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Heading to a Conference? Tack on a Vacation, Too.

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The opportunity for travel is one of academia’s most attractive perks. In just about any field, you can attend conferences and establish collaborations with far-flung colleagues. Certain fields also provide opportunities for travel through field work or archive visits.

A version of this article first appeared on GradHacker.

But what’s the fun in traveling to a new city or country if you only work while you’re there? It’s natural to want to combine personal activities with the professional duties that are the primary motivation for the trip. I recently surveyed (former) grad students to find out how they combined personal travel pursuits with professional travel opportunities.

conference vacation

Adding Personal Activities to Conference Travel Is Popular

Nearly all of the respondents to my survey shared experiences of adding on personal travel to conferences.

The easiest and lowest-stakes way to accomplish this is to spend the time you’re already not at the conference, such as the evenings, however you like. Grad students reported sightseeing, attending cultural events, sampling the local cuisine, hiking, and visiting friends or family during their personal time. Ron from Duke University suggested maximizing your time: “Use the “extra” time you have – evenings out for dinner and in the city, free time the day before and after the conference if your flight is late.”

The next level up is to add days to your trip that are purely personal time. A student at Yale University who did this frequently advised: “Tack on a couple days either over a weekend or on ‘going and coming’ days to hang out.”

Jenn from Duke University attended an American Chemical Society meeting in Puerto Rico. She vacationed on the island for four days before the meeting started, timing it so that she only missed two workdays. This was a unique travel opportunity for her, as most of her other travel during grad school was obligation travel. “This was the only trip I took where I felt it was a true/real vacation (ironic that it was for a work conference). I took a trip for me to do something I loved, in an exotic location. I still talk about it to this day 8 years later. I would 100% do it again.”

It’s also possible to make it a family vacation! While at the University of Michigan, Katy Peplin (Katy Peplin Coaching) visited the Scottish Highlands with her husband before attending a conference in Glasgow. Jennifer Polk (From PhD to Life) spent a week in a villa in Italy with her parents and friends before traveling to London for a conference while she was at the University of Toronto. Mariana from the University of Brasília typically spends one month of each summer in North America vacating and attending an annual association meeting with her fiancé. They even scheduled their wedding and honeymoon to coincide with one of these trips!

Conference Selection Based on Location

Some students took their personal travel desires into consideration when applying to conferences. Diane Burgess from Simon Fraser University advised: “Give some thought to picking conferences that will combine excellent networking opportunities with the chance to travel. I try to select conferences that are in cities I’d like to visit.” Alex from Duke University concurred: “Go to legit conferences that have academic value, but in places where you can also enjoy the outside stuff. It’s usually easy to do both.”

Who Pays?

Unsurprisingly, the personal aspects of these trips were only subsidized to the degree that they overlapped with the professional itinerary and available funding. Some students paid for their professional travel entirely out of pocket, but most survey respondents received partial or full funding for the professional aspects of the travel. Extra nights of lodging, personal activities and their corresponding local transportation, meals on bonus days, and airfare for family members were always paid for by the students.

Lauren wrote, “Conferences were a great opportunity to explore new cities, and taking a few days prior to or following the conference on my own dime was totally possible. Use conference funds for the conference, and self-fund personal travel surrounding it.”

A student from UC Davis suggested ways to stretch the conference funding: “Find flights on different days that are cheaper or equal price to the flight you would normally take so that the air travel is completely covered, minimize spending during professional events, and take advantage of any provided meals so that you can use your per diem to cover meals on the extra days you are traveling.”

Should You Ask for Permission to Add on Personal Travel?

The majority of the grad students who responded to the survey did not explicitly ask for permission to add personal travel on to their professional travel. A few told their advisors that they would be taking some additional time away from work, and a couple cleared their requests for staying extra time with the person who paid for their travel. However, the advice given by some of these grad students was to just be upfront with your advisor about your plans. A student at UC Davis who visited San Diego in conjunction with a conference wrote, “It’s pretty expected to do personal travel; it’s a not a big deal to ask about.” Ron from Duke University added, “The structure of the events and hints from coworkers made it clear that I should enjoy some sightseeing.”

Beyond Conferences

Conferences are not the only professional travel opportunities that can be combined with vacation. A student at Miami University traveled to Peru and Thailand for 10-day field expeditions, after which she took two weeks of vacation. She hiked to Machu Picchu, went birding, and scuba dived during these vacations. Kirstin from Baylor University traveled to Israel for excavations, adding on time to visit family and friends.

Vacationing Is Self-Care

Taking vacations during graduate school is challenging but necessary for basic self-care. Mariana from the University of Brasília lamented that “it’s virtually impossible to take vacations when you’re a grad student.” Combining vacations with personal travel rejuvenates students for a fraction of the money and time that might otherwise be spent.

A student from UMass Amherst wrote, “Adding personal travel gives you the opportunity to unwind before/after trip. Often nice way to take a break/reward oneself after a big professional accomplishment since our research/writing commitments can be so demanding at times and it can be hard to prioritize celebrating oneself.”

“Grad school is grueling, find some vacation time when you can,” implored Nicole from the University of Kansas.

