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How a Freelancing Career Can Take You from Academia to Affluence

August 24, 2020 by Meryem Ok

In this episode, Emily interviews Courtney Danyel of Academia to Affluence. Courtney became a successful freelance writer after leaving her PhD program in anthropology and moving to one of her field sites. She now teaches other academics how to launch freelancing careers through her course, Endless Freelance Income. In this interview, Courtney gives us her #1 piece of advice for new freelancers, which all academics need to take to heart! She also outlines the simple steps it takes to get your freelance career off the ground. Courtney’s location-independent business has enabled her to earn a very nice income on very part-time work, which will be attractive to academics looking to freelance for a side or main income.

Links Mentioned in the Episode

Teaser

00:00 Courtney: I actually do not work full time. I work maybe 15 or 20 hours a week. But I actually still earn a full-time income because I get paid well.

Introduction

00:16 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 17, and today my guest is Courtney Danyel of Academia to Affluence. Courtney became a successful freelance writer after leaving her PhD program in anthropology and moving to one of her field sites, but it wasn’t all smooth sailing. She now teaches other academics how to launch freelance careers through her course, Endless Freelance Income. In this interview, Courtney gives us her best advice for new freelancers, which all academics need to take to heart. She also outlines the simple steps it takes to get your freelance career off the ground. Courtney’s location-independent business has enabled her to earn a very nice income on a very part-time schedule, which I know is attractive to academics looking to freelance for a side income or main income. Without further ado, here’s my interview with Courtney Danyel of Academia to Affluence.

Will You Please Introduce Yourself Further?

01:17 Emily: I am delighted to have joining me on the podcast today Courtney Danyel of Academia to Affluence. And I just want to tell you, in one second, how Courtney and I first met online, which is that I saw a post that she wrote a few months back on Jobs on Toast, and I saw her business name, Academia to Affluence, and I was like, this is going to be a good fit. I need to talk with Courtney. So, Courtney, will you please tell us a little bit more about yourself and why your business name is what it is and what you’re up to?

01:47 Courtney: Okay. Yes. So sure. My name is Courtney Danyel. I am an anthropologist by training, but I actually wear quite a few different hats. I’m a freelance business writer also. I’ve been doing that for the past seven years. And as an anthropologist, I’ve worked in Africa in the Central African Republic and Ethiopia. And I actually currently live in one of my field sites, which is Ethiopia. I’ve lived here since I started freelancing seven years ago. And another thing that I started doing late last year was I started mentoring other academics and other people with an academic background to help them transition into freelancing and actually have created an online course for that purpose.

Top Advice for an Academic to Start Freelancing

02:30 Emily: Yeah. So the course name is Endless Freelance Income. I’m actually affiliate for Courtney’s course. I had an opportunity to check it out, you know, before this interview, I think it’s fabulous. And if you want to find out more about that on my end, you can go to pfforphds.com/freelance and find out more about Courtney’s course. And I actually have a couple of bonuses for people in my audience who want to sign up for her course. So, first, you know, right up front, we’re going to get some insights from this course. And then we’ll learn a little bit more about Courtney’s background and her personal story that got her to this point. So, Courtney, your absolute top advice for an academic looking to start freelancing, what is it?

03:10 Courtney: My number one piece of advice for academics who want to start freelancing is to command high pay from day one. That’s because that’s a major mistake that I made when I first started freelancing. I had finished my master’s and I had done part of my PhD and I ended up dropping out of my PhD and decided to switch to freelancing. And as far as I was concerned, I thought I was starting from zero because I was doing freelance writing and I’m writing about topics that aren’t related to my academic discipline. And so, “I don’t know what I’m doing.” And that’s basically what I thought about myself. And so for that reason, I didn’t think that I deserved very high pay. And then I took a lot of jobs that didn’t pay very well at all.

03:57 Courtney: Actually, for the first year and a half or so that I freelanced I was not paid well at all. And then one day I was doing some research for an article that I was writing. I did a lot of ghostwriting back then, which is you write content for other people and it’s published under their name. And I was doing some research for an article that I was ghostwriting for a client. And I Googled something and I clicked on an article that was on forbes.com and I looked at it and it looked familiar. And then I realized that it was written by me. And after I realized that, I started doing some more Googling and I found that my content, stuff that I had written for my clients, had been published on Forbes, Vice, Business Insider, entrepreneur.com and like all these different top business publications. So, that’s what made me realize that, wow, I guess I am a really good writer in other niches besides just anthropology. And I do deserve to be paid well for the work that I do. And after that, I raised my rates, tripled them really, and basically never looked back.

05:05 Emily: I think that this advice is, one, good advice just for everybody, but two, something that academics or post-academics really need to hear, because we are kind of conditioned during graduate school to undervalue ourselves. And it takes really a lot of mental work–and for you a year and a half of actually working in your new field–to undo that conditioning, that mindset that’s been instilled in us. So, I think that it’s something that this audience really, really needs to hear. And I have found as I’ve been involved in academic entrepreneurship spaces, this is one of the top pieces of advice that we pass to one another, which is just raise your rates, raise your rates, raise your rates. I mean, we’re so conditioned. Yeah. We’re so conditioned not only to undervalue our time, undervalue our work, but also think that service is something that you have to do for your job, which I guess in academia, yes, you do have to, but outside of that, no, you should be paid for the value that you bring.

Courtney’s Course Covers Base Pay in Different Freelance Fields

06:09 Emily: So, anyway, it’s a wonderful, wonderful piece of advice. So, actually one thing I wanted to mention is, something I liked in your course is that you speak, of course your experience is in writing, but in the course, you cover a lot more than that, right? Freelancing is a lot more than just freelance writing. And so you talk about base pay rates that you can kind of expect in different fields. Right? I thought that was really that you just got the research jump-started a little bit for the people in the course.

06:40 Courtney: Yeah. You know, for me, I’m basically almost a hundred percent at this point, just a writer, but I actually have a lot of experience freelancing in other areas also, including doing editing and data science and different things. Because you can dip your nib in a lot of different freelance niches. And I also wanted to make the course really open to people who have different skill sets from what I have. Not everybody’s an anthropologist. They have different things, different skills that they bring from academia that they can earn good money from in freelancing also. And so, the course actually introduces several different popular niches, including writing and editing, translation, data science, consulting, sales, and marketing. So, you can kind of discover which one is the best fit for your current skills.

07:30 Emily: Yeah. I mean one of the fields you just mentioned, consulting, is always one that’s very attractive to me when I find other PhDs or graduate students who are consulting. One, because it’s a very broad in flexible kind of terms. So, a lot of people can be consultants in different ways, but also because it tends to command a nice high pay rate if you’re consulting in an area of expertise. I mean, you mentioned earlier that when you went into freelance writing, you were kind of moving away from anthropology. You were writing more about business. But you know, many other people who might be listening to this, they want to double down in their field of expertise. Right? And that’s how they can command those really high pay rates that you mentioned earlier.

08:07 Courtney: Absolutely.

Get Noticed as a Freelancer

08:07 Emily: Okay. So, let’s say you’ve convinced people, people are in your course, they’re going to go down this freelance route, whether it’s writing, consulting, some other field. What’s the best way for them to get started kind of hanging their shingle and letting people know I’m a freelancer now, you can hire me?

08:27 Courtney: Yeah. So, I think the first and most important thing is to build a website. Which, surprisingly to me, I know a lot of people in academia who were like, “Wow, you have your own website. That’s so cool. I wish I could do that.” And I’m like, “Well, you can. You can set up a website in one day. It’s not very difficult.” Yeah. So, building a website is the first and most important thing you can do to make yourself look like a professional freelancer. And that is another thing I discuss in my course. I take you through step by step, how to buy your domain hosting and set everything up, and what the important information you should put on your freelance website to make yourself look like a professional. So, that’s the first step.

09:02 Courtney: And then the next thing that you should do is use networking and cold pitching to get clients. Because there are a lot of freelance websites out there that you can get on where you can apply for jobs and stuff. And I’m not kicking that. I think that’s great also. And I do recommend that you do that, but you won’t get really high-paying clients from those kinds of gigs. You want to first start with networking. And even if you don’t have anybody, you can’t get any clients through your personal network. That’s fine. You can do it through cold pitching. And for me personally, over the years, the clients that I’ve had that have earned me hundreds of thousands of dollars are always the ones that I got through cold pitching. So, that’s what I recommend.

09:43 Emily: Yeah. You know, I actually went through a similar process. I don’t, I guess, identify as a freelancer, I identify as a business owner. But I went through a similar process when I started my business, which is how do I let people know that I’m available for speaking engagements and the other work that I was doing? And so I went through several years as I was building my network where I was cold emailing people. So, I know I don’t really love to be on the receiving end of most cold emails. And so I don’t love to send them either, but honestly, that was the necessary step in the overall process. So, I did a few years of a lot of cold emailing, built up my network, got some responses from that. And now I have basically stopped that. I kind of only do warm-emailing or cultivating my existing network at this point. So, I like that I’ve moved past that, but I feel like it was a really, really necessary start to the whole thing. My business would not have gotten off the ground if I hadn’t just been reaching out to people and trying to start establishing that network. So, it’s not necessarily pleasant, but it is necessary.

10:46 Courtney: It is necessary. And I always found it intimidating in the beginning, especially because you can send 50 emails and not get a response on a single one of them. That’s just the reality of cold pitching. But once you get that one gig and then it earns you a bunch of money, and then it’s like, “Oh, totally worth it.” And you feel motivated to do it more. And so, it can be intimidating. But that’s another thing that for the people who sign up for my course is that they have email support from me. And so, I will help them out with any questions they have. So, if they want to start cold emailing, but they’re not really sure where to start or what to say, they can ask me about that and I’ll give guidance based on the experience that I’ve had over the years.

How Freelancing Enhanced Courtney’s Life

11:28 Emily: That’s actually really nice. Because I know one of the sort of major challenges when you’re starting a business or starting a side income, like freelancing could be at first, is not really having colleagues who you can talk with about the work that you’re doing. And so, that’s just a really great sort of addition, in addition to the excellent content in your course, is also to be able to have interactions with you to get that support, again, as you’re building your network of your peers who are also freelancing or doing other kinds of work like that. So, I find that really valuable. I’ve been part of a couple of communities and I love just, you know, some people process things by talking to other people and they want some outside input, and you’re providing that. So, that’s super valuable. Now that we’ve gotten those excellent nuggets of advice from you, let’s talk a little bit about you and your story. I know you gave a quick overview at the start of the interview as to how you got into this, but why don’t you dive into a little bit more detail about what freelancing has done for you?

12:30 Courtney: Yeah, so, I flew through my bachelor’s degree and flew through my master’s holding my breath. I did that all really young and then I was starting my PhD. By the time I started my PhD, I was completely burnt out. It was just, I don’t need to explain how difficult academia is to anybody who’s listening to this podcast, but yeah, it was just too much for me and I needed a break. And the thing that I always loved about anthropology, the one thing that I love the most about it was being able to do field work. But field work was something that I was only ever able to do, if I was lucky, one or two months out of the year. And the rest of the year was spent in a windowless office doing research and data entry and stuff like that.

13:17 Courtney: And so, I wanted to just have the field work experience without the office experience. I just wanted to do something different. And so I was like, “Okay, I’m going to move to my field site. I love it there. I think it’s great. And I want to go live there. How can I do that? I don’t know.” And so, I actually ended up talking to my mom about it, who she actually works online. And she’s like, “Well, why don’t you start freelance writing? You don’t need to earn a lot of money in order to earn a living, especially if you’re in Africa. So, just give it a go.” And so, that’s what I did. I dropped out of my PhD program. I sold my car, used that to buy a plane ticket, and I left and I started freelancing here in Ethiopia and I’ve actually been here ever since.

13:59 Courtney: So, that has enhanced my life a lot because I get 12 months of sunshine, which is really important to me. And I love the environment and I love the culture and learning languages. And so that location-independence was really, really valuable to me for my mental health and just my personal happiness. And then the other thing that is always important is money. So, I earn very, very good money as a freelancer. I didn’t the first year and a half, as I mentioned before, but once I figured out that I was worth it, I started demanding it and asking for it. And I got it. And I continued to get it every time I raised my rates. People say, yes, somebody says yes. You know? And so, that’s really important, especially compared to academia, unfortunately. After the first two years of freelancing, I started earning more money than my former PhD advisor earns. And they’re a tenured professor. So, that’s something.

Location Independence and High Pay Rates

14:58 Emily: Yeah. I want to explore each of those points a little bit more because they’re both super attractive. The first one, the location-independence, you explained how that played out in your life. It enables you to move to the place that you want to live at one of your field sites and have sort of your whole life feel a little bit more like what you enjoyed the most about your academic experience. And of course, if someone else wants to do that and wants to make freelancing the way they make it happen, that’s awesome. I can think of some other benefits, which is, as you know, academic careers and PhD careers, you don’t have a lot of control over where you live, especially if you’re in academia. But even if you’re just a highly specialized professional, there are certain industries that are concentrated in certain cities, and so forth.

15:44 Emily: So, there may be reasons related to your PhD why you want to stay in a certain place, and this freelancing can follow you wherever you go. Side note, I as a, what’s called a trailing spouse–so we live where we live because my husband’s job is here and we anticipate moving because my husband may be changing jobs from time to time and he’s highly specialized–I get to take my business wherever I go. So, I don’t have to start over in a new job every time I might need to move. So, that’s a real, real benefit that I see that location-independence. And then of course on the money side, because this is a personal finance podcast. So, commanding the high pay rates, getting paid very well for your time.

16:26 Emily: Not just for people like you who are doing this full time, but as a side hustle. If that’s the way this starts, or that’s the way you want to keep this as you move forward in your freelancing career, as well as your academic or PhD-type career. It’s really nice when you can make a good amount of money for not that much time invested. As a PhD student, for example, you might be able to work, I don’t know, two hours a week, five hours a week, some pretty small number, but still get a really, really nice amount of money out of that small, small side hustle. And when you compare that, when you’re thinking about hourly rates to the other kinds of work that some PhDs do, or some people do when they’re still in graduate school or PhD training, it’s really nice, right?

17:10 Emily: To not have to work so many hours and also to have maybe a more like stimulating type of work, intellectually that is, yet something that is different probably from what you’re doing as your main day to day job, if this is still a side hustle. I think that’s really attractive in terms of having balance in your life. It’s awesome that you’ve been able to command these high pay rates and put together this full-time career, making a very nice income from Africa, from where you wanted to live. And I definitely want others to consider following your tracks.

17:44 Courtney: You were saying that this is like a full-time job for me, which it kind of is. But a lot of other people who listen to your podcast are people who are in academia to stay and they would like to have some additional stream of income to add on top of that. So, one point that I would like to make is that I actually do not work full-time. I work maybe 15 or 20 hours a week. But I actually still earn a full-time income because I get paid well. And this is something that I choose for my personal life because I have three foster kids and I homeschool them. And between that, and being a mom and, keeping my yard clean, I work 15, 20 hours a week on freelancing and that’s about it. And so you could do this as a part-time gig and still earn a lot of money. It doesn’t have to become like your full career. You don’t need to invest a hundred percent of your time in it. I don’t even invest a hundred percent of my time and I don’t even have another source of income. So, that’s something.

18:41 Emily: Yeah. Thank you so much for adding that. That’s awesome that you’re earning this like great, full-time income from part-time work. I actually also work part-time as well. I work about 25 hours a week and I’m quite happy with that balance actually. So, I really like that you added that point because the whole working 40 hours a week thing is so job-centric. That’s what our culture has decided–well, really not just 40, much more than 40 hours a week–is like the proper amount of time to be working. And once you start your own business, once you strike out on your own, all the rules are out the window, right? You can define what you want your work life to look like completely. And that goes both location and time and amount of money as we talked about earlier. So, I’m so glad that you added that. Thank you.

Endless Freelance Income: What to Expect

19:28 Emily: Let’s say someone is super excited about what we’ve been talking about. They want to start down their freelancing career in whatever field that might be in, and they want to sign up for your course, which again, they can do through pfforphds.com/freelance. And you can get the couple of bonuses that I created there. So, what can someone expect to find when they start your course?

19:49 Courtney: Okay. Well, first I guess I’ll explain who the course is for specifically. After I started freelancing, even in the first year or two I started freelancing, I got emails from people that I know. From people in my former cohort, professors that I know, people in grad school who heard, “Hey, I heard that you left academia and started freelancing. And I’d like to do something similar. Can you give me some advice?” And so, I’ve been giving advice to people for years. I get emails several, 10 or 15 times a year, I get an email from somebody, or I get a referral from somebody who’s in academia and they want to make the switch, or they want to add on to an additional stream of income through freelancing. And so, after years of basically kind of helping people just as like a side project, I decided to create a course to basically do what I was already doing, but do it in a more organized and formal way to help people.

Ch. 1: Intro to Freelance, Ch. 2: Identify Your Valuable Skills

20:47 Courtney: So, that’s what I created this course for. It’s called Endless Freelance Income, how to turn your liberal arts degree into an endless freelance income. However, even if your background is in science or any of the STEM areas, it can also be relevant to you. So, the course at the very beginning, it just introduces you to the online freelance world. So, if you don’t know the first thing about it, don’t worry. I will explain it to you in the course. That’s the first chapter. And then the next chapter, which I think is probably the most valuable one for people, is helping you identify what your most valuable and profitable skills are, from academia, that you can translate into freelance income. Through the mentoring there, I also kind of help people–people tend to overlook their skills. They think, “Oh, I guess I can write,” or like, “I guess I can do some data analysis, but I don’t have a degree in that. So, I’m not qualified to do that.” So, kind of just help people break that down. Imposter syndrome follows you outside of academia. I learned that the hard way. And so, just kind of help people to understand, no, these are valuable skills and you can utilize them.

22:08 Emily: What I liked about that portion of your course, what I noticed there is that you have worksheets in here, right? So, it’s not just like, I’m just reading all this material. It’s a very engaging format, right? So, you’re giving people some little tools they can use to do things like brainstorm about their own skillsets, which I totally agree with what you said. We tend to discount our own skills or our own areas of expertise unless we have a degree in it. That’s very important to us in academics that we have a degree in XYZ. But I know, personally, like my field is now personal finance and I don’t have a degree in personal finance and that’s okay. I’m still confident at this point that I am an expert in this area because of my long experience. But I think that for people who aren’t quite there yet, it is a little difficult of a hurdle to overcome. So, your course definitely helps with that.

22:55 Courtney: Yeah. And you know, same story for me, I’m an anthropologist, but I write in marketing topics, marketing and entrepreneurship. And I am an expert because I became one. And that’s it. And so, you can do it, too. That’s basically what the course helps you to figure out. So, once you’ve kind of broken down and pulled your skills out, then the next chapter teaches you about several different major freelance niches that you can get into. And I already mentioned before, there’s writing, editing translation, administrative support, design and creative, customer service, consulting, data science analysis, and sales and marketing are the ones that I go through. So, those are the main ones. And then it walks you through how you can look at your current skills and line them up with what each of these niches demand, or what they need.

How to Look Professional as a Freelancer

23:46 Courtney: And then it also helps you think about which one’s most interesting to you too. Because it’s not just about your skills, it’s also about what you want to do, right? And then you can choose your niche. And then after that, the course goes through how to make yourself look professional as a freelancer. One thing that I discovered when I left academia is that I needed to tone down my CV. What’s professional in academia and what’s professional in the online business world are very different. And so I kind of teach people how to make yourself look professional online as opposed to professional as a 10-page CV, or something like that. So, that’s the next step. And then the next thing after that is teaching you how to research your niche so that you can figure out what the going rates are in your niche, the going rates for somebody with your skill level, and just kind of also to weed through the riffraff.

24:47 Courtney: Because a lot of people out there, you know, they say $10 an hour or something like that. Yeah. You don’t need to pay attention to those people. So, to figure out how much you should be charging in the beginning. And then after that, the course takes you through step by step how to create your website, which I mentioned before. And then it walks you through what you need to do to land your first client. And that is the course in a nutshell, as it is right now. I plan to add onto it. Like I said before, I think cold pitching is important. So, one thing I plan to add on to it in the future is more information about walking people through how to set up a cold pitching scheme. And so, that’s something I plan to add onto it in the future. And the good news is that if you have access to the course, you buy it now, you’ll have access to all that future material as it comes up.

Bonus Content from Emily

25:34 Emily: That sounds awesome. As I said earlier, I read through the course prior to this interview, and it really breaks things down and simplifies them and doesn’t make it seem so intimidating to start down this path of freelancing. You really don’t over complexify anything. It’s very simple steps to follow, to get started. So, I wanted to mention for my audience, if you choose to buy Courtney’s course through my affiliate link again, pfforphds.com/freelance, I’ve created a couple of extra bonuses for you. So, one that everyone will receive who buys through my link is a free video training on how to budget with an irregular income, right? So, like I’m really confident, you go through Courtney’s course, you’re committed to this. Like you’re going to be starting down that path of having freelance income.

