And in many cases, they either increase or match it, or sometimes they say, you know what? This is the best that we can offer you. We still really want you, but there’s no way we can compete with that. And it’s up to the student to decide maybe sometimes it is worth it for them to accept the lower offer because cost of living might be different and cost of living makes it so that that’s actually a better offer financially at the end of the day when you crunch the numbers and, and create your budget. So that’s one scenario where that’s been fairly successful. What I’ve also noticed is that a lot of times folks don’t feel like they can negotiate because they say, oh, well I don’t have another offer, or, oh, they’re not offering me any funding. How can I ask? And in these scenarios, I mean, it doesn’t hurt to ask, it is rare. In fact, I’ve only seen this happen for summer programs, but it, it’s rare for folks to have their offer rescinded because they asked for more. Of course, you want to be conscientious, of course you want to be grateful, of course you want to express your enthusiasm. Um, but you can ask, and I’ve seen this happen more than once, where someone didn’t get any, they got into a master’s program, didn’t get awarded any funding, asked if there was any funding that they could apply for or that they were eligible for and could be considered for. And the next thing you know, a few days later, they’ve got a $12,000 scholarship that wasn’t there before. I’m like, so overnight you got $12,000 for asking, you wouldn’t have had that. Aside from that, a lot of applicants don’t know what else they can ask for. It’s not always just tuition remission, it’s not always just a stipend. Some graduate students get, uh, a laptop covered, some graduate students get their travel, um, or re- relocation expenses covered. Sometimes it’s partial, but it’s still something some, uh, I’m trying to think about other things that, that folks will ask for. I remember one year there was one student who was really, really struggling financially, had gotten into his top choice, had to move from California to the Midwest, and he couldn’t even afford his airfare. So he contacted his soon to be advisor, told that person his situation like, look, I, you know, I’m really trying to make it things work. I’m trying to work, I, but I, I just can’t afford my flight there. What can I do? Can I work for you? Like, is there any way that I can figure this out? And that advisor, without even thinking twice, bought him the flight. So it’s all about advocating for yourself. It’s about asking for what you need. It’s about building genuine reciprocal relationships, helping one another out. But it also, it’s about knowing again, what even can you ask for? And sometimes you get some stuff, sometimes you don’t. Uh, but I always kind of lean, lean on the side of asking because I wish that I had been taught this skill a lot earlier on. Now I have that skill of negotiating took many years trial and error. Um, but I, I just, I, I want folks to learn this skill as early as possible because it’s gonna continue to be an ongoing skill that they practice for the rest of their career.

Miroslava (24:26): Yeah, I would definitely agree that it’s like the biggest hurdle is even knowing what to ask. And I would, I was, I don’t wanna say I grew up in the generation, but I came of age in terms of academia that of my generation where we just didn’t ask. We were just grateful, right? As a, as a Chicano Latina, I was accepted first gen immigrant, you know, that I was being, I didn’t even know that this happened at all. So even for me to get comfortable after all these years, it’s really, really hard. So when you, if you’re newer, new-ish or newer ish coming into academia, practice it and you’ll get more comfortable. And, um, also there’s a question of like sharing information with your peers. That’s another topic as well. In terms of funding packages. Do you talk about them or not? Um, other, I’ll just add two more things that I’ve seen in, in the, the last, um, few years I’ve been academia a lot of times I, what I’ve seen in, um, in terms of packages is that it’s kind of set the amount, but the one thing you could do is you could ask for money to be moved around. Like instead of having that fellowship off the first semester, I’d like it to be off the second semester so you can negotiate those things. So moving money around. Also, another thing to not, not forget or, um, is summer funding. Um, ’cause a lot of these packages do not include summer funding and then summer rolls around, it’s like, oh, oh, you know, we’ve had horror stories here on my campus where students live in their cars and things like that because there’s no, they can’t afford, you know, rent in the summer In Santa Barbara here it’s very, very expensive. So some programs are getting much better at providing funding or helping them find some form of a TA ship over the summer. There’s a lot of course, a lot more online, um, online courses. There’s a huge push in our University of California system for more of those courses. And so that’s a, a space where graduate students can work and make some money over the summer. But, um, I would have summer funding like on the table when thinking about a program.

Emily (26:10): I love what kind of both of you pointed out in that, is that the, the, the start of the negotiation process or the pre-negotiations aspect is figuring out, just really having clarity on what the offer is on what the funding path is, both in the first year and in subsequent years. Um, and even just asking some clarifying questions like Yvette, your example of someone saying, well, you know, is there an internal fellowship that I could apply for anything that we can do here, um, that can sometimes result in, uh, the, the outcome you want from a negotiation without even feeling like a negotiation. You were just asking some clarifying questions. Oh, I didn’t see that there was, um, a moving stipend included in this offer, but I, I’ve seen other universities do that. Is that something that you all offer? That’s pretty like low stakes and easy to ask and it could potentially result in an offer being made. I think something that perspective graduate students should know about the negotiation process, and you all both kind of pointed this out in different ways, is that the, the director of graduate studies or whoever the person is that you’re approaching about this, um, potential augmentation of your funding offer, they know a lot more about what levers, you know, can be pulled, what can be adjusted than you do. And so I think it’s really helpful to keep your question or request very open-ended. Like is there anything that you could do to augment this package? I’m not sure how that could come about. Um, instead of saying something like, I must have my stipend increased by X many thousands of dollars because it’s an, that’s an easy no, a lot of times a base stipend can’t be increased because the rates are set, you know, above that person’s pay grade by far. But maybe there’s, you know, a top up fellowship that they could offer you. Maybe they can put your name forward for an internal fellowship. Maybe they could, uh, get you into subsidized housing. So they know all the kind of background things that could happen much better than you do. And so I think, yeah, just keeping it open-ended is a good idea. Do you have any other tips about the negotiation process that you’d like to add?

Yvette (27:57): Well, there’s one thing that you just reminded me of is about asking clarifying questions. Because not every offer looks the same. Some are very clear and they lay out every year what you’re getting. And others are more vague. They’re like, you’re gonna be receiving a stipend of X amount every year in the program. Okay, how many years is guaranteed? And you wanna have that in writing. So first I would say get very clear about what your offer is because sometimes it’s not very clear and you’re made to feel like maybe you just aren’t reading it right. So I’ve had so many cases where folks ask me to read an offer alongside with them to make sure that they’re understanding it correctly. And then I go over, I’m like, yep, they’re not telling you how many years <laugh> you need to ask this and this and this. You need to ask about healthcare. ’cause healthcare is also not the same. You need to ask about professional development support because again, that’s not the same. I’ve had clients who have had their departments pay for my coaching services and I’ve had folks ask, and if they hadn’t asked, they wouldn’t have had that support. So you, again, just make sure before you negotiate, ask as many clarifying questions as you need to know exactly what you’re getting offered. And once you know what you’re getting offered, sometimes it can help to see if you get in somewhere else to compare and contrast the offers or compare and contrast to some of the offers we mentioned in the book. Which, you know, unfortunately, I would say they might become outdated at some sort, but, or at some point. But, um, sadly these stipends are not going up that much more. So you can kind of compare and contrast between your offer and a friend’s offer if they’re comfortable, your offer and another offer or your offering, even the samples that we have in the book. So you can get a sense of what information you do have, what information you’re missing and what’s, what are the things that are your priorities that you want to ask for. Even childcare is another one that comes up too, that people ask about. Yeah, yeah.

Miroslava (29:52): I, I will add to, um, to last things and something just piggyback on what Yvette was saying in terms of, uh, you might ask as well, like, will there be other opportunities for, um, fellowships or small grants in our program at the end of the year, we have the award ceremony and people apply for these smaller, you know, pots of money, a thousand, 2000 or even $500. Um, and sometimes those pot, those awards are for people working in specific areas, but sometimes the larger, beyond your department, the graduate division might have, um, fellowships for, um, maybe first generation students or maybe Asian American students working in a particular field. So again, like as Yvette saying doesn’t hurt to ask, um, are these opportunities available for me down the road?

Emily (30:33): I wanted to follow up on one of the thing you said Miroslava, which was that, you know, um, some time ago or, or back when you were admitted to graduate school, there was this attitude of, oh, they admitted me. I’m so grateful. This is amazing. I’m not maybe gonna look too closely at what this offer is. I’m just gonna say yes. Um, because you’re so flattered, right? To be admitted right to academia, this, um, this particular institution. And I, I definitely don’t think that attitude serves the student well. In fact, during the, um, admission season, after they’ve extended an offer of admission and before you accept it, that’s the time period when that student has really the most leverage and the most power in terms of negotiating and getting what they want and, and so forth, um, compared to any other time later on in graduate school. ’cause once you say yes to them, you’re committed. And the longer you spend in that program, kind of the more sunk costs, um, there are. And so you really don’t have as much as much leverage later on as you do during the application process. So I just wanna point that out as like, um, it’s, it’s a, it’s a golden opportunity <laugh>. So when you get are in that season, um, take the best advantage of it that you can because it’s not, it’s probably not gonna come around again, frankly.

Yvette (31:38): And I would encourage folks to get support in this process because for some of us, it’s also a major cultural difference and it feels wrong to do it. Like there’s guilt <laugh> and there’s shame involved in asking for more. And so it can help to lean on a mentor femtor, someone who’s been there, who has experienced that, who can push you or coach you or guide you so that way you can test it out and have that support. Maybe they come back, reply back, we can’t do this, but can we do that? And just that, just a lot of people do this even just professionally in their careers. They’ll hire someone to help them with the negotiation process. You know, a lot of folks, recruiters, you know, they work outside of academia, like this is the norm. But for a lot of first gen students, they don’t know this is the norm. And if they’re coming from different cultural backgrounds, then they’re made to feel like this is not okay. But it is. And, um, yeah, just if, if it’s really hard for you because it was for me at one point, get the help and support that you need from a trusted mentor Femtor,

Emily (32:44): I think something that might help with that, um, sort of realignment of mindset there is understanding that, again, as I said earlier, being sufficiently financially supported during your graduate degree is more likely to help you get to that desired end point, um, of graduating and moving on to a wonderful career, which is actually where your interests and the interests of the program are completely aligned. We, everybody wants that for the student. And if finances are going to, um, help that and help the person not be stressed and not be distracted and not have to side hustle and do all the other things that people have to do, um, to make ends meet, then that’s good for the program too. So I don’t think it’s, um, illegitimate at all to <laugh> to bring it up, but as you said it, it can take a little bit of an adjustment of, of the mindset and, um, dealing with the, the cultural backgrounds of everybody. So thank you so much for, um, for elaborating on those points.