Don’t Miss Out on this Opportunity

Professional travel to conferences or for research also presents an opportunity to recharge, experience something new, and visit friends and family. None of the participants in my survey reported any fallout from combining professional and personal travel, and many exhorted other grad students to follow suit. You can determine whether it’s better to leave your personal travel and activities unspoken or to ask for explicit permission, for example if you are extending your trip, as you know your advisor and field best. Piggybacking personal travel onto professional travel is a fantastic way to vacate while spending less time and money than you otherwise might. Don’t forgo this incredible perk of academic research!

How to Financially Navigate an Unfunded Summer

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One of the most frustrating aspects of graduate school is that your income may fluctuate with each term. In some fields and at some universities, you might change roles not just each academic year but perhaps as frequently as each semester or trimester. When each role (fellow, teaching assistant, research assistant, graduate assistant) comes with a different pay rate, the result is a variable or irregular income. It’s even common to go without an income for a term, most typically the summer. This does not mean that you are at loose ends over the summer or free to work any type of other job. Research must go on in order for you to graduate in a timely manner!

An unfunded summer – or even just an income decrease – is not at all financially trivial for a grad student, and the solutions to an irregular income that other people use are not necessarily available or optimal for a grad student because of his low overall income. Of course, the ideal situation is to secure funding over the summer from an RA position or outside grant. If that option is not available, you must consider other avenues. If you see the funding lapse coming or it occurs regularly, you can prepare for it throughout the entire year.

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1) Get Another Job

You can take a job to replace the income you received during the academic year.

It may not be possible (or ethical) to find a regular full-time job since you plan to return to your fellowship or assistantship in the fall. A temporary or seasonable job is a good alternative, whether full-time or part-time.

First, look for a job that would advance your career in some way; it might help you demonstrate an existing skill, learn a new skill, expand your network, or simply look good on a CV. A paid internship is an example of a temporary job that is likely to advance your career.

Second, look for a job that you would enjoy doing, even if it’s not career-advancing. Your university is a great place to start when searching out opportunities, such as a work-study position. Inside or outside your university, there may be opportunities to work with younger students who are also on summer break, such as through camps or tutoring services.

Third, look for a job that pays you the highest available rate while still allowing you some time for your research and/or professional development on the side. If it isn’t advancing your career and you don’t enjoy it, just earn as much as you can per hour so you can minimize your work time.

2) Become Self-Employed

A way to earn an income that is an alternative to a temporary job is to work for yourself. It takes a certain personality and a lot of work to be successfully self-employed, but the advantages are:

  • You choose the type of work and clients,
  • It has the potential to pay a better hourly rate than a job, and
  • Your schedule and workload are under your control.

Try to think of a unique or marketable skill that you have and how you can leverage it to serve clients.

A few generic avenues for self-employment available to many grad students are:

  • Consulting (in your field),
  • Tutoring,
  • Freelance research, writing, and/or editing, and
  • Childcare.

If self-employment appeals to you, you should start pursuing it ASAP, because it often takes time to start generating an income/get paid. You might have to sustain your business year-round, though you could ramp it up or down depending on your academic workload.

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3) Save in Advance

The typical financial advice for dealing with an irregular income or lapse in income is to save up in advance so that you can cover your expenses from your savings instead of your income. This is good advice for someone with an income that far exceeds her expenses. For example, if you will go three months without an income, you should save approximately one-quarter of your income from each month that you are paid to sustain yourself during your unfunded summer. Setting this savings goal ensures that you keep your expenses in check year-round while building up the account you plan to draw from.

But how many graduate students are able to save one-quarter of their net income? And more so, how many of those well-paid graduate students might actually face an unfunded summer?

To the degree possible, you should save from your academic year income (your grad student income as well as side hustle if you have one) to pay expenses during your unfunded period if you don’t know you will earn as much from a different job/side hustle. In the face of short-term uncertainty, especially with respect to income, cash is king. But be honest with yourself from the first regular paycheck you receive about whether this plan is feasible.

4) Reduce/Shift Expenses

In the spirit of living within your means, if you are going to earn less or live off savings during your unfunded summer, you should try to reduce your expenses as well.

As your largest expense is likely housing, that’s where you should look first. If there is nothing physically keeping you at your university over the summer, you can move for the term. Sub-let your academic-year home and rent a less expensive place somewhere else, move in with your parents/relatives, or house-sit.

If any other of your typical expenses become unnecessary over the summer, try to jettison those as well. For example, many cities offer a slate of free activities over the summer, so you may be able to dramatically reduce the amount of money you typically spend on entertainment, eating/drinking out, etc.

Another possibility for making ends meet on a temporarily lower income is to shift any expenses possible to when you have a higher income. This doesn’t necessarily reduce the amount you would spend, but rather makes budgeting easier. Expenses that might be shifted include:

  • Shopping, i.e., for clothes, electronics, household furnishings,
  • Routine medical/dental/vision care,
  • Non-monthly insurance premiums or subscriptions, and
  • Vacation.

5) Take Out Student Loans

Finally, if you are enrolled as a student and taking a sufficient number of credits over the summer, you may be eligible to take out a student loan. (Credits don’t necessarily equal classes, depending on how your university registers graduate students.)

This is in my opinion a method of last resort and should only be used to speed progress toward graduation if a large salary bump is expected. A summer free from teaching or other service obligations can be an incredibly fruitful time for research progress – for some projects, it might be the only time when meaningful work is accomplished – so student debt can be reasonably justified for that purpose.