26:18 Emily: And you know, that’s a really great thing, but it can also pose some budgeting challenges. So, I’ve created a training that you’ll get for free when you buy the course on how to manage that. Like manage your finances when you have a side income stream that’s irregular, maybe growing into a full-sized income stream over time. So, it’ll help you with that. And then for the first five people who buy the course, so not everyone, but just the first five, I’m going to offer a free 20-minute financial coaching session. So, what I think will be really great about this is if you schedule this for maybe like two months out from when you start taking the course, it’ll be a nice little accountability point to meet with me at that time and say, “Okay, Emily, here’s the income stream. I’ve established it. I got my first invoice over here. I’ve gotten paid for the first time.” And so we can talk more about what you want to do with that money. How it’s going to help you reach your goals. How it’s going to fit into your budget. Do you want to be paying debt? Do you want to be investing it? So, we can talk about all that kind of stuff. So, that’s how I recommend you use that bonus if you’re one of the first five to sign up is schedule it a little ways out. So you actually have that income stream established by the time we meet together. And I’ll certainly be asking you, have you been implementing everything from the course? So again, pfforphds.com/freelance is where you can sign up and of course link through to find out more about the course from Courtney.

Best Financial Advice for Early-Career Academics

27:38 Emily: So, Courtney, we’ve come to the end of the interview. Thank you so much for what you’ve shared with the audience today. I think it’s been excellent advice and thank you for telling us more about Endless Freelance Income. So, final question that I ask all my guests is what is your best financial advice for another early career academic or maybe recovering academic like you?

28:00 Courtney: My best advice would be don’t put all your eggs in one basket. Something my dad told me when I was 17 years old and I didn’t know what it meant at the time, but now I do. So, even if you’ve got your dream job, even if you’ve gotten that research position or that tenure track job or whatever, you never know what’s going to happen in the future. That’s something we’ve learned this year in 2020, I think. And so, having an additional stream of income is really valuable. And I know that’s what Emily talks about all the time on her blog. And the thing about freelancing is that there’s no risk in starting and giving it a try. And you can just work on it in your spare time and you can build it up over time in whatever time you have. And if you don’t have time to work on it, you don’t have time to work on it. And it doesn’t hurt you to work on this and build up this extra stream of income. You don’t have to be like me where you leave your job and leave your country and change your whole career. I think that all academics should be doing something on the side, some kind of freelancing, blogging, something. So, that’s my advice.

29:06 Emily: Yeah. I totally agree. You know, not all the eggs in one basket can apply it to a lot of different areas, but certainly when it comes to your income, having a job or even being in graduate school means you’re dependent on another institution to decide to continue to give you work. But the advantage of freelancing is that you spread that around to a lot of different clients and it’s much less risk. Yeah, one client drops off, no big deal. You can supplement that by hustling up a few new clients. But if your employer decides they don’t want to work with you anymore, that’s kind of a devastating like life thing. So, excellent, excellent advice. What I also like about what you said is that if you do the work, for instance, by going through your course. If you do the work to establish yourself as a freelancer, and you devote even something like an hour a week to it, like I mentioned earlier. As long as that income stream is established and in a field like freelancing, it’s something that you can decide to turn up or turn down as you need in your own life.

30:00 Emily: So, for example, if you have an unfunded summer, you know, some people–again, you mentioned 2020–some people in 2020 have late in the game discovered that they don’t have summer funding in the way that they thought they would. Yes. Their funding will pick up again in the fall. It’s not like they’re going to drop out of graduate school and get a full-time job or whatever. But for a few months, the income that they thought was secure is not there. So, once the situation is upon you, it’s very difficult to scramble and kind of fix it. But if you’ve already established that one hour per week freelancing job, then that’s something you can ramp up or ramp down as your life allows, as your money situation requires. So, I just think that’s a real advantage to establishing yourself. Even if you’re not going to do it, like you just said, 15 hours a week to make the equivalent of a full-time income. So, great, great advice. Courtney, thank you so much for joining me on the podcast today. It was a real pleasure to talk with you again.

30:54 Courtney: Thanks so much, Emily. Thank you.

Outtro

30:55 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This Fulbright Fellow Supplements Her Stipend with Prior Savings

August 17, 2020 by Lourdes Bobbio

In this episode, Emily interviews Dr. Caitlin Kirby, a graduate student at Michigan State University and former Fulbright fellow in Germany. Caitlin has been greatly financially challenged on the Fulbright, namely by: 1) the large amount of money needed to move and settle into her new city and university, 2) the high cost of housing relative to the stipend, and 3) the additional expense of bringing her husband with her. Caitlin and the majority of her peers are supplementing their Fulbright income with prior savings. Fortunately, Caitlin and her husband grew their net worth in advance of starting the fellowship through house hacking and savings goals.

Links Mentioned

Find Dr. Caitlin Kirby on Twitter
Personal Finance for PhDs: Speaking
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Personal Finance for PhDs: Subscribe to the mailing list

Teaser

00:00 Caitlin: We’re paying about €1,025 a month for a furnished apartment with all bills included, which is the norm in Germany, and that’s 85% of my base stipend.

Introduction

00:18 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 16, and today my guest is Dr. Caitlin Kirby, a graduate student at Michigan State University, and former Fulbright fellow in Germany. Caitlin details the financial challenges she experienced on the Fulbright, namely the large amount of money needed to move and settle into her new city and the university, the high cost of housing relative to the stipend and the additional expense of bringing her husband with her. Caitlin and the majority of her peers supplemented their Fulbright income with prior savings. Fortunately, Caitlin and her husband built up savings in advance of starting the fellowship through house hacking and savings goals. This episode is valuable, not just for future Fulbright fellows, but also anyone facing a career transition or move. By the way, we recorded this interview in February, 2020, and I’ve included an August, 2020 update from Caitlin after the interview. Without further ado, here’s my interview with Dr. Caitlin Kirby.

Will You Please Introduce Yourself Further?

01:25 Emily: I have joining me on the podcast today, Caitlin Kirby, and we’re discussing something that I haven’t had the opportunity to before, which is actually the Fulbright fellowship, super exciting, that is as a PhD student. And Caitlin will also be telling us in the second half of the episode about how to prepare for financial challenges that you don’t even know you’re preparing for, like the Fulbright. So Caitlin, I’m really excited to have you on the podcast. Dave, thank you so much. And will you please introduce yourself a little bit to the audience?

01:53 Caitlin: Yeah. Thanks. I’m glad to be joining you. I am a PhD candidate at Michigan State University in Environmental Science and Policy. My dissertation looks at environmental decision making in cross cultural spaces, and I also engage in science education research in university classrooms.

02:13 Emily: Yeah. How did you decide that you wanted to do the Fulbright? I guess maybe my own bias coming into this is that I really think of it as something people do after undergrad while not yet enrolled in a graduate program, but you know much more about this. So how did this come on your radar and why’d you decide to apply for it?

02:31 Caitlin: Yeah, so the program you’re thinking of is probably primarily the English teaching assistant program, which is primarily students who have graduated undergrad and not moved on to a graduate degree program. And then a smaller subset of the Fulbright is study and research grants for graduate students. I have always enjoyed international travel. Like I said, my dissertation is looking in cross cultural spaces. I did some research in South and so it was always something that was kind of on my radar. And actually I was thinking about doing it for a post doc. And in my last couple of years of grad school started looking at the application requirements and figured out that it was going to be simpler to apply as a graduate student, so I did, and here I am.

03:18 Emily: And is this, I know it’s playing into your dissertation, but is this kind of you taking like an extra year or is this really not extending your time to degree at all and it’s just going to go right in with your overall plan?

03:31 Caitlin: Yeah. So a little bit of both. I actually defended my dissertation in October, so it’s kind of an extension of my dissertation and degree time. Although I probably would have graduated in May anyways and now it’s August instead.

Financial Support Provided by Fulbright

03:47 Emily: Gotcha. Well, congratulations on already defending. We’re recording this in February, 2020, so for the listeners reference. Okay, so what financial support does the Fulbright give to you?

04:01 Caitlin: Yeah, so it is different for every country. I am speaking about Germany Fulbright grant. Although I also looked at a lot of the Western European ones. They get a lot of applications as well, have a lot of grants and are fairly similar in that they are relatively expensive places to live. Hopefully this is generalizable across a lot of those spaces. My understanding from folks that I’ve heard from who are in spaces that have lower cost of living is that the stipend is a little bit more generous in those spaces.

04:34 Caitlin: What Fulbright does provide in Germany, if you are a graduate student or an English TA, you get €850 a month. If you’re a PhD candidate, so you’ve passed your comprehensive exams, then it goes up to €1,200 a month. So if you are a PhD student and you can wait until after comps, I think it’s worth it.

04:58 Emily: Yeah, that’s a big raise, surprisingly.

05:01 Caitlin: Yeah and €850 is actually the lowest, I’ve seen for countries in this area. Other countries in Western Europe range from about €1,300 to €1,500 a month. These stipends are not posted on the actual application website. You have to go to the Fulbright website for each individual country to find those, and sometimes they’re not available and sometimes they don’t include all the details.

Financial Challenges of the Fulbright

05:26 Emily: Yeah. So I understand that you have encountered some financial challenges based on that stipend and also maybe a lack of clarity up front about exactly what was going into this whole package. So can you explain a little bit more about what you’ve found?

05:41 Caitlin: Yeah. There are some challenges that are specific to my situation and then some challenges that some other Fulbrighters have also experienced. I would say sort of summarizing those across from what I’ve seen from others and for myself is that the three really primary challenges are that you need a lot of savings at the beginning to cover your first couple of months and some initial expenses. Then number two would be that housing is really kind of the make or break factor in how far your stipend goes. And so if you can look ahead of time when you’re deciding what institution to work with at the cost of living in a city, maybe try and find one that’s not so high. And then the third thing would be, think about any extenuating circumstances that might make it more costly for you as an individual.

06:33 Emily: This actually sounds like really good advice for anyone approaching any financial or location transition whatsoever, so people going into graduate school, going to a post doc, going to your first job, so I really want you to expand more on each one of those points.

#1: Expected and Unexpected Upfront Expenses

06:48 Caitlin: For the initial costs,, or the one-time costs when I arrived here in Germany, first of all, like everything else in academia, the Fulbright stipend model is built on reimbursement. So you buy everything ahead of time, and then after you get your bank account in your country, they will reimburse you, which for Germany can also take a long time. It’s a very bureaucratic country. A lot of the Fulbrighters in Germany were paid late, like two or three months after their grant had started, and it was really inconsistent across different fellowship recipients. Or sometimes they were paid in consistently. So having that initial savings is really important to be able to get you through.

07:34 Emily: What kinds of upfront costs were you experiencing?

07:39 Caitlin: Yeah, so moving costs in general, right? You have to get your travel, which Fulbright covers some of, and sometimes again, depends on the country. My flight was covered and then they provided an additional, like €150 for other expenses, but I decided to fly out of Chicago, which was far away, so I needed hotel and transit and it didn’t really cover all that. Then once we arrived as well, there was a lot of traveling around the city that we had to do to get everything settled. I’m saying we, because I came here with my husband, and that transit was eventually covered by my university pass, which I also had to pay about 300 euros to enroll at a university. And some folks will have to pay tuition as well.

08:29 Emily: Wow. That is a lot, and it sounds like it’s quite variable too. Going into this situation, it sounds like actually you’re in contact with other people doing the Fulbright. And so is there like a network already of people that you can tap to find out, okay, what are all these expenses, or does the program make it really, really clear once you have a host university?

08:51 Caitlin: It was more hearing from other people that I got this information. I don’t remember how I was contacted about this initially actually, but there was a Fulbright Facebook specifically for folks in my year. And some alum had joined that as well. I believe the Fulbright did actually connect me with these social networks. So they are very good about getting you in contact with alumni and folks that you can engage with, and then beyond that, it’s kind of up to the folks in each cohort to decide what to share and how often and all of that.

09:26 Emily: This actually sounds very familiar to what I understand is the experience of many international students coming to the US — the place where they get the most information from, is the network of students from their country already at that university or who are coming in at the same time, which can be truly an amazing resource in many ways. However, if that group doesn’t already have the correct information or the best information, then it can kind of be passed along and not like optimized. It’s probably 80% awesome and then 20% maybe someone else could give you better information, but like that is really the best go to resource.

10:05 Caitlin: Yeah.

10:06 Emily: Not being paid, that is reimbursed for two to three months sounds really long. Were there any other kind of upfront reasons why you needed to tap savings or expenses that you wish you’d known about in advance?

10:22 Caitlin: Yeah. This one is perhaps unique to Germany in that when you get an apartment in Germany, when they say unfurnished, they mean like unfurnished. There are no light fixtures, there are no cupboards, there’s no kitchen sink. So your choices are to come and basically furnish a whole apartment, which I know another married grantee did this year, or you can pay a premium to get a furnished apartment, which are much less available and so much more expensive than —

10:58 Emily: Wow, so it’s typical to bring in your own appliances and like all of that? Do people move that stuff when they move from place to place?

11:06 Caitlin: There’s a reason that Ikea is a big deal here because you can just kind of pack it up and take it with you or you can sell it to the person who’s renting your apartment next, which so then if you’re renting an apartment and they’re offering the kitchen, then you can pay like 1200 euro to, I’ve seen up to like €4,000 to keep the kitchen in the apartment

11:28 Emily: Wow, that is a lot of upfront costs. Anything else to add to that list?

11:34 Caitlin: Some bureaucratic stuff in general. I think most Fulbrighters would be aware of this, but maybe not necessarily how much of it or how much it might add up. So passport photos, the passport itself, some places have expensive visa applications and then myself coming in as a married grantee, there’s extra documentation that we needed around our marriage certificate, getting that translated, paying for my husband’s visa, that kind of thing.

12:02 Emily: It’s a lot of costs. It’s a lot of costs you’re listing. Are you being completely supported by the Fulbright in this year or is Michigan State supplementing at all?

12:11 Caitlin: You’re not allowed to really have significant other income. It’s up to 450, I don’t remember dollars or euro a month is allowed as a Fulbright grantee. And that again, may be specific to Germany that amount, but still the fact that you’re not supposed to have significant outside sources of income holds true. I did receive an award in the semester that I was awarded the Fulbright, from Michigan state. I got some money from them as an award for receiving this fellowship that I then tucked away and said, okay, that’s going to supplement when I am on my Fulbright.

12:52 Emily: Yeah. That’s a great thing to have upfront going into this process.

12:56 Emily: Okay, so we’ve talked about upfront expenses. Sounds like you need massive amount of savings to undertake this. What was the second point that you were going to make?

#2: Cost of Living and Housing in Your New City

13:06 Caitlin: Yeah, housing is definitely the biggest factor in how far your stipend is going to go. That’s again where you might want to consider, because as a Fulbright grantee, you decide which institute you’re going to work with or which university you’re going to attend, and if you somehow have a choice between some different costs of living areas, you might want to choose one that’s a little bit easier on the wallet. Then the other thing that sort of made housing more difficult for myself as an older grantee, and a married grantee is that there’s not really shared housing options available as a married couple. We had to get our own apartment, and that makes it a lot more expensive. It’s a lot more reasonable if you’re able to share space, but a lot of graduate students might not be able to, or might not want to for a variety of reasons.

13:57 Emily: So when you’re talking about sharing space and that not being available to you as a married couple, are you still talking about having like individual bedrooms or is it like a dorm situation or what would other people do if they were single?

14:11 Caitlin: Yeah, so they’re called veh has in German, or WG is the abbreviation for it. And it’s basically everybody has their individual bedroom in an apartment that’s shared with people.

14:24 Emily: Okay. And you can’t share a bedroom then as a couple?

14:28 Caitlin: It’s just extremely rare, so rare that on the websites where you can like search for these housing options, there’s no option to have a couple, or like a male/female mix going into these rooms. So it’s a little bit of a cultural thing.

14:47 Emily: Yeah. Interesting. I mean this point is also super super applicable to anyone moving anywhere. Rent, or your housing expenses more generally, is most likely going to be the largest expense in your budget. It’s very difficult to change once you — I mean, you can change it maybe after a year or something, but once you sign that lease, you’re locked in for a little while. It’s so important to put really the bulk of probably the research that you’re doing into that housing choice. And it does sound like yours was further constrained by bringing your spouse along with you. Anything else you wanted to add about the housing cost?

15:22 Caitlin: I think that about covers it, but just to give an idea, we’re paying about €1,025 a month for a furnished apartment with all bills included, which is the norm in Germany, and that’s 85% of my base stipend. I do also get, I think I didn’t mention that I get some dependent support for my husband being with me. It’s about €270 a month, so not a huge amount. That really has been, that was the biggest shock to me, I think, because I could see on apartment websites, things that were cheaper, but they weren’t able to fit to our needs.

16:05 Emily: Yeah. And do you have any other source of income right now? You’ve mentioned the Fulbright grant, the additional support for having a spouse and then the upfront award that Michigan State gave you to help a little bit with that. Does your husband have any income right now?

16:19 Caitlin: No. He’s not allowed to have income either, both because of visa issues, and then if he did earn significant income, then we would just say, okay, we don’t need the dependent support from Fulbright. But with visa issues and also language issues, it would be very difficult for him to work. So it’s savings and Fulbright.

16:43 Emily: Yeah. Wow. Okay, well, we’ll get into how you’re making that work in a moment. And what was that third point that you wanted to say about everyone’s unique situation?

#3: Individual Personal Finance Situations

16:53 Caitlin: Yeah, so there’s a lot of difficulties that I’ve had with the Fulbright, but I don’t think overall it’s necessarily an unfair stipend. I think that you need to weigh it against your individual needs. So again, myself bringing my husband, that’s two people living on one income, obviously it’s going to be more difficult. If you have student loans that you’re still paying, some of them are eligible for deferment, depends on who your loan provider is, in some cases. If you have pets that you either want to try and bring with you or need to get taken care of. If you have a lease at home that you need to break or keep paying on or storage for your items, regular bills at home. So our car right now is on storage insurance, which is luckily not very much, but still something to consider. Prescription drugs — there is some level of health coverage provided by Fulbright, but they do not pay for regular expenses like that. And accessibility needs too. Our apartment would not be accessible to someone with a wheelchair. And even though there’s great public transportation, you might need to be closer to the city center than we are. Just all kinds of things that maybe are easily or more integrated into your life before you leave that become very obvious as challenges when you’re on your way.

18:20 Emily: A lot to think about there. Actually going back to your second point, I think I was getting the impression that the Fulbright grant is the same across every country. Is that right? The income, that is, that you would get as the same across the country, or is it actually different depending on which university you land in?

18:40 Caitlin: So for Germany, it is the same across the country. Some other countries vary it depending on what the cost of living is in the city that you’re in.

18:50 Emily: Okay. So in some cases you might have a cost of living adjustment built into your income, and in some cases you might not, and that’s why you were saying, okay, let’s be really careful about, which institute you choose to go to in that case.

19:01 Caitlin: Yes. And Germany did actually announce a few months into the grant that they have extra money for a housing stipend. So folks who are in those higher costs of living situations will be able to receive up to €250 a month. And there is some kind of, I think as an American, maybe kind of ridiculous size requirements and that single people get 200 something square feet for that stipend and as a married couple, you can get a 320 square foot apartment, which is tiny. That’s like a studio with like a hot plate and a toaster oven, right? For us, cooking is really important, so we opted to get a prorated stipend and have somewhere with a full kitchen.

19:47 Emily: Gotcha.

Commercial

19:51 Emily: Emily here for a brief interlude. I bet you and your peers are hungry for financial information right now, especially if it’s tailored for your unique PhD experience. I offer seminars, webinars, and workshops on personal finance for early career PhDs that can be billed as professional development or personal wellness programming. My events cover a wide range of personal finance topics, or take a deep dive into the financial topics that matter most to PhDs, like taxes, investing, career transitions, and frugality. If you’re interested in having me speak to your group, or recommending me to a potential host, you can find more information and ways to contact me at PFforPhDs.com/speaking. We can absolutely find a way to get this great content to you and your peers even while social distancing. Now back to our interview.

Making it Work Despite the Financial Challenges

20:50 Emily: So, I’m freaking out a little bit for you when you mentioned the percentage of your income that your rent takes up. How are you making this work? What have you been doing in the years leading up to going on the Fulbright that makes you not freak out right now about money?

21:09 Caitlin: Yeah. So one piece that I do want to say, is that I’m not necessarily unique in that I am having to use a lot of other savings. On the Facebook group, I mentioned that to the other Fulbrighters in Germany, I just did an informal poll and 62 out of 91 responded, so that’s about 70%, said that they would not be able to financially survive without significant additional savings, gifts or income. So —

21:37 Emily: Is that something that the program makes clear earlier in the application cycle or is this something that comes as a surprise once people are really starting to look into the financials?

21:49 Caitlin: I think it’s more of a surprise. They are pretty upfront about what support is provided, like you can go look at the numbers. I was surprised that that many people were struggling with it because I was thinking like, yeah, this makes sense, I’m supporting two people on this income and my savings, so of course it’s going to feel like a, a stressful year. But I was surprised that that many people expressed that they, they had to use significant outside sources. There were like 15% of people who said that they had money left over for savings, so again it’s working for some people.