Opportunity Costs of Pursuing a PhD

Emily (33:31): And then last question, or second to last question here, um, is let’s talk a little bit about what the opportunity costs are of pursuing a PhD because they are quite steep. And how should a prospective graduate student evaluate whether graduate school is going to be, um, a good investment for their career?

Yvette (33:50): I mean there, there are a lot of opportunity costs. Um, the first thing that comes to mind off the top of my head is the amount of time that a lot of people spend in graduate school. You might be spending anywhere from four to 10 years of your life in a PhD program. And while you, your income stays relatively the same, you’ve got colleagues whose income might be going up, who are advancing in their careers, who are getting promoted, and it can feel like that’s a big, um, that’s a big sacrifice that you’re making to pursue this PhD. So that’s one thing is the the income. The other thing I think about is, um, saving and oh, not saving, investing for retirement. A lot of times when folks are in graduate school, because your income is relatively low for a lot of people, unless you’re working on the side or working full time while you’re doing your PhD, you know, a lot of folks put their, uh, retirement investing and retirement accounts on hold. And what does that mean? That means, again, four to 10 years of your life that you could be investing, that you could be preparing for your future retirement that’s gone. Um, and even some folks put their life on hold, big major life decisions on hold. They’re like, oh, I don’t wanna have a baby or I don’t wanna get married or I don’t wanna, whatever the big milestone is in their life. So those are some things to keep in mind. That’s why we ask in the book, if graduate school is right for you and also when is the right time? Because people ask all the time like, when is the right time to go? Should I go after undergrad? Should I take a gap year or two? Should I get some work experience? And really it’s you and your circumstances and you get to decide when is the right time for you. There is no right or wrong time, even if you go back 10 years later. So it is important to calculate these costs to think about like how much is it gonna cost you? Not just if you think about taking on student debt or not just if you think about your income loss, but just thinking about the timing and other life factors and whether or not you’re willing to make that sacrifice for the end goal in sight, which might be a PhD and then whatever other career opportunities can come with a PhD.

Emily (36:03): I wanna underline everything you just said, especially about the investing time lost. Amazing. But let’s not forget about student loans either. If you have student loans from your undergraduate degree and they’re unsubsidized, they’re gonna continue accumulating interest. And as you said, if you put off, uh, if you are able to defer them, which is wonderful for six or 10 years or however long it is, it’s gonna be, you know, the interest will capitalize and the balance will be that much higher on the other side.

Miroslava (36:26): Those years I was thinking, I was thinking about that my twenties, right? ’cause I went straight through, uh, and I was thinking about how much it your life is sort of on hold. I guess for me personally, I kind of felt like I couldn’t make those decisions that Yvette was referring to in terms of a family this or that. ’cause I was so focused on my work and it was really hard for me coming from a family. Um, the questions came up, when are you gonna get a real job? When are you gonna get married? You know, or somebody to take care of you, quote unquote. And I thought like, oh my goodness. And you just have to tell them I’m one, at one point I just said, I’m gonna be in school for the rest of my life and get used to it, you know? And so that, I don’t know if that settled things or not, but um, yeah, I mean you don’t realize these things later I realized, oh, I didn’t invest. I could have been investing. I mean this is for myself, you know, coming from immigrant family and, and um, not having any of this information, uh, later on. But I will say like being on the other side now for all these years, it’s the best decision I could have made.

Best Financial Advice for Another Early-Career PhD

Emily (37:15): This has been just, um, the most wonderful conversation. I thank you so much for agreeing to come on the podcast and telling us about the book and diving deeper into some of these financial aspects. It’s been so wonderful to talk with you. So I want to pose to each of you the question that I ask all of my guests at the end of interviews, which is, what is your best financial advice for another early career PhD that could be a prospective graduate student or a current graduate student, or however you wanna interpret that. And it could be something that we’ve already touched on in the interview or it could be something completely new.

Miroslava (37:43): This is based on some of the the, my own experiences, but I think it’s important when you start thinking about graduate schools, I think it’s important to come with your finances in order to the most, to the best of your ability that it’s important not to come with tons of debt or financial obligations. I think I just think about the, this is sort of like, I don’t wanna say the the, so it is the femtor in me, right? To say not to um, to come and risk putting excessive stress on yourself, on your career in grad school. Just thinking about like you have all these mounting bills, these grad, these undergrad, right? Uh, not only loans, but maybe perhaps car loans or your, you are supporting your family that you decide to, you know, come to graduate school because you, you did get a package and then that will, you know, offset you for a while. Um, I think that it’s really hard to be able to focus on your work if you have all those financial burdens. You know, we can’t, many of us can’t sleep at night when we are just thinking about where’s our, our next paycheck or am I gonna be able to do these things? Um, so you need to think about, you know, because there’ll be so many other hidden costs in graduate school. And so I’ve seen some of my students come with lots of stress, you know, financial stress and I’m always with my mouth jaws my jaw open. Like, oh my goodness, how are you doing it? So that’s one thing I would say, if possible, try to get your finances in some kind of working order or get a system to help you, um, get to your goals.

Yvette (39:01): Yeah, I mean, I’ll echo what Miros just said. I do think it’s important that this starts before you even accept an offer. So create a budget before you accept an offer and make sure you can actually make ends meet with that offer. Um, if it’s possible. Again, I know everybody’s circumstances are different, but if it’s possible, minimize debt of any kind. Um, especially, I mean all all debt I’m not a fan of, but especially when it’s more than federal debt, when it’s personal loans, when it’s credit card debt, like to try to avoid that as much as possible. And more importantly like learn about financial literacy, learn about personal finance. I put that on hold throughout my graduate school journey. I didn’t start learning until after I got my PhD and it’s a shame. I wish I would’ve just done that homework on the side because it would’ve saved me, like literally saved me a lot of money. <laugh>, Um, explore other funding or income opportunities. Some of us already learned those skills because we have to. Um, but if you haven’t quite learned that skill, you know, explore what, whether that might be tutoring, mentoring, teaching, editing, you name it, you have a lot of skills that you can use to help you make ends meet. Um, and also maximize your institutional access and resources because at one point you’re not gonna have access to that really great healthcare or to that free or low cost therapy or to those LinkedIn learning courses. At one point you’re gonna have to be the one to pay for it. So ask around, find out what those benefits are and and maximize them. And then of course, I cannot say this because I wish that older me would’ve taught younger me how to do this, which is like getting, getting into the habit of investing earlier on. Um, even if it’s something as small as, I don’t know, $25 a month, if that’s all that you can do, just getting into the habit of investing will help you in the long run. Even if it doesn’t feel like it’s gonna make a big dent, that habit will make it a lot less burdensome, a lot less scary for you to then increase that amount in the future so that you can set yourself up for success. I wish I would’ve had that. Now I have to work even harder because I started out a little later.

Miroslava (41:15): I think most of us didn’t even know that was something in my family I grew up with, um, hoarders in terms of money, immigrant, you know, put it underneath the, the mattress and save every penny. And I’m sort of grateful I didn’t go the opposite way. We sometimes we go opposite what we learn and so I’m very much a penny pincher. Um, but you know, it doesn’t grow if you leave it underneath your mattress. So, um, anyways, so we just wanna play catch up, but we try to then share that information with others to help them sort of correct some mistakes that we made.

Emily (41:46): Well, we don’t have enough time for me to praise every single piece of advice that you two just gave because that was absolutely fantastic. So I’ll just say to the listener, if you need to, you know, rerun the rerun the last couple of minutes, listen to it over and over again because there was so much gold in just those quick responses. Um, and I certainly hope the listeners will take it to heart. So once again, thank you so much for coming on the podcast. Um, it’s been absolutely great to have you. And the book again is, Is Grad School For Me? Demystifying the Application Process for First-Gen BIPOC students. Will you say the website again where they can get it?

Yvette (42:14): Yes, that’s isgradschoolforme.com.

Emily (42:17): Perfect. Thank you so much. Thank you.

Yvette (42:19): Thank you

Miroslava (42:20): This was really fun.

Outtro

Emily (42:30): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

This PhD Promotes DEI with a Focus on Finances

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In this episode, Emily interviews Dr. Carolina Mendoza Cavazos, who holds a PhD in microbiology from the University of Wisconsin-Madison and currently works in industry. Carolina has long been interested in and open about personal finances, and she focused her DEI efforts while in graduate school around finances, including starting a money club and creating clear communications regarding pay and benefits. Carolina shares her insights into the kinds of financial issues graduate students face and how universities should back up their recruitment of diverse candidates with sufficient financial support and communication. Finally, Carolina and Emily discuss the financial goals and lifestyle upgrades Carolina has enjoyed since starting her job in industry.

Links mentioned in the Episode

PhD Promotes Diversity, Equity, and Inclusion with a Focus on Finances

Teaser

Carolina (00:00): Basically like who, who can afford to go to graduate school and how the people that have made it to graduate school, how can we support them during? There’s a lot of focus on the DEI efforts within recruiting. I also think that if there is not a support system for the students that are coming in and staying, I think that is a disservice to the minorities that you recruited. While it’s really great to get a fellowship, if the school can get to brag about the funding that you have, the schools should also support you through the issues that may arise due to that funding.