Do some math on the ROI of taking on the debt (principal and interest) vs. your other income options for an unfunded summer to make sure it’s worth it. You don’t want to end graduate school with an amount of debt that will be onerous to pay back with your post-PhD salary, but you also don’t want to tread water in graduate school and put off earning that post-PhD salary for too long.

Using student loans over the summer isn’t incompatible with any of the other options; use the other approaches to minimize the amount of student loans you need to take out/repay them immediately to the degree that they do not interfere with your research progress. Also, it is preferable to take out student loans than to accrue higher-interest rate debt (e.g., credit card debt) due to poor planning.

If you know your upcoming summer will be un/under-funded or you aren’t sure whether you’ll be able to secure an academic position or grant, start preparing now by:

  1. Reducing your expenses and saving as much as you can.
  2. Searching for temporary/part-time jobs.
  3. Pursuing a self-employment side hustle that ideally both pays well and complements your graduate work.

Even if you find funding for your summer and don’t need the side hustle or saved money, you will have put yourself in a better financial position and set your mind more at ease about the potential for subsequent unfunded summers.

Can and Should You Refinance Your Student Loans During Grad School?

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One of the most talked-about topics within personal finance in the last several years is student loan refinancing. Student loan refinancing is taking out a new private student loan and using it to pay off your old student loan(s), federal or private. The student loan industry is being disrupted by traditional banks, peer-to-peer lenders, and technology companies. Combining those new players with the current low interest rate environment has produced incredibly low-cost alternatives to the standard student loans that have been issued over the past decade or so. Current graduate students with student loans from undergrad or grad school may be looking at these new options with great interest, especially because of pervasive advertising by one of the industry leaders.

refinance student loans grad school

A version of this article originally appeared on GradHacker.

But is student loan refinancing advisable or even possible for graduate students? Below are several questions graduate students with student loans may be asking when exploring refinancing.

Is the Refinanced Student Loan a Better Deal than Your Current Student Loans?

First and foremost, you should only consider refinancing your student loans if another lender will give you a better deal than the one you currently have. This better deal will almost certainly be defined by a lower interest rate on the debt, although there may be other reasons to switch if the interest rates are close, such as locking in a fixed interest rate or lowering your monthly payment. If the new loan involves an origination fee (many do not), you must make sure that the decrease in interest rate justifies the up-front fee.

When you take out any new debt, you must read the fine print associated with your loan very carefully. This is especially true for student loans, as even private lenders may offer a few perks not available for other kinds of debt, such as a grace period or forbearance. For refinancing student loans, you need to have a full idea of what both your current lender and your possible new lender are offering you so you can be sure you are not forgoing any relevant benefits.

Can You Defer Refinanced Private Student Loans While You Are in Grad School?

One of the major benefits of federal and many private student loans is the option to defer the loan payments while you are enrolled in graduate school. When your student loans are deferred, no payments are due, though interest will still accrue if the loans are unsubsidized. Deferment is likely one of the perks you want to preserve through your refinance unless your loan payment amounts will be so small that you can easily manage them on your stipend. Chances are that in-school deferment will be available if you are creating a new student loan, though you should carefully check on this with each lender you are considering, including possible limits on the deferment term.

Should You Ever Refinance Federal Student Loans?

If you refinance federal student loans, you will almost certainly give up access to the unique benefits that the federal government provides, such as flexible repayment and forgiveness. If you think there is a possibility that after graduation you will 1) need, based on your income, to extend your repayment term to lower your monthly payment or 2) both enter a career field (e.g., public service) that is eligible for forgiveness and want to take advantage of that option, you should probably not refinance your student loans at this time.

That isn’t to say that you should never refinance federal student loans. If you are confident you won’t need any of the flexible repayment options, getting a lower interest rate on the debt now makes more sense than preserving the option to lower the monthly payments. The latter would almost certainly result in you paying more in interest on your loans both because of the presumably higher interest rate and the extended repayment term.

Some federal student loans are subsidized, which means that the federal government is paying the interest on the loans while they are deferred. (Starting in 2012, all graduate student loans are unsubsidized, though subsidized undergraduate student loans are available to qualifying students.) Refinancing subsidized federal student loans means that the interest rate would go from effectively 0% to a higher interest rate; while the subsidized federal student loans are deferred, it seems unlikely that any private student loans would be a better deal.

Can a Graduate Student Refinance Student Loans?

As in any refinancing process, to get a good deal the borrower must have a sufficient income and good credit. Both of these requirements demonstrate the ability to repay the debt. Some lenders may have explicit minimum incomes and/or credit scores, while others may consider a more holistic picture of the borrower and the debt.

The likely sticking point for graduate students is going to be the income requirement. In general, the most attractive refinancing offers come from lenders who require high incomes and/or low debt-to-income ratios. Graduate students with high debt loads who earn typical stipends will probably find themselves ineligible for refinancing until they start earning more money after graduation. However, it doesn’t hurt to check on the published minimum salaries or even apply for pre-approval from a few lenders (as long as the process doesn’t involve a hard credit pull) to see if you are eligible.