22:27 Caitlin: Yeah, but not the majority. All right. Yeah, go ahead. How are you making this work?

22:33 Caitlin: Yeah, so I think like with anything else in academia or life, it’s a combination of luck and privilege and decision making. My husband and I were in a low cost of living area, Michigan State University is in East Lansing right next to Lansing, Michigan’s state capital. We were living in Lansing where houses are fairly cheap and we were able to buy a house when I started graduate school, because I had funds, enough for a down payment, from a relative who had passed away. We intentionally bought this house within biking distance from the university, so we sold one of our cars once we arrived, and we ended up having roommates for almost the entire time that we lived there.

23:23 Emily: How large is your house? How many bedrooms?

23:26 Caitlin: It was a three bedroom.

23:28 Emily: Okay. And so you had one or two tenants that entire time?

23:34 Caitlin: Yes. Usually one, sometimes two.

23:38 Emily: I love this strategy. It’s come to be known as house hacking. It’s actually something I’m excited about covering even more on the podcast. Either — well, whenever this is released — maybe in the recent past, or maybe in the soon to be future. But I love the strategy for graduate students. Of course, it’s only possible in relatively low or moderate cost of living cities, where the housing market is something that a graduate student can kind of grasp. It definitely helps to have two incomes, like presumably you and your husband have, and also to have acquired down payment money from somewhere. Those are things that are very, very helpful, although not strictly necessary, but go into the likelihood of house hacking being possible. Overall, has that single tenant paid your entire mortgage, half of your mortgage? How much of a financial boost has that situation given you?

24:31 Caitlin: We were doing it both for personal and financial reasons. Every single person who lived in our house was someone we knew, either friends or family members. So we charged the actual cost to them, of living there, which maybe doesn’t quite work out in our favor because we were also then paying for maintenance costs and that kind of thing, but it was what we decided to do. All of the income that we got from renters, we put into savings or paying off my husband’s student loans, which we had to do at the beginning of graduate school, or IRAs, retirement accounts.

25:17 Emily: What was your husband’s income like during this time? Did his income far exceed yours, or was it similar to what you were making?

25:25 Caitlin: His income was similar to what I was making, similar to a graduate stipend?

25:29 Emily: Yeah. Okay. Not a huge boost there, but good for two people living in a lower cost of living city. Great, so you were beefing up your savings. Anything else that you were doing during that time to help you prepare for this challenging year?

25:43 Caitlin: Well, so I knew relatively ahead of time that the Fulbright was a possibility and if I didn’t get the Fulbright, we were going to take a trip to travel around Europe anyway, so we had this designated savings account for a Europe trip or Fulbright supplement and we were able to put $5,000 in that. I was also keeping pretty good track of how much money we were spending, so I knew in general how much we would need to supplement the Fulbright and was able to funnel that away in the months leading up to it.

26:18 Emily: How long did you take to directly prepare for the Fulbright and, or generally going to Europe?

26:26 Caitlin: Hmm, that’s a good question. It has been a goal in my financial tracking account for over two years.

26:37 Emily: Okay. Yeah. That’s a great time horizon. I usually encourage people to think out at least a ahead, like what major expenses may be coming their way, but two years is even better, if you can do it. That’s a great kind of baseline to have to prepare. I forgot to ask, what are you doing with your house right now? Is it fully rented out?

26:55 Caitlin: We sold our house before we left. We didn’t want —

26:58 Emily: Oh wow.

26:58 Caitlin: Yeah. And because I’m graduating at the end of the Fulbright, I’ve been applying for jobs. We don’t know where we’ll land, so it just made sense.

27:05 Emily: Okay, so you’re not planning on returning to Lansing, and you’ve closed everything out there that you need to before leaving.

27:13 Caitlin: Yeah.

27:13 Emily: That’s great. So presumably you also had some capital gains from that sale?

27:18 Caitlin: We did, yeah.

27:19 Emily: That’s awesome. Anything else that you’re doing to make your financials work this year?

27:25 Caitlin: Just keeping track, basically, which is a little bit harder in Germany. It’s very much a cash economy and I like to keep track of my purchases with card, but instead I’m out paying cash and euro and then coming home and converting that and remembering what went to what. Keeping track so that we can then also have some money set aside for travel, since that’s part of the mission of the Fulbright, as well as this cultural exchange.

27:56 Emily: That sounds awesome. Anything else you want to say to another potential Fulbright applicant, regarding the finances of, of doing the fellowship?

28:05 Caitlin: I would say don’t be dissuaded based, based on what I’ve said. I think it tends to be most overwhelming at the beginning and then things kind of level out. You either figure out where to make sacrifices, or there are options for you to earn up to an extra 400 euro a month, which is pretty accessible. I would say that it’s still definitely worth it, if in your situation it’s not going to be too burdensome.

28:36 Emily: I think it’s kind of like with any other life transitions, as I was saying earlier. Having cash in your bank account and your savings account is going to help you so much through that transition, and it’s not necessarily like vital, but it is going to make it a lot smoother. And it’s something that you can then repay out of your ongoing income. Like you said, with the reimbursements coming slowly, that can go right back into refilling the savings for the next transition that will be happening at the end of the year, or whatever. So the earlier you can build up savings kind of for whatever comes your way, as you did, the better okay.

Final Words of Advice

29:10 Emily: Caitlin, I end all my interviews by asking my guest, what is your best financial advice for another early career PhD?

29:17 Caitlin: I would say find a way to enjoy or kind of make a game out of financial management, with the caveat that I understand that some PhDs are not in a position where they can really even sustain themselves. You’re allowed to feel stressed out about it if that’s the situation you’re in, but find what works for you and what interests you about your finances, so that you can keep track in a way that makes sense for you. For example, I do not like to budget out where every single bit of my money is going. Instead I set aside, this is for retirement, this is for long-term savings, this is for this specific short term savings goal, and then everything else can get spent because everything’s taken care of. But if you don’t want to even want to look at a spreadsheet, then make a visualization or make it into a presentation, make it interesting for yourself.

30:18 Emily: I love that tip. I don’t know if this is a widely used term, but I call it the “unbudgeting” method. So for those people who don’t want to be down in the weeds with this category versus this category, as long as you have that high level savings or debt repayment or whatever you’re doing, as long as that’s taken care of and ideally through like automated transactions, so you don’t even have to think about it. As long as you’re paying attention to that balance in your checking account, just spend what’s there because you know you have your big goals already taken care of. And it actually — seems like it doesn’t sound like this is your preference — but in a cash economy, budgeting without putting a ton of spreadsheet effort into it can be possible because you just say, here’s my cash for eating out, here’s my cash for groceries, and just spend that down, and don’t worry about having to keep track specifically because you did it ahead of time.

31:09 Emily: Well, thank you so much for joining me on the podcast today, Caitlin. As I said, I’m really excited to discuss the Fulbright. It’s a first for me.

31:16 Caitlin: Yeah. Great, and I’m excited to discuss personal finance.

31:20 Emily: Thank you.

August 2020 Update

31:22 Caitlin: Hi, Caitlin Kirby here with an update on what happened with coronavirus and Fulbright. In March, Fulbright programs around the world started sending people home as coronavirus was coming into those countries. For me in Germany, that meant a couple of weeks of sort of confusing communication from Fulbright, followed by eventually them suggesting that everybody go home, followed shortly by all Fulbright programs, worldwide, being suspended. Again, things were different on a country to country level. For Germany, we were given funding for changes in travel plans to head home. As per regular in the Fulbright program, that was only for the grantee and not for any dependents. And then we were also given our stipend through June 30th, which for me meant that I was receiving a month and a half less of payment. For most people that’s when the program was ending anyway.

32:31 Caitlin: And then Fulbright Germany was also able to provide folks with, I think it was a thousand euros just as additional transition funds. This information kind of all came piecemeal, so it was a little bit stressful in the moment. But I did end up then going back to the United States in March. I was fortunate enough to be able to, at least from the research standpoint, work remotely with my research team back in Germany, so I still got to complete a lot of my goals for the Fulbright, as far as research goes, but obviously missed out on the rest of that experience of being in the country, in Germany. I was also fortunate to then be able to start my postdoctoral research position at the University of Nebraska, Lincoln a little bit early, so I didn’t have gaps in funding, which obviously was really helpful.

33:24 Caitlin: Fulbright, in this coming year, again is a little bit country to country. I know some programs have been canceled because of coronavirus. Some programs are starting late, in January, and that is really all that I’ve heard. If you are just considering applying to Fulbright now, I think chances are better that things will be a little bit more normal by the time you start or at least Fulbright will have better contingency plans for what happens if outbreaks do occur so that you’re not sort of waiting week by week, or really day by day to figure out what’s happening at the commission level or with the Fulbright program, overall.

34:08 Caitlin: One other note, if you are applying this year, there is potential for you to have increased competition because Fulbright did offer for folks whose grants were interrupted to be able to reapply in the coming cycle. They don’t have any priority over folks who are applying for the first time or second time, but that is a possibility for folks who are in situations where they’re able to come home and then apply for Fulbright again, which is not for a lot of people I know who were doing the Fulbright, but it’s, again, a possibility.

34:46 Caitlin: If you want a little bit more information about some of the impacts of the changes in the Fulbright program in different countries, there is a group on Twitter called Fulbright Crisis and they have been cataloging some of the difficulties that people coming back from different countries have had, or people coming back in general. Like for example, the health insurance that Fulbright provided was only in the country that your Fulbright was in so when folks were sent back home, some of them did not have health insurance. And some folks were not provided stipends throughout the program. Like once the programs ended in March, some countries were not providing stipends for their grantees. Again, the Twitter handle for that is @FulbrightCrisis and they’re showcasing some of those difficulties if you want a little bit more information about what that has looked like and maybe what that will look like in the future

Outtro

35:49 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

How This Entering PhD Student Has Set Himself Up for Financial Success in Graduate School

August 10, 2020 by Emily

In this episode, Emily interviews George Walters-Marrah, a rising first-year PhD student in biophysics at Stanford. In the last year, as George has been applying to and preparing to attend graduate school, he’s been on a financial journey as well. We walk chronologically through the financial steps he’s taken this year, from applying for fellowships last fall to taking a personal finance course this past spring to drafting a budget this summer for how he plans to use his stipend in Palo Alto. Additionally, Emily and George have an insightful conversation on what George learned about investing in his personal finance course and how he’s already implementing some of the strategies.

Teaser

00:00 George: I’ve been investing for a while now. And it’s like, it’s not really time-consuming at all. I kind of like check it at least once a day just because I like looking at it. But other than that, it’s not like I’m constantly fidgeting with my stuff. And I think the more you fidget with it, the more fees you get. So, it’s like, it’s kind of like passive investing. It’s kind of like a win-win.

Introduction

00:21 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 15, and today my guest is George Walters-Marrah, a rising first-year PhD student in biophysics at Stanford. In the last year, as George has been applying to and preparing to attend graduate school, he’s been on a financial journey as well. We walk chronologically through the financial steps he’s taken this year, from applying for fellowships last fall to taking a personal finance course this past spring to drafting a budget this summer for how he plans to use his stipend in Palo Alto. Additionally, we have an insightful conversation on what George learned about investing in his personal finance course and how he’s already implementing some of the strategies. This is a perfect episode to listen to if you are near the start of your financial journey, whether that’s at the beginning of graduate school or further on in your career. Without further ado, here’s my interview with George Walters-Marrah.

Will You Please Introduce Yourself Further?

01:26 Emily: I have joining me on the podcast today George Walters-Marrah. He is a rising PhD student. We are recording this interview in July, 2020, and within the next month or two, he’s going to be starting his PhD program at Stanford. And he’s already been on a financial journey. So, we’re going to talk through about the last year, how he’s been preparing financial aid to go into his PhD program, as well as he’s done an awesome amount of career preparation to get to that stage as well. So, George, it’s a real pleasure to have you on the podcast. Would you please introduce yourself to the listeners?

01:58 George: Thank you for having me. So, I just graduated with my bachelor’s in molecular microbiology, and I have a research interest in interdisciplinary sciences. But I’ve also been kind of really obsessed with personal finance over the last year. So, I’m glad to be able to talk about it. Because whenever I get the chance, I kind of get excited because I’ve been so involved and kind of like consumed with it for a while. So, thanks for having me.

Financial Preparation Before Grad School

02:28 Emily: Well, it’s really exciting for me as well. And the way we actually met was over Twitter, and you prepared this fabulous document of personal finance resources and included a lot of mine in there, which I’m really grateful for and you shared it. And I happened to see it and was just so flattered that you did that, and it was a fantastic document. So, I’m really excited that you have been sharing this material with your peers. We’ll get into that, why you’re doing that during the course of the interview. So, let’s take it back to almost a year ago. How were you starting to prepare financially for graduate school even, you know, well, well, before you finished your undergrad degree?

03:05 George: Yeah. So, about a year ago I was like kind of oblivious to personal finance. But what I did know was that there were things called fellowships and scholarships and stuff that I could apply to. So, like about a year ago during the summer, I was looking into scholarships and fellowships and I applied, I was starting to apply to the NSF GRFP, the Ford Fellowship, and other things like that. So, I started that pretty early and I would suggest to start that over the summer, if you can. If not, start it at the beginning of the fall, because I was able to get a couple of fellowships and I think a really big reason I was able to do that was because I started so early, kind of like reaching out to my letter writers and starting my personal statement and kind of like collecting the different, like papers that I would need to write my research proposal.

Balancing Coursework with Grad School Applications

03:54 Emily: Yeah. We’ll link in the show notes because I’ve done a couple other interviews with fellowship winners and that was a common thread of advice: start early. So, even right now, you know, July for the people who are going to be applying in the upcoming, you know, starting about six months from now, they need to really be working on this, you know, the preparation process getting started now. How did you–so I applied for graduate school and all of these fellowships after I finished my undergrad, I had a post-bac year–how did you manage sort of balancing your coursework, your thesis work, I assume, with doing these, you know, intensive applications?

04:30 George: So, full disclosure, I was a fifth year student, so I graduated in five years. So, I had most of my class requirements done. So, I had the luxury of kind of decreasing the amount of classes I had. So, I still had 12 credit hours, but I was able to kind of like pick and choose classes that weren’t like super intensive. So, I kind of did that. And I also had the luxury of having a class that could be like a placeholder and I could use that time to do my personal statement and prepare to apply to graduate school and fellowships. But I would say that, try to decrease the amount of classes that are super intensive. Try to kind of pick classes that, you don’t have a lot of, like, time-consuming, like it doesn’t consume a lot of the your time, and kind of learn how to say no to things.

05:25 George: If you can kind of just say no to a few things so you can use that time to kind of work towards your fellowship applications, work towards your grad school applications. I think that would kind of like, it builds up, like when you keep saying yes. So, if you kind of learn how to say no to things that may not be helpful to you in the future, or may not be worth the time, I think that would kind of really be helpful with allowing you to find that time to kind of complete all that you need to do that last semester.

Which Fellowships Did You Win?

05:54 Emily: Yeah. I think it’s a great idea that you actually had space in your core schedule for doing these applications, because that’s really how you need to treat it. You need to treat it as at least one class, if not multiple classes. That’s the amount of time it’ll take. So, you were successful in winning some of these fellowships. Which ones did you win?

06:12 George: So, I was able to get like three fellowships. It was kind of like three different types of fellowships. So, I had got an external fellowship and two internal fellowships. So, I got the NSF GRFP, which was external, it kind of followed me wherever I went. And then I got an internal Stanford fellowship, which is, they kind of reviewed my application and you kind of get considered for this just by applying. And they gave me that fellowship based on my application. And then my last fellowship is one I got actually pretty recently. And it was a fellowship that I got by applying to a program, a first year program, after I got accepted and after I decided to come. So, it was kind of like the first one, I applied to it way before I applied to grad school, and then I got the external one. The second one, like they considered me just by applying, and I got that one. And the third one, I applied to it after I actually got into the program. And it was like a separate first-year program at Stanford. So, like, there are kind of several different ways that you can try and get these fellowships, which I think is like really nice.

07:16 Emily: Yeah. So, the fellowship applications did not stop, you know, just after the fall of your application season. That’s awesome that you won so many different ones. I have a post that I’ll link to in the show notes where I list a bunch of these portable external fellowships, like the NSF GRFP. So, I’ll put them in the show notes if people want to kind of peruse through. A lot of people know about the NSF fellowship, but there are some other ones that are a little bit less known. You mentioned Ford earlier. That’s another great one. So anyway, there’ll be a list there, several ones you can probably apply to, you know, in the year that you’re applying to graduate school and then in a few years after that, but you’re taking care of for a few years. So, that’s amazing.

Lessons Learned from Undergrad Personal Finance Course

07:53 Emily: Okay, so now we’re going to fast forward, you know, that was kind of the fall of your last year of undergrad. And then I believe in the spring semester you took a personal finance course. So, tell me a little bit about that course. Like why did you elect to take it, and maybe like two to three big takeaways from the course that you think would be really instructive for other PhDs to know?

08:14 George: Yeah. So, my school like offers this course called Personal Finance and Investments. I actually learned about it the fall that I was applying to graduate school. And I always wanted to take a personal finance class because I didn’t really know anything about personal finance. I didn’t know how to invest. I didn’t know how to make a budget. I didn’t know any of that stuff. And in my first few semesters, I thought of like, “Oh, maybe it’s microeconomics or macroeconomics or something like that,” but I read the summary and it didn’t make sense. So, I finally found this class and that’s like, “Oh, this is the class.” So, I took it and it was a great class. Like, it was a kind of a learning curve. You had to kind of learn the language of personal finance. Like what’s a dividend and all these different stuff.

Lesson 1: You Don’t Have to be an Expert to Invest

08:55 George: But after I got the hang of it, it kind of went very smoothly and I got like way more invested in it. And if I was to say to like three things that I thought that I learned from that class that were very helpful to me, the first big one is that to invest, you don’t really need to like follow the stock market and be like an expert and kind of like, look at it every single second of every day. There are like a lot of different kinds of innovative ways that allow kind of like people who are super busy or people that are kind of inexperienced to actually have a good experience investing.

09:29 Emily: If I can summarize that first point or what you were starting to say, it’s that, I mean, I love the way you phrased it. Like investing does not have to be something that you are paying attention to all day long every day in and out. I think that is an image that we have in our culture of what investing is, maybe from like, I don’t know, the eighties or the nineties or something, like it’s kind of archaic at this point. Because index funds, which I think was what you were starting to talk about there. They’ve been around for, I don’t know, four or five decades at this point, but only have really been gaining in popularity in the last couple of decades. But index funds, like you were saying, just are a diversification. Like you get a lot of different investments, stock investments often in one bucket and it’s representative of kind of the whole market or an entire sector of the market. And so you can buy, you essentially buy everything when you buy an index fund and it’s in a given market sector. That means you’re buying the winners. It means you’re buying the losers. But it turns out that that’s a more effective strategy than trying to pick the winners and avoid the losers. Is that what you were learning through your course?

10:31 George: Yeah, so, it was big because like, I think like a lot of people think they have to beat the market, but if you match the market, you kind of avoid that pitfall of like losing to the market. Because it either could go really bad or really good, or you could just match it. And then the market kind of like trends up. So, I decided to go that way, kind of like passive investing. So, that’s like the one, the first big thing that you don’t have to, it’s not a full-time job to invest, which is really nice, since as a grad student, I’ll be very busy.

11:04 Emily: Actually, if I could expand on that for one more second. So, I also tell people like investing should not be your side hustle. Like you should not be spending a ton of time working on your investments. And I always say to them, like, if you want a full-time job doing investing, get a full-time job as an investor, be a hedge fund manager or go do that kind of thing. Like, make a ton of money off of this. Don’t just play around with your own money. If you’re going to be, you know, actually investing that kind of time into the process, which again, I don’t think is necessary or a good idea. So to me, investing is kind of like learn about it for a little while, you set up what you need to set up, and then you just let it run and you just do maintenance and you don’t have to, you know, mess around with it a whole lot.

Lesson 2: Make an Emergency Fund

11:45 George: Yeah. I totally agree, because like, I’ve been investing for a while now and it’s like, it’s not really time-consuming at all. I kind of like check it at least once a day just because I like looking at it. But other than that, it’s not like I’m constantly fidgeting with my stuff. And I think the more you fidget with it, the more fees you get. So, it’s like, it’s kind of like passive investing. It’s kind of like a win-win. But I guess two more points that I would say that are really nice that I got out of it is that kind of making an emergency fund. I never really thought of that. Kind of like before, an emergency happens, you just have the money in your savings account. So, I’ve been trying to get my emergency fund kind of like they say at a minimum is three months but I’m hoping to get it like higher, maybe to nine months, if possible.

Lesson 3: Time Value of Money

12:29 George: And I’m kind of slowly building towards that. And another thing that I learned that was pretty interesting is that, kind of like this thing called, I think it’s called time, money value, a time value of money. It’s kind of like a dollar today is worth more than a dollar a year from now. So, if you can get money today and kind of put it in your investments or put it into your savings account, maybe like a high yield savings account, that will be worth more than kind of like $50, maybe a year from now, that you weren’t able to get that interest off of by having it in your account. So, I never really thought of it that way. I kind of, I always thought that like, “Oh, if I have a thousand dollars today, it’s the same as having a thousand dollars in 10 years.” So, those are kind of like the three big things that I would think of that I got from the class.