Introduction

Emily (00:55): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (01:24): This is Season 18, Episode 3, and today my guest is Dr. Carolina Mendoza Cavazos, who holds a PhD in microbiology from the University of Wisconsin-Madison and currently works in industry. Carolina has long been interested in and open about personal finances, and she focused her DEI efforts while in graduate school around finances, including starting a money club and creating clear communications regarding pay and benefits. Carolina shares her insights into the kinds of financial issues graduate students face and how universities should back up their recruitment of diverse candidates with sufficient financial support and communication. Finally, Carolina and I discuss the financial goals and lifestyle upgrades she has enjoyed since starting her job in industry.

Emily (02:10): When I teach budgeting, I emphasize that it actually consists of two components, budgeting aka telling your money what to do and tracking aka checking that your money did what you told it to do. While I love and use automated tracking software, in my opinion nothing beats manual tracking, which naturally keeps you accountable to yourself for your spending. In fact, last year I made a custom expense tracking spreadsheet for my own use. If you would like to try out manual expense tracking, feel free to take my spreadsheet and use it as is or build it out however you like. I built in a couple of budgeting principles that I like to follow and teach to PhDs. There’s a companion video available explaining those principles. If you’d like to grab the spreadsheet, it’s totally free, simply sign up through PFforPhDs.com/tracker/. You can find the show notes for this episode at PFforPhDs.com/s18e3/. Without further ado, here’s my interview with Dr. Carolina Mendoza Cavazos of Finances with Carolina.

Will You Please Introduce Yourself Further?

Emily (03:29): I am delighted to have joining me on the podcast today Dr. Carolina Mendoza Cavazos. She is a scientist working in the private sector. She finished her PhD about two years ago, and like me, Carolina is also really, really into personal finance and also she has a special focus on DEI, efforts related to personal finance. And Carolina has a website called FinancesWithCarolina.com, and I first came across her, it must have been several years ago on Twitter, and I’ve been keeping my eye on her for a while. We finally had reason to connect recently and set up this podcast interview, which I’m really excited about. So Carolina, would you please go ahead and introduce yourself further for the audience?

Carolina (04:04): Sure thing, Emily. Hi everyone, my name is Carolina and I obtained my PhD at the University of Wisconsin Madison. I’m currently a scientist in the r and d department at Promega, and um, I’m very excited to be here today.

Finances During Childhood, College, and Beyond

Emily (04:21): Yeah, let’s go back, um, even further because I want to hear about, uh, your background, especially with respect to finances starting kind of in your childhood. You can give us a brief overview of how things were, um, financially growing up and then through college and graduate school and I’m, I’m interested both in kind of materially what was going on and also how that affected your mindset through that period.

Carolina (04:41): My family and I moved to United States in 2011 and I finished my senior year of high school, then applied to college and I obtained my undergrad at California State University Fullerton. My dad is an accountant, so he talked about money quite often. I would say that being an immigrant, we did have certain like mindset that came with that and frugality was a really important one. I would say that from the both sides of my family, either one or two generations broke the cycle of poverty and I grew up in a family with two college educated parents and we were able to migrate here to the United States, um, due to a job opportunity for my mom. So that was kinda um, how we got here. I would say I was always interested in finances in general in college. The first time I got a paycheck was through a program called MARC Maximizing Access to Career Research and is a pipeline for like graduate school program. So that’s kind of where my budgeting journey started. I lived at home, uh, during college and receiving that paycheck was the first time that I was, you know, making all my budgeting spreadsheets and stuff like that.

Emily (05:58): Yeah. So let’s kind of turn to graduate school now. It actually seems like you were set up pretty well to understand maybe the finance of graduate school having been in that program, the MARC program during undergrad. Um, so tell us about like that transition and maybe the kinds of offers you got and whether you considered, you know, finances. It sounds like you probably would in your selection of which university to attend.

Carolina (06:17): I don’t think I looked at the stipend as carefully as I would today. I gravitated towards the Midwest because the Midwest had awesome microbiology and I knew I was gonna end up somewhere in the Midwest. Um, my last two top school choices, like were between UW Madison where I ended up attending and um, Wash U. So those were my two offers. And in general, stipend wise, they were pretty similar. However, UW Madison had a program similar to MARC called SciMed, shout out to SciMed, it’s called Science and Science and Medicine Scholars. And basically it was a community that I could plug into that I did not see at any other universities and I felt that that was, uh, a good fit for me. So that’s kind of why I decided to go to UW Madison.

Emily (07:16): So tell us a little bit more about how finances were going for you during graduate school. You said that you had, you know, uh, a frugal and a debt averse kind of background with your family. Um, you’re in the Midwest. Yeah. Was the stipend livable? Were you able to save? How are things going for you personally?

Carolina (07:33): Yeah, in terms of finances, I did move here to Madison with a partner at the time, now my husband and we, that’s kind of when we started not fully merging our finances, but we’re definitely operating as a household at the moment and basically we were like kind of equally splitting everything. So that was definitely helpful and I would say that the stipend was livable, however, having a partner was definitely helpful. And one interesting thing is that I was funded the whole time during graduate school, so the five years I had different grants, fellowships, things like that. So I was fortunate that I didn’t have to pay segregated fees or like the student fees for that. Um, I ended up working as an hourly for assignment and that was, um, a workaround in order to get retirement benefits like a 403B or something like that.

Carolina (08:35): I definitely think that my husband and I had like different mindsets about finances and it was interesting to kind of get into that. But I would say in graduate school I found your podcast through Hello PhD and I think the, the thing that really caught my attention was the use of, um, buckets for like high yield savings accounts. So I think that that was like one of the first things that I did in order to get the same service but like in a cheaper way. Like for example, like car insurance, I faced a lot of issues with funding transitions that ended up being, in my opinion, DEI issues in terms that I don’t know, I, I saw a lot of the times like the same pe- people in the program doing the same jobs and being funded differently would still face different issues. And in terms for advanced opportunity fellowships like for, um, minorities like me and things like that, I would say like that was like a double whammy of you might have a surprise tax bill and things like that. And like how, how do you deal with that? Do you, do you have your emergency fund set up? Do you rely on a network? Is there network that you can rely? Do you incur debt? And things like that. Issues that I encounter with my funding, I always wonder and through the grapevine have heard that other people that were funded had this issues. So I think that that was my first step to get into using personal finance and deed efforts during graduate school.

Financial Challenges During Grad School

Emily (10:15): Hmm. Yeah, I definitely wanna hear about more about that in a minute. Um, can you expand at all on the, the issues you were just talking about with like the funding? So like quarterly estimated tax bills. We talk about that a lot in the podcast, hopefully the listeners familiar with that. Um, anything else? Like, just tell me what, what the issues were that you either experienced or that you observed.

Carolina (10:35): Yes, so one of the issues right off the bat was taxes obviously. And um, I definitely had a tax bill that I wasn’t expecting and I wasn’t aware of the fellowship, um, quarterly estimated taxes on my first year or something like that, the Kiddie tax. Why not? One of the things that I would say is that access to benefits was a little different. So for example, there was no, someone in my lab and me, the other peop- the other person could contribute to an FSA account or they would be able to and eligible to open a 403B. Um, what else? Gaps in insurance or, um, what are they called? Potential gaps in insurance. For example, some of my friends that were in the NSF were getting COBRA letters when they were having their funding transitions because you might have lost insurance and they were not aware of this and it was just because some paperwork was delayed and things like that.

Carolina (11:46): Personally, I did a, an internship during my fourth year summer, somewhere between fourth and fifth, and I had to take a short leave of absence for that. I had to prepay my insurance and there was a lot of issues with that. Um, I, I think I was the first one to do this and the program that was receiving a stipend that, that was receiving a stipend and had to pause that in order to go into the private sector and get, um, private sector money. Usually if you were in your, I don’t know, a W2 route, I don’t know how they would have handled it, but there was miscommunication on that. Uh, one point I wasn’t sure if I was gonna have insurance over the summer and access to healthcare is definitely something that everybody should have. And, um, I had some health issues during graduate school, so that was a very scary time for me.

Carolina (12:45): And through the grapevine again when that happened, I started documenting if other people have faced this within the, the fellowships during, within the T32s and stuff like that. So when I was working as an hourly for assignment, some of my job was to write down what should you do if you are going to into a internship, what are the, um, I also implemented, I was part of the DEI committee in my program and I also proposed and implemented a funding transition form to pinpoint where is your money coming from in this semester? Where is your money gonna come from next time? Do these people know each other? Should we introduce everybody? Do they know that you’re coming or that you’re leaving the, the fellowship training grant, et cetera. And I found a lot of people that were having trouble with this things and it wasn’t just me. So I think that there is, there, there is a very powerful thing in community and I was trying to find the people that were having these issues and try to play safety nets for when people did face them because they’re bound to happen sometimes. They knew what to do, who to contact and things like that.

Emily (14:10): So helpful. I mean, it’s amazing that you, you know, worked along with your peers to put that resource together, um, through SciMed. It sounds like it was kind of part of your job, but to the extent, yes, you were doing it and it wasn’t part of your job, uh, amazing community service, but probably should have been taken up by the university. Um, obviously they’re the ones providing these benefits or facilitating the benefits, so like, yeah, they should be taking charge and making sure the transitions are seamless. I think about some this sometimes with respect to the tax questions of, you know, calculating, filing quarterly estimated tax or dealing with stuff during tax season. Um, like I know it’s really normal in the US for your employer to be very hands off about taxes. Like yeah, we’ll do withholding, that’s it, that’s the extent of what we’ll handle. But like universities aren’t even doing that much in most cases for fellowship recipients. And I do think they should be a little bit more proactive and, and thank you so much to the ones that work with me and are proactive about this, but be proactive about at least communicating right when the students, um, about what’s gonna happen. And it sounds like not, not only in the tax realm, but it extends with all these other benefits like you were just talking about. So I’m really glad you kind of gave us that overview. Um, so it sounds like you were working with, you know, SciMed and also talking with your peers. Can you tell me a little bit more about kind of what you learned or observed about how your peers were handling this stuff financially? Not just with, with respect to the benefits issues that we just spoke about, but maybe more generally what they needed to know or what they needed to apply, um, in their personal finances during graduate school?