While refinancing student loans to a lower interest rate is helpful, it is not a cure-all when it comes to surmounting your debt. You still have to actually work through the payoff process. One of the downsides to refinancing (or consolidating) student loans is that it gives you the impression that you’ve done something to get rid of your debt, when all you’ve really done is reshuffle it. But as long as you are still willing to pay down your debt energetically, either during or following grad school, and you are not giving up any relevant benefits, refinancing can save you quite a lot of money over the long term.

Have you considered refinancing your student loans?

The Power of Percentage-Based Budgeting for a Career-Building PhD

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I would imagine that most workers in the US don’t experience large income jumps after they start working full-time. They will receive periodic raises and perhaps some small jumps if they change career tracks or negotiate well with a new employer, but nothing like increasing their incomes by 50 or 100% at one time. However, those types of jumps are common for PhDs. The income jump from graduate school to a postdoc is roughly 50%, and the jump from a postdoc to a career job is perhaps another 50 to 100% or even more. At least, that’s the expected track! Having that expectation, whether or not it conforms with reality, can bring about some strange attitudes towards money. However, if a PhD(-in-training) adopts percentage-based budgeting, it has the potential to keep her finances in balance even through the income jumps.

percentage budgeting PhD

What Is Percentage-Based Budgeting?

There are many versions of percentage-based budgeting in terms of how it is enacted and the appropriate percentages to assign to various budgeting categories. The foundation of all of them is that your financial goals and expenses should scale with your income according to a consistent percentage.

Retirement Savings Rate

The most common example of percentage-based budgeting is the advice to save a percentage of gross or net income for retirement. It’s not reasonable to say that everyone should max out their 401(k)s ($18,500 in 2018) every year – though I have read that advice time and again in the personal finance blogosphere – not only because not everyone has a job that offers a 401(k) but also because that would be an incredibly high savings rate for someone earning what a graduate student or postdoc does. It’s much more reasonable to assign a percentage for your retirement savings goal, e.g., 5, 10, 15, or 20%.

The big advantage for using percentages instead of absolute numbers for savings rates is that it allows you to create a positive financial habit or even becomes part of your character (“I am a saver; I contribute 10% of my gross income to my retirement account”) at a level that is possible for your income. As your income grows, your absolute contribution to your savings grows as well.

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Other Budget Applications of Percentage-Based Budgeting

Tax

I like to think of income taxes as another type of percentage-based budgeting category, even though individuals don’t have control over the tax rate. If you have income tax withholding set up, you are sending a (more or less) fixed percentage of your gross income to the IRS throughout the year. If your withholding is accurate, this percentage is your effective tax rate. Your marginal tax rate is the tax rate on the income bracket that your income tops out in (e.g., 12%), but your effective tax rate is the amount of tax you actually pay divided by your gross income (e.g. 6%).

Another type of tax, FICA (Social Security and Medicare), is also percentage-based, although students and non-wage earners are exempted and the tax phases out at higher incomes ($127,200 in 2017).

Spending Categories

One of the most well-known percentage-based budgets is the Balanced Money Formula, which is detailed in All Your Worth: The Ultimate Lifetime Money Plan* by Elizabeth Warren and Amelia Warren Tyagi. It is a recommendation of how much of your net income to spend in three areas: 50% on needs, 30% on wants, and 20% on savings and debt repayment. The 50% of net income to needs (defined as housing and transportation; contracted payments; and basic food, clothing, etc.) is emphasized as the category that tends to grow out of control and lead to financial stress in American households.

[* This is an affiliate link. Thank you for supporting PF for PhDs!]

Further reading: A Graduate Student’s Balanced Money Formula

Dave Ramsey, a well-known get-out-of-debt financial guru, also makes budget category recommendations for his followers (after they have gotten out of non-mortgage debt). He lists percentage ranges for eight budget categories in addition to saving and giving, e.g., housing should be 25-35% of net income, food should be 10-15%, etc.

Further reading: Starter Percentages for an Every Dollar Budget

These percentage-based budget category suggestions are just that – recommendations based on what that particular expert has observed to work well for most American households. You will, of course, find your own levels of spending that feel comfortable for you. But these kinds of recommendations are great to compare with your current spending from time to time so that you can see if any category seems wildly out of line, especially if it’s a category you can adjust.

The advantage to basing your spending on percentages of your income is that, again, you spend less when you earn less and spend more when you earn more. Your lifestyle scales with your income, and you automatically live within your means.

Using Percentage-Based Budgeting on Only Part of Your Income

Percentage-based budgeting is a useful structure not only on your salary but also on any variable income you might have, such as from a side hustle. If you budget all your basic and regular monthly expenses on your salary, you can use your extra income to fund, in a percentage-based allocation, some extra splurges or savings.

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For example, for every dollar of side income money you earn, you could allocate a percentage for taxes (I use my marginal tax rate plus 15.3%, the self-employment tax rate), a percentage for saving, and the remainder for little luxuries or lifestyle upgrades. That way, you both further your financial goals and reward yourself for a job well done.

Further reading: Side Income (Category), Best Financial Practices for Your PhD Side Hustle

What Are the Pitfalls of Not Using Percentage-Based Budgeting?