13:15 Emily: Yeah. I think the time value of money is also just a, it’s a mind-blowing concept. Like once you kind of understand like compound interest and how much your money can work for you. And I think the point that, you know, graduate students especially should take away from that is it’s okay–it’s great–to start investing now with a very small amount of money. It will not be a small amount of money decades from now when you actually reach retirement. So, what I like to say is that graduate students should not dismiss whatever tiny amount of money they might be able to start investing right now. Maybe it’s $10 a month. Maybe it’s $50 a month. That money will add up over time with this factor of compounding with the time value of money applied to it. And so, yeah, it’s not something that you should just say, “Oh, well, I can’t really save that much, so I’m not going to bother. Like, it’s still something you should pursue, even if it’s a small amount of money today.

14:05 George: Yeah. Totally agree.

What Financial Changes Did You Make?

14:08 Emily: And so, what did you actually, you know, you took this fabulous course, you learned a lot from it. What changes did you actually make? So, you’ve already mentioned that you started investing. Can you talk a little bit about how you started down that road?

14:20 George: Yeah, so I started investing well, like the first thing I did was I tried to get my financial life together, trying to get like my financial health in order because I didn’t really know anything. So, I started tracking my finances. So, I got the Mint app. I started tracking how much money I spend in a month. And the first month I wasn’t really trying to make a budget. I was just trying to understand my money habits and see what I could change. See what I wanted to keep. And then I started thinking about budgeting. And then after that I started my emergency fund. I also started collecting all of my important documents, like my birth certificate and my social security number and putting them in one place. They were kind of like scattered around. So, I wanted to put them in one place and kind of like, just get all of my stuff, like organized, like the first few months.

15:05 George: And then after I got myself situated and kind of like knew what was going on financially, that’s when I started investing. I decided to do a Robo Roth at the start until I get kind of like experienced with the stock market. And then I plan to transfer it over to a manual one to kind of like start my own Roth. So, my manual Roth–I mean not my manual Roth, my Robo Roth, I’m kind of like, “invest stuff for me,” and it’s kind of in the safest way possible. So, I don’t kind of like put it in something that kind of like blows up in my face and I lose all my retirement money. And my brokerage account is kind of just, it’s a tax account, but I only put money in there that I put in there so I can kind of gain experience with buying stocks and selling stocks and stuff like that.

15:50 George: So, and now that I think about it, one other thing that I learned from my class is that, when I’m looking at stocks and stuff, there are these things called like target-date retirement kinds of funds, which is like kind of nice. And I plan when I make my manual Roth, I actually planned a large part of it to be a target-date fund, which will kind of like change based on how close I am to retirement. And so after I did all of that, I kind of like started thinking about like different things that I learned about in my class that I should think about when I’m kind of like investing my brokerage account. Like don’t invest what I’m not willing to lose. And like, if you don’t understand it, don’t invest in it. And I started kind of like building up my portfolio and now I have like a pretty decent nest egg. So, I’m pretty proud of how I’ve gotten so far in the last few months.

Choosing a Robo-Advisor

16:42 Emily: I know, you haven’t even started graduate school yet. I mean, which is arguably I guess not a job, and you’re just getting out of undergrad, and I don’t know, it’s a fabulous amount of progress that you’ve made in this time. Which robo-advisor did you choose to start with?

16:57 George: Oh, so I actually chose Betterment. So, there are several different websites, I think there’s NerdWallet, that kind of review all these different things. Something else I learned from my class is don’t take it from one source alone, kind of go to multiple different sources and then based on all the sources together, make a decision. And kind of like across the board people suggested Betterment. So, I kind of went with Betterment since it had such great reviews all across the board.

17:31 Emily: Mhm. I think, I don’t know specifically, this is true for Betterment. It might be because you chose them. But one of the advantages that robo-advisors have is that they often have $0 minimums to start investing. So, it’s a great place like you’re doing when you’re just at the very, very start of your journey to use something like that, as you were saying, sort of some more familiarity, get some experience. And then you can switch over as you were planning on doing to a Roth IRA that you manage yourself through one of like the discount brokerage firms, like Vanguard, Fidelity, Schwab. I’m sure you’re looking at one of those three, if not something similar, for once you switch, but those often have some kind of minimum. So, I know like my strategy when I started my Roth IRA was I started with Fidelity because they, at that time, they waived their minimum if you had a $50 per month automated investing plan. So, I did that until I had $3,000 and then I switched over to Vanguard, because that’s where I really wanted to be, once I had the Vanguard $3,000 minimum. So, it sounds like you’re probably doing something similar with your robo-advisor to, you know, a Roth IRA that you’ll manage yourself strategy. Is that right?

18:34 George: Yeah. And there are like multiple different reasons as well. Like a big one is like the minimum so that like I could start investing now so that even if it’s a little bit, I could still start growing my investments. And also, when I get to a decent amount, I’ll be able to get, like, I think there are minimums in mutual funds as well. So, it’s like in order to invest in mutual funds, you need to have a certain amount of money. I’m not there yet. So, I think I’ll keep it in my Robo fund, which is kind of very low expense. Very kind of like, easy to, well, not low expenses–you can put as little money there as possible, and then it starts going in investments. But I feel like with the robo-advisors, I don’t want to keep it in there too long because they have these expense ratios. And if I have a large amount of money, I kind of start eating at my investments. But I think early on in the process that this was the best decision for me.

19:25 Emily: Yeah. And expense ratio, for those in the audience who haven’t started investing yet, is a representation. It’s a percentage representation of the total cost of owning whatever the investment is. So, with something like a robo-advisor, they usually add to the expense ratio of the underlying funds that you buy. Maybe about a 0.25% fee, which is sort of low. It sounds like pretty low. But you can get quite a bit lower if you just manage it yourself. Like you’re planning on doing, you know, in a few months or a year or whatever. You can get down under like 0.1%, 0.05%, even down to 0% expense ratios. So, there are very, very low expense ratios out there, even though the robo-advising fee doesn’t sound very high. Over time, as you were saying, it really does add up. Whatever you’re paying in expenses compounds, as we were talking about earlier, and it could end up being quite a bit of money over your entire investing lifetime. But your plan sounds really great to me. It sounds like you’ve gone about it in a totally intelligent way. So, that’s awesome.

Commercial

20:27 Emily: Emily here, for a brief interlude. I am just bursting with this news. I have launched a Community for Personal Finance for PhDs. The Community is for PhDs and people pursuing PhDs who want to level up their practice of personal finance by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the Community, you’ll have access to a library of financial education products I’ve made in the past. And I’m going to add new trainings to that library every month. There is also a discussion forum, monthly live calls with me, a book club, and progress journaling for financial goals. Basically, the Community is going to help you reach your financial goals, whatever they are. Go to pfforphds.com/community to find out even more. If you’re listening to this in real-time, you have the opportunity to become a founding member of the Community at a discount. The price is going up on August 15th, 2020, so don’t delay. Go to pfforphds.com/community for all the details. I can’t wait to help propel you to financial success. Now, back to the interview.

George’s Financial Resources Document

21:47 Emily: Could you share like why you created the document that you did? Because I think it came out of the course, right? What you were learning from the course?

21:57 George: Yeah so, I was learning all the different stuff and I started kind of looking up all these different, like websites and I found your website and many other websites and I started bookmarking them. And then, since I was kind of so engrossed with it, I would talk about it. So, I’m a McNair scholar at University of Central Florida, and we’re in this kind of like community together. And I always talk about it to other McNair scholars, and they ask me for advice, they ask me, “Oh, what can I learn about this?” And then I would kind of like blow them up with links. And I didn’t think it was kind of the best way to go about it. So, I decided to make an easy to read document with like the links, kind of like embedded in words.

22:36 George: So, you can read through it in kind of a relaxing way, and then click a link if you want to learn more about what I was talking about. And then I posted this in our McNair group chat. But then I thought it would be nice for other people to use this as well as they wanted to. So, I posted it on my Twitter, and I think a few people were able to like use it to learn more about personal finance.

22:58 Emily: Yeah. And we’ll link to the document in the show notes as well because I thought it was really well put together. So, thank you for doing that. Thank you for that, like, community service.

Factors in Choosing a Graduate School

23:06 Emily: Okay. So, now we’re in the spring semester, you have, you know, you have applied to your fellowships, you’ve applied to graduate school. You’re being admitted to different programs. And of course, you know, we’re considering a lot of things when we choose a graduate program, the quality of the research, the mentor that you might work with, maybe overall the program, the structure of it, where it’s located and so forth. But you know, the stipend, I think should be one of those considerations. Did you factor in the finances when you were choosing which graduate program to attend, or were you able to make the decision based on those other factors?

23:41 George: So, I applied to like nine graduate schools, and I think from eliminating the first ones, it was mostly based on like the research and like the faculty and the resources and stuff like that. But then when I got to the end, it was kind of hard to decide. It was a very hard decision. And when I was down to two, like based on cost of living of the two areas, the stipends were very similar, the research interests were really similar. Like everything was very similar. So, it was kind of hard to kind of make that decision. So, I think what it came down to was kind of two things. The first thing was that one school was kind of like calling me and checking up on me, answering my questions and that kind of like had a really good impact on me.

24:27 George: But then the last thing is that the school that I decided to go to, which is Stanford, they offered transitioning costs. So, like transitioning funds. So, I think transitioning to grad, I mean, I haven’t done it yet, but I’ve heard that transitioning to grad school can be really expensive. So, that they offered kind of some funds to allow me to kind of like take that stress off of me was kind of like, I think that’s what kind of pushed me to choose Stanford since it was a really hard decision.

24:58 Emily: I think that’s an excellent, I mean it’s a really, really good insight into your decision-making process. It sounds like, you know, these final two schools, it was really close. What tipped you over was, you know, people at Stanford were really attentive to you, checking up on you, and then they offered you this moving fund. And I mean, that’s something that graduate programs should know about. If something that minor, a few thousand dollars I assume?

25:19 George: It was actually $500.

Consider Stipends AND Cost of Living

25:20 Emily: Oh, $500? Okay. Right. So, $500, which is like nothing to the graduate programs, could tip an excellent candidate like you, you know, you won this outside fellowship, you’re bringing in money. If something like offering you $500 could tip the scales in their favor, that’s something that they all should be doing, frankly, at this point. So, I think you mentioned something in there really quickly, but I believe you said something like after you factored in the cost of living of the two different places, the stipends were similar, is that right? So the stipends themselves weren’t actually the same, but they were similar to another, once you factored in the cost of living, is that right? Can you talk about how you did that?

25:57 George: Yeah. So, like the cost of living at Stanford is much higher. So, the two schools, I guess, were Stanford and Cornell. So, the cost of living in Palo Alto is much higher than the cost of living in Ithaca, New York. So, the Stanford stipend was much higher than the Cornell stipend, but there are different websites where you can put in the location. I think it’s a cost of living calculator. You could put in the location where you plan to live and then the money that you’ll be bringing in, and there are also like tax calculators, because there are different tax rules. So, you can calculate how much tax will be coming out of your stipend. They can calculate how your stipend compares if you were to live in another area. And I kind of compared the two stipends and they were very similar, like almost identical, once you took into consideration cost of living. So, I couldn’t really use that as a reason to choose one over the other.

26:53 Emily: Yeah. Thank you for pointing that out. Like, I mean, even, you know, I also was sort of getting into personal finance in the year that I was applying to graduate school, and I didn’t even do that step that you did of taking that into consideration. I was just kind of looking at, “Oh, the stipends are all sort of similar. I don’t know. I assume the cities are different, but I never sat down and like actually did that little, little bit of math that you did. So, it’s a great idea just for the audience, anyone else going through this. I really like to use the MIT Living Wage database or calculator, livingwage.mit.edu. And it shows you what the living wage is for every, you know, county or metro city area in the U.S. And so, that’s the factor that I like to use.

27:31 Emily: That’s what we use in phdstipends.com, which is my database website where people enter their stipends and then we do this little division, like you were just saying, of divide the stipend by the local cost of living from this database and spit out this like factor, you know, is it more than one? Is it less than one? So, exactly what you were doing, maybe using a different calculator, but I think it’s really, really smart.

Housing Budget and Taxes

27:51 Emily: So, okay. You’ve chosen to go to Sanford, and you already were just mentioning some of the basic building blocks of the budget that you’ll have once you start graduate school. Like you were talking about taking into consideration how much your taxes are going to be. And I know that you’ve been preparing a budget over this summer before you’re moving to Palo Alto. So, can you talk about that process a little bit, and also about your decision around housing?

28:12 George: Yeah. So, I started my budget already. So, the first thing that I kind of took out of my budget was taxes. Because what I kind of like found out that was pretty surprising is that they don’t take taxes out of fellowships. So, like your income tax will be kind of just like given to you and you’re expected to know that it’s supposed to be paid back in taxes.

Quarterly Taxes on Non-W-2 Income

28:34 Emily: Okay. Let’s pause there because I think we need to emphasize that. At most universities, it sounds like it’s Stanford included, if you’re receiving a fellowship, which is what I call non-W-2 income. So, fellowship, training grant, this kind of income. Very likely, they will not be withholding income tax for you, as a domestic student. For international students, they do. So, let’s emphasize that again. You are receiving your entire paycheck, but that does not mean that you get to keep all of that. Part of that is going to go back to the IRS in the form of income taxes, which you may have to pay quarterly. I’ll link in the show notes to my resources on that. It’s probably ones that you found, George, as you were doing this research. But yeah, please keep going. I just wanted to, like–we don’t want to gloss over that. Like, you will probably end up paying income tax and you have to do it yourself. It’s not done for you. And it’s a process that a lot of people just completely miss and they have an ugly surprise when they get to their taxes after their first year of graduate school.

29:30 George: Yeah. And actually, I plan to do quarterly taxes as well. So, I was kind of like putting it together so that every month, like I kind of calculated how much taxes I would owe at the end, and then I divided that by 12. And then I would kind of like save that amount of money every single month. So, when it comes to that time, when I have to pay my quarterly tax, I already have it in my savings account and I can just pay it. But that’s the first thing I kind of put away. And then I went to my housing. So, at Stanford, they have housing on campus which is subsidized. So, it’s kind of nice that I was able to kind of apply to housing at Stanford.

30:06 George: So, I kind of looked at all the housing options, and out all of the ones that I liked, I kind of picked the highest monthly rent, and I put that in my budget. And I was thinking that, if I get a lower one, I could just change that in my budget. It will be easier to change to lower than to higher. So, that was kind of my thought process on that. And then with my budget, I tried to make it so that it’s not a budget that I kind of don’t like looking at. So, I kind of like, as I said before, like I tried to find out how I spend my own money and I tried to make a budget that I can comfortably live within the budget, and I gave myself some breathing room.

30:44 George: I wanted my budget to be kind of pleasant to live on so I don’t kind of like break my budget. So, I kind of was thinking like, “Okay, I spent this much on food. Let me give myself a little breathing room since I can kind of like afford to do that.” And then I also put some money in there for shopping. I put some money in there for transportation because I don’t plan to bring my car with me my first year. And then I also put like 20 to 25% away for investments. So, kind of like putting stuff into my savings accounts, putting stuff into my Roth IRA. And then for my brokerage account, I don’t plan to put monthly in there until I have a good amount in my savings account, but then I plan to start putting monthly into my brokerage account. For now, I’ll just kind of like, if I have some money from the money I put away for shopping and for like kind of random stuff, I’ll buy some stocks if I feel like I want to, but it won’t be like a monthly thing that I put money specifically away for yet. But that’s kind of like what I decided to put in my budget.

Ranking Housing Options

31:53 Emily: I want to go back just to the housing point for a second, because I think you’ve made a really good decision, which was like, okay, so you’re applying for all this, you know, subsidized on-campus housing. You account in your budget for the highest possible rent you would be paying. But is that actually how it turned out? Like what housing did you, when you were saying where you wanted to live, was that the one that you put at the top of your list? Or like how did you rank order that list and what did you actually get into?

32:18 George: So, I ranked the list, so there’s like really new housing that’s coming out. It’s going to actually debut this fall semester. So, I put that at the top of my list and that was actually the most expensive, and I was able to get it. So, I didn’t change my budget, but I also had these different ones that were a little bit older, but they had good amenities. They would have good spacing. And I actually got the tour it when I was at my interview. So, I would be fine living with it. It’s not like I would be like, “Oh, I can’t live here and I’ll have to live somewhere else.” So, that’s how I ranked it.

32:53 George: But, there were other options that were really, really expensive. So, I kind of listed those. They say to list everything, so I listed them, but they were like in 30th place, like it was kind of ridiculous how much they cost. So, I tried to kind of combine quality, but also the cost of living because I feel like housing, I think when I was reading my budgeting you should try to keep housing as close to 50% as possible. My housing is a little bit, it’s still over 50%, but I think it’s kind of difficult to kind of get 50% or lower as a grad student. So, I tried to get as close to that as possible. And with some of the other housing, it was like well over 50%. So, I tried to take into consideration that I should try to be close to 50%, if at all possible.

33:43 Emily: Yeah, I think I don’t know exactly what you were learning in the course, but according to the balanced money formula, which is a framework that I like to reference, you should keep all of your necessary expenses below 50% of your net income, which is really, really challenging to do on a graduate student stipend and also on a graduate student stipend in a high cost of living area, which is what you’re doing. So, it’s not surprising at all to me that even you, you know, making a prudent housing choice, it’s still over 50% of your income. That is pretty common for graduate students in high cost of living areas. But yeah, so it sounds like you were, you know, really thinking through both the finances and the lifestyle that you wanted to have with that housing decision. So, super happy that you were, you know, really intentional about that.

Long-Term Emergency Savings Goals

34:29 Emily: And you were mentioning just now, like some of your financial goals for your finances in graduate school. You mentioned that you were going to be saving/investing 20 to 25% of your income and then possibly doing a little bit more investing if you wanted to at any particular time. And I think you also mentioned earlier that you wanted to save up an emergency fund of nine months of expenses. Is that right? Is that your ultimate goal?

34:54 George: Yeah, I’m trying to, one day I hope to get to nine months. So, I would say my kind of goals for personal finance and graduate school, in particular, are kind of modest. I’m not looking to have like a huge, huge thing by the time I graduate. I hope to kind of like build habits and get into the habit of kind of like investing, get into the habit of staying on my budget, getting into the habit of putting money away monthly. Because like in undergrad, I didn’t have any of those habits, and I think that’s something I’m going to have to kind of build. And also, have at least like three months, hopefully nine months, of my emergency fund. Because I know that emergencies are emergencies and I doubt I won’t have any emergencies in graduate school.

35:37 George: So, hopefully by the time I graduate, I’ll have at least three months, hopefully nine months. And then kind of have a decent amount in my kind of Roth IRA as well as in my brokerage account, and that I’ve kind of stayed consistent throughout the five, six, or maybe seven years that I’ll be doing my PhD of monthly, always, putting some money away and not falling into blowing money on stuff. But also giving me that kind of flexibility to have fun and to do things that I find kind of amusing so that I don’t get too stressed through graduate school.

36:13 Emily: I think that’s such an excellent point that you made. Like yes, it would be great to come out of graduate school with savings, with investments, with a nice nest egg. That’s what happened for me. My husband and I defended with quite a good nest egg, and it was really fabulous for our subsequent life. But, the more important thing, actually, is the habit formation. And it’s sort of changing your–like becoming a person who budgets, becoming a person who invests. Now, I know I said earlier that it matters a whole lot. Like if you do that with a small amount of money, it’s great, and yes, that’s true. But, even more powerful is the habit. And so, when you have that nice post-PhD salary, and you’re already in the habit of investing or you’re in the habit of saving, you can then apply those habits to that fabulous higher income and really make some fast progress with your, you know, financial goals.

Any Other Goals for Grad School?

37:02 Emily: So, I think that was such a good point that you made, and even for people who aren’t able to do what you plan on doing, which is still, you know, saving and investing during graduate school. Even getting into the habit of budgeting, like that can be a great goal for your time during graduate school is just to make those changes in yourself and who you are. Even if you aren’t able to come out with more savings, again, once you have the post-PhD income, you’ll be able to keep applying those habits and really make some fast progress. So, such an excellent point, George. Any other goals you have for graduate school, aside from the ones that we just talked about?

37:37 George: I guess like, I mean, there are like nonfinancial goals, like kind of building like skills and kind of building my network and traveling and learning all the different stuff from different people. But financial-wise, I just hope to kind of pay as little in taxes as possible, learn how to file my own taxes. Kind of learn like all the financial things that I need to know to kind of like succeed. I think for my brokerage account, I’ll be kind of investing. I think the money in there is probably going to be used as a down payment on a house in the future. That’s kind of like, well far off, but I’m kind of thinking, “Oh, I’m investing in my brokerage account. I’ll probably use it to kind of buy a house or have some money towards a house.” Kind of things like that. Those are kind of like the goals I’m thinking of, but I don’t really have like super hard, concrete stuff yet. But those are kind of the things I’ve been thinking about.