The Birth of the Money Club

Carolina (15:36): Yeah, I, I think a lot of my peers were either, I don’t know, like I would say like there was like two categories. People that were in the category of like, you know what, I don’t wanna think about it. I am, I’m gonna take a pause on this while I’m in graduate school and once I figure out what my career path is gonna be, I’m gonna pick it up. And there was a small subset, small but mighty that was interested on talking about this and was sort of like, I think the taxes are the foot in the door for everybody that they’re just want to learn a little bit more of how to handle those. But once they’re in and then you just start chatting and like, where do you put your tax money before the thing is due? How are you, um, self withholding and things like that. I think that was kind of like the natural birth of the, the, the money club that we developed. And I really can’t remember if that was part of the SciMed job or eventually we kind intertwined it or something like that. The SciMed job was basically really help your community, how can you do this? Obviously there was like events and food ordering or flyer making and stuff like that, but I, at one point I was trying to explore student services as a career, so I think that that was my in, um, with that position. And then it turned into a way for me to look at this DEI issues and try to create resources for the people that were within the fellowship where in the fellowship were gonna come into the fellowship and things like that.

Emily (17:22): I totally agree with you that the taxes are the way to most, uh, you know, getting most people’s attention into personal finances. Yeah. Uh, where did it go after that? You know, you already mentioned using targeted savings or sinking funds as a helpful sort of addendum to your budgeting. Did you all talk about that or what other topics did ended up being of interest to this group?

Carolina (17:42): One of the topics definitely people were interested in investing. I think that that was one of the other ones that we’re kind of popular and, um, I don’t know, mystified a little bit and people wanted to ask around. I think, I think the money club really started getting around going like in 2021 after the summer of 2020, um, when George Floyd was murdered the entire a a group in the program started writing a letter to our admins and our professors and things like that in which we were quote unquote demanding changes in our program and whatever. So I was involved in that effort and I do remember putting some personal finance stuff in there and, um, I think when the whole program read it and they knew that there was like some of the things that I was requesting, like for example, um, I had recommended you to, to our program. I don’t know if they ended up hiring you or not. Basically like in the program then I, I became known as the person that talked about money and then people that wanted to talk about money found me. And, um, the other topics that I would say not so much as investing, but I kinda wrapped it around with investing was retirement and some of the benefits that the university was offering for students that did have access to those. The majority of my program was not like brought partners or anything like that. I, I don’t remember, but sometimes there was students that had in their budget a, a way to invest and they just wanted to start.

Emily (19:22): Absolutely. For me, I always say taxes and investing are my two favorite topics to discuss. And it’s lucky because those are the two top, um, most popular topics that get requested, which is really fun for me. Um, it’s so interesting too being in an environment where some people have access to that 403B, um, and even the other, well you mentioned FSA not an HSA, um, through the university, but perhaps other benefits that’d be relevant, you know, for investing. Um, and obviously if you’re on fellowship or, and if you’re not an employee, you’re not gonna have access to that, but it sounds like a subset of people would, and you and you also had access to <crosstalk>.

Carolina (19:55): So I found a loophole

Emily (19:57): Yeah. To be, um, a proper W2 employee at least for a few hours enough to give you that benefit.

Carolina (20:03): And I made it automatic that all a hundred percent of my hours with SciMed would go to the 403B.

Emily (20:10): Well, that’s kind of cool that they let you do that. I know sometimes employers that have like a restriction like no more than 50% of your paycheck or 25 or something, but obviously since it was just part-time for you, if that makes sense. Um, yeah. Anything else you wanna tell us about the money club?

Carolina (20:25): I think people just need safe spaces to talk about money, and I think it’s one of the cases that if you create it, people will come. I, I personally feel that a lot of people wanted to start working on their finances and they just didn’t have the language, the space, sometimes the resources or like the, the uh, uh, closed mindset of, well, I’m not making enough money so I, how can I work on this? And I think that’s my main, one of the things that I try to help people with is that your personal finance, like, and starting to work in your personal finance, it doesn’t have to be this ginormous thing that you have to put thousands of dollars into it. I think it’s small actions that just kind of add up and, um, my whole spiel is that I, I would like to create systems that you later edit when you get a different job and there’s a lot of things that you can do in order to work in your personal finance that don’t cost money or they can be a $2 thing and, and it’s more of like flexing that muscle as a lot of people say in the community. I think it’s true.

Emily (21:51): I totally agree. Um, and I, going back to kind of what you said earlier about, you know, the, you sort of encounter two kinds of people, like some people who wanted to engage, but some people just wanna say, you know, I’m not making that much money, it’s not the right time to be working my finances. I will pick this up later. And they are overlooking that benefit of, as you said, flexing the muscle of learning a few skills, of getting a little bit of extra knowledge, um, whether that can be applied during grad school or whether it’s just gonna be something that’s practiced a bit or set aside for later. Um, all of that does help you set up for financial success in your next post PhD career when you have that higher salary coming in. And of course it will be easier in some sense when you have, when you’re making more money, but if you’ve never practiced budgeting, if you’ve never really thought about what’s important to you in your spending, if you’ve never opened an IRA before, well that’s stuff you’re gonna have to learn, um, when the stakes are a little bit higher later on. So of course you know that I’m a proponent of working on that stuff during graduate school, you know, if at all possible, and as you said, it doesn’t have to, you don’t have to be able to save necessarily to have a savings rate to do positive things, um, in your personal finance, there’s lots of cost neutral things that you could do. Um, and hopefully you can get to a point where you’re able to save.

Commercial

Emily (23:05): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2024-2025 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Orientations or very close to the start of the academic year would be a perfect time for tax education or general personal finance content. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

DEI and Personal Finance

Emily (24:32): I wanna get back to this point about how you, um, use the topic of personal finance within your own DEI efforts. And it’s something you’ve mentioned a few different aspects of it until now, but I just wanted you to just make it really explicit, like how do you view this and how do you work in this area?

Carolina (24:47): So I think DEI efforts are sometimes in some spaces, and this is not particularly about my university or my program or anything like that, but they get a little bit performative and they can get into, uh, check a box. We have a DEI committee and that’s it. That’s it. So I was involved in the DEI committee since this founding at, um, my program after the letter that I mentioned that we wrote. So through that there was two representatives for the students in this committee and we’ll bring issues forward regarding whatever our, our peers had brought up. And a lot of those ones sometimes were personal finance related, for example, there was one time that our paycheck schedule changed from a monthly to a biweekly time and a lot of the students were like, how am I gonna make rent if the biweekly paycheck is happening and then that I’m receiving that in this amount of time. I don’t have a safety net to just make that payment at the beginning of the, of the month if this happens. Um, so trying to make explicit what type of resources are available in the university for, uh, emergency hardship and stuff like that. That was one thing I definitely always advocated for more clarity on funding transitions as well as the fellowship letter. For example, I know that that one or my specific university came in March while your W2 came in January. So we had a case in which a student basically submitted their tax return after they got a W2 and they then they got the fellowship letter and they had to amend it. So basically being more transparent and proactive about the types of issues that funded students might face having I, I know one of my, um, one of the other representatives really advocated for having the, the number of the stipend for our incoming students instead of just kind being this nebulous number that you kind of hear there when you’re already in the interview.

Carolina (27:24): During the time that I was there, another person, not myself, but they got my full support, was really trying to start the conversation of a livable wage. So what is that? Like, how do we compare to other programs? And um, she did a tremendous effort, um, in order to look at the cost of living and how is that going and how, you know, it might not be our stipend might not be keeping up with this, what are we gonna do about that? So I would say that I definitely advocated for transparency in my, um, dei position from the program for the university. And I basically started spreading the information and just kinda reporting back to the committee and say like, this is what I did and I had my, my PI’s full support. I was very fortunate that she had my back. And um, there was instances in which I think if my PI was not supportive, like maybe they could have been like some issues and um, in terms of just like, hey, I think that what we’re doing is wrong, not wrong, but like not having the stipend number really there.

Emily (28:46): Yeah. Sort of obfuscating. Yeah.

Carolina (28:49): Yeah, I didn’t like that as much. My main issue was the medical coverage and I, I did as much as I could in order to create as much documentation and as much process safety nets for people to not receive that letter, um, of the COBRA Fellowship, um, not have to pay out of pocket for necessary prescriptions. If you have a lacking coverage, you cannot even make an a, a doctor’s appointment. It’s not like you can make it for later when you have coverage, they’re just not gonna talk to you. I had a back injury during graduate school and um, other chronic conditions that access to healthcare was, is necessary for everyone, but for me was particularly scary not to, and just the threat of not having it, it’s sometimes it was just that the, some deadline was occurring and like you’d really never had a lack of care. But just having that big thing in your brain that you might not have it, I think you, that takes you away from science and then you’re worrying about that instead of your experiment.

Emily (30:04): That’s exactly what I was thinking when you were going through, um, that response is that if we want to keep graduate students and postdocs, um, focused on their research, focused on progressing in their programs, successful in their academics, academia has to materially support them properly so they aren’t one distracted by the things like the benefit issues and all the, all the one things that we’ve talked about so far. Um, but then also by financial stress overall, um, having to be super, super frugal or having to make very extreme sacrifices in what your expenses are. Or on the flip side, you know, maybe spending a lot of time side hustling because your stipend is just not sufficient. And as a DEI issue, I mean if we want <laugh> more diversity in academia, um, and more people being successful across the board, we have to support them in a way that we’re assuming that they’re not gonna have to depend on family members or partners or other people who might or might not be able to contribute financially to them. Um, and frankly, a lot of people, you know, now have caregiving responsibilities. They have to contribute to the finances, other families too. And so again, you can’t even assume it’s just like a single person and all we have to do is provide for your basic living expenses and that should be enough for you because even these small bumps in the road, like you’ve been talking about these small emergencies or something medical comes up or I have to take an unexpected flight, these irregular expenses that you mentioned earlier, um, that can completely throw off your budget if you’re living with very little margin very close to the edge in the first place. So the way that I see it, we just have to fund graduate students, um, more than the baseline, right? Like not even the living wage. We gotta go beyond the living wage because you, to really be financially secure, you have to have a savings rate because these things will ease emergencies, these things will come up and it’s so much easier to recover from them and get back to being focused on your program and on your work, um, when you have the finances there and you don’t have to scramble and be stressed about it. So <laugh> that’s my part of the soapbox there. Um, yeah, anything more that you’d like to say about your, like the way that you do these DEI efforts?

