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Even in NYC, This Graduate Student Maintains a Super Frugal Lifestyle

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In this episode, Emily interviews Athena Pierquet, a rising second-year graduate student at New York University in English. In her first year as a PhD student, Athena lived on her $28,000 per year fellowship and save all of her smaller income sources, but her finances are facing a new challenge as she transitions out of subsidized university housing. Despite living in Manhattan, Athena maintains a very frugal lifestyle, minimizing her spending on groceries, transportation, entertainment, and recreation.

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NYC frugal grad student

0:00 Introduction

1:15 Q1: Please Introduce Yourself

Athena is a rising second year PhD student in the Department of English at New York University. She lives in the Manhattan neighborhood Stuyvesant, or Stuy Town. Her overall income was $38,000 from several university sources. Most of her income comes from the MacCracken Fellowship, provided for all NYU PhD students, which was $27,526 this past year. She received a housing stipend of $5,500. Several scholarships and grants made up $4,000 of her income, and short term research contracts made up $1,000 to $2,000.

2:20 How is your income reported for taxes?

For taxes, Athena has to self report the MacCracken Fellowship and her other scholarships to the federal government. The university provides her a 1098-T form for taxes. Her short term research contracts are reported on W-2, but these are a minor part of her income.

4:08 Q2: What are your five largest expenses each month?

Athena’s five largest expenses are rent, food, books and supplies, incidentals, and going out for fun.

4:28 #1 Expense: Rent

Athena pays $1,100 per month for rent. This cost includes all utilities, except for internet. She shares a two-bedroom apartment in Stuy Town with another first year NYU PhD student. The market rate for her apartment is $3,500 per month, but since the apartment is in a university housing complex, the cost is subsidized by the university. However, university housing is only available to first year PhD students, so Athena is searching for new housing in Manhattan.

For her new housing search, Athena’s budget is $1,200 to $1,300 for a room in a three or four bedroom apartment. NYU will continue to provide a housing stipend of $5,500 during her second year, but in subsequent years the housing stipend will be replaced with income from teaching classes. In general, her income does not increase to cover the new housing costs.

Athena saved much of her income from her first year in anticipation of her move into the cut throat Manhattan housing market. To get an apartment in Manhattan, she needs $3,000 to $5,000 available. Securing an apartment requires payment deposits for first month’s rent and last month’s rent.

9:57 #2 Expense: Food

Athena’s food budget is $100 per week. This category broadly covers anything she purchases to eat. She includes groceries, coffee shops, restaurants, and take-out in her weekly food budget. She plans out her meals and makes grocery shopping a priority. She makes almost all of her food at home and describes some of her meals, such as fully loaded oatmeal and hearty, entree salads. Athena eats at restaurants only two or three times each semester. She has several frugal tips for going to restaurants in Manhattan and getting free food from NYU events.

20:30 #3 Expense: Books and Course Supplies

Athena’s spending on books and course supplies is about $300 per semester. Her expenses for books and course supplies are considered non-taxable income. As a literature student, she needs many books for her work. She estimates that if she bought every book she needed or wanted, she would be spending thousands of dollars. She frequently borrows from the library, gets used books, and finds resources online. Nonetheless, this was tricky to budget for because of different needs for different courses.

24:29 #4 Expense: Incidentals

Athena budgeted for unexpected expenses, which she describes as the impulsive book purchase, miscellaneous fees, and spontaneous entertainment. Since she set her budget week by week, she intentionally put $45 each week for incidentals. Typically, she only had one or two unexpected expenses each month. The miscellaneous category is a place to lose money if you’re not careful, in Athena’s opinion.

27:29 Problems budgeting for taxes while on a fellowship

Athena later learned that the $45 per week that she budgeted for incidentals was really what she needed for taxes. When Athena began first year of graduate school, she didn’t know how much to set aside for taxes. NYU does not withhold taxes for U.S. citizens in their PhD programs, so it was Athena’s responsibility to estimate how much she might owe in taxes and plan for tax season. This is a challenge faced by many PhD students receiving fellowship funding.

Further reading: The Complete Guide to Quarterly Estimated Tax for Fellowship Recipients

30:47 #5 Expense: Going Out for Fun

Athena budgeted $20 per week for going out, and spent $280 over one semester on happy hours and other social events. She went to bars with friends about once or twice a month for happy hour, where she would socialize for two or three hours. In her budget, Athena distinguishes drinks at a bar or restaurant from purchasing a bottle of wine or six pack from the store. She notes that at NYU, she has plenty of opportunities to enjoy free drinks and free food at events sponsored by the institution.

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34:36 Q3: What are you currently doing to further your financial goals?

Athena tries her best to live within her means. She only lives off of the MacCracken fellowship, about $28,000, which is her only guaranteed income source for 5 years. She puts her other fluctuating funding sources into savings and does not create her budget from it. Athena has a healthy cash savings account, and every now and then she moves it into an investment account with Vanguard for retirement and index funds that could be used for major purchases in 20 to 40 years. She needs her cash savings for her new apartment, new furniture, and irregular expenses.

38:19 Q4: What don’t you spend money on that might surprise people?

Athena doesn’t spend money on transportation. If it’s less than an hour walk, she will walk to the distance. The $2.75 to take the subway or bus is better spend on coffee, in her opinion. She won’t take cabs or ride share unless she absolutely has to.

She makes use of public spaces with internet access and working spaces, like the New York Public Library. Some people pay memberships to writers’ rooms and co-working spaces, or even a desk at home, but Athena has a list of go-to public spaces to work remotely.

Additionally, Athena doesn’t have a gym membership, and she won’t go to exercise classes. She avoids shopping and costly activities. Though she’s surrounded by high income earners in Manhattan, she reminds herself that she has more important priorities than the high expense lifestyle.

43:56 Q5: What are you happy with in your spending and what would you like to change?

Athena would like to change how she tracks her cash spending. Since some places are cash only, and some only take cards, Athena finds it tricky to document all of her expenditures.

She’s happy with how little she spends on exercise activities. Athena is a long distance runner, so she makes use of the long trails and paths throughout New York City. She has a deeply discounted New York Roadrunners membership, and recommends that others look into student discounts.

47:36 Q6: What is your best financial advice for a new PhD student at NYU who is budget-conscious?

First, Athena says that budgeting and spending conservatively is absolutely a must. Many daily necessities, like laundry and groceries, are more expensive than you might expect.

Second, she says do not buy in bulk! Buying only what you need will save money in the long term, as well as save space in small apartments.

51:17 Find out your summer funding situation

Athena recommends being aware of how you will be funded through the summer. In some cases, you will receive payments for only the nine months of the academic year. Some refer to the first summer after graduate school as the “summer of poverty,” so think about this when you get your offer letter. You may need to save during the academic year to get through the summer, or find summer work. Make plans at the beginning of the academic year.

Further reading: How to Financially Navigate an Summer

52:49 Q7: Would you like to make any other comments on what it takes to get by where you live on what you earn?

Athena says you need to be honest about your financial situation. Seeing wealth around you in NYC does not mean you need to spend like that too, or emulate what you see people doing around you. Athena takes the initiative to suggest more frugal activities, like going to coffee or happy hour instead of more costly brunches and dinners.

Athena does an end of the semester assessment of her budget that she finds highly valuable. She evaluates how she spent her money and considers how she can do better the next semester. It can be difficult to anticipate how expensive things will be ahead of time, so she has gone through a process to try things out and reassess her expenses.

58:00 Conclusion

The Complete Guide to a Side Hustle for a PhD Student or Postdoc

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It’s no secret that PhD students and postdocs are paid a meager salary, sometimes not even as much as the local living wage. While a fraction of graduate students have probably always pursued side income to supplement their stipends/salaries, e.g., through part-time jobs, moonlighting, or odd jobs, only in recent years has it become easy to make money online or make money from home. Enter the ‘side hustle.’ The term exploded in popularity during the Great Recession along with the ‘gig economy.’ The flexibility of modern side hustles has made it possible for students and postdocs to fit their income-generating activities around their busy research schedules.

This article details why a graduate student or postdoc would want to side hustle, whether it’s allowed by their university/institution, examples of real side hustles held by PhDs, how to best manage the side income, and advice from PhDs with successful side hustles.

side hustle PhD postdoc

Motivations for Side Hustling

The motivations for having a side hustle during your PhD training are to make up for the deficiencies in what the university provides: money (primarily) and career-advancing experiences.

Increase Income

Pursuing your PhD during graduate school or gaining additional training as a postdoc is supposed to be your full-time (or more) pursuit. Research is life, right? Unfortunately, the positions don’t pay anywhere near as well as a regular full-time job.

The best case scenario for a PhD student or postdoc is that you will be paid enough to support yourself without making extreme lifestyle sacrifices, i.e., living in a van. However, there are plenty of programs and universities that do not even meet that low bar for a single person with no dependents. For a graduate student or postdoc with a dependent spouse (e.g., of an international trainee) or children, the low stipend or salary is almost certainly inadequate.

Graduate students almost always turn first to cutting their living expenses to be able to live within their means. They know that they are supposed to devote the lion’s share of their weekly energy to their coursework, research, and teaching. But when their backs are against the wall, some make money on the side to avoid going (further) into debt.

Career-Advancing Experiences

Some graduate students and postdocs are motivated to side hustle not by lack of income but rather lack of practical career preparation.

What careers does a PhD or postdoc prepare you for? These days, the vast majority of PhDs are not hired into tenure-track faculty positions. (Time to stop calling the jobs most PhDs get “alternative”, right?) Some universities have acknowledged this and put in place programming to help PhDs transition out of academia (my alma mater, Duke University, and in particular the Pratt School of Engineering, is innovating in this area), while others are still catching up.

Of course, PhDs have plenty of transferable skills that can be put to use in a wide variety of careers, but landing a job is still challenging.

Further reading: How My PhD Prepared Me for Entrepreneurship

A judiciously chosen side hustle (or even volunteer work) can help a PhD build out her resumé/CV and network to stand out from the other PhD applicants. A side hustle can teach you new skills, give you an opportunity to demonstrate the skills you already possess, and introduce you to professionals who can further your career journey.

Video Series: How to Increase Your Income as a Graduate Student

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Are Side Hustles Allowed by Your PhD Program or Postdoc Position?

While some academics may take the view that side hustling distracts from classes, teaching, research, etc., for some people a side hustle is the main factor that enables them to stay in their graduate programs or postdoc positions. They side hustle because they want to keep doing PhD-level research; otherwise, they can just leave and earn more money elsewhere! If conceived and managed properly, a side hustle is not a distraction from the student or postdoc’s training but rather an enhancement of it.

If you think about graduate school or your postdoc as similar to any other type of job, usually the only stipulations regarding your side hustle are that: 1) it does not interfere with your primary job and 2) it does not present a conflict of interest. That logic is helpful for thinking through whether a side hustle is allowed, but the universities sometimes add layers of complexity.

Further reading: Can a Graduate Student Have a Side Hustle?

Side Hustle Permissibility by Position Type: International, Fellow, Employee, Etc.

There may be explicit bans on making money on the side or it may be frowned upon. The income and experience gained from a side hustle is not worth getting kicked out of your graduate program or postdoc position.

International trainees

The F-1 and J-1 visas generally only permit employment directly in your capacity as a graduate student or postdoc. Sometimes, you can seek permission for other employment ventures, such as Optional Practical Training (OPT) for F-1 visa holders. A side hustle that you work on simultaneously with your research will likely not comply with these rules, so it’s a no-go.

Fellowship Recipients (Graduate or Postdoc)

Check the terms of your fellowship funding supplied by your university, employer, or funding agency. There may be a stipulation that no outside income is allowed as the fellowship is designed to support you completely and require your complete dedication. If you choose to pursue a side income against the terms of your fellowship, proceed with extreme caution and recognize the downside is potentially losing your primary funding. In other cases, outside income is not mentioned by the fellowship terms or is even explicitly allowed.

Research and Teaching Assistants

This is the category of graduate students most likely to be able to get away with a side hustle or be explicitly allowed because your responsibilities are generally time-limited to 20 hours per week (officially). Of course, beyond that, you are responsible for your dissertation work, so side hustling might conflict with that important pursuit. If you are in a contract with your university, check its terms. If outside income is not allowed, proceed with caution as you might lose your assistantship. You might, however, find a provision that allows outside income, perhaps up to a certain number of hours per week.

Postdoc Employees

A postdoc employee has a regular job, albeit a demanding one. Your desire to side hustle at that point in your training is more likely motivated by career advancement rather than income. Again, check your contract, but a side hustle may very well be permissible as long as it doesn’t interfere with your work. If you are working in your field, though, it could be a good idea to seek your advisor’s permission in advance.

What Does Your Advisor Think?