38:30 Emily: Yeah. I think it’s great that you identified like, “Okay, I know it’s important to have an emergency fund.” You’re going build that up. “I know it’s important to save for retirement. I’m going to build that up.” And then, “Okay, whatever else comes, I have this other brokerage account, you know, other savings I can use for that. If it’s a house down payment, if it’s something else.” I think that’s a great way to structure your finances when you have a lot of unknowns in the future, as is very, very common for PhDs, because we never know where we’re going to live. You know, after, it’s a lot of uncertainty that we live with kind of longterm.

38:59 Emily: But George, it was a real pleasure to talk with you today. Thank you so much for coming on the podcast and sharing this beginning part of your journey. I hope that we’ll catch up with you again in maybe a few months or a year and see if it’s all panning out the way you thought it would. Thank you so much for sharing your insight.

39:15 George: Yeah, no problem. It was a pleasure to be able to talk about it.

Outtro

39:17 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This PhD Candidate Paid for Her Wedding with Her Research Side Hustle

August 3, 2020 by Lourdes Bobbio

In this episode, Emily interviews Rebecca Brenner Graham about side hustling to pay for her wedding while a PhD candidate in history at American University. In addition to working on her own dissertation and serving as a teaching assistant, Rebecca used her skills as a history researcher in a self-employment position assisting an economics professor at another university. Rebecca had to quickly learn how to manage her time and energy well across all her different professional roles and her personal life. If you are planning a wedding as a graduate student, you’ll also enjoy hearing wedding planning and budgeting tips from both Rebecca and Emily.

Links Mentioned

Find Rebecca on her website and on Twitter
Personal Finance for PhDs: Community
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Subscribe to the mailing list

Teaser

00:00 Rebecca: The piece of advice that I’m just learning and wish I had known sooner was that unpaid opportunities are almost always not worth it. Full stop.

Introduction

00:20 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 14, and today my guest is Rebecca Brenner Graham, a PhD candidate in history at American University. Rebecca has always side hustled to supplement her stipend, but she kicked it up a notch in her fourth year to pay for her wedding. We discuss how Rebecca balanced her time and energy among her own dissertation work, her teaching assistantship, her self employment gig as a researcher for an economics professor, wedding planning, and the rest of her life. Listen through to the end here, how Rebecca’s wedding went and some wedding planning tips from both of us. Without further ado, here’s my interview with Rebecca Brenner Graham.

Will You Please Introduce Yourself Further?

01:07 Emily: I am so delighted to have joining me on the podcast today Rebecca Brenner Graham, who is going to be discussing with me, her wedding, her recent wedding, and how she ended up paying for that on her Grad student stipend, and actually on more than just her grad student’s stipend. So Rebecca, thanks so much for joining me on the podcast today and will you please tell us a little bit more about yourself?

01:27 Rebecca: Thank you so much for having me, as I was telling you. I’m a long time listener and it just occurred to me that I might have something useful to add. I went to college at Mount Holyoke in Western, Massachusetts as a women’s college. There, I double majored in history and philosophy, and then I went straight into my history graduate school. I’m now starting my fifth year of the PhD. I was able to do the public history master’s combined with my doctoral coursework, which is one of the reasons that I love my department at American University. My dissertation, if anyone’s interested in that, is on Sunday mail delivery from 1810 through 1912 as a lens into religion, state relations. Because I got my masters in public history, I’ve also had some museum gigs on the side, on top of working as a TA in the American University Department of History. That’s about it.

Side-Hustling as a History PhD

02:27 Emily: Yeah. Is that typical for people in your department to be taking on museum jobs or outside gigs like that.

02:33 Rebecca: It’s typical in the sense that being atypical is typical. So there’s not one way to do it. There’s not one way to make it work. Like one of my classmates does a bunch of oral histories of basketball players for money. Some of them are like older and married or have houses. For me, especially brcause I came straight from undergrad, in order to have enough money to not be worrying about it constantly, I have had part time work every year on top of the TA-ing.

03:06 Emily: Okay. That’s good to know. So basically what you’re saying is the stipend that you’re receiving is not sufficient across the board. No one is doing this on just the stipend. They either have outside sources of income from a spouse or something, or maybe past savings, or they’re currently taking on side hustles. Right?

03:22 Rebecca: So I can think of two classmates who, and this is not a coincidence, they’re the two in the department that are younger than me, that haven’t had that much part time work. One of them is extremely frugal and the other one decided to take out loans on top of the stipend. I adore my department, like I am so happy to be there, at the same time we do have the second lowest stipends of all history departments in the greater DC area.

03:49 Emily: Okay. Yeah. Glad to hear that balance of like, Hey, it’s worth it, we’re doing it, but this is what it takes to get it done. Side hustling for you, other solutions for other people, but glad to hear that.

Getting Engaged During Grad School

04:01 Emily: Okay, you’ve given us a little bit of a brief career history, coming straight from college into graduate school, doing your master’s and PhD right in a row. Where does your relationship factor into this?

04:12 Rebecca: Going way back for a second, we actually met in a summer program in Washington, DC when we were 16, like for high school students. We ended up at college near each other. His name is Brandon, and Brandon went to UMass Amherst. We were together for the first half of college, and then we broke up, just seeing other people, didn’t think or know that we’d get back together. We ran into each other a couple of years later and the summer after graduation, we ended up getting back together. Then six months after that, he moved from New York to DC in order to be with me. And even before Brandon and I got back together, I had to facetiously told friends that I need to pass my dissertation proposal, even before I get an engagement proposal. And this was even before I was in a PhD program, this is when I knew I wanted to do a PhD.

05:04 Rebecca: So third year of graduate school, toward the end of the year, I was about to become all but dissertation, ABD, and we had already gone ring shopping. I thought we might be getting engaged soon. And then I ended up getting engaged a few weeks before my prospectus defense. So at the end of my third year of grad school, I was ABD and also engaged.

05:30 Emily: Yeah. I really love that you were, I know you said facetiously, but you were thoughtful about this, right? You had an idea of how you wanted your career to play out and also how your relationship, whoever that was with, how you wanted that to play out. And it’s good to hear really that, um, your husband made that sacrifice when he was your boyfriend of moving to where you were so that you could prioritize your career and he was going to figure it out and it’s not necessarily common story. I’m really glad to hear that.

06:00 Emily: I’m reminded of when I got engaged which was also during graduate school. My husband, we had sort of decided together that we were going to get married, moving towards that direction, but he wanted to wait to propose until he also achieved candidacy. So I was further away from that. That actually didn’t happen for me until my fourth year of graduate school, I think, just the way my department works. But he was like, no, I got to get, I have to get my prelims out of the way, and then I can think about the engagement. So he had the same thought process as you, but from the opposite perspective, in our case.

06:34 Rebecca: I think it’s an autonomy of time thing because even if it’s the same work across the board, you have, I think in most programs, you have more autonomy of time after that ABD mark.

06:45 Emily: Yeah. I think for my husband, it was that, but also just the stress of preparing for the prelim and writing whatever he had to write and doing whatever we had to do, like oral defense or something, I don’t remember the details for him, but just to get past that stressful thing, he wanted it off his plate, so he could enjoy the process of being engaged and planning the wedding and not having to juggle those two things simultaneously and know that, yeah, there’s going to be a few more years here until we have to repeat that process for the dissertation and ultimate defense. With respect to your actual timing of your wedding, like how long were you guys engaged for?

07:25 Rebecca: We got engaged in March, 2018. For about a month, we were actually planning with my parents, and my mom in particular is quite traditional and they were generously willing to pay for it, but it became clear, especially to me very quickly that coordinating with them and negotiating priorities was more labor, and especially more emotional labor, than actually making money myself and working towards paying for it. We also decided in between that March and April period that the things that we cared most about relating to our wedding were not that expensive. Like making the ceremony go how it was important to me was a higher priority than venue or the number of people who were coming. So eventually, I guess around April, when we started planning and paying for it ourselves, we got a date on the calendar. We got married a year and I guess two or three months, not great with numbers, I guess a year and three months later on June 30th, 2019.

08:43 Emily: Okay. So yeah, we are recording this in August, 2019, so this is really fresh for you and that’s exciting. This is definitely a tip for other people who are going into the wedding planning process of anyone who contributes gets a say. If you don’t want that party to have that say in that particular way or whatever, if there are strings attached to that gift, sometimes it is easier to simply take on all of the finances on your own. That’s the decision that you made.

Paying for the Wedding through Side-Hustling

09:12 Emily: We’ve already kind of gone over that your stipend was not really enough to live on, at least in the lifestyle that you want, and you were already side hustling. Did you have a plan for like how much more money did you need to bring in either in total or on a monthly basis to be able to pay for the wedding?

09:28 Rebecca: We looked at it a little backwards, in retrospect. It was more like however much money we have to delegate toward this, that is how much that we could pay. Brandon and I split it almost exactly evenly between us with a few exceptions. If there was something that was really important to him or really important to me. I paid for Ketubah the Jewish marriage contract. I paid for our pre rabbinical counseling. He paid for our entire rehearsal brunch because that was not something that I was tied to doing. On my end, my stipend from American when I started was $19,000 per year, and now currently thanks to our union it’s $22,000 per year, which is actually a huge difference just in the four years or whatever that I’ve been a TA. I really didn’t give it that much thought about, will I be able to afford this? It was more if I can’t afford it, then I won’t do it, and we love each other, and we want to get married, and that’s the most important thing. I have another classmate in my program who literally eloped at one, but I don’t really know the details on that. Also around this time, I was reading those books by Jen Sincero, have you ever read her books? The first one is called “You Are a Badas” and the second one is called “You Are a Badass at Making Money” and they’re —

11:00 Emily: Actually, I’ll interrupt you just for a second. I literally just finished “You’re a Badass At Making Money”, like last week. So I’m a little late to the Jen Sincero game, but I did read it and enjoyed it. I’m trying to figure out what I want to incorporate. So yeah, please go on.

11:15 Rebecca: Oh, that’s so exciting. I’m glad you liked it. In spring 2018, this was when her money book came out, the green one. She’s a little bit more, I don’t know if the word is capitalist than I am, but she’s also in line with my feminism. A central takeaway from Sincero’s work is that sometimes you have to jump and then create the net for yourself. That’s what happened when we decided to pay for our own wedding. So around the time that we had made that decision, I was reading a bunch of Jen Sincero. A major advantage of doing a history program in DC is that a lot of people email the department to offer work opportunities. So then in May, 2018, I heard about a summer job working for an economics professor at George Mason to do research on 19th and early 20th century labor history. My dissertation is on 19th century and early 20th century religion-state relations, and there was a lot of overlap with that labor history. I ended up working for her over the summer and then she offered for me to stay for the coming school year, like this past school year 2018-19. My advisor helped me negotiate a 50% salary increase for that, so that was my side gig that took a lot of time and essentially paid for my wedding. But it was also a completely pleasant experience working for this economist.

12:55 Emily: Yeah. I want to hear more about the logistics of how this side hustle worked. For you with American, because you’re a TA, does that mean that you’re not working/not being paid over the summer?

13:07 Rebecca: Oh yes.

13:09 Emily: Okay, so you’re already dealing with an academic year only stipend. So —

13:13 Rebecca: Last year I had a fellowship from my department for summer research. This year I did not, which was my why my reaction was “Oh yeah”, because that was the situation. But last summer I had a $3,500 fellowship from my department and then $5,000 from this professor George Mason.

13:35 Emily: Okay, so in your summers, at least last summer, you had a balance of working on your own dissertation and also doing this other work for this other professor, but I’m wondering, because you guys are at different universities, what was the actual relationship between you and this professor or the grant? Were you a W-2 employee or was this a self-employment situation?

13:58 Rebecca: It was a self employment situation, so I got taxed on it pretty heavily.

Researching as a Side-Hustle

14:04 Emily: Yeah. So that’s definitely a couple of things I want to talk further about with that, because I don’t really know that well, how this works. I think you’re the first person I interviewed for the podcast who has done research, like very similar skill set and everything to what you’re doing for your dissertation, and as a graduate student, but as a self employment project. Can you just talk to me a little bit more about what the differences are between that self-employment gig and maybe what you typically do as a graduate student?

14:36 Rebecca: In terms of the content itself, it was really just teaching versus researching. This past year I TA-ed class about the presidents and then I TA-ed History of Memory, and that whole time I was researching 19th century labor history. The biggest difference in terms of how much it affects me is that the side gig did not withhold any taxes. So as a graduate student, I’m cobbling together a bunch of opportunities to approach like 40[K per year, which is really great for grad school, I paid $4,000 in taxes last year, and that was most of my money.

15:23 Emily: I’ll make a couple elaborations on that for anyone who is looking into self-employment, which, if you’re going to do a side hustle, I kind of think self-employment is the way to go, because you have a lot more control over your schedule over how much you’re going to work. But the flip side of that is you have to take a lot more responsibility yourself when it comes to the financial side of things. One of the main things is that you need to pay a lot of tax and no one is withholding that tax for you, so two notes there. The first is that, with self-employment stuff, it’s not like income tax and you know that, so I’m speaking to the audience, but it’s not like income tax where you’re not taxed on the first chunk of income you take in, then you’ll have a low tax rate on the next chunk, then you’ll have a higher tax rate on the next chunk. That’s the graduated income tax system. You will still pay income tax as a self employed person, so just add that on top of whatever the rest of your income is. It’s going to be in the 12% or maybe even the 22% bracket, depending on how much money you make. But in addition, you have self employment tax, which is, I believe 15.3% on everything. The first dollar that you make as a self employed person, 15.3% of everything. So it’s not like that graduated system. It ends up feeling like you pay a lot and you do pay a lot in tax because of these two different types of tax that you end up paying income tax and self employment tax.

Emily: For anyone who is making a significant self employment income like you did, you have to set money aside for tax. You have to prepare for that. You have to do the calculations because you don’t want to be surprised at the end of the year with…I mean, you can be very pleased that you made all this money through selling employment, that’s amazing, but you have to be prepared for the tax side of things. One thing I’ll recommend actually for anyone who is either self employed or who has a fellowship who doesn’t have income tax withheld, I have resources on my website about paying quarterly estimated tax. You can go to the site and search for quarterly estimated tax. You’ll come up with like my main article on that. It’s designed for people who have fellowship income, but people with self employment income can take a lot out of that as well. And if you want a little bit further help I’ll link from the show notes, actually have a workshop on helping people pay quarterly estimated tax. Again, to not be surprised at the end of the year with a huge tax bill. It helps you estimate the amount of tax you’ll have to pay and also pay through it quarterly.

17:37 Emily: Okay, so Rebecca, that was a little bit of a diversion just because this is my wheelhouse about taxes.

17:41 Rebecca: That’s very helpful. Yeah.

17:44 Emily: I actually was a little bit for curious, because I think what I was asking, I didn’t phrase quite right earlier, was about, so the difference between your dissertation work, which you are either receiving a fellowship for, or maybe not being explicitly paid to do in your primary role as a graduate student versus the self employment relationship, this contractor relationship you have with this professor. I guess what I’m asking about is like intellectual or academic ownership over that work. Are you going to be on papers? Just because it’s an unusual way to be doing research, as a self employed person, but still in an academic setting, but it’s at a different university. So that’s why it was sort of interesting and complex.

18:24 Rebecca: I find it to be really common, particularly in Washington DC where we have a lot of federal archives. Since I started grad school in 2015, I’ve honestly lost track of the number of professors who’ve emailed the department literally from as far as Australia and asked our grad students to do work for them. Now I don’t do it unless it’s $30 per hour, but I used to do it for like $12, $15 per hour before I knew better. And as far as I know, we never get even an acknowledgement because we’re a human in the right location who has used archives before, and isn’t going to mess it up when researching.

19:12 Emily: Gotcha.

19:13 Rebecca: For my dissertation, I am the author.

19:16 Emily: Right. So it’s really just by virtue of where you’re attending graduate school and the skill set that you have,that you have access and people, as you were saying from all of the world want some access and they’ll use you, hire you to be a conduit for helping them with that work. But in terms of the academic ownership, because you’re being paid and again, as a contractor, it sounds like you sort of relinquish that. They’re going to be completely in control of the scholarship side of things. You’re not apparently even getting an acknowledgement, which I feel like it definitely deserves an acknowledgement at minimum, but okay.

19:50 Rebecca: That’s just the random people from California or whoever who can’t fly into DC.

19:54 Emily: Yeah, totally. Okay. So now I have a better idea about this.

19:57 Rebecca: It’s not even taxed sometimes, because it’s not enough money to be taxed, but I’ve done that a lot of times. And then my research gig at George Mason, I have a relationship with this person now. I don’t know when her book will be done, but I’ll be in communication with her. And I definitely felt like I was a part of the project, even though for the argument of the book, that’s entirely her argument, I’m just providing the facts that she then integrates into her analysis.

20:29 Emily: Yeah. I guess I’m also wondering like maybe you know for her situation, why wasn’t she working with a graduate student at our own institution? Like her advisee or something like that.

20:39 Rebecca: She wanted a historian. She’s in an economics department and she specifically reached out to history departments because she wanted reviews of historical literature by historians. And then also just that change over time analysis that my department trains me to do.

21:01 Emily: Gotcha. Okay. Yeah. This is really, really interesting to me.

Commercial

21:06 Emily: Emily here for a brief interlude. I am just bursting with this news. I have launched a community for personal finance for PhDs. The community is for PhDs and people pursuing PhDs who want to level up their practice of personal finance by opening and funding an IRA, starting to budget, aggressively paying off debt financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products I’ve made in the past, and I’m going to add new trainings that library every month. There is also a discussion forum, a monthly live calls with me, a book club, and progress journaling for financial goals. Basically, the community is going to help you reach your financial goals, whatever they are. Go to PFForPhDs.com/community to find out even more. If you’re listening to this in real time, you have the opportunity to become a founding member of the community at a discount. The price is going up on August 15th, 2020, so don’t delay. Go to PFForPhDs.com/community for all the details. I can’t wait to help propel you to financial success. Now back to the interview.

Research Side-Hustles and Career Advancement

22:29 Emily: I guess the other sort of big picture question I wanted to ask you about side hustling is, so the side hustling is necessary financially — for the wedding, for living your life — do you think it’s giving you more than that? Like is this actually advancing your career in some way?

22:46 Rebecca: That’s a fantastic question and I really hadn’t thought about it. I mean, the economics people at George Mason, like their department is a completely different environment than mine, so it’s educational, just in that sense to meet more people in different places. Overall, the research work definitely was not expanding my skillset. It probably expanded my content knowledge a little bit, but it wasn’t that much more than whatever I had to be familiar with for comprehensive exams, because I did all of that time period. For the George Mason people I earned, what was it? For the whole year it was $15,000. And the previous year, before I was engaged, my side hustle, during my third year of graduate school paid $1,500, so literally take off a zero, and that was writing an exhibit for a museum. That was fantastic experience that definitely advanced my CV/resume and what I know how to do.

23:56 Emily: Gotcha. So there may be a little bit of a trade off there. This is not surprising that the things that benefit you more as an individual, there may be a trade off on the money there. You’re being paid more, but —

24:06 Rebecca: In my experience, that is correct.

24:08 Emily: Yeah, so I mean, hopefully that’s not the case. I wish for everyone to have a side hustle that pays really well and advances your career and all that, but sometimes you may have to trade off one or the other, but it sounds like at least at the very, very minimum you’ve expanded your network, right? You’ve met more people. You’ve worked closely with this one individual. So maybe that’ll come into play later on. Who knows about that.

Time Management and Side-Hustling

24:31 Emily: So I want to move now to talking about how you, how you manage your time. You’re obviously a long time side hustler, but it sounds like you really maybe stepped it up, maybe stepped up your hours to make this additional money in this past year to be able to fund the wedding that you wanted. Can you talk to me a little bit about how you balanced your dissertation work, your TA role, the side hustle, maybe multiple side hustles, if you’re still doing other ones, and then of course, just the rest of your personal life.

24:59 Rebecca: I have noticed for a while that it comes down to two things. One is time management, which I’m sure seems pretty straight forward. And the second is the kind of energy that the opportunity is giving you. I have felt for a long time, this is also just my personality, that if an opportunity is giving me a lot of positive energy and genuinely feel like I can do anything, but if it’s not, and sometimes things take away from my energy, then that becomes a real challenge. I remember at the beginning of last school year, last fall, actually around this exact time, last year, I majorly had not figured out how that balance was going to work. I was so stressed that I ended up giving up caffeine for several months, even though coffee is my favorite thing, because I was just so energized and stressed all the time that it was just miserable. And just not knowing how I was going to balance my time all year.