For PhD trainees in particular who are anticipating income jumps, it is very tempting to tell yourself that you will work on financial goals such as saving and debt repayment once you are earning more. In fact, you might even allow yourself to live above your means and accumulate some debt in the confidence that you will pay it all off later on.

Further reading: A Low Income Is a Blessing in Disguise

If you’ve ever heard of the permanent income hypothesis, you might be tempted to add its label to the above line of thinking. However, I think rather than a strictly rational calculation, it is simply our natural procrastination and fear of financial sacrifice disguising itself as a reasonable argument. Keeping a lid on your lifestyle is difficult when your income is low. Saving and debt repayment are difficult. We imagine a brighter future when those actions won’t be so challenging, and assume we can make it Future Us’s problem.

Further reading: You Should Spend More and Save Less (Especially Grad Students)

While I certainly hope that you experience the income jumps you anticipate – and don’t forget, there’s no guarantee that they will materialize – it doesn’t really become easier to save with age the way most people think it will. As the decades pass, on average your lifestyle starts to cost more and more. You buy a house. You have some kids. You upgrade your car. You’re pressed for time, so you don’t practice frugality the way you used to. The fact is there is always a reason not to make financial sacrifice today, especially if you’re an optimist. Percentage-based budgeting keeps your lifestyle in line with your current reality and doesn’t allow you to defer accepting responsibility for your financial life.

Where Does Percentage-Based Budgeting Break Down?

Low Incomes

Percentage-based budgeting works well over a range of incomes, but there is a floor to its functionality, and it’s somewhere around the living wage for each local area. At some point, when your income is low enough, you can’t scale your basic needs down to that ideal percentage of your gross income. And unfortunately, a lot of graduate students and some PhDs are living right around that breaking point. Savings/debt repayment will be cut back or eliminated, needs will balloon out of proportion, and there will probably be little spent on wants. You may even find yourself accumulating debt. The best solution to this conundrum is to land a higher-paying position as soon as you can, following graduation if necessary. A side income may help keep you afloat in the meantime, but don’t let it slow down your progress to that better job.

Taxes

Some percentage-based budgeting formulations, like the Balanced Money Formula and Dave Ramsey’s, work off your net (after tax) income. I like to work off my gross income and think of taxes as part of my percentage-based budget, but as I said earlier, your effective tax rate is not a percentage that you as the taxpayer control. As your income increases, all else being equal, your effective tax rate will increase as well, meaning that everything else has to shift to accommodate it, so your percentages cannot stay totally fixed.

My Experience with Percentage-Based Budgeting

I implemented percentage-based budgeting early on in graduate school for my high-level financial goals that are still the same today. I paid my taxes (through quarterly estimated tax, at times!), contributed to my Roth IRA (starting at 10% of gross income, working my way up to 17% by the end of grad school, and 18% today), and tithed. Beyond that, I did check that my spending on needs and wants was more or less in line with the Balanced Money Formula. I found that a 5:3 ratio of spending on needs to wants is quite comfortable.

I’m so glad that I implemented percentage-based budgeting, at least for my high-level goals, during grad school. It has helped my husband and I keep perspective about our finances through the income increases and moves we’ve undergone. We now have one regular income (my husband’s salary) and a few variable income streams (from my business and side hustle), and we practice slightly different forms of percentage-based budgeting with each. We pay taxes (at different rates), contribute to our retirement accounts, and tithe from each income, but we budget all our expenses off my husband’s income and use mine for extra saving (usually for a house down payment).

Probably the thing I like best about percentage-based budgeting is that it’s so flexible; you can make it entirely your own based on your goals and your lifestyle preferences. Yes, there are guidelines out there for you to access if you want to, but the final decision is yours. If you find a comfortable ratio among savings, needs, and wants while your income is low and maintain it as your income grows, you can confidently enjoy the fruits of your success.

Give Yourself a Raise: Prepare Your Own Food Even with a Busy Schedule

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Grad students and postdocs typically spend a significant portion of their income on groceries and restaurant food; these budget categories are often targeted by trainees who want to cut back on their spending in favor of reaching other financial goals. Forming new habits around cooking and eating is challenging but certainly not impossible, even for busy researchers.

prepare food busy schedule

A version of this article was originally published on GradHacker.

If you are looking to “give yourself a raise” by reducing your spending on food, the go-to suggestions are to:

  • Reduce the number of meals you eat in restaurants or as take-out.
  • Prepare food from base rather than pre-processed ingredients; shop the perimeter of the grocery store.
  • Buy food in season.
  • Don’t waste food.
  • Buy in bulk.
  • Plan your menus.
  • Stick to your shopping list.
  • Patronize alternative food retailers.

Sometimes trainees justify their high food spending by citing long hours on campus and variable schedules. They tell themselves they don’t have time to plan, shop, or cook or they can’t commit to being home by dinnertime. They are often inexperienced in the kitchen, which means they rarely cook or are slow when they do.

Early on in my grad school career, I fell into some of these high spending patterns. I ate out with classmates because I wanted to bond with my peers. I wasn’t very capable in the kitchen, subsisting largely on sandwiches, fruit, salads, and canned goods. When I did cook, I picked rather involved recipes from cookbooks with several ingredients I wouldn’t use again, and making each meal took a large investment of time. I often stayed late on campus, and I ate far too many meals at Panda Express because I hadn’t planned ahead.