The person with the most important opinion on your side hustle–after you–is your advisor. Allowed, disallowed, frowned upon… The status of side hustling in the eyes of your university, department, or funding agency is less important than its status to your advisor. If your advisor is an unforgiving taskmaster who expects his myopic view of the supremacy of research to be adopted by his trainees, a side hustle is a very risky endeavor. However, if your advisor is a reasonable and kind person who respects work-life balance, it may be better to ask for forgiveness rather than permission if your side hustle is discovered and viewed negatively.

The Bottom Line: The Spirit of the Law

The spirit of the law when it comes to side hustling during graduate school or your postdoc is that it should not distract from your training. (This sentiment does not apply to visa holders; the letter of the law is most important in that case.) Financial and career stress itself can easily distract from training, so it may be a matter of choosing the lesser of two ‘evils.’

Prohibitions against outside income make sense when the income comes from a part-time job with fixed hours (meaning that you wouldn’t be able to stay late in lab if necessary) or if it takes so much time overall that you can’t complete your work healthily. But I don’t find prohibitions against outside work that doesn’t interfere with the student or postdoc’s primary ‘job’ any more logical than prohibitions against having a family or a hobby (assuming no conflict of interest).

Ultimately, rules or no rules and advisor’s opinion aside, you are the only person who gets to decide whether to pursue a side hustle. You are the one who will manage it and make sure that it enhances your PhD training instead of detracting from it.

Types of PhD Side Hustles and Examples of PhD Side Hustles

I break side hustles for PhDs into four categories: ones that advance your career, ones that you enjoy, ones that pay well (enough), and passive income. A side hustle that pays well and advances your career is ideal. If you can’t achieve that, doing something you enjoy is obviously preferable to doing something that you dislike or feel neutral toward that simply pays some bills. Passive income is outside of this ranked order as it doesn’t involve trading time directly for money.

By the way, if you are looking for a way to increase your income that your advisor would be totally on board with, try applying for a fellowship. I’ve created a guide to applying for and winning fellowships that includes a list of broad, portable fellowships that pay full stipends/salaries.

Further reading: How to Find, Apply for, and Win a Fellowship During Your PhD or Postdoc

PhD Side Hustles that Advance Your Career

There’s no better type of side hustle than one that pays you and helps you along in your career. Through this type of side hustle, you put your current skills to use, learn new skills, expand your network, and/or explore a possible career path. Often, this sort of side hustle is related to your current field of research or uses skills you’ve honed during your PhD. You might even be able to start working for a potential future employer while you’re still in training.

Examples of PhD side hustles that advance your career are:

  • Consulting
  • Writing
    • Freelance writing (Derek)
    • Freelance academic writing (Vicki)
    • Journalism
  • Editing
    • Freelance scientific paper editing (Julie and Amy)
    • Freelance scientific paper editing (Jenni)
    • Thesis/dissertation editing
  • Internships
    • Scientific research summer internship (Alice)
    • Engineering summer internship (David)
  • Professional fellowships
    • Science policy fellow (Emily)
  • Analysis
    • Research analyst for investor relations (Adam)
  • Teaching

PhD Side Hustles that You Enjoy

Sometimes an enjoyable hobby can be monetized or you can find meaning and delight in a side hustle. This kind of side hustle is one you would likely spend some time doing even if you weren’t being paid and can be particularly revitalizing during the long slog of your PhD or postdoc.

Examples of PhD side hustles that you might enjoy are:

  • Monetized hobby
  • Non-academic teaching
  • Resident advising
    • Resident advising for graduate students (David)
    • Resident advising for a fraternity (Adrian)

PhD Side Hustles that Pay the Bills

If the only purpose a side hustle fulfills is bringing in some money, it’s done its job. Sometimes these pursuits are necessary for survival, but you shouldn’t spend any more time on them than absolutely necessary.

Examples of PhD side hustles that (likely) simply bring in income are:

  • Tutoring
  • Retail
  • Food service
  • Uber/Lyft
  • Childcare

PhD Passive Income

Passive income has become a bit of a buzzword in recent years. Ostensibly, passive income occurs after you make some kind of investment that then pays a residual.

Making a monetary investment in a rental property or dividend-paying stock is a classic example of passive income. The former is definitely a possible income source for a PhD who owns her own home.

Further reading: Should I Buy a Home During Grad School?

If you don’t have money up front, you can “invest” your time and talent into a product that people will buy over time. The classic example of that type is an author who is paid a royalty with each book sale.

The current fad incarnation of passive investing is a promise that you can “make money while you sleep!” through online business, generally selling previously created digital products. (I do this in my business.) However, almost no online business runs for long without input of time and labor. The upside for a graduate student or postdoc, however, is that the large time investment needed up front to generate passive income and the maintenance over the long term can generally be performed on your own schedule and under the radar.

Examples of PhD side hustles that are passive income:

  • Writing (i.e., published author)
  • Patent holder (licensed)
  • Digital products
    • Flash cards and ebook (Alex)
    • Courses
  • Investing for current income
  • Landlording

Video Series: How to Increase Your Income as a Graduate Student

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Balancing Your Side Hustle with Your PhD Work

Figuring out how to make money and settling into a groove of earning a side income can be exciting. It can even be more gratifying at times than your research as research is basically a series of failures punctuated by occasional successes. In those weeks and month when nothing is going right in your research, being able to turn to an activity with a known outcome ($$!) can be a welcome relief. However, you should not forget why you are pursuing the side hustle in the first place: to finish your PhD and pursue a certain career. (Of course, your side hustle may spur you to leave your program, but only do so after serious reflection! It shouldn’t be about the side hustle per se but a carefully considered evolution of your career plans.)

To that end, there are a few strategies you can use to make sure your side hustle complements and does not compete with your primary role:

1) Track Your Time

Set weekly limits for yourself on the amount of time you will spend on your role as a graduate student or postdoc vs. on your side hustle. If your time spent side hustling creeps too high or your time spent on research dips too low, you know you need to readjust. Expect your weekly time goals to change throughout the seasons of your PhD training.

2) Set Geographic and/or Temporal Boundaries

It’s best if you conduct your side hustle in a different location than your primary PhD workspace; for example, you could work from home on your side hustle and never in your office or on campus. An alternative to geographic boundaries is temporal boundaries, such as never working on your side hustle during daytime working hours. The exact boundaries you set will depend heavily on the nature of both your PhD work and your side hustle.

3) Choose a Flexible Side Hustle

An ideal side hustle for a PhD is one that can be accomplished from anywhere at any time and ramped up or down depending on how busy you are with your research. This is not realistic for all side hustles, but the more axes of flexibility yours has the better it will complement your primary job.

4) Keep Your Side Hustle Quiet (If Possible)

An internship or professional fellowship that requires time away from your graduate program or postdoc obviously can’t be kept secret, but many other side hustles can fly under the radar of your advisor and department if you want them to. The seriousness of the possible repercussions or how “frowned upon” side hustling is should dictate how open you are about your pursuit. Keep in mind that a side hustle in your current field of research may very well get back to your advisor as communities are quite small, so in that case it may be better to be completely above board.

Best Financial Practices for Your Side Hustle

Most side hustles are independent contractor or self-employment positions, which means that you become an entrepreneur (or solopreneur) of a kind. There are some common best practices in self-employment you should put in place from the start of your side hustle.

Further reading:

1) Use a Separate Business Checking Account

Separating your personal transactions from your business transactions at the account level will help you keep track of exactly how much money you are earning after expenses and what is deductible on your tax return. You can make periodic transfers from your business account to your personal account to pay yourself.

2) Set Aside Money for Tax Payments (Quarterly or Annually)

Your PhD side hustle generates (potentially) taxable income, subject not only to income tax but also in many cases self-employment tax. Add your marginal tax brackets at the federal, state, and local levels together with the FICA tax you must pay, and set aside that fraction of each of your side hustle paychecks to ultimately pay the extra tax. If you earn enough in your side hustle compared to your primary job, you eventually will need to start paying quarterly estimated tax. Fellowship recipients who don’t have automatic tax withholding are already familiar with this process. Even if you aren’t required to pay quarterly, expect a larger year-end tax bill.

Further reading: The Complete Guide to Quarterly Estimated Tax for Fellowship Recipients

3) Give your Earnings a Job

The best way to ensure you don’t blow your side income is to assign it a job to be completed as soon as it hits your personal account. You could pay a specific bill or two with your side income or only allow yourself certain indulgences from your side income. For example, Jenni saved her side hustle earnings for travel.

Closing Advice and Thoughts from PhD Side Hustlers

“Honestly, it kept me sane to have other things going on… [They] helped me to finish my dissertation more quickly because I was more focused on the time I had, instead of having lots of unstructured time to work.” – Kathayoon

“I’d encourage graduate students to pursue a lot of different opportunities while in school, even ones that are at a slant from what they usually do. It’s easy to get tunnel vision as a grad student, but if you open yourself up, you can develop really useful skills while reinvigorating your academic work.” – Derek

“I definitely recommend finding something in grad school that’s unrelated to the work you do, monetized or not, so that if all your experiments fail one week, you still have something meaningful to throw yourself into.” – Shannon

“This experience was critical for my transition out of graduate school. I ended up getting a full-time offer at the same company after maybe 2 months of hourly work and have been there for almost 2 years now. The best part was that I had an opportunity to try out my job before starting full-time. How else do you know if you want to launch a career in a certain field?” – Adam

This PhD Student Paid Off $62,000 in Undergrad Student Loans Prior to Graduation

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In this episode, Emily interviews Dr. Jenni Rinker, a mechanical engineering PhD currently working as a researcher at the Denmark Technical University. Jenni paid of $62,000 of student loans from her undergraduate degree while pursuing her PhD at Duke University. Her average payment was approximately $1,500 per month on a post-tax income of $2,700-$3,000 per month. Jenni shares her motivation for setting her lofty debt repayment goal and the practical strategies she used to accomplish it. After paying off her student loans, Jenni even saved enough money to take six months off from work post-defense.

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Links mentioned in episode

Introduction

Emily (00:08): Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Emily Roberts. The objective of this podcast is to share the financial wisdom of the PhD community. Season one contains two types of episodes, budget breakdowns and money stories. You can find the show notes for this episode at pfforphds.com/s1e5. That’s P-F-F-O-R-P-H-D-S.com/letter S, number one, letter E, number five. On this episode, I interviewed Dr. Jenni Rinker, a mechanical engineer who paid off an unbelievable $62,000 in student loan debt while pursuing her PhD. Jenni applied several classic personal finance principles consistently throughout her amazing debt repayment journey. This story is so inspirational, you’ll be setting your own audacious personal finance goal before it’s even over. Without further ado, here’s my interview with Jenni Rinker.

Please Introduce Yourself

Emily (01:10): Welcome Dr. Jenni Rinker to the podcast. She is my guest today. Jenni’s actually, um, sort of a personal friend of mine and I’ll let her introduce herself a little bit further.

Jenni (01:22): Okay. Well, thanks very much for having me. It’s an honor to be here. I’m really excited to share my experience, to be honest. Um, so yes, as already mentioned, my name is Jenni. I am, uh, a researcher at DTU Wind Energy. So DTU is the Denmark Technical University. Um, I graduated from Harvey Mudd College in 2011, uh, with a bachelor’s in engineering and then I went right into grad school. Um, I went to Duke University and I got a master’s in civil engineering and then a PhD in mechanical engineering. Um, and yeah, and then right after that I came to Denmark for a postdoc at DTU in the loads and control section. And then I liked it so much I’ve decided not to leave.

Emily (02:08): That’s a really exciting story and one not within the scope of what we’re talking about today, but so interesting to maybe follow up with another time. Um, yeah, so Jenni and I have the, I think unusual distinction of having two alma maters in common, both our undergraduate and graduate institutions. Um, although we didn’t overlap actually during undergrad, so we didn’t meet until graduate school. But one of the things that, um, surprised and impressed me about Jenni was that I actually knew a little bit about a debt repayment journey that she went through, which is not something that everybody is comfortable talking about. So when I conceived this podcast, Jenni was at the top of my list for people who I wanted to talk with about a, an amazing financial accomplishment, um, that happened while she was in graduate school. So I’ll let Jenni say really briefly what kind of, at high level what that accomplishment was.

We’re talking today about your debt repayment journey. Can you tell us about this?

Jenni (02:57): Yes. Um, I don’t know if it’s, it’s amazing, but I guess we’ll, we’ll let the, the audience be the judge. Um, so when I graduated from Mudd, uh, we call Harvey Mudd, Mudd. So if I say that, hopefully not to confuse the listeners. Um, it’s a private institution, so the, um, the cost of tuition’s a little high. So I graduated from Mudd with about $62,000 of debt. Um, that was in 2011. Um, and my goal was to repay it during my PhD. Um, and so I paid off $62,000 of debt, um, in a little bit, about three years and seven months I paid it all off.

Can you tell us more about what kinds of loans you had?