26:03 Rebecca: Also, the way that we ended up doing our wedding, and I’m sure we’ll talk about this later, it ended up working out great, but we accepted a lot of favors from people. Like a friend did the photography, a friend did the flowers, a family friend officiated our service. And when you rely on people, even if they’re really close friends and family, it’s just really stressful to maintain the relationships. I never wanted to feel like I was a burden on people. That created a lot of stress and the most challenges very early on, but over the course of the year, I think I just adjusted. Also second semester, I had this past TA assignment for a fantastic, really supportive enthusiastic professor. She’s Eileen Finley at American University and she was just a breath of fresh air twice a week, and that made a huge positive difference in my ability to find positive energy and manage my time well.

27:08 Emily: I think that’s an excellent, excellent point that you’re making. I wonder to make it any more applicable for the listener, can you tell in advance what kinds of activities are going to give you energy? So you can kind of filter, like I’m not gonna accept this opportunity because it seems like it’ll be draining. Have you figured out any kind of framework around that or is it just have to try it and then see?

27:31 Rebecca: I’m definitely not an expert on that in the sense that I am still figuring that out. So this is not what you asked, but I could break down what an average week was like. I think both semesters my TA at AU, that was Tuesday and Friday, so then I would often go to George Mason where they gave me a desk, which was nice. And that way I felt like I had community there. I almost always went once a week. I didn’t go more than once a week, very often, but it was typically on a Monday, Wednesday or a Thursday really. And then one or two days I would actually get to do my own work on my own dissertation. And I ended up, um, drafting one chapter out of six first semester and one chapter out of six second semester, but I really have much higher hopes for this coming academic year when I’m not planning and paying for a wedding. I hope to be able to draft more than one chapter each semester.

28:31 Emily: That actually does sound like really good progress to me. I take it you are going to take the side hustle down some. You’re not trying to make as much money in the upcoming year as you did last year.

28:41 Rebecca: I ended working for George Mason at the end of the school year, because it was an academic school year position, but also during second semester, I allocated some time toward applying for fellowships just because everyone told me that that’s what you do when you’re going into fifth year. I actually got three out of four of the ones that I applied for. One of them is through the same people at George Mason, so that ties into what you said about like making connections helps. One is from Mount Holyoke College where I did my undergrad work. It’s specifically from the history department. There that’s the biggest fellowship. They’re basically paying my rent for the coming year. And that will hopefully really allow me to focus on my actual dissertation work. Then the third is a research grant from my department at American. I’m really trying not to take on side hustle work like I did last year. Though, I did have a potentially paid opportunity fall into my lap for this coming year, but it hasn’t fully developed yet and I need to prioritize my dissertation because I wasn’t always able to work on it as much as I wanted to this past year.

29:58 Emily: Yeah. Congratulations on winning those three fellowships. Are you continuing to TA in addition to accepting those fellowships?

30:05 Rebecca: This coming year is my last year of TA-ing.

30:08 Emily: Yeah, it’s a great point for anyone who is looking to side hustling during graduate school and especially for you where your progress on your dissertation is up to you. You’re ABD, it’s at your own speed. There is a danger of devoting too much time to making money on the side and not enough time to actually progressing through your current career stage so that you can get a full time job and have an actual salary.

30:33 Rebecca: It’s a balance to strike for a few reasons. One is I get the most work done when I can take myself out to the pizza place next to my apartment and buy my favorite pizza, or get coffee and a bunch of different coffee shops, or buy a nice new planner for myself to organize my life. You have to have some cash flow, at least in my experience in order to be your best student.

31:00 Emily: Gotcha.

31:01 Rebecca: And I think the other reason is that I actually want to go into public history and museum work rather than academia. So in order to get more relevant job experience, that’s also a balance to strike for me.

The Financial Side of Wedding Planning

31:15 Emily: For sure. Yeah. Thanks for pointing that out. So we’ve been talking about the side hustles and the wedding you added, you know, $15,000 to your wedding fund. It sounds like more or less for this past year and it just was a month or so ago. So how was it, how did the wedding go?

31:30 Rebecca: We got married at the Hamilton Restaurant in downtown Washington, DC. It’s around the corner from the White House and it’s both a restaurant and a concert venue. And I would highly recommend to anyone looking to have a great wedding at a minimal cost to get married at a restaurant that has a concert venue because under one contract we had our venue, the food, they provided the cupcakes, they included the open bar. There was a guy that was — so, I thought we had a lights guy and then a sound guy, and I just realized when I was telling my husband about this interview, that those were actually the same person. So it came with a lights guy and the sound guy. The venue was really great.

32:18 Rebecca: I was really happy with my dress. I found it for $130, which I’m really proud of. One of my bridesmaids asked me what I was envisioning and I described sort of a shorter dress, but also a sun dress, but also beautiful. And she pulled up one on Pinterest and was like, “do you mean like this?” And I was like, “yes, that’s exactly what I’m looking for.” Then, a few days later she texted me that it was 75% off online. So that’s how I got my dress from $130. A different bridesmaid took me veil shopping and I got one for $30. I would say for any brides out there, don’t spend a lot of money on the veil because you’re only going to wear it once. One of my aunts bought my shoes for me at Macy’s or something as a gift.

33:09 Rebecca: The most important part of the whole wedding experience to me was the ceremony and it’s hard to describe why that is. I guess, I mean, it’s a Jewish life cycle event and I did not have the traditional bat mitzvah, but I identify very strongly with Judaism, and my husband’s one of his parents is Jewish, but he didn’t grow up with a lot of religion, so I would describe it as Jewish with an interfaith twist. The way I think back on our ceremony is that there are a few events in life that are really deeply, very important, and for one of those to go so well, I appreciate that it went flawlessly so much. I think the ceremony itself, which we have a link to the video, actually that I can send you if you’re interested, I’m just so happy with how it went. We had a family friend officiate and play guitar and sing. My cousin, who is also a bridesmaid, did the Hebrew. An aunt and uncle made our chuppah for us as a gift to us. My dad sang a song during it, actually. It was like everything I could have imagined, and I’m so grateful for that, and we made it happen ourselves.

34:31 Emily: Yeah, that’s something to be really, really proud of, obviously. What I’m hearing, as someone who has also planning a wedding, is that it sounds like you DIY-ed, in terms of accessing your community and asking people to contribute, the parts of the whole experience that were most meaningful to you, but also the ones that their contribution was particularly, again, meaningful or personal, like singing a song, for example. And also not particularly a ton of work, versus your choice of venue, where you combined the restaurant and the venue and all the staff is there and everything is, as you said, under one contract. That was a way that you made a really simple decision that made the planning a lot, lot easier. I did the opposite thing with my wedding, so I know that it’s a lot of work and a lot of money to do things the other way. So anyone who’s thinking about planning a wedding, I think that you went about this in a very positive and thoughtful and way that paid off, it sounds like, really well.

35:34 Rebecca: What was your wedding venue, if you don’t mind me asking?

35:36 Emily: Yeah. So we had two, first of all, because one, we got married in the church and two the reception was at a different location. So it’s already dealing with two different locations, right? We actually had our reception at a museum of natural history in Raleigh, North Carolina, which was awesome.

35:52 Rebecca: I’ve been there, actually.

35:55 Emily: Yes, it’s a fantastic museum. I was so excited. I grew up outside DC, so I’ve been in love with the natural history museum as part of the Smithsonian forever, so to have a chance to do that in a similar museum in Raleigh was so much fun. The venue was really, really fun, but it was an outside caterer. It’s a lot of work. Rentals were a whole separate thing. Getting it all done in one place, I think, was really smart. It saves a lot of time, saves a lot of money. And as I said, then you chose to DIY the parts where people could actually really contribute instead of, for example, asking for people to contribute on the food or, you know, there’s other ways to do this kind of thing that could be a little bit more work for everyone rather than just, oh, I’m giving you this wonderful gift of a song or the shoes or whatever it turns out to be. I appreciate hearing that. And it sounds like you had a wonderful time and I’m happy that everything worked out with the side hustle and everything. Any final comments on the wedding and the side hustle?

36:50 Rebecca: Just a quick, funny thing that came to mind is that one of my closest friends who did our flowers, she was literally a few days away from getting her doctorate. Her name’s Arlisha and she got her doctorate in history a few days after my wedding. Her final year of dissertating, she literally texted me and was like, I’m taking up flower arrangement as a hobby while I finished my dissertation, can I do this for your wedding? And I had not previously cared about the flowers, but I was like, yes, if you want to, go for it. She did an amazing job. Just the aesthetics of the room, I think looked so much better because Arlisha’s dissertation side hobby was flower arrangement.

37:34 Emily: Yeah. I think in the academic space, we talk a lot about mental health and self care and so forth, and that’s a really fun, healing, stress-relieving thing to potentially do that, hey, can also help out a friend or even become a side hustle , if you want to. I had an interview recently with someone who decided to turn her baking hobby, as a graduate student, into a business. So it’s the same kind of thing, right? You have something you enjoy doing, it’s a stress reliever for you, why not turn it into something a little bit bigger?

Final Words of Advice

38:02 Emily: Final question here, Rebecca, which is, what is your best financial advice for another early career?

38:08 Rebecca: The piece of advice that I’m just learning and wish I had known sooner was that unpaid opportunities are almost always not worth it. Full stop.

38:20 Emily: Yup.

38:20 Rebecca: Also, as a PhD student, you have to do your doctoral requirements and dissertation, but there’s really nothing else that you have to do. And if you have different wedding preferences from your parents, just do it your own way. And if some customs from your religion are meaningful, just stick to those. If others aren’t…our wedding was really a growth opportunity for me and I’m proud and thankful for how it went.

38:50 Emily: Wonderful. No need to elaborate any further on that, Rebecca. Thank you so much for sharing the story on the podcast with me.

38:56 Rebecca: Thank you so much.

Outtro

38:58 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

This Muslim Graduate Student Found Halal Investing and Now Teaches It to Her Family and Friends

July 27, 2020 by Meryem Ok

In this episode, Emily interviews Joumana Altallal, a Muslim graduate student at the University of Michigan. Joumana began investigating personal finance in the summer before she started graduate school to prepare to manage her stipend. In just her first year on a stipend, she has saved a full emergency fund, established credit, and funded a Roth IRA. Joumana shares what she’s learned about Halal investing, a strain of socially responsible investing for Muslims that has become much more accessible in recent years with the rise of robo-investing. Joumana’s enthusiasm for personal finance and halal investing, in particular, has spilled into her relationships with her family and friends. At the end of the episode, she gives a wonderful articulation of the role her finances play in the world.

Links Mentioned in the Episode

UMich Helen Zell Writers’ Program
PF For PhDs Episode 8: This PhD Government Scientist Is Pursuing Financial Independence: Part 1 (Dr. Gov Worker)
PF for PhDs Episode 9: This PhD Government Scientist Is Pursuing Financial Independence: Part 2 (Dr. Gov Worker)
George Hayward Household Budget YouTube Video
George Hayward Household Budget Excel Template
Halal Investment Companies, e.g.,
- Wahed Invest: https://wahedinvest.com/
- Amana Mutual Funds: https://www.saturna.com/amana
- Azzad Funds: https://www.azzadfunds.com/
PF for PhDs: Speaking
PF for PhDs Episode 13: Combatting Climate Change with Your Finances, Individually and Collectively (Jewel Tomasula)
PF for PhDs Podcast Hub
PF for PhDs: Subscribe

Teaser

00:00 Joumana: I think taking a halal approach to investing and saving money is always really grounding for me in that it acts as this constant reminder, that at the end of the day, my finances are meant to serve an ethical role in the world. So, they’re not just a fulfillment for my own needs and desires, but that they also function in this greater, sort of just way in the world.

Introduction

00:28 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 13, and today my guest is Joumana Altallal, a Muslim graduate student at the University of Michigan. Joumana began investigating personal finance in the summer before she started graduate school to prepare to manage her stipend. In just her first year on a stipend, she has saved a full emergency fund, established credit, and funded a Roth IRA. Joumana shares what she’s learned about halal investing, a strain of socially responsible investing for Muslims that has become much more accessible in recent years with the rise of robo-investing. Joumana’s enthusiasm for personal finance and halal investing in particular has spilled into her relationships with her family and friends. You won’t want to miss her wonderful articulation of the role her finances play in the world. Without further ado, here’s my interview with Joumana Altallal.

Will You Please Introduce Yourself Further?

01:28 Emily: I’m delighted to have joining me on the podcast today, Joumana Altallal. She is a current graduate student and also a Muslim graduate student. So, we’re going to be talking about a particular version of socially responsible investing today, which is halal investing. So, Joumana, thank you so much for coming on the podcast today. And will you please introduce yourself a little bit further to the audience?

01:49 Joumana: Hi, Emily. Thanks for having me today. My name is Joumana Altallal. I’m a second-year master of fine arts student in poetry at the University of Michigan. My family and I immigrated to the U.S. In 2003 and were resettled in Charlottesville, Virginia. So, that’s actually where I grew up since I was about six years old. And I would say my journey with personal finance has definitely been informed by my identity as both a refugee and a Muslim.

02:17 Emily: Yeah. Thank you so much for that. And tell us where you are now and what you’re studying.

02:21 Joumana: Yeah, absolutely. So, I’m at the University of Michigan at the Helen Zell Writers’ Program. So, it’s a creative writing program that is two years with a fellowship year third year. I am a poet, so I’m spending all of my time in writing workshops

02:37 Emily: Sounds fantastic. And you and I actually met when I was speaking at the University of Michigan in 2019, I guess it was, right?

02:46 Joumana: Yeah.

Personal Finance Journey

02:46 Emily: Yeah. So, I met in person, actually, you came up to me with this question about this particular version of investing, and I said, “I have no idea about that. Will you please come on the podcast and teach me and my audience about this?” So, I’m really happy to have you on today to talk more about that. So, kind of first step, more like background stuff before we get to that particular topic. So, what have you been learning about personal finance and also applying since you started graduate school?

03:15 Joumana: Yeah, absolutely. So, I actually came to graduate school immediately from undergrad. So, I didn’t have much experience budgeting or tracking money in a sort of systematic way before. And although I’d been obviously working throughout high school and college, I was still primarily supported by my parents. So, my financial decisions were definitely limited in that scope. But my interest in personal finance kind of grew out of a hobby that I had. The summer before moving for grad school, I was kind of introduced to the financial independence and early retirement movement through Reddit forums of all places. And I found myself sort of accidentally spending a lot of time reading people’s posts and advice to each other. So, I think part of what’s so great about personal finance forums, I guess, is that they don’t really assume a starting place for anyone, which was really helpful for me. You can ask questions as a beginner or share advice on an experience that you just went through. So, as someone coming from like an immigrant background, I saw my parents really struggle with understanding what things like 401ks were even. And I believe a huge part of that is because workplaces don’t use accessible language to really explain what these investment opportunities are. So, a huge group of people end up being like absolutely excluded from personal finance conversations despite having a right to them.

Financial Independence, Retire Early (FIRE)

04:49 Emily: So, I love that you were sort of introduced to personal finance inspired by the FIRE movement, something I’ve also been kind of getting into recently. FIRE, Financial Independence and [Retire Early]. I’ve actually done a couple, a pair of interviews with a PhD who’s pursuing FIRE in season three of the podcast. So, if people want to check that out, we’ll link that from the show notes. And also some of my other guests have sort of incidentally mentioned being inspired by the movement as well. Would you say that you are pursuing FIRE or going to be pursuing FIRE, maybe once you’re done with graduate school? Or are you just like, “No, I’m just using some of the principles for like general personal finance stuff”?

05:27 Joumana: I think right now I’m using the general principles for personal finance. It feels a little scary to say that I’m pursuing FIRE as a 22-year-old grad student. But that is absolutely something that I would love to one day be a little more stringent in following.

05:45 Emily: Yeah. So, for listeners who aren’t yet familiar or haven’t listened to the other podcasts on the subject. I think the reason why, you know, Joumana and I do not say we’re part of the FIRE movement is probably because we do not have savings rates that top 50% of our income, which is not a requirement to be part of the movement, but definitely something that many people within the movement do. And that’s how you get that, you know, really fast acceleration towards retirement. So, very difficult to carry out that particular aspect of it on a grad student kind of salary, but you can definitely use the broader principles, start using the broader principles that also apply to personal finance. That was really something that came out of my previous interview with Dr. Gov Worker, is that he really sees the FIRE movement as like an entrance into just good personal finance practices. It’s just a particular way to like inspire people to follow through on the stuff that everybody talks about, you know, from decades ago. So, yeah. What have you actually, like maybe things you’ve put into practice within your finances since last summer?

Building Credit and Budgeting

06:44 Joumana: Yeah, absolutely. So, the summer before grad school, my sort of first step into the journey was opening a student credit card through Discover which is something that prior to that I’d never had. So, beginning to build my credit was really important to me. And then obviously knowing that I would be receiving a monthly stipend once I began my MFA, I knew I needed some sort of system to track my income and expenses. So, I know there are apps like Mint that do this automatically, but I actually rely on a sort of extensive Excel spreadsheet that allows me to type things in manually the particular template that I’ve been using for the past year and a half just comes from George Hayward’s YouTube channel. But any, and all can achieve the same thing really.

07:31 Emily: We’ll track that down and put that in the show notes as well.

Emergency Fund and Roth IRA

07:35 Joumana: And the most important step I think after that was really focusing on building an emergency fund that I knew could last me for at least two months, but now I’ve brought it up to six months. And that’s actually advice that my parents have always followed. So, it didn’t feel too strange to me to begin doing. And after that, opening a Roth and beginning to stash away a monthly amount into my savings.

What is Halal Investing?

08:01 Emily: Yeah. Those are a fantastic number of steps to be taking just in like your first year or so of graduate school, especially that six month of expenses emergency fund. Very, very impressive. You must be living well below your means there in Ann Arbor. So, for those of us who like me, had never heard of halal investing before you brought it up. Can you tell us some of the differences between halal investing and maybe, you know, what your average American might be doing for investing?

08:28 Joumana: Yeah, absolutely. So, to kind of backtrack a little bit, in Islam, the word halal just means permissible. So, halal investing is just a faith-based approach to investment management that’s both ethically and socially responsible. Halal investing really just tries to eliminate placing money in interest-based investments and highly leveraged company stocks or in securities of companies whose profit is typically earned from things like firearms, alcohol, or gambling, for instance. So, as you can tell, it’s not just as easy as opening a Roth through Vanguard, for instance, and beginning to save. However, doing the research has really helped me understand what it is I’m doing with my money and how the process works.

09:17 Emily: Yeah. So, maybe to explain like, just a little bit further for the listeners. So, what you’re basically saying is no bonds, right? Because bonds are a debt-based product. So, stocks are okay. But you mentioned that you can’t use companies that are very highly leveraged, so that requires some additional degree of research. So, it sounds like some company stock would be okay, some wouldn’t. And then nothing in these certain categories of “the sin stocks” as they might be referred to. Okay. So, that gives us a basis there. Does that also mean that you don’t use like interest-bearing checking or savings account? Is that correct?

09:55 Joumana: Yes. So, typically I actually won’t put my money into the savings portion of my bank account and I just have it all stashed in terms of the like six-month emergency fund, I just have it in my checking account. Because interest isn’t necessarily something that I’d want on my money, the same way that most people would.

10:18 Emily: Yeah. Gotcha. When I read up about the subject a tiny bit before our conversation, I read that many who are pursuing halal investing actually will end up not investing in stocks at all because of that additional degree of research that’s required. Can you expand on that a little bit?

Halal Investment Companies

10:37 Joumana: Yeah, absolutely. I think for the average person, it can seem a little bit overwhelming to have to do all of this research all of a sudden. But I do think that there are actually a lot more solutions now than there were even just a few years ago. So, there are actually investment companies like Wahed Invest, Amana Mutal Funds, or Azzad and others that kind of facilitate the process of halal investing so that it’s not all entirely on the Muslim investor who doesn’t necessarily always know where to go or where to put their money. So, the way this works is that these companies essentially screen investments and identify companies that meet ethical standards based on halal investing. So, they also do things like help you calculate your annual Zakat percentage, which is just an obligatory charitable payment that has to be made on your earnings every year. And really the good thing with using these companies is that they have tickers that you can use to still invest through places like Schwab or Vanguard. So, realistically your Roth could still be with Schwab like I have it. But these companies by using tickers, these companies just screen all of the investments that you could have and provide you with places that you could potentially invest in.

Compromise: Higher Expense Ratios for Greater Flexibility

12:05 Emily: Okay. So, let me see if I have this right. So, basically, as I said earlier, this is sort of a particular version of socially responsible investing. So, this is a similar process that other socially responsible investing funds would go through, right? There’s a higher degree of screening of the companies that are included according to whatever the principles are that the fund operates under. And so it sounds like these companies that you just mentioned, they have created mutual funds, is that right? That then you can invest in maybe directly through them, but also through, as you just said, you know, other companies just by buying that particular mutual fund. And something that often happens with other SRI funds is that, due to that increased basically degree of work that’s required, the expense ratio is a little bit higher than you might find if you were doing like a standard index bond. Is that correct for like the investment that you chose?

12:54 Joumana: Yes, that’s typically correct. Although I know that companies like Wahed Invest, for instance, rely kind of heavily on robo-investors. So, the percentage is probably a lot lower. But yes, there are some kind of compromises that you make in terms of these investments that you choose to follow.