Carolina (32:13): What, what I, I currently try to do and what I tried to do during graduate school was really providing the information that some people might not have. Basically like who, who can afford to go to graduate school and how the people that have made it to graduate school, how can we support them during, I believe that there are, there’s a lot of focus on the DEI efforts within recruiting and being like, yes, come to our university and having admissions numbers. And I think that that is very important. I also think that if there is not a support system for the students that are coming in and staying, I think that is a disservice to the minorities that you recruited. So while it’s really great to get a fellowship and it’s really good to be a funded student and that opens the doors for you to go into a lab that you might not have access before or gives you more research freedom and things like that, I think that if, if the school can get to brag about the funding that you have, the schools should also support you through the issues that may arise due to that funding.

Emily (33:48): Very good point. Thank you so much for adding that. Let’s turn our attention back to you in your post PhD life with your proper job, with your proper, uh, salary, which sounds amazing. So how are you pursuing financial goals these days and how are you doing with your, um, spending and just like, what’s going on in your finances now?

Post-PhD Finances

Carolina (34:08): Well, the private industry pays very well and as we know, our equation for our budgeting income is one of the biggest, um, in there. So I would say that for the first six months that I was at my full-time employment, I didn’t give myself a raise and I threw everything into retirement. So I think I started in the end of August, so I tried to get as close as the max as I could for the employee sponsored 401k and um, that, that was really great because, um, we were used to living in a given stipend and we didn’t really change much during those six months. Then after that I would say that my husband and I made a list of things that we wanted to upgrade in our house and one of them was a new bed <laugh>, one of them was a new fridge and, you know, things that we were like, it’s large expenses and is, I don’t know, it just felt like it was definitely a, a pivotal moment in an income that we could just buy this and not really like budget for it or something like that. And I, I think we bought the fridge for like a bonus or something <laugh> my sign up bonus or something like that. And I would say right now, because in graduate school I faced some medical issues, I would say that I really became a quote unquote vaulist that I was really trying to find what adds value to my life and the things that I really care about. And I think when people get sick or something like that, they really turn inward and, and start thinking of like, what is important in life. And I really started seeing like, okay, what in my budget reflects my values? What doesn’t and how can we reconcile those? So for example, family is very important to me and my husband, so I am happy that travel is a big category in my budget and we, we ran the numbers for the last year and I think like that was like our third category that we spend money on because our families are not here, so we have to travel to see them and we are pursuing fire. I think right now we don’t have responsibilities that are really sinking funds at the moment. So, um, I think I’m, we’re just kinda understanding what this new income can do and where can we put it into the long term retirement plans. And I’m also focusing on trying to live the life that I, I want. And I feel like during graduate school sometimes people really throw themselves into work and they’re like, they’re passionate about their stuff and they kind of like sometimes like don’t have like outside things. I definitely was guilty of that. So I’m trying to course correct and really focus on things that bring me joy in my every day today and spend on those ones I wouldn’t say previously, but definitely spend on, on the things that bring me joy and the things that I don’t care about, like my cell phone plan to definitely cut it as much as I can.

Emily (38:00): I just hope that, um, the listeners who are still in graduate school and are looking forward to the transition that you, um, have com- have, um, completed, can remember this example when they’re in your shoes because in, in my view, you have executed this like just perfectly <laugh>, um, which is kind of a combination of live like a grad student, like okay, don’t make any major changes right away. You, it sounds like you didn’t have to move or anything. So like there was some stability and it was, uh, easier in a sense to continue on with your previous level of spending, but in combination with that sort of as a default, okay, we’re not gonna, we’re gonna default to not changing anything, but then as you said, be so intentional about thinking through where you do want to spend more or where you wanna save more, um, to reach your financial goals and your lifestyle goals and everything and just add money to those buckets and to those places, um, and really get, as you said, like introspective about what’s important to you and apply that to your budget and reconcile them as best you can. Um, I just think it’s a wonderful, wonderful example, especially for someone who, who doesn’t right immediately after graduate school because the moving process brings in like more variables and more opportunities for like chaos in your budget when you have those kinds of transitions. That was the one that I went through personally. But yeah, I just think it’s so wonderful and awesome job. Of course, given the background that we heard, we knew that you were gonna do an awesome job with this, but it’s just amazing to like hear some more details about that.

Financial Mindsets, Skills, and Habits That Help With Post-PhD Life

Emily (39:22): Were there any skills or mindsets that you developed during graduate school with respect to your finances that you found useful in this post PhD, uh, life that you haven’t already brought up?

Carolina (39:34): I think making things automatic was something that I am still doing and I’m glad that I started before and I think like going back to the beginning about the savings accounts and we, we had a lot of transactions being automatic and right now I feel like we’re just kind of coasting. Like it, it’s something that we, we have developed already and I think that I’m never gonna pay my car insurance by month. I think that that is something that, um, I started doing in grad school because it was cheaper and now we, we just kind of continue with that. I think the frugal mindset of, of graduate students and like finding fun things to do for free, that is something that I have continued. Just yesterday I went to the library because they had a craft cafe and I made a craft and I had a blast and, and it cost $0. So I, I think a graduate student is good at finding those things around and taking the opportunity to, you know, have fun with a free activity when you, when your stipend is not as large, you sometimes like you really try to find the things that you care about and spend money on those. Like for example, I have a friend that he was willing to bike in and he bought a rather expensive bike, but it brought him a lot of joy and that was something that he did during graduate school and biking was his like stress reliever. So that was very worth it for him. And I think finding the things that are worth it for you, I think graduate school is a great time because you are sort of like tied on the money side and then sort of like continue those things and cut merci- mercifully, um, in the rest.

Finances with Carolina

Emily (41:37): Mm-Hmm <affirmative>, that’s Ramit Sethi <laugh>. I know that quote. Yeah. Um, well it was so great. It was so wonderful talking with you Carolina. Can you tell the listeners more about Finances with Carolina and what you do through your business?

Carolina (41:48): Sure. This business started out of the money club and I, I wanted to have a space in which I can help graduate students that are facing similar challenges to the ones that I faced or that my peers faced. And I would say that right now I do a lot of coaching calls in which students fill out a questionnaire that I have for them and that covers things, uh, as I mentioned, what brings you joy in your life and uh, I’m not gonna ask them to cut in their budget if that thing brings them joy <laugh> and, um, we go all over debt repayment and, um, trying to set up those high yield savings account, what are irregular expenses that they are gonna face. Retirement a lot of people are interested in that. And I would say personally from my community, I think finding someone that went through graduate school is just helpful that they can relate to you. I think that that is something that you and I bring to our communities that we, we know what it was like and we know what the problems might have been and, and heard about certain solutions or know someone that might have gone into that. So I would say the network that we, that I developed during graduate school, I have been using that for my clients as well. If someone is, and, and right now I would say coaching like just once on ones are my main focus and the way that I try to get funded is basically making the program, uh, cover those so the grad student doesn’t have to pay. Yeah, anything from budgeting to debt repayment. And I really like the one-on-one conversation. I I don’t think that’s scalable, but uh, I’m having a lot of fun with that. So, and I do like having an impact on someone’s life directly. So I think that’s why I am, I’m keeping it on the one-on-ones at the moment and I do have one digital product in which I have put like just kind of like stuff together in which, what the most common questions are and things like that. And I understand that not everybody likes the, the chatty, um, the chattiness that comes with like one-on-one coaching. So that’s, um, why I developed that one. In the future I hope to develop one that is not focused on graduate students and just in general because now I have been finding at work that some people that I did not find them in graduate school and they’re now starting their careers and they’re in their first full-time job with benefits and things like that, they’re a little bit lost. So that is another digital product that I wanna develop but is not ready yet. <laugh>.

Emily (44:38): Yeah, sounds like you’re repeating, repeating what you did during graduate school. You’re, you’re just a person that is open about money that people can feel comfortable talking to you and you find other people who are interested and you find other people who need your help at every single stage. So that’s just wonderful. And tell the listeners where they can find you.

Carolina (44:55): Yes, listeners can find me at financeswithcarolina.com and in there there’s uh, there’s a link to the digital product that I talked about. Um, there’s a link to the coaching services and things like that. So if you find me relatable and you wanna chat about money, schedule something <laugh>.

Best Financial Advice for Another Early-Career PhD

Emily (45:16): Beautiful. Okay, let’s finish up with the last question that I ask of all my guests, which is, what is your best financial advice for another early career PhD? And that could be something that we’ve already touched on in the interview or it could be something completely new.

Carolina (45:29): My best financial advice. The, it’s, it’s a marathon, not a sprint. And I think that if you start flexing the muscle of working on your personal finances with small changes that are sustainable in realistic for you, you’re more likely to stick to those goals. I would also say that in order to keep that momentum going and that inspiration that you sometimes need on, on personal finance, I really would like to encourage the listeners to find content creators that speak with relative, like speak to you in experiences that you relate to in experiences that you might have aspirational in things. And, and overall really find the content that is gonna keep you motivated. And the content is the same, it’s just the delivery, it’s the, the, the experiences that the people that are delivering the content, the network of those people. So overall, find someone that does inspire you and keep you motivated and slow and steady.

Emily (46:46): All right. Name your top few content creators that you love to follow for, for yourself personally.

Carolina (46:52): Yes. Um, well of course your podcast. I think that was one of the ones that Hello PhD. You you did a cross interview with them and that’s how I find you and I was just mesmerized of all the things that I could do with my stipend <laugh>. Um, so that’s one definitely related to graduate school in terms of minorities, I I really like the podcast Brown ambition. There’s two ladies in there and they have everything about career questions, entrepreneurship, money stuff and how that relates to one another. They’re in different stages of their careers and lives and just very interesting to see where they’re coming from and where they’re going. Uh, popcorn Finance is another one that is very nice and um, it has a lot of investing. I love their investing series. I referred everyone to that one because they have a lot of content of like, what is an ETF, what is an index fund, what is a lot of what is and and when you start reading all these things,

Emily (48:01): I didn’t know about that series. I’m gonna check that out.