Emily (03:34): Wow. That is even faster than I thought it was going to be. Um, I though you might have taken, you know, maybe your whole PhD to do that. Um, ama – wow. Okay. I’m so excited about this story now. Um, yeah. So let’s dive into the starting point a little bit more. Like what kinds of loans were these? Um, maybe what were the interest rates they were at, subsidized, unsubsidized?

Jenni (04:00): Excellent. Okay. So luckily for the both of us, I kept a spreadsheet <laugh> with all of this information.

Emily (04:05): Of course you did. <laugh>.

Jenni (04:06): Yeah, of course. I mean, how else would you track everything? So let me just pull it up real quick. Um, so I had pretty much all unsubsidized loans. So I had, um, both of my parents were generally were an upper middle, upper middle class family, um, which means unfortunately that I don’t really qualify for any unsubsidized, sorry, any subsidized loans. Um, so what I had was kind of a mishmash. Um, I had some government loans that were at 6.8% interest, um, held in Sally Mae and Nelnet at the time. And then I also had private loans. Um, oh yeah. So my government loans, those at 6.8%, that was about 20, almost $28,000. And then my private loans, I had eight and a half thousand that I took out from a program called Alaska Advantage, which I really wish I hadn’t because that was a whopping 7.3% interest rate, which was pretty dang high. And then I had, um, a collection of private loans that I took out from Wells Fargo that because I was taking them out in like 2000, yeah, 2008, 2010, right around the stock market crash, my interest rates were quite low with the private loans. They were like three and a half to 4%. Oh, this one, one of them is higher. But anyway, so I had a collection of private loans that totaled 34,000. Um, and this was an, uh, this is as of September in 2011. And so that also includes that, that total includes the interest that had accrued, um, throughout my, uh, uh, undergrad. So this was like the values basically right after I graduated.

Emily (05:42): Right. Um, okay. So it sounds like a mix of federal and uh, private and also a wide range of interest rate rates there. Um, and then when you, I guess when you started graduate school at Duke in that, you know, September of 2011, uh, what were you working with at that time? Like what was your income approximately versus your expenses, maybe just roughly for the time being?

What was your income during your PhD?

Jenni (06:08): Yeah. So, um, I had an NSF fellowship for the first three years.

Emily (06:12): All right. Congratulations.

Jenni (06:13): Thanks. So that was, I mean, man, what a way to make graduate schools like you. I tell you what. Um, everyone wants you if you have an NSF fellowship. It’s very nice. Um, anyway, that’s a side, that’s a rabbit hole. Um, so I had this NSF fellowship, but then also, um, Duke offered like an extra package on top. So like for the first year I had like a little bit of an extra loan, not loan, a little bit of extra income. Um, but throughout the course of like my time as a graduate student, my income varied anywhere from about, uh, $2,700 per month to actually up to maybe even $3,000, uh, dollars per month. So anywhere from 2,700 to 3,000 roughly. And that actually held kind of steady throughout the course of, um, my PhD.

Emily (06:55): Yeah. I’m curious. So when your NSF ended, so after the first three years, um, did Duke get, like, help you with a higher stipend after that point than what their baseline was?

Jenni (07:06): Yeah. So, um, my section, not my section, my department, um, civil environmental engineering, it’s quite a nice department because what they do is they guarantee that if they give you admission, you are guaranteed five years of funding, which is very convenient. Um, obviously not at, at like a kind of higher level, but they do guarantee some sort of, you know, baseline tuition, which is nice. So you don’t have to worry about having forced, being forced to master out. Um, that being said, after my NSF ran out, I immediately got, I started applying for a different fellowship. And so my fourth year was basically covered then by this other fellowship, um, by the office of science. Um, and that actually funded a one year external stay at the National Renewable Energy Laboratory in Colorado. Um, so that’s kind of what covered. And that actually was monthly $3,000 pre-tax. Unfortunately they didn’t tax it, which was unfortunate because then you had to like, you know, pay attention to taxes, which is really annoying in my opinion. But, um, so that was $3,000 pre-tax.

Emily (08:08): I’ll just say for the, for the listeners, Duke is unusual in that they actually offer tax, income tax withholding on outside fellowships like NSF. Um, whereas most universities actually don’t do that. So you were actually fortunate that you only had to deal with estimated tax for a smaller period of time during not the entire time. Yeah. Duke is very unusual.

Jenni (08:29): So I was spoiled. Oh man. All right.

Emily (08:31): But they also give us super weird tax forms that cause everybody lots of headaches. So there’s pluses and minuses there.

Jenni (08:37): Like the 1099 MISC and stuff. Yeah. That makes sense now. Hindsight. <laugh>

Emily (08:44): Um, and then your fifth year, was that fellowship as well or was that from funding?

Jenni (08:49): I kind of did. So I actually finished my PhD in like four and a half years. Um, so I defended in like February. And then the way my timing worked out at NREL, I only had like three months gap between my NSF fellowship and then the, the NREL fellowship. So Duke was kind enough to just cover me for those three, um, those three months. And then also, um, I think, yeah, I kept getting income actually <laugh>, um, after I defended as well because I was trying to finish up some papers. Um, but I think that was just, I think that was my, my, um, department being kind and saying like, “Okay, well you had four years of funding. Like we can, we can get you these extra like couple months here and there.”

Emily (09:31): No kidding. <laugh> Yeah. You hustled for much of that stipend. So, um, and then just to kind of clear the board about your starting point, did you have any significant assets at that time that you could, could or ended up putting towards the debt? Or was it just kind of like sort of starting from this point of just having debt? 

Jenni (09:52): No, I didn’t, I didn’t have any assets. I mean, I did do a summer, um, like a summer kind of internship thing. So I got some income from that and I did, I don’t unfortunately have the numbers, but I did earn more than I spent. And so I was able to start paying off my loans over the summer, but things got really chaotic, um, in 2011 because, so I did the summer program, but then I moved to Duke. So there was also like moving costs and then, you know, buying furniture and stuff. So that’s why a lot of my record keeping doesn’t start until September because the whole summer is just chaos. Um, but no significant-

Emily (10:25): I definitely relate to that.

Jenni (10:27): Yeah. Moving across country and stuff. Um, but yeah, no significant assets, no, um, yeah, no house I could sell and no, no, uh, no stock, stocks, none of that.

Why were you so determined to pay off student loans during grad school?

Emily (10:36): Yeah. So you were starting from that negative point that a lot of people coming out of college were starting from and you were going into graduate school. So you knew that that income was going to be capped and quite limited for a large number of years. So the question is why were you so determined that you were going to pay off this debt during graduate school? Why did you set that goal for yourself? Because a lot of people would take the position of my loans can be deferred. I don’t have to make any payments. It’s going to be a challenging time anyway, even without setting that extra goal. Like why did you decide to do that?

Jenni (11:10): Um, I think for me it was, it was kind of like a philosophical choice or like a personal choice. I, I really just don’t like owing loans or people. And the other thing too is like, because my loans were not subsidized, you know, yeah, technically I don’t have to pay during grad school, but the interest is still accruing. Like that’s still more money that I’m going to have to pay back in the end. Um, so it didn’t make sense to me to like, I don’t know, go ahead and buy like 10,000 flat screen TVs or whatever I could have actually bought. Um, it made more sense to actually just get rid of those loans. And then the other thing too is because then if I left, um, if I left grad school then, and I still had all of these loans, I was going to be kind of trapped into paying them. And it really kind of like, if I decided to go, I don’t know, be a bum for a year and travel the world, you can’t do that. Well, you can, but it definitely makes it a lot harder. Um, so-

Emily (12:02): So it sounds like it was a lot about freedom for you, like just there was this burden, um, even though you weren’t obligated to start paying it right away, you felt, um, you know, it hit your gut. Like you felt that you needed to pay this off faster so that you could sort of be unchained from it.

Jenni (12:18): Yeah. I think that’s a, that’s a really good, that’s a really good observation. I just didn’t like, you know, exactly like the chain, I just didn’t like having this weight over my head. And then also the, the knowledge that each day that weight is growing. Like yeah, you don’t see it unless you pay attention, but it’s there. So I think, yeah, I think that’s, that’s kind of why I knew I wanted to at least try to pay off my loans. And then to be honest, I think the decision to do it during my PhD was initially just completely like a random goal. I was like, “Yeah, let’s do it.” And I didn’t actually look at like whether or not it was financially feasible. I was just like, “Let’s just make it work.” And then eventually I did some calculations. I was like, “Okay, now, this is feasible. It’s all right.” <laugh>

Emily (12:55): But – Yeah, that was gonna be my next question, whether or not you had sort of thought about whether or not it was even accomplishable. But no, you’re just like gonna dive in. <laugh> I’m gonna just set this audacious goal and go for it. Um, you know, no matter what the logistics of the situation. But they did work out.

Jenni (13:10): Right. Well, so it did end up being a lot more manageable than I expected. And we’ll get into the details, but yeah. So, um, I think that’s, that’s one way in which I got kind of lucky. Like, you know, to the, the bottom line is that in order to pay off debt, like you need to be able to have your income be higher than your expenses, of course. And like, you know, it’s that profit margin that allows you to pay off loans more quickly or more slowly. And I just got lucky enough that the way I was living and the way, you know, I had income and stuff, which we’ll probably get into a little bit later, um, I was able to do that and still also enjoy the quality of life that I value. So it was, it was kind of like lucky in the way it all played out, but there was also some planning as well.

How did you pay off your student loans?

Emily (13:52): Yeah. Sounds like it. Well, let’s get into those details then. So how did you do this? Like how? <laugh>

Jenni (14:01): Magic, no. <laugh> Um, yeah. So I, um, there’s a kind of financial philosophy that I still hold true, which is like, they basically, my money that I earn from my job, um, that’s what goes towards, you know, like rent, utilities, uh, food. If I have loans, then those get paid off. Um, and then, then like, then I can skin off, skim off the top and do stuff with it. But if I wanna do things like, so, so during this time that I did pay off my loans, I also did like several trips actually for fun. Like I spent two weeks in New Zealand on vacation. Um, I went to Montreal for two weeks for a, a competition. Um, I went to Moab, Utah for another like weekend kind of competition thing. Um, so, and all of these, like, these are like, for me, those are the, the quality of life things that I was talking about. And the way that I told myself I had to pay for those is like that money was not generally allowed to come from my income. That had to be something else. And so what I did on the side that I had like my kind of, uh, side job was, um, primarily, uh, technical copy editing. So I would kind of had some private clients and then also I worked for a company called American Journal Experts. So what they do is they just hire you to basically copy edit, uh, technical papers that have been written by people who don’t speak English as the first language. Um, so, so you’re not really editing kind of the content, but you’re just kind of changing the grammar and making the flow sound like a native English speaker wrote it. So that was kind of my side gig that I really enjoyed doing because it kind of allowed me to get this extra income that then I could spend in a way guilt free, right? I didn’t have to feel bad like, oh, this income could go towards my loans. It’s like, no, I did this extra, this is outside. This is what I can do to, this is the money that I can use to, you know, go to New Zealand, go to India, go to wherever.

Emily (15:57): Yeah, this is a strategy that I’ve actually taught about, um, multiple times in the past, which is, um, when you set up a side income, dedicate it to a specific purpose, post-tax, dedicate it to a specific purpose because then you know every time you work, you know, put the hours in towards that side income, you’re saying, I’m working so I can go to XYZ location for this purpose. Like you know what you’re making that sacrifice for. Um, it makes it a lot more palatable to put in that time because you know exactly where that money’s going to end up going. Um, so I love that strategy. Did you do that throughout your entire graduate school experience or like when did you get started with the side income?

Jenni (16:35): You know, I think I started maybe like one year into my PhD or something. There was a flyer up on, on a wall somewhere at Duke and I was like, “Oh, that might be interesting.” So I kind of like, I was like, “I, I think I don’t suck at editing.” So I kind of, uh, applied. And then it’s, it’s actually still something that I do now. Um, sometimes I had to, well, anyway. Um, but yeah. So, so that was, that was kind of one thing in terms of like I kind of adding, augmenting my income that kind of allowed me to ensure the quality of life that I enjoyed. Um, but the thing that I haven’t really mentioned yet that was probably the most important thing, um, is spreadsheets. So I had, um, a budget. I had a, a, you know, each year I had my spreadsheet and then each spreadsheet had a tab where each tab was a month. So I would track like, okay, so this is my income from Duke University each month. And then I would say, okay, here’s my rent, here’s my utilities, here’s my stuff. And then I had like, and my goal, like, and then I, after I kind of did my calculations, I was like, all right, if I want to pay off my loans in four years, my goal was four years because I also wanted to finish my PhD around four, four and a half years. Um, I needed to put away about $1,300 per month roughly. So I was earning around $2,700 to $3,000 and then I was paying around $1,300 a month pretty much.