13:17 Emily: Yeah. So, one of the principles, let’s say, of the FIRE movement that you might come across, and also personal finance more generally, is this ruthless pursuit of low expense ratios on investments. And what expense ratios are for the listener, it’s basically just an expression of the cost of owning a particular fund. It’s expressed as a percentage. So, you know, at Vanguard with ETFs or something, you might get an expense ratio down in the 0.05 or less percentage. So, five basis points or less. They could be as low as that.

13:52 Emily: And then higher expense ratios are like 1%. Like 1% would be like pretty high. And there are many, you know, in between. And usually, with robo-advisors, you would have the underlying expense of the actual fund that you buy. So, like maybe 0.1% or less, plus a fee that the robo-advisor would tax on top of that to basically be managing your investments for you. But it sounds like even within this, you know, halal investing, even among these options, there are various expense ratios that you could be sort of pursuing and choosing among. Yeah, I think it’s one of the downfalls of the FIRE movement that SRI, socially responsible investing, is not talked about that much. And it’s very important to certain people for various different reasons. And so it’s something that is definitely worth, you know, maybe sacrificing a little bit on the low expense ratio side of things to, of course, in your case, be able to invest according to your principles at all. And for other people just being able to invest according to their general values and what they want to be supporting in our economy and so forth.

Commercial

14:54 Emily: Emily here for a brief interlude. I bet you and your peers are hungry for financial information right now, especially if it’s tailored for your unique PhD experience. I offer seminars, webinars, and workshops on personal finance for early-career PhDs that can be billed as professional development or personal wellness programming. My events cover a wide range of personal finance topics, or take a deep dive into the financial topics that matter most to PhDs like taxes, investing career transitions, and frugality. If you’re interested in having me speak to your group or recommending me to a potential host, you can find more information and ways to contact me at pfforphds.com/speaking. We can absolutely find a way to get this great content to you and your peers, even while social distancing. Now, back to our interview.

Halal Investing is Growing and Increasingly Accessible

15:53 Emily: Anything else you want to add about the products or the solutions that are available for halal investing?

16:00 Joumana: I would say that they are definitely doing a better job of reaching out to the Muslim population now. So, I think there’s a growing movement really of young Muslim students, or even young Muslim workers who are really active in the investment community, which is always lovely to see.

16:21 Emily: Yeah, absolutely. It seems like, you know, as you said, robo-advisors are now being involved and robo-advisors are a relatively recent phenomenon in the last five or 10 years. So maybe, you know, the last generation when they were looking into investing they probably saw that, well, the burden was completely on them, right? To do all this research that we were just talking about and that can be, you know, prohibitive, right?

16:44 Emily: For even going that route at all. Like for instance, before mutual funds came on the scene, everyone was like calling up their brokers, buying more of this stock or selling more of that stock. Like that’s a lot of work to be putting in. And we’re so fortunate now to be living in a time when, you know, index funds are available to us. When these highly curated mutual funds are available to us that are, you know, relatively not that expensive. And as you just said, you know, there’s been more and more attention being brought to this. And so, these particular funds exist for your community and that’s really great to hear and very encouraging.

17:17 Joumana: Yeah, absolutely.

17:19 Emily: One other thing that I read about in this article was that, for some Muslims, again, who were avoiding stock investing entirely and of course, bond investing as well they basically had their money just in cash and real estate. Was that the case maybe in generations past?

17:36 Joumana: Yeah, absolutely. I actually still think that it’s overwhelmingly the case for most folks who identify as Muslim in the U.S. And I think so much of that is just the lack of really accessible information about the kinds of investments that are available for adherence of the Muslim faith. And I think most Muslims, especially of an older generation, have this lack of trust in banks or in investment companies generally for various totally rational reasons. But I also think so much of it is just a lack of understanding of what actually your money is doing and how you can still adhere to a principle of halal investing while having your money in places like Schwab or Vanguard, for instance, or in a 401k or a Roth, whatever that may be.

Helping Family and Friends with Halal Investing

18:32 Emily: And have you been, now that you’ve been learning this stuff from Reddit and other places, have you been kind of turning around and spreading that message like to your parents or other family members or other people in your community?

18:42 Joumana: Yeah, absolutely. Once I started learning about it, I would honestly annoy my parents all the time by being like, “Hey, let’s talk about this now, let’s talk about this.” So, I actually ended up helping my mom, once she left the job that she had been working in for about 15 years, to roll over her 401k there into an IRA, actually. And that was sort of a defining moment in my journey throughout personal finance is being able to actually like implement and apply the things that I’ve been learning. Especially when it came to someone like my mom, who I felt like was always on that journey alongside me somehow. So, I’ve definitely been bringing it over to my family. And then in terms of friends, I’ve actually been reaching out to a lot of my Muslim friends and being like, “Hey, let’s have like meetups where we talk about our finances, let’s talk about like our stipends or how we’re dealing with just being in grad school and even just budgeting if we’re not ready to talk about investing really.” So, it’s definitely been a way for me to kind of understand what other people are doing in terms of their grad stipends or the ways that they’re organizing and negotiating the budgets that they have for themselves.

20:08 Emily: That sounds amazing. Has this group gotten much traction?

20:13 Joumana: Yeah, absolutely. So, a lot of the people that I speak to are actually in totally different places. So, we’ll FaceTime occasionally and just kind of touch base about what we’re doing on any like new information that we’ve learned in terms of halal investing, any kinds of opportunities that have opened up. So, it’s definitely something that I’ve been really happy about keeping up with. And it’s definitely been just an absolutely amazing learning opportunity for me as well. Now that I can take it from those Reddit forums into the real world.

20:49 Emily: Yeah. It sounds like you’ve created, I think in the entrepreneurship community, we call this a mastermind, right? A group of people, same people who regularly meet and talk about a certain topic and sort of hold each other accountable and push each other forward towards meeting your goals. That sounds absolutely brilliant. And something that I hope that other people replicate in their own communities or among their own friend networks. Are there any other ways that you would say that your practice of personal finance is different than that of your peers?

21:19 Joumana: Hmm. I don’t know that there are any huge differences really, but I think taking a halal approach to investing and saving money is always really grounding for me in that it acts as this constant reminder that at the end of the day, my finances are meant to serve an ethical role in the world. So, they’re not just a fulfillment for my own needs and desires, but that they also function in this greater sort of just way in the world. And I don’t know, I don’t know if that’s the kind of relationship that many of my peers have been able to cultivate with their finances. I know that many do, I know that many are very interested in socially responsible investments. But yeah, at the end of the day, that is deeply important for me to know about my own finances.

22:11 Emily: Yeah. I think you articulated that very well. It’s very inspiring to hear. I’ve actually recorded another interview on socially responsible investing. I’m not sure if that’ll be published first or if this one will be published first, but in any case, I’ll, I’ll try to link from the show notes to the other one, which is on sort of environmentally focused, socially responsible investing approach. So, these two complement each other very well, I think, in talking about those principles.

Best Financial Advice for an Early-Career PhD

22:34 Emily: So, final question here, Joumana, as we wrap up. What is your best financial advice for another early-career PhD? And that could be something that we’ve touched on already in the interview, or it could be something completely else.

22:46 Joumana: Yeah. I think it’s incredibly easy to become overwhelmed when it comes to tracking money, especially as a grad student who is already not earning that much. But really, finding a system that works for you and supports your own mental health is way more important than applying every single piece of advice you read. So, really, the best financial advice that I can give to any other grad student is to do what works for you. To find a system that is helpful to you, and to explore all the options that exist out there. Because what works for someone might just be a terrible use of resources for you.

23:27 Emily: Yeah. I totally agree with that. These systems that we use for managing our money should absolutely be, you know, supporting and complimenting our lives and not be a super heavy burden or some onerous thing that we feel is like externally put on us. It definitely has to come from like within and be, of course, in adherence with your own values and your own priorities. It really should be something that makes you feel good and augments your life instead of, you know, feeling the reverse way. So, I hope that everyone can get to that point with their finances. And thank you so much for coming on the podcast and giving this interview. And you’re obviously, you know, very thoughtful about the subject and I’m so glad that you’ve learned about it and now you’re, you know, turning back around and helping your family and your community learn these principles as well. So, thank you very much.

24:14 Joumana: Thank you, Emily.

Outtro

24:14 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

How This PhD Student’s Budgeting Practice Enabled a Hawaiian Vacation

July 20, 2020 by Lourdes Bobbio

In this episode, Emily interviews Sean from Authentically Average, a fourth-year PhD student at a university in Houston, TX. Sean and his wife have very intentionally set up their budget to reflect their values, and now live and die by their budget. Their top three budget priorities are retirement savings, tithing, and travel. Sean’s budget helps him say “no” to certain areas of spending or opportunities for spending so that he can say “yes” to his travel aspirations. Sean describes a wellness vacation he and his wife took to Hawaii and why travel is such a high priority right now.

Links Mentioned

Find Sean on his blog, Authentically Average, and on Twitter, Instagram, and Pinterest
Find out more about Sean’s leadership coaching
Blog Post: Put Your Money In What You Value
Blog Post: Travaasa Hana Highlight Reel
Personal Finance for PhDs: Financial Coaching
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Subscribe to the mailing list

budgeting for travel on a grad student stipend

Teaser

00:00 Sean: If you aren’t budgeting yet, try to get there as soon as possible. Tracking expenses is great and it’s helpful to get you in the right mindset. But until you are, I think, front end saying this is the money I will have coming in, here are the places it’s going to go, you can’t really capture your values fully and where to invest unless you’re doing it upfront.

Introduction

00:26 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 12. And today my guest is Sean from Authentically Average, a fourth year PhD student at a university in Houston, Texas. Sean, and his wife live and die by their budget. And they have put a lot of effort into making sure that their budget reflects their values. Their top three budget priorities are retirement savings, timing, and travel. Sean describes a vacation they took to Hawaii and the ways they minimize spending in lower priority areas of their life so that they can spend more on vacations and other types of experiential living. By the way, we recorded this interview in September, 2019. Without further ado, here’s my interview with Sean from authentically average.

Will You Please Introduce Yourself Further?

01:18 Emily: I am delighted to have joined me on the podcast day Sean, from Authentically Average. Authentically Average is the name of his blog. And Sean, I’ll just let you introduce yourself to the listeners.

01:28 Sean: Sure. Thanks Emily for having me. My name is Sean. I run the authentically average blog. I characterize myself as a PhD student, husband, chef, pretty much all of the above kind of general life stuff, and that’s the focus of the blogs, every day kind of living. I’m a PhD student in the 3D printing space. I just started my fourth year, so I’m hopefully approaching the light at the end of the tunnel. I live in Houston with my wife, Allie. We have nine children, and by children, I mean plants and most of them are still alive. I’m doing a PhD in 3D printing space. I got my bachelor’s in chemical engineering before that, went directly to grad school, and still trying to figure out what I’m looking for afterwards. I’m thinking like medical device route. That’s a really interesting space for me and the community in Houston is really kind of exploding right now, so I’m really passionate about trying to see that grow.

02:36 Emily: Yeah. Sounds really good. And I understand that your wife is a graduate student as well.

02:41 Sean: She is. My wife is getting her MBA currently. She’s super woman. She’s working full time and getting her MBA on the weekends. A lot of school at our house.

02:50 Emily: Yeah, that’s a full plate. I guess you might not be the busiest one in the household.

02:57 Sean: I think it goes both ways. The nicety of being a PhD student, sometimes, is depending on your advisor, the work schedule is not necessarily lighter, but more flexible. I tend to do a lot more of the, I talked about this briefly on my blog, but like, I tend to do a lot more of the household activities, like the cleaning and cooking and stuff, just because I’m the one that has the time for it. It’s like not always super sexy to talk about sometimes, but if I don’t cook, we don’t eat. Somebody’s got to do it. But we like to share. I mean, she’s got a lot on her plate right now from a professional capacity, so I’m happy to take on those other roles.

Translating Life Values to Your Budget

03:45 Emily: Yeah. And I guess that’s one of those things that you can talk about on a blog that is named Authentically Average. You can talk about your everyday experiences. And money of course, is among those. You recently published a post that was kind of talking about your financial values, which is something that I love to talk about. It’s the foundational concept in personal finance, yet not one that gets a lot of airtime, I feel like, unfortunately, so why don’t you go ahead and tell us about how your values inform how you use your money.

04:20 Sean: Sure. Thank you for that. A couple of weeks ago, the focus of that post was, and we can talk about this in a little bit, but I had gone on a vacation and some people were like, “Oh wow, this is great” and some people were kind of like, “okay, great, you went on this really nice vacation, but your blog is authentically average, how do you reconcile those?” I started thinking about it. I said, okay, I should probably take a step back. The value focus, like you said, is I think central to personal finance and making “smart” decisions with money, but not one that’s talked about a lot. Primarily the goal for that was “here are my values, here’s what I try to invest my money in, and by extension a little bit my time.”

Retirement Savings

05:10 Sean: For me and my wife, we have three top tier values, and then beyond that, everything kind of falls into place. The first one is financial security, so saving for retirement, making sure that we are doing the things we need to do now so that we can live comfortably later. I think that sometimes people get really caught up in this concept of like, I’m doing what I gotta do right now, and that’s fine. And sometimes they are not saving for retirement because they feel like they can’t and that there’s a lot there to kind of go through. And sometimes because they simply don’t think about it. The first time that I kind of understood the concept of like retirement savings and compounding interest and all of that, I started to notice, Oh, wow, there’s a lot of ground that I can make up here in my late twenties and set the stage for how my thirties and forties are going to go. That’s the first piece. The second piece is —

06:14 Emily: Actually, I want to make one offshoot comment to that because of course, saving for retirement is something that I love to talk about. One point that I really like to make when I’m speaking with graduate students or other sort of people on the younger side, younger and lower income side of things, is that if you look at those compound interest calculators, the time is what matters. I mean the time and the amount of money you save, of course they both matter, but the time — you wouldn’t believe what a little bit of extra time will get you in terms of increased returns. And so I always say, whatever amount…like if you feel like you can’t save anything okay, maybe that’s true, but if you can even find like $10, $50 a month that you can start putting away for that purpose, it’s unbelievable what a huge difference that makes on the back end of things, just to have those few extra years. Don’t be discouraged if you can’t save like a thousand dollars a month. That is a very large and unreasonable amount of money for a graduate student level of income, but a smaller amount of money makes a really, really big difference too.

07:18 Sean: Yeah, definitely. And just to kind of keep going on that thread, the stereotypical thing that people give of why you should start investing as early as possible is they talk about if you invest for 10 years from 20 to 30, the amount of money that you make during that time, by the time you retire, will outpace starting from 30 and moving forward. You can’t possibly catch up. Just like you said, sometimes I think people get like, Oh no, I can’t do that much., and that’s okay, but if you can do something, that’s great.

07:55 Emily: Yeah. I think one of the really difficult things that people run into early on is that they’re dealing with debt loads and they might have to clear those first before they can even touch the investing for retirement side of things. But since you’re already starting to invest retirement, I take it you’re either debt-free or you have debt that does not concern you.

08:14 Sean: We are debt free. I would say that my wife and I are very blessed, lucky, strategic, however you want to look at it, I guess. We paid our last debt off last year. I had an outstanding car note that I paid off. We again are very fortunate, I think, to be able to cash flow her MBA. That’s something that I think is a challenge, especially in higher education. I know that the finances for PhDs vary pretty drastically depending on field. In my PhD program, it’s tuition free, and we collect a stipend for working here. When I think about my PhD, I think about it more as job than I think an education of being a student. And I think collecting a paycheck helps me keep that association clear. So yeah, we are debt free. We are investing some. I’d like to be investing more, but also, you know, like you just said, there are different things that we’re trying to take care of and trying to keep all the balls in the air at the same time.

09:23 Sean: Yeah, definitely. Okay. So that is one of your top priorities, is saving for retirement. What’s the next one?

Experiential Living

09:30 Sean: So there’s two more. The second one would be, we have a really big focus on, I call it experiential living, but in the current case it’s travel. I joked about having plant children. Allie and I don’t have any kids yet. We have plans to have kids, but we just don’t have them right now. We have this focus on like, if there are things that would either be impossible or significantly more difficult to do when we have kids and when we’re older, we’d love to do them now. That post that you mentioned earlier about our travel, we went to Maui for a week over the summer. That was born out of like, “Hey, this is a great time to just go and spend a week in Hawaii and just, you know, live it up.” I mean, responsibly, but this is great. After saving for retirement, our next focus is, Hey, we want to have a good time, and for us having a good time looks like going out and exploring.

10:33 Emily: So I was really curious about this term, you just used — experiential living. Right now you said it looks like travel. What are the other things that might fall under that category for you?

10:42 Sean: I guess one thing is I know that some people, their focus is they want this nice X or Y. I think Allie and I, we would much rather save up money for a few pay periods and go to a nice concert or go see a play or a musical or something than buy a new TV or buy something else for the house. We do live in a nice apartment and we’ve decorated and all of that, but we would much rather do something that’s I think a little bit more like out and active. There’s not anything good or bad about that, or any other way. That’s just our preference.

11:24 Emily: Okay. So is this basically boiling down to the personal finance experiences versus stuff debate where everyone has kind of come down to the side of experiences? Is that what I’m hearing

11:36 Sean: Somewhat, yeah. I think that the stuff thing, depending on what the stuff is, is very valuable, in terms of having stuff and, and that’s all fine. But also I know just from, we did the like whole KonMari thing a couple months ago and realized, Oh, I have a lot of stuff. It was nice at the time, but in hindsight I would rather, I think have spent the money that I spent on that stuff on doing something.

12:06 Emily: Yeah. I actually heard this really great thing on a podcast recently. It was on the ChooseFI podcast and the, one of the people that they were interviewing, I can’t remember who the guest was said, something like he strives to have one memorable moment per month, some new thing that he’s never tried before. Travel would certainly fall under that, but it could be like a cooking class or like just doing something different out of your routine, once per month, he has that goal to make a memory, basically, with his wife. And actually it can be the same moment or they can have two different moments, one that each one prefers more per month, but that was his goal. And I thought that was amazing, and I really want to implement it in my life now, because I do feel like months can go by where it’s like, yeah, what happened that was great or notable or important, I’m not even sure.

12:59 Emily: Okay. So experiences, concerts, travel, that kind of stuff. And so right now your focus is doing the things that you would have a harder time doing once you have children. And I will have to say that when I read your post about your vacation, I was like, how do I get rid of my kids for a week, so I can do this. It sounds awesome. What is your third top priority?

Tithing

13:20 Sean: Again, so saving for retirement, travel and experiential living. The third one, honestly, is giving back and tithing. My wife and I tithe every pay period. I know sometimes as graduate students that can seem like a tumultous topic. We already do not make all that much money —

13:45 Emily: Actually, Sean, let’s pause there because some of the listeners might not be familiar with the term “tithe”, could you define that?

13:51 Sean: Sure. In a traditional tithe you would be giving, donating a 10th or some amounts. I mean, tithe literally is “10th”, but giving some amount back to your church family. My wife and I are Catholic. We give back to, we split between the church that we currently go to and then we also support a couple of students through the FOCUS program. They do ministry on college campuses throughout the United States. Good clarification. We give back to our church. For us, we do a traditional 10% tithe. That’s just, I think how we have decided that that’s where we want to put that value at. Does that kind of answer that?

14:39 Emily: Yeah. It’s not something that’s come up on the podcast hardly at all, but we also tithe and have for throughout graduate school, a long time. And it definitely, while I knew other graduate students from our church who also did that practice, it wasn’t something that I felt like was really widespread or something that graduate students could really get a handle on that large percentage. The 10% is a very, very large chunk of your income, but, I feel like tithing for me in terms of like the budget actually pushed us towards what I call percentage-based budgeting. If a 10th of your gross income is going towards that, we also did a certain percentage, it changed over time, starting at 10%, for like saving for retirement and then now we’re up to like 20%, so we’ve increased that over time. And I’m trying to remember, well, taxes are also sort of, not exactly a percentage, but you can convert them to a percentage of your income, so for us, it was like these different goals scale with the amount of money that we make, which I really liked that there was like this flexible percentage. The percentage is fixed, but the amount of money is changes depending on what your income is.

15:51 Emily: I really liked that way of thinking about budgeting, that you should have percentages going towards different things. And it actually goes pretty well with the balanced money formula. I don’t know if you’re familiar with this at all. It basically says that you should keep your necessary expenses below half of your take home pay. And I really liked that as well because, I think for graduate students, there’s this phrase that Dave Ramsey uses that I really like, not for graduate schools, but for people in general, which is something like “act your wage”, something along those lines. I think this percentage-based budgeting, I think, is really appropriate for people who have incomes that they expect to change a lot, like graduate school. Hopefully it’ll be going up alive later on, but if you have those percentages it can keep you really grounded and something can be consistent through those fluctuations in income basically.