Over the course of my grad school career, I slowly improved both my time management and food preparation skills to the point that I was able to reduce the amount of money I spent on food while still feeling satisfied with what and with whom I was eating. My health also improved in parallel with my nutrition.

Sometimes the stumbling block in our efforts to reduce our spending is not that we don’t know how to spend less but rather that we don’t understand how to adjust our lifestyles to meet our new goals. The remainder of this post will not focus on how to spend less money, but how to make typical strategies for spending less money on food more palatable to a grad student or postdoc.

Think ‘Food Assembly’ or ‘Food Preparation’ Rather than ‘Cooking’

Novices in the kitchen may be intimidated out of preparing much of their own meals because they don’t know how to replicate, especially in a time-efficient fashion, the meals they are accustomed to eating in their parents’ homes, dining halls, or restaurants. But feeding yourself doesn’t have to involve skilled or elaborate cooking; you can reframe it as food assembly or food preparation.

Identify a few simple (components of) meals that you like that have only a single or a small number of ingredients and may or may not involve ‘cooking.’ You’re the only one you need to please with your meal, so don’t worry about whether it would be worthy to bring to a potluck.

Some of my favorite meals during grad school that involved little to no cooking were spinach salads loaded with vegetables and hardboiled eggs or ham, curry tuna salad paired with fruit, tuna mashed with avocado, a taco bowl, and a bunless cheeseburger with steamed broccoli.

Get into a Groove

Repetition is an amazing time-saver when it comes to eating out of your own kitchen. You don’t have to master every cooking technique out there; you just have to become competent at preparing a small number of meals that you like. Rotate through each meal in your wheelhouse at whatever frequency you need to keep from getting bored; add in new foods and techniques slowly so you don’t become overwhelmed.

Some personalities are more amenable to this strategy than others. My husband has eaten virtually the same breakfast and lunch nearly every weekday for years, and before we were married he only ever cooked a handful of different dinners; this amount of variety is satisfying to him and certainly has cost him very little in terms of time and money. Disabusing myself of the idea that I needed (or wanted) a different meal every day of the week was one of my big breakthroughs in committing to preparing my own food while pursuing my PhD.

Establishing patterns in your weekly or monthly meals also makes grocery shopping much easier; you don’t have to spend much time making a list or running to the store for forgotten items.

Acknowledge Your True Schedule

I didn’t have many peers in graduate school who seemed to keep a fixed work schedule, and I don’t remember any non-parents doing so. On top of the large number of hours many researchers put in each week, the nature of research often demands time flexibility. I frequently found myself staying on campus well past what my body told me was dinner hour to finish up labwork, meet up with classmates for a study session, or knock out some administrative tasks.

Early on in grad school, I didn’t plan ahead for these evening workday extensions; while I was quite consistent in bringing lunch to campus daily, I was ‘forced’ to buy dinner on campus if I wanted to stay late. Once I acknowledged that I would be eating dinner on campus from time to time, even if I didn’t know exactly on which days of the week that would occur, I started to plan for it. I prepared a few refrigerator-stable, microwavable, single-serving meals each week to keep in my office for the late nights, replenishing my supply as needed.

My favorite microwavable dinners to keep on campus were chili, split pea soup, flaxseed meal pizza, Mexican lasagna, and pasta with sauce. Full meals aren’t even needed in many cases to help you resist the convenience food available on campus; there’s really no reason to not keep some snacks around to tide you over. Easy room-temperature or refrigerator snacks to keep in your office are instant oatmeal, nuts or nut butters, yogurt, hardboiled eggs, cheese, raw vegetables, and fruit.

Don’t Allow Yourself to Get Too Hungry

‘Never go to the grocery store hungry’ is great advice; hunger can sap our willpower to stick with our eating plan, causing us to overbuy expensive, unhealthy, or unnecessary food. As a graduate student working sometimes long and late hours, I realized that allowing myself to become quite hungry caused me to make poor eating choices on campus and at home in addition to at the grocery store. It’s pretty difficult to arrive home hungry and take the time needed to prepare a meal, especially for a slow cook.

I started flipping my schedule around; nearly every weekday evening, I ate a pre-prepared dinner (or snack) right when I arrived home, and then cooked subsequent days’ meals later in the evening when my hunger was already satisfied. An alternative is to do as much food preparation as possible in advance (washing, chopping, saucing, etc.) so that finishing your meal when you arrive home takes a minimal amount of time.

Batch Cook

Acquiring a slow cooker halfway through grad school absolutely revolutionized how I prepared food; it was my introduction to batch cooking. Batch cooking is preparing multiple meals at once to freeze or refrigerate until they are consumed. Slow cookers are not the only way to batch cook, but they are an incredible tool for preparing large quantities of food at once with relatively little active work or skill needed. Batch cooking usually doesn’t take any or much more time than preparing a single meal, so it’s perfect for a busy trainee. A single person can prepare a meal of 4 or 8 servings and eat for a week off that one-time effort!

Socialize Economically

The connections you make in graduate school are very important for your career; I would not suggest that you skip chances to engage socially with your peers simply because you are trying to spend less money on food. You can, however, often socialize in a manner that limits the damage to your budget. For example:

Changing your eating habits is certainly not easy. However, by overcoming the challenges to eating out of your own kitchen while you are still a student or postdoc, you can effectively give yourself a raise both during your training and throughout the rest of your life.