Emily (17:54): That’s an incredible ratio. I mean that, that’s a lofty goal to set for yourself. Um, in terms of the percentage that it works out to be, and especially because of that sort of lower, not for a graduate student, but for the general population, lower, um, starting income. Yeah, that’s really incredible that you put away that high percentage.

Jenni (18:13): Well, there were, there were a couple things I had going for me. Um, number one is I had some low rent. So my rent or like my uti – like rent utilities and all of that was around eight or $900 per month. Um, like and that includes, you know, car insurance, I think gas as well. I don’t remember 100%. Um, so I, then that left me kind of enough to spare over. And then I also, I wasn’t really one for like going out to dinner very often. I didn’t really go out to bars very often. Not because I felt like I was restricting myself, but because I would rather spend that money, um, you know, traveling, for example. Like that’s, that was what I enjoyed. So that’s what I did. 

Emily (18:50): So it sounds like you had a solid calculation of what, what’s called like your monthly nut, like what absolutely has to go out the door to pay for your basic expenses. And then you had this large, um, you know, amount of money that you, you wanted to put towards your loans to, to finish within the timeframe that you said. And then you had some other discretionary spending, but it wasn’t really, sounds like you’re sort of a naturally frugal person, um, not wanting to live an extravagant lifestyle. Or rather, like you said, knowing where your priorities were, which was in travel rather than going out sort of on a day to day or, or week to week basis.

Jenni (19:25): Yeah. I think, um, and the other, the other strategy that I employed that actually helped a lot was like every payday, like right after payday, I made my loan payment. Um, so like once, you know, you have that big bank account, that’s when I was like, “All right, $1,300, it’s going away right now.” Um, that did kind of put me into like, it did mean that like my emergency fund wasn’t quite as big as it should have been. Um, but luckily like I managed to, like I did at one point like have my car break and so I did have to pull from my emergency fund, which like completely tanked it and then I never built it back up. Um, but I got kind of lucky in that respect. Like I didn’t have any massive emer – um, financial emergencies. Um, and I’m trying to think. Yeah, but all, yeah, at least for me, like the trick of like getting paid and then immediately sending your loan away so you basically don’t see the money, that’s really, because then at the end of the month you’re like, “Oh, I would love to buy for me, like I love buying cake. I love cake.” So I was like, “Oh, I’d love cake.” And I was like, “Oh, I, I don’t have money to buy cake.” I’m like, “All right, that’s fine. I didn’t need the cake anyway.”

Emily (20:30): Um, yeah, that strategy is more, is commonly known as paying yourself first. And I, I agree it’s totally amazingly powerful. Um, did you, when you were making that $1,300 month payment, did you have that auto pay or was that something you did manually every single month?

Jenni (20:45): Yeah. So that’s something I did manually. And the reason that I did it manually is because, um, so my ultimate goal, of course, was paying off the loans in, in part as quickly as possible, but also in paying as little back as, as little, um, overall, like in, in total. So that meant that I needed to pay off the highest interest loans first. Um, and so I would have to like go through my spreadsheet, my, uh, my other spreadsheet that tracked my loans and say, okay, so what do I have that’s left? Um, which of these has the highest interest rate? And like, okay, let’s, let’s pull that. And then I would just like, and I had this like list of all my loans and then every time I paid one off, I would like gray out the text. So then when I copied the tab for the next month, like that one was basically, it was gone. Um, and it got a little tricky when I got to like Wells Fargo, for example, because I had like four different private loans from them. And if you just like make an online payment, they won’t let you pick like, I want my money to go to this loan. They’ll just, they’ll distribute it accordingly and probably in whatever fashion will allow them to make the most money. So what I had to do was like, I think I had to send a check in, I had to send in multiple checks, like if, or like, and you have to like specify on the check, like this check goes to this loan. Um, so that part, yeah, that part required a little bit more, again, bookkeeping and spreadsheets.

Emily (22:09): Yeah. It sounds like that was a really, um, as you were saying, a crucial tool for you is these spreadsheets, keeping track of everything. And this, um, I want to dive a little bit more into this particular strategy of paying off the highest interest rate loan first because I think this is really more widely applicable. So as you noted, lenders do not always, uh, cooperate, make this easy for you to do. Um, so you had to really go in and figure out for each different lender how you were going to prioritize paying off one particular loan. How to communicate with them. That’s what you needed to do. Um, so I’m wondering, did you, um, because your loans were deferred at the time, I suppose you could have literally just paid on one loan at a time. And it sounds like you were prioritizing to some degree, but did you also make payments kind of across all of them or it was really just one at a time?

Jenni (22:59): Yes. I completely prioritized. I was like, so for example, that Alaska Advantage loan that was like 7.3% or something like that. I was like, okay, that’s the worst one. And also that had a pretty hefty balance too, because I originally took out 8,500 on it. In fact, it was my biggest loan, both in principle and then it had the highest interest rate. So I was like, well, that one’s going to get paid off first. So I just attacked that one, so to speak. And just every, every month I was like, this is all it’s going to. And then when that one died, then I was like, okay, next up is this one. And like you said, because I was in deferment, I was able to completely, uh, prioritize my own way, like which loans could be paid. Um, and I don’t even think I sent, um, and I can check, let me look at the spreadsheet real quick. Um, I don’t think that I even bothered. I think everything was like this month goes to, yeah, for example, yeah, my first, first month of payment paid $1,800 to Alaska Advantage and then Alaska Advantage. And then, and then I have a list of like, okay, now I’m paying to Wells Fargo, now I’m paying to Wells Fargo, now I’m paying to this. So everything was basically only on, I would only pay to multiple loans if I had enough to like pay off one loan and continue with another one.

Emily (24:16): Gotcha. Yeah. So this, um, technique is called the debt avalanche method. I don’t know if you’re familiar with that term.

Jenni (24:22): And the snowball is the other one? Is that right?

Emily (24:24): Yeah. So for the listeners, what Jenni’s describing is the debt avalanche method. And this is as opposed to the debt snowball method. And so with each one of these methods, and they’re both really powerful and sort of in different ways, um, with each one of these methods, you make a list, a prioritized list of all of your different loans. And something like student loans, we often think of as one line item, student loans, balance. But actually in this case, you need to do, you need to break it out into every single individual loan that you’ve taken out, uh, every different lender, all the different years, et cetera. So, you know, Jenni, you had a large handful of loans, it sounds like.

Emily (24:59): Yeah. So nine different loans, not just one, nine different line items and prioritize them. And so with the debt avalanche method, you prioritize based on, um, interest rate and you would pay the minimums on everything if required, which in your case it wasn’t. And then just attack, attack, attack, like you said, that top priority loan with the highest interest rate first. This is as opposed to the debt snowball method where you would prioritize based on loan balance. And that, but in that method, you pay off the smallest balance first. So with this debt snowball, it’s sort of like, um, a psychologically motivating process to get one debt paid off completely before moving on to the next. Start with the smallest one because that gives you the easiest win. But in your case, you did exactly the opposite because you just said you went for your largest loan, which had the highest interest rate first. Um, but I, I’m a little bit partial to the debt avalanche method as well. It sounds like as a fellow spreadsheet lover, you are too. And so you were really motivated by the math and imagining, you know, that debt accruing a larger and larger balance every single day that went by with that high interest rate.

Jenni (26:03): Yeah. I mean, bottom line was just I wanted to pay back in the end as little as possible. And so then mathematically it made sense to get rid of the highest interest loans first. So I was like, all right, well, let’s, let’s do that, you know, so.

Emily (26:15): Yeah. Well, you’ve already illustrated like so many great, um, sort of techniques and strategies for debt repayment or, you know, sort of in general for money management. Was there anything else that you did? Any additional strategies?

Jenni (26:29): I don’t think there’s anything that I really employed, but that’s because, you know, in general, like I wasn’t in such a tight financial situation that I needed to be, needed to be very careful. Um, I’m actually in a situation now where I do need to be a little more careful financially, almost more careful than I was in grad school. So some things that I employ now include like, um, kind of identifying my weak points and like where I tend to overspend. Um, it’s, there’s like a certain, I’ve noticed there’s like a certain, uh, case where I’ll be like, oh, I’ll just buy, like I tend to spend a lot more now like going out to eat, for example, um, or like getting fast food kind of thing. So I’m trying to be more careful on being aware of that. And then if even being aware isn’t enough, then actually what I’ll do is I’ll take out cash and I’ll say like, this is what you have, you’re not allowed to use your card, because definitely when I, when I use my card is when I don’t realize how much I’m spending. Um, so that’s one thing. Um, I still stick to the paying myself first, um, each month because that’s, um, again, if I don’t have, if I’ve already paid myself, then I can’t, uh, I can’t use the, uh, use the money later in an unwise decision. So I think, um, yeah, I think between the budgets and then also just, you know, trying to be more care – be more aware of what I’m spending and what I’m spending on, um, that’s probably my main, my main weapons, so to speak.

Commercial

Emily (27:50): And now, a brief break from the interview. If you want to have conversations about money with other PhDs, like the one I’m having in this interview, I invite you to join the Personal Finance for PhDs membership community. Inside the community, we encourage and equip one another to make meaningful financial strides no matter what your income. Please go to pfforphds.com/membership-community to find out more and sign up. Now back to the interview.

Did you have any speed bumps during your debt repayment journey?

Emily (28:23): So you already mentioned once that you had like a car breakdown that you had to access your emergency fund during graduate school. Was there any other time where you kind of came upon something that was a bit of a speed bump in this journey or was it pretty much, “Nope, I’m paying myself first. It’s my top priority,” and nothing kind of, um, you know, derailed you from that?

Jenni (28:43): You know, I think I got really lucky and I, I didn’t have any big financial setbacks. Um, in general, like I had some, like occasionally, if anything, I have kind of financial help, like weird, unexpected help. Um, in, in the case, like, for example, like I went to a conference and then I got a per diem and then I didn’t spend all the per diem, so then I had like a little bit extra money kind of thing. Um, just a couple small things like that kind of came along and that really, really helped kind of send the loans, send more money to the loans or be a little more aggressive, which is why I ended up paying it back faster than I expected.

Emily (29:19): Yeah, so you had this schedule where you were supposed to pay $1,300 a month, but it sounds like sometimes you threw something more at it.

Jenni (29:27): Yeah. I calculated the average and it looks like I was actually paying about 1,500 per month overall. On average. So that’s, that’s cool. <laugh> I didn’t even realize that till I calculated that number today.

Emily (29:40): Yeah. So not only did you set up this, in your own mind, regular payment schedule, but in addition, you threw whatever else came your way towards those loans. Yeah, it was clearly, clearly a high priority, um, for you. So when you got to three years, three and a half years into this journey and you made the last payment on your loans, like what happened? Like how did you feel or, or, you know, did anything change in your life?

How did you feel after paying off your student loans? Did anything change in your life?

Jenni (30:07): Um, I felt amazing first thing. I was, it was so nice to be like, wow, that’s, that’s done. That’s, that’s something that not a lot of people do. So it’s always kind of cool when you’re just like, wow, I’ve, I’ve done something kind of unusual. Like in a good way, right? Like if you do something unusual and it’s because you fell down the stairs, then you feel bad. But, um –

Emily (30:27): I remember actually that I think you posted on Facebook at the time. Um, and you got so many congratulations, which is like wonderful to see.

Jenni (30:36): Yeah, I did. I, yeah, that was definitely, I was like, all right, I’m gonna brag on Facebook. <laugh>.

Emily (30:41): Yeah. Very, very brag worthy.

Jenni (30:43): Yeah. It was, it was just, it was just so nice to have that off my, off my brain, off my chest, I guess. I, it just, yeah. And, and like I said, because remember the whole, the whole thing was kind of motivated by my mental image of this being like a weight over my head. So, so it really was freeing, like you’ve noted. I was then free to be like, wow, okay. So, and I wasn’t done with school either. I still had this income. So I was like, okay, so now instead of spending $1,300 each month on my loans, I can do anything what I want with it. And then naturally me, I was so used to just like taking that money and just throwing it into a, into a hole. I was like, well, let’s keep doing that. But instead of it being like a hole owned by the man, quote unquote, let’s have it be my own like pot of money. And so I, what I did is I started saving up for travel. And so I planned, I was like, okay, well, you’re going to defend in February and then let’s plan in a six month gap where I can just travel and use this pot of money to go somewhere, anywhere, places. So that’s what, that’s what I did. Um, I started saving up like every month I would take my $1,300 and I would put it away and I had a separate spreadsheet that’s like, here’s how much money you have for this month, um, for this, uh.

Emily (31:57): Must have felt so amazing to be in the black instead of in the red at that time and watching that balance just accumulate so fast.