16:44 Sean: Right. Definitely. Yeah. We do a similar thing in terms of trying to make sure that we’re doing a percentage breakdown on our budget. One small detail, we do typically everything on net pay, and then also when we get a tax return, I mean, ideally our tax return is zero, right. But if we do get a tax return, then we’ll do the same thing on whatever the return is. But I think it basically shakes out to be the same thing. I have found that to be really helpful. I feel like it helps us recognize where are we essentially overspending in our lives, and conversely, where could we be giving more attention, certainly.

Living and Dying By Your Budget

17:32 Emily: A phrase that I read in your recent post was we live and die by our budget, and that really stuck out because you talked about, I guess, that your budget is a plan for how you’re going to spend your money. And if opportunities arise after you’ve made the, you oftentimes say no to those opportunities, you stick with your original plan. I just wanted to ask you about that. How did you guys put together your budget, and how do you find the fortitude to stick with it?

18:02 Sean: I mentioned this very briefly before, disclaimer, this is not an ad, wish it was an ad, but it’s not, my wife and I use it’s called YNAB, or You Need A Budget. It’s a budgeting tool online that you use, to keep everything in order. One of the, I think, nice things about living and dying by your budget is it tells you how much money you’ve budgeted and allocated to every, whatever category you want to put it in. And if you overspend, the color of the money bar goes from a nice, pretty green to a very angry red color. And that’s just like, I think, maybe potentially a little bit of an immature way, but it’s really reinforcing for me of like, Hey, you made your money angry because you spent more than you allocated.

18:56 Sean: I joke about that sometimes living and dying by our budget. Really, it’s taken a lot of discipline to get to the point that we are now and give yourself grace and patience to get there as you’re working through things and things come up, of course. But we’re in a space right now where we have a set of goals, like I talked about, and a set of values. Sometimes things come up that don’t align with those, or potentially detract a little bit from them and we have to make a mature decision on like, Hey, is it worth us to do this? So one of the things I talk about in that post is, a friend of ours came to us and said, Hey, we want to go to this football game, last minute. Allie and I are huge college football fans, I went to a big football school for undergrad. Great, right, in terms of an interest standpoint, I think that’s great.

19:55 Sean: We started to look at the finances and said man, this is going to be like a thousand dollar trip just out of the blue. And I think at the beginning of the year, had we started the year and said, Hey, we want this to come up and we want to plan for this — great, okay, we’ll budget for it. But a few weeks out, we had to say, no. I mean, first of all, based on our budget, we literally did not have the money to do it without taking money from other standpoints. I really struggle with the idea of pulling money that we had saved for retirement out of retirement to go to a football game. But more than that, I think it’s sometimes difficult when you…This is always a challenge when you have very diverse friend groups is like, everybody has their own different set of values. And I want those people to understand, like friends of mine, that sometimes I to turn things down. Like, hey, I love you guys. You’re great, I appreciate everything about you, and I appreciate our relationship, but just understand that me not wanting to come out, or me not wanting to do this last minute, isn’t a reflection on like our relationship and is a reflection on I just don’t have the money for it according to what my wife and I decided it was important to us.

21:11 Emily: Yeah. There’s another blogger, content creator in the personal finance space, Paula and her brand is Afford Anything. And so her tagline is kind of like, “you can afford anything, but you can’t afford everything.” She’s really, like you were just saying, you have to get really clear about what’s important to you because you want to be able to say yes to the things that are at the top of your list. And that does mean saying no to the things that fall further down and that’s hard. But you can’t say yes to everything. If you say yes to everything, you’ll end up saying no to the things that are most important to you, if you accept every opportunity that comes your way.

21:52 Emily: I have to say though, your story reminded me of when I was in graduate school. I went to Duke and Duke won two championships while I was there 2010 and 2015. 2015 was technically after I defended, but I was still enrolled as a student and I still had tickets to games and stuff. So anyway, in 2010, of course you never know, going in to the tournament, how it’s going to turn out. And at the last second, we had an opportunity to go to the Final Four. Duke went, and my husband and I had the opportunity to attend. They were giving away tickets for students. It was actually free. The tickets were free. All you had to do was get there and stay there. And we really deliberated, and I don’t know that it came down to mostly a financial decision. There were other time reasons why we decided not to go. We had already traveled actually the previous year to see them play and they hadn’t advanced, and so we already had like, kind of that disappointment. So we decided against going, and of course in 2010, they ended up winning, same story in 2015. That’s just one of my major regrets from when I was in graduate school, because I was a fan, that I let anything stand in the way of like attending those events. So I do think that my main regrets from graduate school, in terms of my personal life were things that I didn’t do that money played into why I didn’t do it. It probably wasn’t the whole situation, but yeah, there’s two times I can point to an opportunity came my way and I said no to it, a very reasoned decision, and I really think that was the wrong way to go.

23:27 Sean: Yeah. And sometimes I think that that’s a struggle because we’ve done a couple of things too, where it’s like, Oh, this is such a good opportunity to do this thing. Sometimes, and I say this with a mountain of salt, occasionally we will not live and die by the budget. And the only way that that works is to have intentionally over allocated somewhere else, so that the total amount of money is still there, like the money to cover a different decision is still there. It’s not like we’re living outside of our means, but we do give ourselves a little bit of grace. Sometimes I’m like, this is a really big deal. That trip to Hawaii was pretty much entirely planned for, but there were a couple of things once we got there, that was like, you know what, we’re here, I think we’ll regret this thing if we don’t do it, let’s do it and we’ll figure it out.

24:27 Emily: Yeah. I think that strategy of over saving or just saving for things that you don’t know quite what you’re saving for — at some point a friend will invite you to do something, at some point you’ll have an opportunity to come your way that you’ll want to say yes to at the last second. And I think the way that most people who are not on top of their finances would handle it would just say, okay, I’m going to put it on a credit card, I’ll worry about how to pay for it later, which is not a great strategy. But if you save in advance and you’re just not totally sure what that money is going to go for, but you’re pretty sure something’s going to pique your fancy along the way then you can be able to say yes again to those opportunities, knowing that it’s still within everything you’ve allocated for an advance,

25:08 Sean: Just a small insight, we have a category in our budget called “stuff we forgot to budget for”, and we put a small amount, however much, in there every pay period just because inevitably something comes up. Now, if it’s an emergency, we have separate money set aside. You mentioned Dave Ramsey earlier — we have a separate emergency fund set aside for that kind of thing. This is more like your friend asked you to do something, you have an opportunity to go watch Duke win a championship, whatever.

25:44 Emily: Yeah, exactly.

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25:48 Emily: Hey, social distancers, Emily here. I hope you’re doing okay. It took a few weeks, but I think I have my bearings about me in my new normal. There is a lot of uncertainty and fear right now about our public and personal health and our economy. I would like to help you feel more secure in your personal finances and plan and prepare for whatever financial future may come. You can schedule a free 15 minute call with me at PFforPhDs.com/coaching to determine if financial coaching with me is right for you at this time, I hope you will reach out, if only to speak with someone new for a few minutes. Take care. Now back to our interview.

Frugal Tips for Experiential Living

26:34 Emily: So I’m wondering if you have any ways, any sort of frugal things that you’ve done in your life that help you have these experiences that you want have. Either minimizing the money that it takes to do those things or minimizing other areas in your budget so that you can free up more money for your top priority. Are there any like really good strategies you use in that vein?

26:58 Sean: I think the stereotypical student might fight this a little bit. I’ll start with the like ways of like daily life first. We cook 99% of our meals. That’s just the way it is. For me that’s two reasons. That post that I wrote is primarily about investing your money in what you value, but there’s also a small segment on investing your time in what you value and no question about it, cooking for yourself takes it takes time. It costs money to go buy groceries and it takes time to cook those meals. I think it’s easier to go out to eat, from a time perspective or pick up quick ready meals and that kind of thing, but from a time perspective, like at that point, I’m investing in my health. It’s almost exclusively healthier for you to cook for yourself than it is to go out to eat, and it’s almost exclusively less expensive to cook for yourself too. In that post I talk about, Allie and I have been discussing potentially giving ourselves a little bit more room on this and kind of grace on this for when we want to go out. We don’t go out to eat ever. Like once every couple of weeks and the reasoning for that is, whatever amount of money I would spend on going out to eat a couple nights a week is better suited towards saving for Hawaii, or, we’ve been married for just over a year, for our honeymoon we went to Italy. We spent two weeks there. That’s not an inconsequential trip size, and the only way that that works is you’re making cuts, so to speak, elsewhere in your life.

28:37 Sean: The other thing for us has been we’re busy people. She’s in school part time, well, no she’s in school full time and working full time, and I’m working full time and doing things at home. And so it’s really important for us to invest in our marriage. Regular date nights are important, but it doesn’t always have to be this five star restaurant. Those types of things are nicem, but I think I also get 90 plus percent of the relationship building component from that type of date from going to somewhere kind of casual, hole-in-the-wall, or going on an experience. We talked about this this morning, actually. It’s been a couple weeks since we had a formal date, and one thing that we’re going to do next week is we’re going clothes shopping and we’re going to Marshall’s-hop. There’s like seven of them within a 10 mile radius of us and we’re just gonna — we found that when we hit, we really hit there, but they’re very hit and miss, but there’s a lot of them, so we can kind of hop between and see. I think that that might sound somewhat silly to some people, but for us, we like investing in clothes that makes us feel good and feel professional, but also not breaking the bank and this “adventuring”, so to speak, and helping each other try things on — that I think is a fun relationship building activity that literally the travel aspect only costs the gas, and then we would have budgeted for the clothes. There’s that aspect on like life-hacking.

30:11 Sean: From a travel hacking standpoint, honestly, it’s just time. You have to decide how much your time is worth, but we always look for great deals on hotels and flights. Google has a flight tracker that you can use. It’ll send you alerts when your flights fall. I do the same thing for a lot of the hotels. A lot of third party websites are great. For Italy, actually this, this is a great story. For Italy, the flights were going to be like, I don’t remember like $1800 a piece or something, like a lot of money. We went in May, so like the beginning of high season, I get it. Then, the day before I was going to buy, because they weren’t falling, I said, “Oh, let me just look on another website.” I went on, I think it was Priceline or one of the third party website and it was like half that, together. I was like, “Yes, I’m absolutely doing this. We’ll take a weird layover to save half the cost. You could write a book about that, but that’s the things that I think of.

31:15 Emily: Yeah. I think when your goal is to have experiences and make memories and so forth, I guess there’s been research on this that like the anticipation of the experience is a big component of your satisfaction with it. And so taking the time to plan, and do whatever travel hacking and price comparisons and all of that, it actually enhances like your ultimate experience when you put a lot of effort into it upfront. I don’t know, to me it’s a little bit counter-intuitive, but yeah. So pursuing these travel hacking strategies, um, in addition to saving money can actually make you feel better about the whole thing. I guess what I was thinking about when you’re talking, especially about like the food and not spending so much money on eating out and so forth. That was a strategy that we used also. We cut out basically all kinds of convenience food, in favor of cooking for ourselves. And that is like a little bit of a sacrifice because yeah, you have to plan it a little bit more and all that, that goes into cooking. But for us, like for you, the money that we were not spending on convenience eating went towards our travel fund. And so when we knew exactly where the money that we would’ve spent on one thing was going to go, if we didn’t actually carry through with the eating out or whatever it was, that makes the whole thing a lot more palatable. It makes the whole thing go down easier if you know, okay, yeah, I’m sacrificing a little bit in this moment right here, but that is going to enable something really fantastic later on.

32:43 Sean: Right, right, right, right.

32:45 Emily: Any other frugal strategies around those things, either minimizing expenses on things you really want to do or cutting expenses and things that are not such a high priority?

32:54 Sean: I think the only additional thing that I’ll add is — it’s especially common, I think because like I, as a PhD understand or PhD student, rather, my time is limited. I think that my time is a little bit larger than some other people’s because I just try to make a point of, I’m only working X hours this week. Like this is my job and I’m putting this much into it. And that sometimes works for people and sometimes doesn’t. But I see a lot of, because we have such little free time, convenience buying and convenience spending somewhat to kind of what you, you mentioned earlier. And I think in some ways you do have to give yourself a little bit of that because the amount that you stress over not making convenient spend is also a use of resources, maybe not for the best. Just watch it. I always go back to “live and die by the budget”. Until I had a budget that I like actually did religiously every week and every pay period, I didn’t have a clue. And I started to look at my spending habits and said, man, I didn’t realize I was spending this much on snacks, or this much on cable and this other thing that I don’t even use. It just, it never occurred to me because I was always tracking my spending after the fact that never really looking forward any further than the next couple of weeks.

34:20 Emily: Yeah. I mean, tracking your spending is an amazing thing to do as like a first step. It actually does start to change your behavior in many cases. But if you’re just tracking it as a passive activity and it’s not actually balancing, okay, well, where do I want my money to go? And do I prefer it here? Or do I prefer it there? That’s what you have to do with your budgeting. They’re both really useful, um, activities, but I guess once the shock of the tracking wears off and you make whatever sort of subconscious changes you’re going to want to make from that, you need to start budgeting to get that further of value add from the activity.

When Budgeting Pays Off: Sean’s Trip to Hawaii

34:54 Emily: So we’ve teased this enough. Tell us about your trip to Hawaii, that made me so jealous.

35:01 Sean: We went to Maui specifically. We went to Hana, which is a very small town on the East coast of Maui. Allie was really into this idea of like a wellness retreat. And I did, I think the stereotypical husband thing that I hate and I was like, what are you talking about? No. And then I started to look into it. I was like, Oh, this actually sounds pretty awesome. So I was like, okay, yeah, let’s go for it, sure. There was a resort there called the Travaasa, just right in the town. Hana is not really the type of place that you go to and stay at unless you go to this hotel. There’s not a city center. It’s people that live there and this hotel and that’s it.

35:45 Sean: So we went and we said, okay, you know, let’s do it. This sounds great, let’s go. The only thing I’ll say about traveling to Hana is getting to the airports, great, but there’s a very famous road there called the road to Hana and it’s like 90 degree turns the whole way. It’s 40 or 50 miles and it took us three hours. You’re crawling and it’s crazy. But scenery is amazing and beautiful. The little food stops on the way are great. And then once we actually got there, it was just like paradise. It’s still the States, so there is cell service, but there’s no wifi available. The cell service is kind of shaky, we turned our work phones off, and just lived, and it was awesome.

36:34 Sean: There’s there was a lot to do there. They have a spa on site. I’m not a huge massage/spa person, but I was the most relaxed I’ve ever been in my whole life that week. The food was awesome. There was waterfront yoga and like paddle boarding and horseback riding and just like all of this stuff that we don’t ever do in our daily lives. It was really awesome to just for once I think go and just exist. My wife and I, in particular, but I think more generally PhD students and other graduate students, you’re just going nonstop all the time, and there’s not really any moment where you kind of just sit back and you’re like, “Hey, I’m not thinking about anything about tomorrow, except whether I want to do this cool thing or that cool thing.” I don’t know, I think that was a nice refresher for us.

37:34 Sean: Everything about it was super chill. The only not super chill thing about it is, there was actually a wildfire on the West side of the island while we were there. We went back to catch our flight and all the planes are delayed because they’re trying to get people that live there, like out of danger. Things are, I don’t want to say fine because you know, wildfires are extremely dangerous and there was a lot of damage there. People are generally fine. There were a lot of people that got helped. Everybody was safe. I don’t recall seeing any reports of fatalities, which is incredible. But for us, we’re literally there with our bags in a very small airport on Maui and we’re just like, “all right, guess we’ll chill.” I think a small price to pay, obviously relative to potentially losing your home in a fire, of course. But for us, nobody told us anything. Our airline didn’t give us any updates. We just got there and they were like, we’ll see what happens. Like I said, there’s a much longer post about it with pictures that are describing it way better than I can tell it, but highly recommend. Would definitely do it again. It was great.

38:54 Emily: What really struck me about the, your description of this vacation was that I didn’t do anything like that when I was in graduate school, except for my honeymoon. The honeymoon was relaxing. I mentioned that we saved a lot for travel before, but it was all obligation travel, all of it. We were usually traveling domestically to either see our families, or go to weddings, or attend reunions. Other stuff where somebody else was dictating the schedule, the timing, the place, all of that. I’m not trying to say that was a…We wanted to do it. We wanted to do all that obligation travel. Going to weddings is really important to us. That’s a high value for us, but it just kind of squeezed out any other possibility of taking a vacation that was just for us and just for the purposes of recuperation. There were always other purposes for the trips — seeing certain people, or witnessing certain events. Looking back on it, I did not give myself a proper amount of rest, throughout that process. And it’s still something that I struggle with, so I’m really glad that you guys, made it a priority, made the time for it. Hopefully you’ll do it a few more, maybe not the same vacation, but something similar, a few more times during graduate school so you guys can finish strong and finish healthy. So that sounds amazing, and yeah, we can point people to the post from the show notes.

Financial Advice for Early Career PhDs

40:23 Emily: As we finish up here Sean standard question that I ask all my guests — what is your best financial advice for another early career PhD? And that could be something related to what we’ve talked about today, or it could be something entirely different.

40:36 Sean: Sure. Just because we’re towards the end, I’ll give two quick ones, because I think they’re both very important. The first one we’ve touched about a few times is if you aren’t budgeting yet, try to get there as soon as possible. Like you said, tracking expenses is great and it’s helpful to get you in the right mindset. But until you are, I think front end, saying this is the money I will have coming in, here are the places it’s going to go, you can’t really capture your values fully in like where to invest unless you’re doing it on the front end. So that’s the first thing that I recommend.

41:12 Sean: The other thing is, depending on your program, especially for PhD students on grants and fellowships, so kind of take that with a very specific niche market in mind, sometimes you will be allowed to pursue other things outside of your degree and have side jobs and side hustles. I know, recently talked to another student, here in Houston who, I think was baby-sitting or dog-sitting. Am I remembering that right?

41:39 Emily: Pet-sitting.

41:39 Sean: Pet-sitting, right. And like, okay, great. So she had a side hustle and that’s awesome. Sometimes you can and look around for what things are available because the extra cash is really useful. Sometimes you can’t, on paper. They expect you to be in the lab, and if you have time that you could be giving to another job, you should be spending it in the lab. And I think my recommendation for that is more of a career-related one. You’re a graduate student and you’re contributing to the academic space. That’s beneficial to the field. It should also be beneficial to you, and so I think that I always recommend that students take opportunities that they find, when they become available, in stride, because it may be a value add to their career or to their finances, that isn’t necessarily a value add to their academic education. And that’s okay. I think sometimes we get this feeling of guilt of like, I’m not working hard enough in the lab. And if that’s true, okay, work harder in the lab, but if it’s not true and you can be doing other things that are beneficial for you, it’s okay to do things outside of lab. And I really struggled with that when I first got to graduate school, and I see that as a common struggle now.

42:55 Emily: Yeah, I guess, so I’ve been reading a lot about like time management, recently, to work on my own time management practices, and I guess one thing I’ve learned, I’ve been reading and listening to a lot of Laura Vanderkam’s stuff, and so she references research that’s on…First of all, that people don’t work as much as they say they do. Like people who are reporting that they work 80 hour weeks, almost always are never working more than like 55 hours a week. They may be at work for 80 hours a week, and that’s not a good return on your investment of time, is just to be around more. You should be resting or doing other things instead of that. But another part of that is that there’s sort of an optimal amount of work that you can put into something in a given week, and once you start going beyond that, your returns for the amount of time you’re putting in decrease and decrease and decrease. After 40 or 45 hours, you may be putting in more time, but you’re not necessarily getting that much more of it. It’s kind of this like 80/20 principle.

43:51 Sean: Yup, definitely.

43:52 Emily: Yeah. So I’ll just say like on that time management component, that it can really be beneficial for you if you don’t consider research to be like a black hole, you just throw more and more and more and more time into, that’s not necessarily the best way to approach it, but rather more like managing your energy and managing your time as well. And if that gives you time to pivot to a side hustle or hobby or, you know, exercise or whatever it is you want to do, that’s probably going to end up giving you more energy rather than taking away from your work. Do you know what I mean?

44:22 Sean: Right, definitely.

44:22 Emily: Just like taking vacations, you don’t do it necessarily for the reason of being more productive, but you probably are more productive when you come back from it.

44:29 Sean: Absolutely.

Where to Find Sean Online

44:33 Emily: Where can people find you if they want to read your blog or follow up with you elsewhere?

44:37 Sean: Sure. I’ll send these over so you can put them on the show notes as well. The name of the blog is Authentically Average. It’s authenticallyaverage.com. No hyphens or spaces. On Instagram and Pinterest I’m @AuthenticallyAverage, one word. Twitter was a little weird and I have @AuthenticAvg. That’s where you can find all of the different ways to connect with me. The two posts that we talked about today are up as pins on Pinterest. I can send those over and people can look at them if they want to. I love using Pinterest, just as a side note, I think it’s been really fun. If you are in the 3D-printing space and see me at an academic conference, come and say hey. I’m not shy. If you happen to recognize me, I’m happy to talk and all of that.

43:33 Emily: Yeah. Well, thank you so much for coming on the podcast and having this great discussion with me, Sean.

45:37 Sean: Yeah. Thank you for having me

Outtro

45:39 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.