How have you kept your food spending low as a graduate student or postdoc?

How to Start Investing with Just Five Dollars per Month

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In the last several years, we’ve seen an explosion of “fintech,” aka financial technology. One of those new areas is “microinvesting;” there’s never been a better time to be a beginning investor with only a small amount of cash flow available to invest. No longer must you have thousands of dollars to open an investment account or millions of dollars to receive professional investment advice. While of course it is preferable to invest a large amount of money each month for your retirement or other investing goals, sometimes that’s simply not possible. Often it’s not possible for graduate students and postdocs, yet these groups are just as intensely interested in investing as anyone else – more so, I’d wager. This post details how to start investing with just five dollars per month (or whatever amount of money you can spare right now).

invest just five dollars per month

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Why It’s Beneficial to Invest Just Five Dollars per Month

Thanks to the power of compound interest, a small amount of money given a long amount of time can turn into a large amount of money. That means that any amount of money you can put away when you are younger is going to make a significant difference to your wealth in retirement. It’s much, much, much better to invest $5/month than $0/month when you have decades to let it grow.

Now, you’re not going to fund your entire retirement with just a few dollars per month. But starting small is perfectly acceptable when your income is suppressed during your PhD training or you are otherwise in a financially challenging circumstance. Get started now with whatever amount you can, and increase your savings rate when your income increases and/or expenses decrease.

For example, if you contributed $5/month to an investment account over 5 years and received an 8% average annual rate of return, you’d end that time period with $367. Leave that $367 invested with an 8% rate of return for 50 years, and your ending balance is just shy of $20,000. I won’t sugar-coat it: That amount of money isn’t going to get you too far in your old age. But it is $20k better than taking no action.

Further reading:

In addition to the money itself, I see two compelling reasons to start investing even with only five dollars per month:

1) Committing to an investment plan creates a habit and changes your self-identity. If you invest five dollars per month, you become an “investor.” It’s part of who you are. The positive financial habit of committing to a monthly savings rate is a very powerful one to cultivate early on in life.

2) Once you get started, it’s easy to increase. The biggest hurdle is going from investing $0/month to $5/month, not from $5/month to $100/month. If you self-identify as an investor, you are naturally going to look for ways to increase your rate of investment. When you complete your training and move into a better-paid position, you will be ready and raring to save more each month, and you’ll already have the infrastructure in place. You’ll only be a few clicks away from investing serious money each month instead of having to wrestle with all the decisions and setting everything up at the same time that you’re dealing with a job transition.

Why It’s Challenging to Invest Just Five Dollars per Month

Until a few years ago, the only way to invest a small amount of money each month and be well-diversified was to use a mutual fund. Unfortunately, to open a brokerage account in which you could buy mutual funds usually took at least $1,000 if not several thousand dollars. Even the brokerage firms that waived their minimum balances usually required an ongoing investment commitment on the order of $50 or $100/month. That barrier can seem prohibitively high to some people; instead of saving up cash for months or years to meet the minimum balance, I imagine many people gave up on the idea of investing.

Further reading: Brokerage and IRA Account Minimums

Now, however, several investing platforms use fractional ETF shares to solve this issue. The platform buys whole shares of ETFs but sells fractions to its users. In this way, a user can purchase one or more ETFs in whatever increments she likes, and there is often no minimum balance required to open the account.

(I have only included in my list below microinvesting platforms that use ETFs. Robinhood is another investing platform that I ran across many times while researching this article because it is a fee-free platform. However, it is designed for investing in individual stocks. You have to invest a lot of money to create a diversified stock portfolio through buying individual stocks. You can buy ETFs through Robinhood but not fractional shares, so that is not compatible with investing just $5 per month. I’ve decided to exclude Robinhood from my list below because it inherently encourages active investing. Of course, if that’s your preferred investing strategy and/or you have a larger amount of money to invest, Robinhood is well worth considering.)

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The Best Platforms For Investing Just Five Dollars per Month

I reviewed a number of fintech microinvesting platforms for this article, though I do not claim that it is comprehensive. I am not a customer/don’t have a relationship with any of these platforms, so I’ve drawn this information from the company websites and reviews rather than personal experience or communications.

Acorns

Acorns is probably the best-known microinvesting platform. Its concept is to round up each of your purchases to the next whole dollar and invest the change. You can also set up a recurring investment.

Fee structure: $1/month for under $5,000 (free for students for 4 years) + ETF expense ratios
IRA option: Coming “early 2018”
Portfolio creation: Suggests a portfolio of ETFs after receiving user input

WiseBanyan

WiseBanyan calls itself the “first free financial advisor.” (They earn money through upselling products and services to their clients.) The service asks you a few questions and uses Modern Portfolio Theory to construct a passive portfolio appropriate for you.

Fee structure: Only the expense ratios of the underlying funds
IRA option: Yes
Portfolio creation: Uses low-fee index ETFs according to Modern Portfolio Theory after you input data for its investor profile

Stash

Stash allows the user to choose among low-cost ETFs to create her own portfolio. The expense ratios on the ETFs are low, and Stash can recommend certain “themed” combinations of ETFs.