Carolina (48:03): It’s really good. Um, journey to Launch is another one, that I follow, she definitely has like really cool interviews and just a lot of inspirational stories. Afford anything by Paula Pant. Yeah, those, those ones are the ones that like I probably listen like yesterday or today.

Emily (48:27): Yeah, every single one of those podcasts is also on my feed except for Popcorn Finance. I’ve only listened on and off to Popcorn Finance, but the rest of ’em, I’m a regular listener. I love all of them, especially, um, Afford Anything is like taking the podcast medium to like the next level with like journalism, um, around finances, which is so amazing. Paula Pant doing an amazing job. Um, okay. Well Carolina, thank you so much for giving this interview. It’s been really insightful and it’s been lovely talking with you. Um, thank you so much for agreeing to come on.

Carolina (48:55): Of course.

Outtro

Emily (49:06): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

How This International Graduate Student Grew His Career and Social Wealth Alongside His Net Worth

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In this episode, Emily interviews Dr. Cyrus Liu, a postdoctoral fellow in computer science at Grinnell College. Cyrus came to the US from China as a graduate student without any knowledge of how the US financial system works. Over the course of his PhD, Cyrus found ways to minimize his expenses and increase his income so that he could meet his goal of investing $500 per month into a Roth IRA and a taxable brokerage account. He also invested in his physical and mental health and grew his career and social wealth in a frugal manner. Cyrus ends the interview with incredible insights into why he was motivated to work on his finances during graduate school and in what ways academics are truly wealthy.

Links mentioned in the Episode

How This International Graduate Student Grew His Career and Social Wealth Alongside His Net Worth

Teaser

Cyrus (00:00): Don’t underestimate yourself because you are a PhD student and you definitely have the knowledge base and then sharing those knowledge with the community, and you are passing to the knowledge. This is the wealth we possess, right? Normally people think we are poor, but actually, and a wider definition of the wealth here we have this part to share with someone else.

Introduction

Emily (00:33): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (01:01): This is Season 18, Episode 2, and today my guest is Dr. Cyrus Liu, a postdoctoral fellow in computer science at Grinnell College. Cyrus came to the US from China as a graduate student without any knowledge of how the US financial system works. Over the course of his PhD, Cyrus found ways to minimize his expenses and increase his income so that he could meet his goal of investing $500 per month into a Roth IRA and a taxable brokerage account. He also invested in his physical and mental health and grew his career and social wealth in a frugal manner. Cyrus ends the interview with incredible insights into why he was motivated to work on his finances during graduate school and in what ways academics are truly wealthy.

Emily (01:45): I’m offering a new slate of workshops for my university clients this fall, and over the summer I’m practicing delivering these workshops for free to a limited number of graduate students and postdocs on the Personal Finance for PhDs mailing list. Last month, we did “Seven Steps to Start Investing as a Graduate Student or Postdoc,” and later in the summer we’ll do “Your Financial Orientation to Graduate School” and “Tax Season Preparation Starts Now for Graduate Students” and possibly more. If you’re not currently on my mailing list but want to receive notice about the upcoming pilot sessions once they are scheduled, please join now! The best way to get on the mailing list as a podcast listener is to sign up through PFforPhDs.com/advice/; you’ll receive a document that summarizes all of my interviewees’ responses regarding their best financial advice. You can find the show notes for this episode at PFforPhDs.com/s18e2/. Without further ado, here’s my interview with Dr. Cyrus Liu.

Will You Please Introduce Yourself Further?

Emily (02:56): I am delighted to have joining me on the podcast today, Dr. Cyrus Liu. He’s currently a postdoctoral fellow in computer science at Grinnell College, and we are going to be talking about his fascinating financial journey, um, as a graduate student and now a postdoc in the US as an international student. And so, Cyrus, I’m so happy that you’ve decided to join me on the podcast today, and will you please introduce yourself a little bit further?

Cyrus (03:19): Yes. Hi, Emily. Thank you for having me here. So I graduated in December, 2022 from computer science degree. Um, after that I landed this, uh, postdoc, um, fellow in computer science. And the current position, I’m do- mostly doing research in the area of programming languages and security.

Money Mindset After Arriving in the US

Emily (03:45): Excellent. So let’s go kind of all the way back to when you first arrived in the US. I assume that was at the start of graduate school, but you can correct me if that’s wrong. Um, tell me like about what your money mindset was at that point and how, if at all, how familiar you were with the US financial system.

Cyrus (04:01): Also, this is my first time before I come to US. It’s actually, I’ve never been to us before my PhD and I’m from China, so I grew up in a poor family, in fact, there. So with that in mind that I’m kind of sort of inherently frugal. But what’s interesting is back then, like I never feel poor in terms of any financials. In general, I have no idea about in credit card scores, uh, credit cards and investing or retirement. And, and that’s later on. I discovered after I entered the US that I do have, uh, a saving and spending mindfully and because how my parents raised me. Right.

Grad School Stipend vs. Local Cost of Living

Emily (04:50): I see. And so when you arrived for, um, graduate school here, can you tell me about, um, what your stipend was and how that struck you, maybe versus like the local cost of living?

Cyrus (05:02): I was living in Hoboken for, um, two years and a half, and also Stevens Institute with the university. I finished my PhD is located in this really beautiful city and it, it is, the local cost is like 60% higher than the national average. I would just say and put in the number that means like I think if you got two bedroom apartments that you might need to spend, um, at least 1700 for one bedroom, that means you need a a roommate. And back then the stipends, uh, I would say it’s like a 28 thousandish and it’s roughly, I remember we got paid like a biweekly, it’s like 2000 a hundred per month after tax.

Increasing Income During Grad School

Emily (05:55): Okay. Well, I really wanna dig into this, uh, with that, you know, relatively expensive cost of living and the relatively low stipend. Um, and the listeners don’t know yet, but this is a financial success story that we’re about to talk about <laugh>. So we’re gonna see how, you know, I wanted to see that starting point and now let’s see how you got to the end point that you got to. Um, so let’s kind of break this down, um, systematically. So during the course of your time in graduate school, how did you, what did you do to increase your income?

Cyrus (06:24): Yeah, so there are a couple things. Um, like I said that before I entering, uh, US, I have, I really have no idea what’s the, uh, um, investment, investment investing or credit cards, and that’s a totally different systems, but I do have a mindset that I need to save, right? And it is how I grew up. Um, but it’s not too much. So most of the case, um, I start to reaching out, um, all the resources I can, I, I think I start with reading the book first and then also I love reading. And then the first book I get to know is basically, uh, it is called I Will Teach Rich by the Ramit. And, and he, he actually kind of introduced me to the whole US financial system from credit card, from the, uh, uh, Roth IRA and then how you would you, uh, increase, uh, your finance and manage your, your spending habits and to how would you invest if you have extra money, even though if you don’t have extra money, just put maybe one, uh, 100 or $50 you can squeeze out. Just experience how things work. Uh, at the beginning it was a little bit overwhelming, but I, I enjoyed read his book. I I think this is also helps me to manage my life, uh, here in a completely, uh, foreign nation. Right?

Emily (08:04): Yeah, that’s a wonderful first book to get started with. I will teach you to be rich by Ramit Sethi. Um, yeah, great, great introduction. He’s very firm about how to tell if someone, someone, you know, an institution is trying to take advantage of you. Like he’s really helping you, like recognize that and push back against it. So I can definitely see how that would be useful when you’re entering a new system, um, entirely. So awesome recommendation, you started there, you read that book,

Cyrus (08:28): And then I start to act <laugh>.

Emily (08:31): Mm-Hmm. <affirmative>.

Cyrus (08:31): And then I open the credit card and then I, I, I take the, the same strategy that I recommended by the, by the book. It, it’s not promotion for the book, but it’s more like, I think around nothing to think of that it is really like you try to minimize all the possible interest, right? Rates I would have and then, or a lot of promotions provided by the credit card and then try to take advantage of that because now we think about that credit cards more like the more you expense and then the more you can potentially save and also they encourage you to spend. So, but I personally very mindful with my expense, but the same times I think they do, credit cards do offer a lot of discounts in terms of purchasing. So that’s the first step.

Emily (09:24): So are you saying that you pursued credit card rewards, like points and cash back and stuff after? Of course, you initially need to establish credit and get started there.

Cyrus (09:32): Yes, exactly.

Emily (09:32): But is that where this led eventually?

Cyrus (09:34): The, the signing bonus and also the cashback reward, that’s also something new to me that I never did, uh, touch before. And then also we do have, uh, I think the first one is the discovery. I think most of international students would get to discovery first because we don’t have any, uh, credit score history here. And so they also have these online stores that will give you 10% or 5% discount. And then when I go out to buy clothes in, or I was living in New York City area, so there’s a lot of department store that can use with this discount opportunities.

Emily (10:16): Mm-Hmm, <affirmative>. Okay. So both increasing income through credit card, um, bonuses and cash back and so forth. Also finding a way to be even more frugal in saving certain percent, percentages on the purchases that you do make.

Cyrus (10:28): After that, um, uh, I started to opening a investment account that was also a little bit struggling because I, first of all, as an international student, I do not know if I was allowed to do that. So I, that’s kind of for research myself. But in the end, after like, um, as long as we are considering as a tax payer resident, and then, so you should have the same opportunity to open all those investment account. And then I, I remembered I started with, uh, uh, 500 ish, um, over the month for the first month. So I just put, I think I, I, I was not expecting to gain anything. I just, uh, put 500 to get to understanding, uh, how the investments work and buying individual stocks. And I think I bought, that was 2018. I bought a Tesla <laugh> because I really like, uh, Elon Musk.