Jenni (32:04): It was, it was, it was so cool. Yeah. And then it was, and then also it really then allowed me so much more like stress free travel the whole next, you know, six months after I graduated. It was like, great, I graduated. I went to Patagonia for two months. I like drove around the US for a month and then I went all around Europe for another two months, two and a half months, something like that. And I didn’t have to worry about like, oh crap, where’s this money coming from? Because I had it. And then I also knew that I had a job waiting for me in September or August. So I knew like I would again have income. It was perfectly fine to spend all this and just enjoy myself. Um, so it was, it was amazing. It was really cool. <laugh>

Emily (32:44): Yeah. I can’t, I mean, I, I would imagine there are very few people who end a PhD program and have the means to take such a significant amount of time off. Sounds like you got all your ducks in a row with your employment and everything set up and it was a true vacation, um, you know, to celebrate finishing, to celebrate your, you know, debt repayment accomplishment, uh, all of that. I mean, just that’s incredible that you were able to do that.

Jenni (33:11): Yeah. I got, I got pretty lucky with my financial situation and then I just started, started, uh, planning early, I think. And I just tried to keep like, keep looking two steps ahead because normally I’m actually not very good at that. So I was like, all right, let’s just get things kind of lined up down the road and then we can figure everything else out, um, a little bit later. So it, it ended up working out really well.

Emily (33:32): And was that a rejuvenating time off? Like did you, when you started your full-time employment, you know, resumed it did you feel ready? <laugh> More ready than you would have been if you had taken, you know, one week off?

Jenni (33:44): Words cannot express. <laugh> Um, yeah. I’m also like I, I kind of like during grad school was, I actually didn’t even really realize that traveling was so important to me until like partway through grad school. I was like, man, there are places in the world that are beautiful and I have never seen them. So it started to become kind of more and more important to me. And so that’s kind of how like in the back of my mind, I think it was like, oh yeah, let’s, let’s, let’s plan in some traveling. And so the fact that I was able to do that, um, I think it, it just put me in a whole different frame of mind when I, you know, kind of got to Denmark finally and was like, all right, let’s try this postdoc thing. It was just, um, yeah, it was like completely resetting my brain and it was, it was very nice.

Is there anything you wish you had done differently?

Emily (34:30): Is there anything from your whole debt repayment journey that you, in retrospect, wish you had done differently?

Jenni (34:38): Let’s see. That’s a good question. I think I probably, I probably should have kept a little closer eye on my emergency fund. Um, like I already noted, I did kind of tank it at one point and then I didn’t build it back up again. Um, and I got lucky in that I didn’t have a substantial financial emergency, but I probably should have kept that a little fuller. Um, but I think overall I’m, I’m mildly satisfied. I’m not mildly. I’m, I’m satisfied <laugh> with, um, with how the whole thing played out. Um, I can’t think of a way that I could have like shaved off some income, you know, and maybe paid it off more quickly. I think I was, I was toeing the line for me what’s acceptable between like being frugal but also having a good quality of life. So I, I don’t think I would actually have changed too much of, of how I, how I handled it.

Emily (35:33): Yeah. It sounds like it. I had a similar, um, view of my small emergency fund during graduate school, like, yeah, that probably should have been bigger, but nothing, nothing bad happened, you know, nothing, nothing that, that, uh, put me in, you know, credit card debt or anything like that. So it’s kind of like Well, I got away with it.

Emily (35:55): Yeah. And I guess in your case, I mean, it sounds like you maybe didn’t even consider this, but in your case you could have just not made that month’s, you know, $1,300 payment if something had come up because you had that cash flow, uh, because you weren’t required to make payments. Sounds like it didn’t happen. Did you even consider that, like not making your full payment at any point?

Jenni (36:15): There’s definitely, there’s a couple months I was looking, there are a couple months where like I paid less, but then somehow, and I, I have to admit, this is where I, I wasn’t like completely fully prepared, um, or I didn’t prepare as much as I would have liked because I was looking and I was like, because I know I did that at some point, like there would be one month where I wouldn’t pay as much or like I would skip a month or something. Um, yeah, like here this month I only paid 600, but then somehow the next month I paid like almost double. So I’m not really sure in the end how it all worked out. Um, but yeah, I think I just tried to –

Emily (36:53): It sounds like you were, you were being a little bit flexible because some months you were paying quite a bit more than your goal. And so on the occasional month paying a little bit less than your goal was not, ultimately it did not, you know, add up to extending the repayment period. Uh, because you were also focused on paying more when you were able to.

Jenni (37:10): Yeah. I think that’s the main thing is like, because in the, for the first year, um, I had, um, I had kind of an extra income. So I was like closer to 3,000 than I was to like 2,700 post-tax. So I think that kind of allowed me the chance to kind of front load in a sense and I was able to pay off kind of more aggressively in the beginning and then it kind of, kind of evened out. I think also to be honest, I also had the image in my head as like if something financially drastic happens, like my parents are kind enough that they will temporarily bail me out because I know that I will pay them back at some point. Um, so it was never, it was never to me so such a concern. Like if something were to happen, I knew that it wouldn’t be like the end of the world. I was like, okay, my mom won’t like it, but she’ll be able to help me out short term and then I’ll pay her back kind of thing. 

Did this experience affect how you approach personal finance?

Emily (38:00): So you had some sort of plans, even if they weren’t, you know, cash in your bank account, you had some, well, I can turn here, I can turn here. Yeah. I think that’s, that’s quite common. Um, okay. So you’ve already touched on this a little bit, but like I would imagine that this debt repayment process was transformative for you in how you dealt with your personal finances. And so is there any, have there been any lingering kind of effects on how you manage your money due to this experience?

Jenni (38:32): Yeah. I think, um, well, I did, I think it was, it’s almost more interesting to ask like once I got to Denmark and then no longer had this debt, kind of how I handled it. And I would, I would say it was interesting because I, like I stopped tracking income basically. I stopped tracking expenses and I definitely could tell that I got a lot more sloppy with how I was spending things. I was just kind of like, I’m going to buy this thing that I don’t need and this thing. And for me, a lot of my extra incomes are on food because I just like, I have trouble resisting fast food, for example. So I’ll go and be like, oh, that’s a good looking cinnamon roll. And then things in Denmark are expensive. So if you buy like a cinnamon roll like each day, it surprisingly adds up really quickly <laugh>. Um, right. So <laugh> I think now that I’ve kind of gone back to being a little more, um, cognizant of where my expenses are going, I think the, the, the budget spreadsheet that I ended up using is probably my most useful tool, um, for keeping an eye on, okay, so what do I have? What can I spend and what am I spending? Um, because I think then that, that tracking and that ability to kind of reflect upon how you’re spending things is probably the most valuable thing. Um, so I think probably the first like practice that I’m, that I’m engaging again now that I think was super valuable was the use of the budget sheet. Um, and then kind of how I would categorize like different expenses and then keep track of like multiple things. Um, that’s been super useful. 

Emily (40:04): Can I ask a small follow up question about this spreadsheet system that you’ve set up? Um, did you grab these templates from anywhere or is this something completely of your own creation?

Jenni (40:13): No, I ended up making one of my own creation. Um, maybe it was inspired by someone else’s, but, um, it definitely has turned into something that’s like, I have like the columns that I like, like I have food in one column and then I have like kind of utilities in one column. Um, and it just, for me, it, it kind of makes sense, um, how I track it. So I’ll happily share that if, if, uh, people think it’d be useful. I don’t mind at all. Um, but yeah, so that’s –

Emily (40:41): Did you also ever consider using software or look into it?

Jenni (40:45): Yeah, I did. I was, I heard really good things about Mint, uh, mint.com I think it’s called. And so I did look into it at one point, but I couldn’t, like there was something about at the time it couldn’t access all of my loans, I think. Um, and then I’m also, I’m a little bit, I don’t want to say analog because obviously I was still on a computer, but, um, I like a little bit more control. And then I think I just didn’t take the time to learn it properly. Mint, mint.com or perhaps some other financial software probably could have done exactly what I did and perhaps even in a more, um, efficient fashion. Um, but the thing that I did like about actual, actually actively, um, putting it into the spreadsheet is it kind of like at, increased my engagement with like the debt tracking process because I actually started asking for receipts all the time and then I would keep the receipts in my wallet and then I would take them, take the receipts and I would manually like put them in, which this is definitely not something everyone will want to do. Like some people will find that way too much work. But for me, it was a very eye opening process because it was like, okay, so I have these like five receipts and they’re all from the cafe and they all have like four different items. Obviously I’m spending a little bit too much at the cafe. Maybe next time I go, I’ll like bring a sandwich and just buy a coffee. Something like that. Um, it was kind of like the actual act of like putting it into the spreadsheet and watching the numbers change that really kind of made me actually think about how I was spending my money.

Emily (42:12): Yeah, that’s something that I really like about these manual tracking methods, um, or budgeting or, you know, the debt repayment, you know, tracking or whatever it is, um, is that it does force, if you’re, if you’re committed to it, it does force that higher level of engagement and awareness, um, which is wonderful. So I, when I, uh, first started out, I was also using spreadsheets and loved it. Um, and it was only after I got married that, um, my husband and I started using software because he was not willing to put in that kind of time to doing the manual tracking. Yeah. So like the whole joint finances thing, uh, made software a better solution for us, but I still kind of lo – you know, have a soft spot for the manual tracking and, and the, uh, the benefits that come from it.

Jenni (42:58): Yeah, yeah. For sure.

What advice would you give to someone starting graduate school with student loans?

Emily (43:00): So let’s move on to kind of like final thoughts here. Um, is there any advice that you would give someone else in your, you know, going back to 2011 when you graduated from college, you had this high debt load. What would you say to maybe another person starting graduate school in a similar situation?

Jenni (43:18): Yeah. I think, um, I think first off it’s going to be kind of go ahead and like evaluate your financial situation and figure out like what your income is and then, um, was it the nut you called it? Like the core things?

Emily (43:30): Monthly nut. Yeah.

Jenni (43:31): The monthly nut, like, is that like what you have to spend?  Is that what – Okay. Yeah. And I would say like start by just figuring out what your income is, what your monthly nut is, and then seeing what the difference is, because if that difference isn’t that large. Okay, let me, let me say first rule of thumb, realistic financial expectations. Um, you know, I, I had a situation where I was able to do this, but it’s because of course my income was this and my expenses were that, yada, yada. So, you know, it’s, you know, you can’t take exactly what I did and apply it to scenario if you have a different income, if you have a different monthly nut. So I think the first thing is going to be kind of look at what you have and figure out what is realistic for you and what will also make sure you have an adequate quality of life. Um, and kind of evaluate and see like where are your problem areas? Do you tend to overspend in electronics? Maybe why do you do that? Can you buy refurbished? Do you necessarily need the new iPhone? Or if you want the new iPhone, then supplement your income through a different way so that you say, okay, so each month I’ll do this, I’ll earn extra $100 and then after 10 months or however long, uh, you can then buy your fancy new iPhone. Um, I would say just kind of, kind of, yeah, identify your problem areas, realize what is actually realistic. You know, if you’re saying like, I’m going to live off of baked beans the whole month and then I will pay off my loans. I mean, perhaps if that makes you happy, go for it. But if you try that for a month or two and it’s not working, I think it’s time to reevaluate your strategy. Um, so I guess there’s, then that’s two things. Number one is realistic goals. And then number two, don’t be afraid to reevaluate your strategy. Um, because we all make mistakes and this isn’t something that we’re born learning and it’s not even something that we’re really taught in schools. So we kind of have to educate ourselves, which makes it different, difficult. Um, and then we have to learn from our mistakes.

Emily (45:25): Yeah. And to me, you know, the, the PhD is such a long journey. Um, if you start off with a strategy that doesn’t end up being sustainable, like that’s okay. Like you have more time. Um Exactly. You can learn from even not necessarily your mistakes, but the successes that you’ve had, the mistakes that you’ve made, all of that. And there’s a lot of time to keep applying that, um, even before you finish graduate school. And I know that I, at any rate, um, evolved in my practice of personal finance quite a lot over the time that I was in graduate school and ended in a really good place, but didn’t, you know, started in a totally different place. And there was a lot of time for that learning and application to happen. Yeah. Um, but I love that you emphasize kind of figuring out like what your priorities are. And you can’t do everything, right, on your limited grad student income. So if one main priority is debt repayment, then maybe you can have one or two like other priorities like for you, travel, but you made that happen through your extra income. Um, yeah, just having that awareness of what is really important to you because you can’t do everything and you don’t, and you don’t want to. Like there are some things that are going to be more important to you than others. Um, so yeah. Any more last comments?

Jenni (46:40): Um, no. I think, um, this has been really fun to, to chat. So I, I hopefully, I guess, I guess I, my comment would just be I, my heartfelt hope that, uh, this is useful to people and perhaps make some kind of look at their financial strategy and see if there’s something they want to change.