Fee structure: $1/month + ETF expense ratios
IRA option: In beta ($2/mo)
Portfolio creation: The user creates his own portfolio from among 40 pre-selected ETFs

Clink

Clink bills itself as more a savings app than an investing app. There is no minimum investment, but if you want to use the scheduler the minimum is $1/day. Clink invests your money in Vanguard ETFs according to Modern Portfolio Theory (a passive strategy).

Fee structure: $1/mo when balance is under $5,000 + ETF expense ratios
IRA option: No
Portfolio creation: Combines your risk tolerance with Modern Portfolio Theory to create an asset allocation of six Vanguard ETFs

In addition to these companies that are explicitly designed for microinvesting, you could also consider other brokerage firms that have wider array of financial services that includes microinvesting. For example, Betterment is a roboadvisor and has no account size minimums. If you do have a lump sum available to invest, though only $5 per month on an ongoing basis to contribute, you could consider other traditional low-cost brokerage firms like Vanguard, Fidelity, or Charles Schwab (and look around for one that will waive its minimum).

What Are the Downsides to Using a Microinvesting Platform?

The microinvesting platforms I listed above are providing a great service to a previously underserved population, and they are to be commended for that. But in order to make it possible, they have engaged in several trade-offs that wouldn’t be necessary with larger investment balances.

1) The Investment Choices Are Severely Limited

The platforms diversify your money into ETFs, but they offer only a small number of ETFs, and I suspect only a few ultimate combinations of those ETFs depending on the user’s input. This is not necessarily a bad thing. If you simply want a generally appropriate asset allocation and are not too concerned with the exact underlying funds used or the exact percentages, having those limited choices might even be advantageous. But if you want to design your own asset allocation or choose among the other thousands of funds possible, you probably won’t be too happy with these platforms.

2) The Fees Are Sky-High

There are two types of fees typically associated with owning investments. The first is due to the cost owning and transacting the investments themselves. When we are talking about an ETF, this fee is called the expense ratio and is expressed as a percentage of your investment balance. Each of the four platforms above have this fee, and it is typically quite low, approximately 0.1%. If you ever see an expense ratio that is around 1%, this is considered high and a red flag that the fund is actively managed.

The second type of fee is for administering the plan or platform itself. For reference, a full-service fee-only human financial advisor charges approximately 1%.

Three of the microinvesting platforms in my list above charge at least a $1 per month fee of the second kind. That doesn’t sound like a lot of money in absolute terms, but the whole reason we’re talking about microinvesting is because small amounts of money are worth paying attention to. If you are investing just five dollars per month, a one dollar per month fee is a staggering 20% of your savings rate. This kind of fee absolutely cripples your investing efforts. I would not be at all surprised if you lost money overall almost every year if you were investing just five dollars per month because the long-term average annual return of the stock market is approximately 10%.

Of course, you can mitigate this problem by using WiseBanyan or another platform that doesn’t charge a fee (e.g., if you are a student and can have the fee waived) or by investing more money each month.

3) They May Not Offer an IRA

Only one of the above platforms currently offers an IRA investing option to all its users. While it is great to invest outside of an IRA, if you are saving for retirement using an IRA is optimal. Plus, your IRA contribution room disappears every year. If you use a microinvesting platform for a few years as a means to save enough to open an IRA with a larger lump sum, keep in mind that your contribution room disappears with each year. It would be better to contribute to an IRA all along instead of doing it in one lump sum at the end because it would use up so much of your contribution room in the last year.

Further reading:

4) You May Develop a Sense of Complacency

I’m trying to thread a needle here: I want to encourage you to invest any small amount of money you can right now while emphasizing that to reach financial independence or retire someday $5 per month is not nearly a high enough investing rate long-term.

If investing just five dollars per month is truly all you can do right now, go for it. But do not allow yourself to think you can keep your savings rate that low when your financial circumstances change. I want you to jump that rate up by about two orders of magnitude as soon as you are able!

Doing something is better than doing nothing, but over time you must move from doing something to doing the best thing or the sufficient thing.

Further listening: Ask Dave: Micro-Investing Apps?

How to Invest When You Have More Money

As of now, I do not think that microinvesting platforms are on par with other brokerage firms and investing platforms that require lump sums to open accounts or higher ongoing investment rates. It’s fine to start out investing with a microinvesting platform, depending on your goals, but as soon as you are able, I think you should switch to a brokerage firm that offers a wider array of investments, lower fees, and IRAs. All of the advantages of the microinvesting platforms (aside from the zero minimums) – low-cost ETF investing, asset allocation recommendations – can be found at a brokerage like Vanguard, Fidelity, or Charles Schwab. Plus, start-ups like these fin tech platforms often change their business models or fold, so even if you like your solution right now it might not be around forever.

When you do make that switch, be sure to choose a diversified, passive, low-cost strategy appropriate to your goals. And increase your savings rate!

If I were in a position to invest only five dollars per month, among the microinvesting platforms I looked at I would sign up for WiseBanyan. Because it doesn’t charge a platform fee on top of the ETF expense ratings and it offers IRAs, I think it gives you the best chance at actually readying you to invest for the long-term. But you also have to consider that it uses a freemium model, which has not yet been proven sustainable in the financial sector.