Cyrus (11:30): Um, but that was another story. It was really funny. And so that’s one part. And then, uh, after that, uh, I get to know the, Roth IRA and then the retirement account. Um, it’s also be, uh, I, I get to understand how the tax work here and then the tax deferred account. And I think that’s whether in long term if, uh, I am staying here or not. I, for me, it’s like, I think it’s, uh, uh, beneficial to open this account as soon as possible because I do pay a lot of taxes. I mean, it’s, uh, in terms of graduate students. Uh, so I think, uh, that’s one way you should take benefit of that. And then I did that, but um, although I didn’t have much money to put on that, and then, uh, in the end, I would, my, my goal was, uh, try to save like, uh, 500 and put into other way to the Roth IRA or the personal, um, uh, investment brokerage and yeah. But this all comes with the risk. So with the mind that you, the money you put in, in the investment account, like it’s possible to lose all of them. Right. But I was fine with that.

Contributing to a Retirement Account as an International Student

Emily (12:47): Couple things there, uh, because I get so many questions from international students and postdocs, um, yeah, maybe they know, they, you know, in theory could contribute money to a Roth ira for example. They, they understand the eligibility, but they’re more questioning like, is this a good idea? And it sounds like you came down on Yep. As soon as possible, whether I end up in the US long term or not, this is a good idea. Can you tell us a little bit more about that thought process and how you made that decision?

Cyrus (13:15): Uh, I think that this decision is very personal for me. Um, because that, that’s all really depends, um, where you going to stay, where are you going to retire in, in the future, right? Um, for me, I didn’t really think that too long. Um, I can in, in the long run, I, I prefer this. I might not stay in United States. Uh, but, uh, I, but uh, for me, you, you got to understand what, what, what’s your, uh, long-term goal. Uh, if you are not going to come back to us at all, or even this is the case, but it is still helpful that because, uh, you are kind of tax deferred assuming you grow your money over there, right? Um, and it just take some penalties if you break the, the rules that you’re taking out the money before your retirement age. But if you can stand with that, it is nothing comparing that if you in your future that you might want to settle down in US or you go want you coming back in us in a later life, it, it, it, it can benefit you a lot, but without risk balance you got assessment, what’s your goal, it is. And then for me, I would like to take that even though maybe a few years I have to, uh, uh, leave or, or for, or I have to withdraw the money, but I need to take a 20% or I don’t know exactly number the penalty for that.

Emily (14:53): Mm-Hmm, <affirmative>, yeah, if I’m remembering correctly, it’s, I think it’s only 10% and it’s only on the gains. And if we’re talking about the Roth IRA, right, because you can withdraw the contribution. So it’s, as you said, you know, there’s a, um, a, a risk there in a sense. Okay, well maybe I will need to remove this money early for some reason. Well, this is the penalty. Am I willing to accept that? Do you know, I’m, and the penalty again, is only on the growth. So it’s only if, yeah, if there things have actually gone well with that investment account, um, in the intervening years. So thank you for giving us a little bit more insight there.

Investing as a Graduate Student

Emily (15:24): And then I also wanted to ask about the taxable brokerage account. Um, you mentioned you bought Tesla. Yeah. Were you, um, cashing out, like making trades and actually taking income from this money over the years? Or is it more been like just sitting there for like, for the long term and you’re not taking income from it?

Cyrus (15:40): So for me, it’s more like a, um, a personal habit. Like, um, uh, I do, I don’t, I didn’t, I did not have much money to invest, and I think I was just bought two or three, few five shares of Tesla, but in 2018, and, but after that, Tesla was like a, like a high rocket, and I do, I did sold a couple share, but those number I really like comparing it, it’s not much. And so no, it, it, it’s more like, uh, a habit. That one is a habit. The another one is I, I did not really have much extra money to invest in this account.

Emily (16:24): Yeah. And I, you said the number of $500 earlier, was that your, was it your goal to invest $500 per month or is that over a different period of time?

Cyrus (16:32): Uh, yeah, I was, uh, uh, a month.

Minimizing Expenses as a Graduate Student

Emily (16:34): Let’s talk about keeping a lid on expenses or decreasing expenses then, because we’ve already heard that the cost of living is very challenging on your grad student stipend. So you already mentioned having multiple roommates. I think you said you were sharing a bedroom, right? So like maybe four people in a two bedroom apartment, is that right?

Cyrus (16:49): Um, um, no, that, that was like, uh, we do have five bedrooms in, uh, a big house, but we, we have our own bedroom. But the things like, uh, in that case we did cutting down a lot of expenses. We share everything.

Emily (17:05): Mm-Hmm, <affirmative>. Okay. So kind of the, the frugal tip there is like larger residents, more roommates, more people to split everything among, right?

Cyrus (17:15): Yeah. Not many PhD students actually live in Hoboken. I was lucky to find this place. Uh, but the same times, like I personally, I don’t think roommates are bad. And because I, I get a chance to know different people and, uh, in my case, uh, there’s a, a little, uh, uh, that, but I can stand with because we do sharing, uh, things, uh, and then sometimes can getting busy, but most of the case are fine with that. So we, I have four other roommates, but they are working in a different area. So basically we would have a different schedule. So in this case, uh, it’s doable and especially, uh, given the resources I have, I don’t commute that much. And then I enjoy in the on campus resource, I like to do it to gym. So it’s like a 10 minutes away from my, uh, my, my lab and then also the, to the gym. So the, I spend most of the time in the lab. And then after that, I go to the gym really just, uh, over the night, come back. And then sometimes we have the good parties, you have roommates, and you can have some little party on the weekends and watch a movie together. That was pretty nice.

Emily (18:30): Mm-Hmm. <affirmative>. Yeah. I actually really like the setup of a single family home that’s shared among multiple different, multiple, you know, people at their own bedrooms. I feel like that’s a pretty, in most areas of the country, that’s a pretty economical way to live if that type of housing is available to you as opposed to like the apartments or, you know, the townhouses or whatever. Yeah. Um, yeah. So what other ways did you find to decrease or minimize your expenses?

Cyrus (18:55): So at the same time, um, we, we do have, uh, uh, so I try to, uh, take a break from my research sometimes. And another way is like, um, travel. When, when it comes to travel, um, I prefer to go with my friends or in a group, and in, in generally I do meal prep. I do, uh, regularly do, uh, exercise and eat healthy. Um, the meal prep myself, it’s also cost less. So I think it is a, it is beneficial in two ways. Um, also in long run, I do value work workout regularly and keep your mental health checked. This would’ve, uh, stopped me going to hospital that often. Like I remember when the seasoning transitions during the transition seasonings and you catch flu isn’t sometimes it’s not just going to the hospital suffering. It’s more like you take at least one week to recover and then you get behind with my research and then that kind of padding up. It’s a lot of stress. So I, I, I wouldn’t, so I, I realized that like, and I, the good way is like take, do more exercise and then to, to keep your immune system robust, <laugh> against that. Um, another thing is like, it, it’s very funny, like when we pay in taxes, right? We, we considering as a, a tax resident. And, uh, but at the same time, I really appreciate my student id. I was living in New York City area and then using student id, you got a lot of free, uh, tickets and also discount tickets to the art gallery and museums and, and gardens. So although I, I, I was, uh, frugal, but I didn’t miss out any fun things over there. I, I still go to museums, gardens, and sometimes, uh, uh, uh, meetups and, and, and local, uh, parties. I, I was, was really fun. And it didn’t really cost you much.

Emily (21:10): Mm-Hmm. <affirmative>. So your entertainment was also satisfactory to you, but you found a way to do it in a frugal manner.

Cyrus (21:16): Yeah. Yeah.

Emily (21:18): Anything else on your list of, of expenses that you managed to minimize?

Cyrus (21:22): I don’t drive, right? So it is also, I was living in the city. It’s really, uh, so those expenses not really, uh, a thing for me. I personally, I do not really purchase too much clothing for me. I’m very minimal. Like, uh, as long I have, uh, uh, a clean fit clothing, that’s enough for me. And for shoes, like, uh, I don’t like to switch too much, and also maybe I have two or three, two, uh, three pair of shoes that one for winter and one or two I can switch during the summer or something like that. So, uh, wearing the things like to the, to the most, um, I think this is preco- probably also because the way that I, how I raised that I am fine with that. And I think that’s kind of, uh, one part, uh, that can cut off the cost in my case.

Emily (22:26): Yeah, definitely.

Commercial

Emily (22:29): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2024-2025 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Orientations or very close to the start of the academic year would be a perfect time for tax education or general personal finance content. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

Increasing Social Wealth

Emily (23:56): Is there anything else that you would like to add about overall how you increased your net worth during graduate school? We talked about investing in the Roth, IRA and also in the taxable brokerage account. Anything else in that category?

Cyrus (24:09): Uh, I think one thing that is more intangible, the the wealth and the finance that, uh, the, it is kind of the, the social wealth, the, which I, I, I, I was not really proud of that, um, and try to, uh, take advantage of the local resources, right? And then I was lucky to live in New York City area, and then that’s, and also Hoboken locally and is very nice community, but I think no matter where you live, the local community more often, have more resources that you can imagine and you might not be aware, just try to reach out. And for example, I was attending almost like every weekend I go out and then join the meetup and conference, and most of, of the time they provide you these free meals, lunch or dinner, and then it, it, it’s a, it’s a nice way you can social and also you don’t need to cook your meal yourself. So these things are very subtle and the same things happening on campus that, um, in, in your department, uh, no matter which major you are, um, try to join the, uh, the, if you have any habit, right, join the club and then your peers, and those are most likely have this, uh, social events that can help you, uh, to reduce sometimes if you don’t want to cook or for breakfast meal. And then those are all great ways to, to do

Emily (25:59): Classic grad student strategy. Um, but I like that your focus here and kind of your spin on it is both like, yeah, you can get some free meals from time to time, but also you get, you get your entertainment and your social interaction. Um, and so it fills your, your calendar and helps you again with your work life balance and your wellness overall. And I like that you mentioned not just doing this on campus, but in the community too. And the thing is that if people are putting on events and they’re giving food and all those things, they really want you there. They really want people to come. So like you’re also, you know, you’re contributing to their community as well.