Final Comments

Emily (46:58): I think it will be. Um, you know, you have a very inspiring story, but it’s also clear, I think this, you explained very clearly the strategies that you used that are going to be applicable to anyone really in any kind of debt repayment scenario whether that’s during graduate school student loans or, you know, any other time, uh, any other type of debt and time of life and so forth. So yeah, thank you so much for, um, sharing those strategies so, so well and, and also for accessing your meticulous records <laugh> so that we can have, you know, an, an accurate conversation here. Um.

Jenni (47:29): Well, I get to thank previous, previous self for that. <laugh>. Previous O- OCD’s help.

Emily (47:35): Yeah. Um, well thank you so much, Jenni, uh, for coming on the podcast today. Um, I think it was a wonderful conversation.

Jenni (47:42): Thank you, Emily. This was super fun and I very much enjoyed it.

Outro

Emily (47:47): I want to send a huge thank you to Jenni for being my guest on the show today. Jenni has graciously made her budgeting and tracking Excel spreadsheet available for download. You can find a link to it in the show notes or go directly to pfforphds.com/s1E5-budget. If you would like to learn more about and apply some of the principles discussed in the episode and a few others, go to pfforphds.com/subscribe and register for my mailing list. You’ll receive a PDF that details five strategies you can employ today to improve your finances. The steps are designed to create maximum effect with minimum effort. I’m currently looking for guests for season two of the podcast. So if you’d like to volunteer to break down your budget or share a money story, please visit pfforphds.com/podcast. Please subscribe to the Personal Finance for PhDs podcast on iTunes. During season one, I’ll release episodes on the second and fourth Monday of each month between July and December 2018. See you in the next episode. The music is Sounds of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC.

How to Find, Apply for, and Win a Fellowship During Your PhD or Postdoc

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Applying for fellowships is an essential component of your PhD training. My fellowship application advice is to apply for a few relevant fellowships as a prospective PhD student, whether you are coming from an undergraduate degree, master’s degree, job, or other fellowship. It’s also a great idea to keep applying for fellowships and grants throughout your PhD and postdoc for any years when you’re not already a fellow.

The advice in this article is on why, where, and how to apply for fellowships successfully. It has a particular focus on outside fellowships that are portable (you can use them at any institution), remunerative (they provide at least stipend/salary support), and broad (many research fields are eligible).

Fellowships at the graduate level are similar to scholarships at the undergraduate level in that they are awards that are given based on merit, and sometimes only a narrow slice of students is eligible. They are “free money” similar to scholarships and grants in the sense that they do not have to be repaid. What is different is that fellowships typically pay part or all of a PhD student or postdoc’s stipend/salary and may also include some money for tuition and fees. However, as a fellow you do have the responsibility of making progress in your research or else your fellowship is not likely to be renewed. PhD-level fellows are free to focus their attention solely on their research (in addition to classes in the early stage of training).

Further Reading:

Why Apply for Fellowships

Regularly applying for outside funding is an expectation in graduate school (and often before and after) that should be made more explicit. Even if you are fully funded by your program or group, you will benefit from applying for fellowships throughout your PhD and postdoc. The only reason to forgo submitting at least one fellowship application in a given year is if you are already funded by an outside fellowship in the upcoming year.

Further Reading: Why You Should Apply for Fellowships Even If You’re Fully Funded

There are numerous reasons apply for fellowships regularly, some of which apply even if you don’t ultimately win a fellowship.

1) A Higher Stipend/Salary

Often, outside fellowships are structured to pay a higher stipend than what is typically paid to a graduate student or postdoc. This is especially true for the prestigious, competitive, national fellowships. Winning an outside fellowship that awards a higher stipend/salary is one of the very few ways a graduate student or postdoc can secure a significant raise within the same career stage. Even if the fellowship pays a stipend/salary lower than the baseline amount for the department, typically the department will supplement the fellowship stipend/salary up to or even above the baseline pay as a gesture of appreciation to the student or postdoc for winning the fellowship.

2) Greater Independence

Depending on the PhD’s stage and department, an outside fellowship may confer an increased degree of research independence. For example, a fellow may be able to set up a new collaboration, pursue a side project, or complete additional lab rotations when a graduate student funded by another means would not be given permission. This is because the fellow’s funding is not tied to working on any specific project the way a grant would specify.

3) Negotiation Power

Virtually all PhD students and many postdocs assume there is no room for negotiation in their funding package. However, there are two points at which negotiation is possible: Upon admission to a program and upon winning an outside fellowship (best if combined). If you are funding yourself through a fellowship, that’s money that your advisor/department does not have to spend on you (assuming they would have), and that money has now been freed up for other purposes.

After finding out that you have won a fellowship, you can tactfully ask your advisor or department chair if it is possible for you to receive an extra benefit. You could ask for an increase in pay, a one-time or yearly bonus, or one of the extra degrees of independence listed above.

4) Excused from “Work”

One aspect of PhD funding that is not necessarily widely discussed is the difference between being funded by a fellowship and being funded by an assistantship.

A research assistant, teaching assistant, or graduate assistant is virtually always an employee of her university (as well as a student). You can be sure of this status if you receive a W-2 at tax time. The graduate student’s stipend or salary is being paid for work she does: teaching, research, or another type of service.

A fellowship, on the other hand, is an award, and there is not supposed to be any work requirement tied to it, although in practice the PhD student must of course make adequate degree progress.

There is not much of a functional day-to-day difference between graduate students funded by research assistantships in which the research is included in their dissertations and graduate students funded by fellowships. In both cases, 100% of the graduate student’s time (less time spent completing courses) can be devoted to his dissertation.

However, being funded by a fellowship makes an enormous difference in the day-to-day life of a graduate student who would otherwise be funded by an assistantship that requires non-dissertation-related work. That work requirement is typically 20 hours per week. Winning a fellowship excuses the graduate student from that work requirement, meaning that 20 hours per week can be devoted to research that furthers the student’s degree progress. This might very well shorten the time it takes for the student to complete his PhD.

5) CV-Booster

One of the unsung but most important benefits of winning a fellowship, particularly a prestigious national fellowship, is its effect on your CV. Once one fellowship committee has deemed you worthy of funding, that stands as a testament to your ability that is seen by every subsequent funding committee. Winning your first fellowship gives you momentum toward career success. Assuming you continue to be an excellent candidate, winning subsequent fellowships and grants becomes more likely.

6) Shows Initiative/Effort

In my opinion, applying for at least one outside fellowship concurrently with applying for graduate school is an unspoken requirement. Being able to say on your grad school application or in your interviews that you have applied for outside funding (even if you don’t ultimately win) shows the faculty members reviewing your application that you take initiative and are ambitious. Even once you are settled into a department and group in grad school, attempting to fund yourself will almost certainly be viewed favorably by your advisor, even if you are not awarded a fellowship.

7) Applying Forces You to Frame and Justify Your Research

Writing a fellowship application can be a wonder pause and possibly reset point in your research progress. You have to step back from your day-to-day work, think about the underlying motivations and aspirations for your project, and explain why they (and you) are worth being funded. This exercise alone is likely to benefit your research and experimental design.

8) Good Practice

The final benefit of applying for fellowships is that it’s good practice. If you stay in academia or research long-term, applying for grants is likely to become part of your regular work rhythm. You may as well start early, gain experience, and hone your message.

When to Apply for Fellowships

Most fellowship application deadlines are in the fall, though a few occur at other points in the academic year. Over each summer, you should create a list of the fellowships you plan to apply for in the upcoming academic year, including ones with deadlines later in the year. Create calendar reminders leading up to each fellowship deadline to ensure that your applications stay on track.

Where to Find Fellowship Opportunities

Your first stop for finding fellowship opportunities should be your research and/or program advisor (postdoc, graduate, or undergraduate). Ask him or her what fellowships you should consider applying to and what fellowships other students and postdocs at your same stage apply to. You can also ask your peers which fellowships they have applied to in the past or are applying to now.

Another great place to look are websites that maintain databases of fellowship opportunities. Your university or department may cultivate such a list. In the next section, I have provided my own list of broad fellowships to consider. Other great databases can be found at:

Finally, try a simple Google search with keyword combinations of “fellowship” or “scholarship” along with anything particular to you, such as your field, research interests, career stage, demographics, standout qualities, etc. You may find a fellowship or scholarship that is tailored to you that your peers wouldn’t qualify for and therefore overlooked.

When looking for fellowship descriptions and listings, always consider both the large, well-known programs that fund a lot of fellows and lesser-known opportunities that may be a good match for you in particular, either because of your demographics or your research area. All of the advantages of fellowship funding apply to both types.

Fellowship Programs for Graduate Students and Postdocs

Below is a list of portable fellowship programs that are granted to a large number of fellows each year in a broad array of fields. These fellowships provide full or nearly full levels of stipend/salary support, often in addition to tuition and fees.

American Association of University Women Dissertation Fellowships

  • Website
  • Fields: All
  • Eligibility: US citizen or permanent residents; applicant must identify as a woman; current PhD students who will complete their dissertations between April 1 and June 30
  • Award: $25,000
  • Number of Awards: Not specified
  • Deadline: November 15, 2023

American Association of University Women Postdoctoral Fellowships

  • Website
  • Fields: All
  • Eligibility: US citizen or permanent residents; applicant must identify as a woman; must hold a Ph.D., Ed.D., D.B.A., M.F.A., J.D., M.D., D.M.D., D.V.M., D.S.W., or M.P.H. at the time of application
  • Award: $50,000
  • Number of Awards: Not specified
  • Deadline: November 15, 2023

Department of Defense Science, Mathematics & Research for Transformation (SMART)

  • Website
  • Fields: Aeronautical and Astronautical Engineering; Biosciences; Biomedical Engineering; Chemical Engineering; Chemistry; Civil Engineering; Cognitive, Neural, and Behavioral Sciences; Computer and Computational Sciences and Computer Engineering; Cybersecurity; Data Science and Analytics; Electrical Engineering; Environmental Sciences; Geosciences; Industrial and Systems Engineering; Information Sciences; Materials Science and Engineering; Mathematics; Mechanical Engineering; Naval Architecture and Ocean Engineering; Nuclear Engineering; Oceanography; Operations Research; Physics; Software Engineering
  • Eligibility: Citizen of the United States, Australia, Canada, New Zealand, or United Kingdom; 18 years of age or older; Requesting at least 1 year of degree funding; Able to accept post-graduation employment with the DoD for every year of funding requested; Minimum cumulative GPA of 3.0 on a 4.0 scale; Enrolled in a regionally accredited U.S. college or university or awaiting notification of admission for fall term.
  • Award: 1-5 years of support; $30,000-46,000/year stipend, full tuition and fees, $2,500 health insurance allowance, $1,000 miscellaneous supplies allowance
  • Number of Awards: Not specified
  • Deadline: December 1, 2023

Department of Energy Computational Science Graduate Fellowship (DOE CSGF)

  • Website
  • Fields: Science & Engineering Track: Aeronautics, Astrophysics, Biological Sciences, Chemical Engineering, Chemistry, Electrical Engineering, Environmental Science, Materials Sciences, Mechanical Engineering, and Physics. Mathematics/Computer Science Track: applied mathematics, statistics, computer science, computer  engineering or computational science.
  • Eligibility: Prospective and first-year graduate students; US citizens or permanent residents; full time uninterrupted study toward a Ph.D. at an accredited U.S. university
  • Award: up to 4 years of support; $45,000/year stipend, full tuition and fees, professional development allowance of $1,000 per year
  • Number of Awards: not stated; there are ~110 current fellows
  • Deadline: January 17, 2024

Ford Foundation Dissertation

  • Website
  • Fields: Research-based programs, e.g., American studies, anthropology, archaeology, art and theater history, astronomy, chemistry, communications, computer science, cultural studies, earth sciences, economics, education, engineering, ethnic studies, ethnomusicology, geography, history, international relations, language, life sciences, linguistics, literature, mathematics, performance study, philosophy, physics, political science, psychology, religious studies, sociology, urban planning, women’s studies, and interdisciplinary programs
  • Eligibility: Previous Ford Foundation Predoctoral Fellowship recipient; Current PhD students who will complete their dissertations no later than fall 2024; Enrolled in an eligible research-based program leading to a Ph.D. or Sc.D. degree at a not for profit U.S. institution of higher education; US citizens, nationals, permanent residents, and DACA recipients; Indigenous individuals exercising rights associated with the Jay Treaty of 1794; individuals granted Temporary Protected Status; asylees; and refugees; committed to a career in teaching and research at the college or university level in the U.S.
  • Award: 1 year of support; $28,000/year stipend
  • Number of Awards: ~36
  • Deadline: December 12, 2023

Ford Foundation Postdoctoral

  • Website
  • Fields: Research-based programs, e.g., American studies, anthropology, archaeology, art and theater history, astronomy, chemistry, communications, computer science, cultural studies, earth sciences, economics, education, engineering, ethnic studies, ethnomusicology, geography, history, international relations, language, life sciences, linguistics, literature, mathematics, performance study, philosophy, physics, political science, psychology, religious studies, sociology, urban planning, women’s studies, and interdisciplinary programs
  • Eligibility: Individuals who held a previous Ford Foundation Fellowship; Individuals who completed or will complete their PhDs or ScDs between 12/08/2015 and 12/08/2022; US citizens, nationals, permanent residents, and DACA recipients; Indigenous individuals exercising rights associated with the Jay Treaty of 1794; individuals granted Temporary Protected Status; asylees; and refugees; committed to a career in teaching and research at the college or university level in the U.S.
  • Award: 1 year of support; $50,000/year stipend
  • Number of Awards: ~24
  • Deadline: December 12, 2023

Graduate Fellowships for Science, Technology, Engineering, and Mathematics Diversity (GFSD)

  • Website
  • Fields: Astronomy, Biomedical Engineering, Chemistry, Computer Science, Geology, Materials Science, Mathematical Sciences, Physics, and their sub-disciplines, and related engineering fields (Chemical, Computer, Electrical, Environmental, Mechanical)
  • Eligibility: Prospective and current graduate students available for two summer internships; US citizens with the ability to pursue graduate work at a GFSD university partner
  • Award: Up to 6 years of support; $20,000/year stipend
  • Number of Awards: Varies
  • Deadline: December 29, 2023

Hertz Foundation

  • Website
  • Fields: Applied physical and biological sciences, mathematics, or engineering
  • Eligibility: Prospective and first-year PhD students; US citizens and permanent residents
  • Award: Up to 5 years of support; $38,000/9-month stipend and full tuition; $5,000/year stipend for fellows with dependent children
  • Number of Awards: 15 in 2023
  • Deadline: October 27, 2023

Life Sciences Research Foundation

  • Website
  • Fields: Life sciences
  • Eligibility: PhD or MD/DVM recipients (awarded less than 5 years ago); US citizens working in any geographic location and non-US citizens working in US laboratories; begun (or will begin) working in your postdoc lab between August 1, 2022 and July 31, 2024; Postdoctoral training must be completed in a lab different from that of your graduate (thesis) lab
  • Award: 3 years of support; $66,000/year for salary and $11,000/year for research
  • Number of Awards: 18-27
  • Deadline: October 1, 2023

National Defense Science and Engineering Graduate Fellowship (NDSEG)

  • Website
  • Fields: Aeronautical and Astronautical Engineering; Astrodynamics; Biomedical Engineering; Biosciences (includes toxicology); Chemical Engineering; Chemistry; Civil Engineering; Cognitive, Neural, and Behavioral Sciences; Computer and Computational Sciences; Electrical Engineering; Geosciences; Materials Science and Engineering; Mathematics; Mechanical Engineering; Naval Architecture and Ocean Engineering; Oceanography; Physics; Space Physics
  • Eligibility: Prospective and current (first or second year) PhD students; US citizens and nationals
  • Award: 3 years of support; $3,400/month in stipend, up to $1,400/year in health insurance, and full tuition and fees
  • Number of Awards: Up to 500
  • Deadline: November 3, 2023

National GEM Consortium MS Engineering and Science Fellowship Program

  • Website
  • Fields: Science and engineering
  • Eligibility: Senior or graduate of an accredited engineering or computer science program; Minimum cumulative grade point average of 2.8/4.0; Agree to intern for two summers with sponsoring GEM Employer; under-represented students (American Indian/Native, African American/Black, Hispanic American/Latino); US citizens or permanent residents
  • Award: Employer Fellows: full tuition and fees; $4,000 living stipend per full-time semester up to 4 semesters; minimum $16,000 total stipend over the entire Master’s program; up to two paid summer internships. University Fellows: full tuition and fees; Associate Fellows: full tuition and fees; at least $8,000 stipend per year
  • Number of Awards: ~180 in 2022
  • Deadline: 2nd Friday in November

National GEM Consortium PhD Engineering and Science Fellowship Program

  • Website
  • Fields: Science and engineering
  • Eligibility: Senior, masters student, or graduate of an accredited engineering or applied science program; Minimum cumulative grade point average of 3.0/4.0; Agree to intern with sponsoring GEM Employer; under-represented students (American Indian/Native, African American/Black, Hispanic American/Latino); US citizens or permanent residents
  • Award: Employer Fellows: full tuition and fees up to the 5th year of the PhD; $16,000 stipend for one academic year, supplemented by university; a minimum of one paid summer internship. Associate Fellows: full tuition and fees; at least $16,000 stipend per year
  • Number of Awards: ~240 in 2022
  • Deadline: 2nd Friday in November

National Science Foundation Graduate Research Fellowship Program (NSF GRFP)

  • Website
  • Fields: STEM and STEM education
  • Eligibility: Pursuing a research-based Master’s or Ph.D. at an accredited United States graduate institution, with a US campus; Completed no more than one academic year of full-time graduate study; Graduate students can apply only once either in their first or second year; US citizens, nationals, and permanent residents
  • Award: 3 years of support; $37,000/year in stipend, $12,000/year to institution
  • Number of Awards: 2,750
  • Deadline: October 16-20, 2023 (date varies based on discipline)

Paul and Daisy Soros

  • Website
  • Fields: Unrestricted
  • Eligibility: Prospective and current (first or second year) graduate students; immigrants and the children of immigrants age 30 or younger
  • Award: 1 or 2 years of support; $25,000/year stipend, 50% of tuition and fees up to $20,000 per year
  • Number of Awards: 30
  • Deadline: 10/26/2023

How to Create a Winning Fellowship Application

You can’t throw together an excellent fellowship application in a weekend. They take a great deal of time and effort to conceive, write, re-write, and improve with feedback. Below are the steps you must follow to submit a potentially winning fellowship application.

1) Find Fellowships that Are a Good Match for You

You will dramatically increase your odds of winning a fellowship if you are selective about which ones you apply to. Don’t waste time applying to fellowship programs that have been cultivated for candidates with characteristics or research interests that you don’t share or for which you are unambiguously unqualified.

2) Read the Fellowship Application Components and Prompts Carefully

It may seem like all fellowship applications are similar, but there are actually overt or subtle differences among them. Most if not all fellowship programs will want to hear about your research or research interests (research statement) and also about you personally (personal statement), but the particular aspects of each that they are looking for may differ. It’s vital to fully answer the specific prompts for each different application. Make it easy for the evaluators to confirm that you have addressed every component of their rubrics, e.g., intellectual merit and broader impacts (for the NSF GRFP), career aspirations, etc.

You may be able to use similar points and even prose across your fellowship applications, but each application statement must be carefully tailored.

Early on, it’s also important to identify the various non-statement components of the fellowship application so you can gather them without rushing. These components may include letters of recommendation, test scores, and transcripts.

You may be required to receive your current university’s permission (nomination) to apply for a fellowship, so you need to be aware of the requirements and deadline for applying for that pre-selection stage.

3) Select and Notify the Writers of Your Letters of Recommendation

Give the writers of your letters of recommendation plenty of notice regarding the fellowship applications you request that they submit to (at least a couple months). It is helpful to share with them a spreadsheet or similar in which you can list all the different applications, their due dates, and submission links for each application season.

Different fellowship applications may require different types of letter writers, so you may need to reach out to faculty members or other mentors who are not your primary research advisors for one application or another.

Give faculty members who have never written you a letter of recommendation in the past an extra-long period of time to prepare the letter and offer to meet with them to discuss your application.

4) Begin Drafting Your Fellowship Application Materials Well in Advance of the Deadline

Once you are finished preparing, it’s time to start writing. Again, writing well in advance of the application deadline is imperative. You need to give yourself time for high-quality research, reflection, and crafting. Finish a draft, walk away from it for a few days or a week, and then come back with fresh eyes. At any stage you may ask for feedback: outline, sketchy draft, full draft, or the I-think-it’s-complete draft.

5) Write for the Proper Audience

As with any piece of writing, it’s vital to write for a certain audience. In the case of fellowship applications, you must understand, possibly by reading between the lines, what the evaluators of the fellowship applications are looking for. This is not to say that you will simply tell them what they want to hear, but rather that you will highlight the specific components of your application that you know they have to or want to see included. You should also use language that the evaluator will understand, which likely does not include obscure jargon.

6) Seek Input from Advisors, Peers, and Past Winners

To create a competitive fellowship application, you need outside eyes and expertise. You can get feedback and tips from:

1. Your Research and/or Academic Advisor(s)

Your undergraduate or graduate advisor is the best person to read your statements and give you feedback from his or her perspective as a career researcher who has advised other fellowship applicants and winners. He or she may even be overseeing the project you have proposed in your application, in which case the feedback will be even more specific and useful. Your advisor is likely also writing you a letter of recommendation, so it’s a great idea to give him or her full awareness of what you’re proposing.

2. Other Research and/or Academic Mentors

You may reach out to other faculty or staff members at your current or past institutions to read and provide feedback on your fellowship application. Your university may even designate a specific faculty or staff member as a mentor for certain fellowship applications. Your current institution may hold workshops and seminars to guide you in your applications, which you should make every effort to attend.

3. Your Peers Applying for Fellowships

Forming a reading group for one or more specific fellowship applications is among the most powerful steps you can do to take your application from ordinary to extraordinary. Your group should be composed of your peers of a similar stage and field who are applying to one or more of the same fellowships. You should agree on deadlines for producing outlines and drafts of your statements and read one another’s work at one or more of the stages to help one another improve the ideas and writing therein.

4. Prior Fellowship Winners

You can learn from the past awardees of the fellowships you are applying to. The first network to tap is your personal one: your friends and (older) peers from your college or graduate school who have previously won the fellowship you are applying to. You can also search for advice from fellowship winners online. Ask these winners to share their tips with you, in particular anything that is unique to that one fellowship. Some past winners may even share their statements with you as a model, but if you do read them be quite careful to avoid even inadvertent plagiarism.

7) Finalize Your Fellowship Application

Once you have incorporated the feedback you receive from your mentors and peers, it’s time to finalize your statements and application. Follow all formatting specifications precisely, and even beyond that format your statements so that they are easy to for the evaluators to read.

Be sure to proofread the final version of your statements carefully. While you can complete this step yourself, it is probably even better to ask a friend or family member who has not yet read your statement to go through it with fresh eyes to catch any grammatical, spelling, or formatting mistakes. You might even be able to use your university’s writing center for this step.

Again, don’t wait to the last minute to load your application materials into the application portal. Do this a couple of days in advance of the deadline so you can be sure you have prepared all the materials properly. Finally, you’re ready to submit!

The main advice in this section is to give your application plenty of time and careful attention and to ask for feedback from anyone willing to give it to you!

How to Be an Excellent Fellowship Applicant

This last subject is arguably the most important one of this entire article. Submitting a large number of marvelously written fellowship applications will not propel a weak applicant to success. That is to say, prior to and concurrently with searching out and applying for fellowships, you should also take steps to increase your strength as an applicant.

Of course, fellowships vary in what they look for in a candidate. But there are commonalities:

  • Research experience with demonstrated results and/or deliverables (e.g., papers, posters, presentations, patents)
  • High grades and test scores
  • Strong and detailed letters of recommendation
  • Community service
  • Stand-out experiences
  • Career commitment to research, teaching, service, etc. (whatever is in line with the ideals of the fellowship program)

It’s a great idea to keep track of accomplishment or activity you participate in throughout your college years and beyond with a few annotations about your contributions to draw upon when preparing fellowship applications.

At the end of the day, what makes you an excellent fellowship applicant has a great deal of overlap with what makes you an excellent undergraduate or graduate student or postdoc, effective researcher, and personable individual. Effort you put toward making yourself a stronger fellowship applicant will benefit many other areas of your life as well.

This Grad Student in DC Prioritizes Living Alone and Investing in Mental Health

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In this episode, Emily interviews Christina Padilla, a PhD candidate at Georgetown University in human development and public policy earning $38,000 per year. Christina shares her top five expenses as a DC resident: rent, groceries, eating and drinking out, regular monthly expenses (i.e., phone, internet), and the copay for her therapist. They discuss Christina’s tips on leveling up her housing, meal planning, living car-free, and finding frugal fun in the city.

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Links Mentioned in Episode

DC grad student

0:00 Introduction

1:18 Q1: Please Introduce Yourself

Christina Padilla is a PhD candidate at Georgetown University in Washington, D.C. She is in the psychology department, and specifically in the human development and public policy program. Her research focuses on early childhood, parenting, and early education.

Christina completed her undergraduate studies in Baltimore before taking a 2-year research position at the National Institute of Health (NIH) in the D.C. area, and then stayed for graduate school.

3:11 Q2: What are the top expenses that you have, either in a typical month or in the last month?

Christina’s top five expenses per month are rent, groceries, eating and drinking out, other regularly occurring monthly expenses like phone and internet access, and a copay for therapy, which she started in the fall.