Cyrus (26:32): Yeah. Yeah. I, I think, um, one of the things not just about the meals, and another thing is about the, the, the social wealth. I would say it’s all, uh, it’s also the concept I learned from the books that, uh, it’s more how would you connect to the people? And then that was, uh, kind of potentially, and the connection may or may not be lead you to in the future when you are in the job market, you could have used these connections, but, uh, I wouldn’t say put this in more like a transactional way, but you should try genuinely more just enjoying the life. But at the same times, you might not realize by doing that, you kind of gain the social wealth.

Freedom as the Ultimate Goal

Emily (27:20): You were obviously putting in a lot of effort with your finances, right? All the things we went through, ways that you keep your lifestyle to a minimum ways you figured out how to increase your income, you know, self-education, and then that turned into more investing and so forth. Um, why, why weren’t you just satisfied with getting by day to day and saving all of that for after you finish graduate school?

Cyrus (27:45): I, I think that’s awesome. One role of the reason is due to my personality, I guess. Um, I think the, the ultimate goal is the freedom to achieve the freedom and to be confident. W- with the any decisions I’m going to make. So I would like to, we are talking about freedom and confidence. It’s more like in the sense that I was, I can make decisions based on my own personal demand, not really subject to any resources surrounding me, right? Like, like I said, like before I entering us, I never felt I’m, I’m poor <laugh> because I don’t really have, have much need and I was spending most of my life and time with school. And then after you explore the world, I have this dream, and then now the time’s moving on, and then I start to realize that I really, it’s not what you think, like ideas are great, but you have these obstacles that related to this, uh, money topic, and then you actually making decisions based on what the resources are available for you. So the final goal, then I would start to thinking like, yeah, this comes so natural, you save more, but saving is just one of those strategies. So, and then that’s why I end up start to find out the other opportunities and yeah. So I, I would say the ultimate goal is to be freedom.

Emily (29:30): Do you feel like, you know, you are, I don’t know, five, six or so years into this now, um, do you feel like you’ve attained that to a degree? Obviously you’re not, maybe, you know, complete financial independence is still, still some time away, but, um, I guess I’m, I’m wondering about, yeah, like does it feel like you are a percentage ways, like towards that at this point?

Cyrus (29:53): Uh, in terms of the net worth, obvious, No, that is a far away, but I think in terms of mindset and the knowledge, and then I am preparing myself and then I’m being mindful with my personal life. It’s called personal finance, right? And then you, I i, I was now I’m able to figuring out in the big picture and then what’s the come in flow, what’s the outflow? And I’m, I’m very mindful of that. And then in the end, it, it’s really also, it’s another pro- a question for myself. Do I really want to be retired early or not, or, so the, the, the, the freedom for me is in a more, in a wider definition that it’s more about the resource management and the organize myself, and it, it, it, it includes material and, but also my mind. I think this kind of, uh, uh, knowledge and skills over these past five to six years that I develop, it’s very helpful. Um, in the long term. I, I think if I stick to that and then keep this growth mindset and in the future, the net worth is just a number, whether you choose retire 40 at 40 or 50 a a it is, can is this is the freedom that I, I’m talking about. I can decide, doesn’t matter if, if I have to work or not, right?

Emily (31:33): Absolutely. I love that. Thank you much for pointing that out. I similarly, I think I came to this similar kinds of reflections after I had finished graduate school, after I’d been on that path for a few years, like recognizing how, um, having not only some money in terms of the net worth, but also those mindsets and the habits and the skills and everything that it took to start down that path really afforded me more, uh, choices even at that relatively early stage, um, in life. So thank you so much for sharing that. Exactly.

Personal Finance Resources for Grad Students

Emily (32:07): Um, do you have any additional resources that you’d like to recommend, either to specifically the international graduate student population or maybe graduate students and postdocs more widely? I mean, your first recommendation, I will teach you to be rich by Ramit Sethi was an excellent one. Were there any other books or I don’t know, podcasts or YouTube channels or anything else that you, uh, that you felt was really helpful along the way?

Cyrus (32:27): Yeah, I think, um, so I, I think books are really, uh, good to start with. And in terms of which books you should read, uh, um, uh, I would recommend if you use Reddit, and that there’s a personal finance Reddit channel, uh, you can join that one. There’s a lot of resources about personal finance and what books you’re getting started. And if you like a podcast, and I think this one is very nice since, uh, at the beginning I, I couldn’t find much resources. That’s also how I get to know this podcast. And I was very excited that actually someone thanks to you <laugh>, um, so you, you, you can get, keep get informed to make a good decision, right? Um, and this, uh, this, this is, uh, complete within your reach if you want to do that. And then I would suggest you do that.

Cyrus (33:28): And in terms of, uh, um, tangible resources, be mindful for the, uh, reach out to your university resources. Like, um, especially I was using this, uh, psycho, uh, psychological services therapy and be open-minded. And for those like, um, we are PhD students, we are graduate students, and then it’s can definitely be very lonely. And then even you are in a relationship, so, and those resources are really just find somewhere to talk. And this I think is the part that can easily be ignored by the students, especially international students thinking I’m really, because I’m alien here and then I feel constrained. But actually, uh, uh, in us, you can definitely, especially in your university, you have a lot of resources, uh, uh, to help you out. And then when you graduated, and actually the careers, uh, service is also very helpful, but you need to know that and you need to reach out for yourself.

Cyrus (34:41): And in terms of local community, no matter where you live, try to find a city. And what I did is like get engaged with the locals and I like running and then I go to 5K races. So those are, you can, um, reach out without any cost, right? And also you can, uh, remain your, uh, healthy mind, mind, uh, mental health. So yeah, I, I think overall just be open-minded. We are living in this, uh, information liberal age is really, you don’t feel missing out, and then you have the access to other information you can figure out yourself. And what’s, one thing I, I learned is, um, what makes you, uh, anxious is mostly the things that you actually didn’t do right? And then if you act on it, it, it, it doesn’t matter how challenging the, the things itself, and then you will be fine. But sitting there <laugh> doing nothing, that that’s the big problem.

Emily (35:54): Mm-Hmm, <affirmative>, I’ve absolutely seen that in, I mean, it, it applies widely, but certainly in the case of finances, um, it’s better to just face it and engage. Yeah. And try something. Um, yeah, instead of, as you said, kind of avoiding or spending a long time in analysis paralysis, not sure which direction you should go, just try something. And you’ve tried a lot of things and I love that we got through all of that in this interview.

Best Financial Advice for Another Early-Career PhD

Emily (36:16): Let’s wrap up with our last question that I ask all of my guests. What is your best financial advice for another early career PhD? And it could be something that we’ve touched on already in the interview, or it could be something completely new.

Cyrus (36:28): Yeah, so, um, I think everyone has a very unique experience, uh, in terms of giving. Otherwise, I would just say I wish what I have done or done more to in my PhD. Um, so one thing I think, like I mentioned couple times, um, value social wealth. And that means that, uh, try to, uh, go out and in, in your spare time, sometimes you might think you don’t have time, especially as a PhD student. And, but I tried, I have the similar mindset, uh, at a certain amount of time. But the thing is like you stick in the lab and the home, you might, you become less productive and then it might take more time than comparing that you just go out and do some activities and then come back with, uh, more energy and fresh mind. So this is the thing that I, I think I did, uh, less, uh, whether it, if you are in a relationship or not, it is the similar thing sometimes, like go out with friends and, and to the meetups and or more importantly, um, it’s also more, uh, career wise or professionally. Like we, we as a graduate student, we don’t really have money to give out, but the same, uh, idea applies. The more you give the, the, the, the, the better. So, but as a scholar, that means that volunteer to giving talks in the meetups, workshops, seminars in your neighboring institutions, I think, uh, don’t underestimate yourself because you are a PhD student and you definitely have the knowledge base and then sharing those knowledge with the community, and you are passing to the knowledge. This is the wealth we possess, right? Normally people think we are poor, but actually, um, a wider definition of the wealth here, we have this part to share with someone else. And then the same times you will get rewarding back, right? Because you, you go out and people get your idea, you get a chance to talk about your research, and the same times you build this genuine connections with the community, and in the future, this connections might help you to navigate your, your future career path.

Cyrus (38:58): So this is the thing that I, I think I missed out a lot also because we was in the covid times, and that’s really dark age. Um, on the other side, as I, I would like to share is I think what I did to contribute the success of my PhD is one thing is really be open-minded. I considering myself a very open-minded person, I, I, at the same time, very minimal for me. And then, but I do exercise more and then, and try new things at the beginning. All those investment accounts really scares me because every time I open the account, that’s a whole for legal documents I have to read. And I, as an international, I’m concerned that I fly-, am I breaking the law or something like that. But if, if you are looking into it and it’s really not that scary, right?

Cyrus (39:56): So I think, I think I, I stand with myself and then I, I try all those things. And then the, the, the, the idea is you need to realize that if you don’t do that, and it’s actually you are paying that, you are not doing that, right? Because the inflations and the interest rates, rates all the things that you have to, you kind of, everyone should open their investment account and, and, and do the investment and manage that to beat the, at least the inflation. So another thing I think I value, uh, more is the people itself, whether it be your significant others or friends. I do valuable value those things. Um, uh, that means that if, if there’s a chance I can spend more time with my friends, like, uh, we go out for a nice, a night, a fancy dinner. Sometimes we go out for, to New York, Manhattan to try different restaurants. I, I, I, I really not at that moment, I value more with the time with my friends. And even though the meal is expensive sometimes, I remember one time we spent almost a hundred each of us for one meal <laugh> was like, but I think that was really, uh, um, uh, valuable for me.

Emily (41:15): Yeah, so insightful. Thank you so much for sharing that with us. Thank you for this entire interview Cyrus, for volunteering to come on the podcast. Um, it’s been absolute pleasure to have you.

Cyrus (41:24): Thank you. And thank you for having me and it is great to sharing the stories with everyone. Thank you so much.

Outtro

Emily (41:41): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.