4:15 Expense #1: Rent

Her first year at the NIH, Christina lived in Maryland because it was closer to her lab and her rent was only $600-$700 plus utilities, but she hated being so far outside the city. In her second year at the NIH, she moved to a group house and paid $800 a month. However, it was a very old house and required Christina to have four roommates. She lived there for three years, including her first two years of graduate school, and then decided it was worth it to live by herself. She had saved money to be able to live in a studio.

Now, Christina is budgeting with an income of $38,000 for the fall 2017 through the summer; after that, her funding situation is uncertain. She allocates $2,700 per month, and of that, rent is $1,350. For a place in D.C., that is not very expensive. Christina lives alone in a rent-controlled studio apartment in a very desirable area outside of Dupont Circle.

Transportation was once one of Christina’s top expenses, and she would spend $150 a month to get to and from campus. She does not own a car: all the costs were for public transportation. At present, she is able to walk to campus, and now spends about $40 every other month on Metro costs. Georgetown also has a free shuttle between the area she lives and the university campus.

9:13 Is the building that you’re living in popular with students?

Another graduate student living in the building recommended it to Christina when she moved out, but Christina took a different unit because the cost was significantly less due to rent control factors. A number of other Georgetown students do live in the building; there are quite a lot of young people and quite a lot of long-term residents, but very few people in between.

11:43 Expense #2: Groceries

Christina spends about $200 per month on groceries on average. Unless she is going to a social event, she tries to cook all of her meals at home instead of ordering out. Christina has a small kitchen, which it is in a separate room from the rest of the apartment. She does not have a dishwasher or garbage disposal, but all other major appliances are included.

13:11 Have you always tried to cook at home, or is that something you decided to do along the way?

Cooking dinner at home is a habit Christina has always had; eating out was only for special occasions, rather than a casual habit. Even when she was at the NIH, she would cook every day. Her savings enabled her to take a lengthy trip to Europe before starting graduate school—Christina and another woman compared their spending and found that a major factor in Christina’s savings for the trip was that she was not ordering out, and the other woman was ordering food almost every day.

16:17 Do you have any comments on how you keep food costs down in a high cost of living area?

Christina also allocates $200 per month for eating out, but her ability to stay within both budgets was enhanced when she started meal planning. Planning meals for a week and only buying what’s necessary for that week has helped her stay within her budget. Christina enjoys cooking, and so cooking food and freezing it is both relaxing and budget-friendly.

On Sundays, Christina will make breakfast and lunch for at least Monday through Wednesday, and cook again on Wednesdays. Previously, she would try to prepare meals one day ahead of time but would often find that she was too tired or busy to do so, and ended up having to cook in the morning or buy meals. By planning meals ahead and cooking in bulk, Christina saves herself money and time.

19:13 Expense #3: Eating and Drinking Out

Christina sometimes feels that $200 per month for eating and drinking out may be high, but acknowledges that D.C. is an expensive city to eat in—one brunch could cost $50 or $60. Brunch and happy hours are both popular in the city, and the costs of each can add up. The $200 also includes going out for celebrations and other social events. Christina avoids going out to eat unless it is with other people so that it stays a treat instead of becoming an expensive habit.

21:21 Expense #4: Other Regular Monthly Expenses

Other regular monthly expenses make up the fourth largest category for Christina, which amount to about $100 per month. She pays $35 each month for her phone, $43 for internet access, $13 for dental insurance, and $5 for Spotify, which is cheaper with a student membership. The cell phone price is for the cost of the actual phone; the one thing Christina’s parents still pay for is Verizon service.

22:12 Expense #5: Therapy Co-Pays

In the fall, Christina was having a difficult time with her dissertation. The $200 per month she now spends on co-pays were originally going into savings and have transitioned into payment for counseling. Christina mentions that all graduate students need support but sometimes struggle with talking about it or feeling justified in seeking out help, and enjoys talking about counseling to help de-stigmatize it. She considers it an investment in herself and getting through graduate school in one piece.

23:24 Will you be finishing grad school soon?

Christina has an external fellowship for $30,000 for two years, and her department gave her an extra $8,000 to match everyone else’s stipends. She will continue to receive the $30,000 stipend but does not know whether her department will award the $8,000 again. She hopes to finish in January of 2019. She may drop her counseling sessions to once or twice a month instead of each week.

25:33 Q3: What financial goals are you working on?

In addition to the five categories and other spending, Christina saves at least $200 per month. $100 goes into a mutual fund with Schwab and $100 goes into a Roth IRA that she set up last year.

Christina does not get a very good interest rate on her savings account and chose to invest in a mutual fund because of an episode of the John Oliver Show “Last Week Tonight,” from which she learned it would be a good option for her savings goals. She has not decided whether to use it for a mid-life expense or for long-term savings, such as a down payment on a house or for retirement.

28:03 Q4: What don’t you spend that much money on that might surprise people?

People are often surprised by how little Christina goes out to eat. Many people in graduate school tend to order in a lot for convenience. However, many people bring lunch to campus, so Christina regularly eats lunch with other people in her lab, and bringing food has not been an isolating experience.

29:24 Q5: What are you happy with in your current spending and what would you like to change?

Christina is overall happy that she is staying afloat and able to save money even though she lives in an expensive city. Many of her friends have “real” jobs where they make more money, and it is hard to compare herself to them, but she is pleased with being able to save at all. She tries to think positively about being paid to get a degree and be happy that a stipend is available, that tuition is covered, and that she has no student loan debt.

31:43 What advice would you have for someone who is starting in their first year at Georgetown?

Christina’s number one piece of advice is to be honest and reflective with yourself about your priorities in terms of housing. It’s not always possible to live in a luxury building in a great location without roommates and have low rent. There are housing options for all priorities, but you have to be honest about what you want and to be ready to make sacrifices in terms of money, location, or roommates. A lot of people live outside D.C. in Virginia or in Maryland, but many of those areas have become as expensive as D.C., so comparing prices is important.

Georgetown does not offer much graduate student housing, and what’s available is about equally expensive as other housing options if not more. Georgetown does provide shuttles, however, because the campus is not connected to the Metro line.

35:30 Any closing thoughts or other comments about living in D.C. on $38,000 per year?

D.C. has a lot of free activities, especially in the summer. There are many free outdoor concerts, and all of the D.C. museums and monuments are free to visit.

No matter where you live, setting a budget and sticking to it is immensely helpful. Christina uses the free version an app called Good Budget, which allows you to create spending categories and record your transactions. The app will show a green bar decreasing as you spend throughout the month. Christina found that Mint was not helpful for her in curbing her spending and now uses Good Budget instead.

Trying to keep up with people who have “real” jobs and salaries is impossible, but it is possible to politely take charge of social situations. For example, Christina recommends offering to choose the restaurant where friends will gather and selecting a lower-cost option. Other people may not recognize that their budget constraints might be looser than a graduate student’s.

Christina opts for casually steering events with friends towards more affordable activities, and will occasionally decline to go to things if they are too expensive. She has found that most people are fairly sensitive to graduate student budgets and have no problem with less expensive activities and options.

40:13 Conclusion

How Fellows Should Prepare for Tax Time at the Start of the Academic Year

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Most Americans don’t like to give any thought to their taxes between when their tax returns are due in mid-April and when their income forms arrive at the end of January. (Scratch that: they don’t want to think about tax anytime outside of the two weeks in early April when they scramble to assemble their returns!) The exception is when they start a new job and are asked to set up their income tax withholding by filing a W-4.

fellowship tax September

A version of this post first appeared on GradHacker.

Graduate students and postdocs – lucky us – have extra opportunities to consider tax withholding, namely every time we change funding from a compensatory source to a non-compensatory source or vice versa. Compensatory funding for your stipend comes from your job as a research, teaching, or graduate assistant. Non-compensatory funding for your stipend comes from fellowships and training grants that are technically awards, not payment for work. (If that distinction makes little sense to you, you’re not alone!) Similarly, postdoc salaries can come in compensatory and non-compensatory versions as well.

As the vocabulary that universities use for these types of funding varies somewhat, here’s how you can definitively determine which type you receive: Compensatory pay is reported at tax time on a W-2. The broadest statement that can be made about non-compensatory pay is that it isn’t reported on a W-2. Universities have different methods for reporting this pay, which include: a 1098-T in Box 5, a 1099-MISC in Box 3, a 1042-S (for international trainees), a courtesy letter, and not at all.

When it comes to tax withholding, compensatory pay is handled by universities the same way employee pay is handled by employers: The trainee files a W-4, which calculates the fraction of each paycheck that will be sent to the IRS throughout the year. Each spring, the taxpayer files a tax return that delineates her exact amount of tax due, and any excess money withheld is refunded or any additional tax due is paid. That system is relatively easy to grasp because it’s the same as what all employees in the US experience.

Fellows (by which I mean trainees whose stipends/salaries are non-compensatory) usually have a different experience with respect to tax withholding, which is the focus of this post.

A small number of universities allow fellows to set up tax withholding using a W-4, just like trainees who receive compensatory pay. If you are a fellow at one of these universities, file your W-4 and join the rest of the country in putting taxes out of your mind until next spring.

However, the large majority of universities do not handle any tax withholding on behalf of their fellows. This does not necessarily exempt those fellows from sending tax payments to the IRS throughout the year; by default, the IRS expects to receive regular payments from each taxpayer. Instead, fellows must engage with the 1040-ES and estimated tax payments, which are more typically used by the self-employed. (But: graduate students are not self-employed!) This omission of services on the part of the universities can be especially challenging for first-year graduate students on training grants or receiving fellowships, who not only may be unfamiliar with the quirks of non-compensatory pay but also the US tax system at large, especially if they have never been a full-time employee.

Further reading: The Complete Guide to Quarterly Estimated Tax for Fellowship Recipients

Fortunately, there are only a few simple steps that fellows need to take at the start of the academic year to prepare for their tax due next April:

1) Use Form 1040-ES to estimate the amount of additional tax you will pay for 2018.

Form 1040-ES is a one-page form (page 8) that assists you in making a high-level estimation of the amount of tax you will owe for this year. (If you want even more information, check out Publication 505.)

You will enter your expected adjusted gross income for 2018 in line 1. If your grad student stipend or postdoc salary is your only income, simply multiply the income on your paycheck by the number of paychecks you expect to receive in 2018. If you have a side income or were otherwise employed prior to starting your fellowship/training grant, add in that income as well.

The worksheet will then walk you through a truncated version of the calculations you will make on your tax return: subtracting your deduction (standard or itemized), calculating your tax due, and factoring in your credits and self-employment tax (from your side income, possibly).

In the end, you will have three relevant numbers: the estimated amount of tax you will owe for 2018 (line 11c), the amount you have to pay throughout 2018 to avoid being penalized (line 12c), and the amount of withholding expected in 2018 (line 13) (for instance, from your job or compensatory pay prior to your switch to non-compensatory pay).

2) Determine whether you are required to make quarterly estimated tax payments, and do so if you are.

If for 2018 you expect to have more tax withheld than the amount required to avoid a penalty, once again you can forget about taxes until next spring.

If for 2018 you will owe at least $1,000 in additional tax, you are required to make quarterly estimated tax payments. (Exception: If your withholding in 2018 is greater than the smaller of 90% of your 2018 tax due or 100% of your 2017 tax due if your 2017 tax return covered 12 months. See Figure 2-A of Publication 505.) You will send in to the IRS one-quarter of your additional tax due (line 15) by September 17, 2018 (for the period of June to August), January 15, 2019, April 15, 2019, and June 15, 2019. You can pay by mail using the vouchers in Form 1040-ES or online at www.IRS.gov/payments.

If in 2018 you will owe less than $1,000 in additional tax, you are not required to make quarterly estimated tax payment, but you will owe a lump sum at tax time.

3) Set up a system of self-withholding to prepare for your tax due quarterly or yearly.

Whether you are required to pay quarterly estimated tax or a lump sum at tax time, the best practice to handle those payments is to prepare for them with each paycheck. Basically, you should simulate your own personal tax withholding system to avoid being forced to come up with a large sum quarterly or yearly, which can be a shock to your budget or cash flow.

Divide your tax due, whether quarterly or yearly, by the number of paychecks you’ll receive in the period it covers. Transfer that amount of money each time you are paid to a dedicated savings account for tax payments. Then, when you pay your quarterly or yearly tax, draw your tax due from the “withholdings” you’ve created in that savings account. (You can also leave this money mixed in with other cash in your checking or savings accounts, but be sure to keep careful track of the amount you have earmarked for taxes so you don’t dip into it for other purposes.)

For the time that you receive non-compensatory pay, you’ll have to stay on top of making your quarterly estimated tax payments or verifying that you are not required to make them. First-year graduate students in particular should redo Form 1040-ES in January for their 2019 income, because while receiving non-compensatory pay for only the fall semester might not meet the requirement for paying quarterly estimated tax, receiving it for the entire calendar year probably will.

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