In this episode, Emily interviews Selena Cho, a second-year graduate student at the University of Utah who receives the NSF Graduate Research Fellowship. Selena shares her budget breakdown, through which her values and the joy she experiences in using her money in this way shine. Selena has right-sized her housing, transportation, and food spending so that they are fairly low but still meet both her needs and wants. By intentionally choosing a university in a medium cost-of-living city and maintaining moderate expenses, Selena has plenty of room in her budget for investing, eating out, and entertainment, which in her case means biking, skiing, camping, and other outdoor pursuits. Don’t miss Selena’s final advice about cultivating happiness during graduate school.

Links Mentioned in This Episode

• Selena’s LinkedIn
• PF for PhDs S13E5 Show Notes
• Emily’s E-mail
• PF for PhDs: Speaking (Seminars/Workshops)
• PF for PhDs Subscribe to Mailing List (Access Advice Document)
• PF for PhDs Podcast Hub (Show Notes)

Teaser

00:00 Selena: We recently discussed the stipends at Utah in the department, and I would say the rough estimate for the stipend is around $22 to $24K for other students. And like having that in my head, I also made sure to like kind of live within those means as well because like, you know, the GRFP is only for three years. So, therefore, like if you know my PhD takes, you know, four or five years, I have to probably live on that stipend so I made sure to live within those means.

Introduction

00:40 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and the founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 13, Episode 5, and today my guest is Selena Cho, a second-year graduate student at the University of Utah who receives the NSF Graduate Research Fellowship. Selena shares her budget breakdown, through which her values and the joy she experiences in using her money in this way shine. Selena has right-sized her housing, transportation, and food spending so that they are fairly low but still meet both her needs and wants. By intentionally choosing a university in a medium-cost-of-living city and maintaining moderate expenses, Selena has plenty of room in her budget for investing, eating out, and entertainment, which in her case means biking, skiing, camping, and other outdoor pursuits. Don’t miss Selena’s final advice about cultivating happiness during graduate school.

02:02 Emily: I’d like to give you an update on how things are going for Personal Finance for PhDs and myself as the owner and sole employee. This year, I’ve had some aha moments about how I want to spend my time in the business, and I’ve taken steps to restructure so that I’m spending more time doing things that really energize and inspire me and less time doing things that are not so fun or draining. First, I decided to continue shifting how I deliver my financial education. This shift started a few years ago as an experiment, but I’m now confident that it is the right direction for me. Pre-pandemic I was doing mostly live in-person seminars, which then switched in 2020 to live remote webinars. I realized that what I find most fun and rewarding in the business is interacting with you all, the PhDs and PhDs-to-be, through answering questions and facilitating discussions and the like. That’s why I do this interview-based podcast as opposed to another form of content. I also love creating educational materials, for example my slide decks and scripts, but in terms of actually presenting them, I only like it. Overall, I really enjoy giving live seminars and webinars, but it’s because of the interaction component, not the presenting component.

02:09 Emily: So, the shift is that I’m offering much of my content now in a pre-recorded format paired with live Q&A and discussion sessions. My experiment years ago was with a pre-recorded tax workshop, and I now offer my two tax workshops exclusively in this format, which I believe serves both me and the participants really well. In 2021, I also created a series of four deep-dive pre-recorded workshops for graduate students and postdocs on financial goal-setting, increasing cash flow, investing, and repaying debt. This year, I’m creating a year-long workshop series for prospective PhD students. Through this format, I get to spend my time largely on creating and updating the materials and interacting with the people who have already viewed or read through them, and I get to skip the middle part of presenting. I find this super enjoyable and am either nudging or requiring my university clients to move in this direction with me, depending on the content.

04:21 Emily: Second, I decided I want to return to working in person—selectively. I didn’t do any in-person work from the start of the pandemic through spring 2022, but in the past several months, I attended two conferences in person and facilitated two in-person discussion and Q&A sessions for the aforementioned deep-dive workshops. I had the best, best time at every single one of those events. They were so life-giving. It sounds cheesy but it’s true! I love my work, and I did not realize how much I had missed talking with people face-to-face for work. I now see that I’m definitely experiencing Zoom fatigue, specifically when it comes to giving webinars. On the other hand, I like not traveling and being at home with my family. So, I don’t want to return to the kind of travel I did pre-pandemic, and I don’t need to sustain or grow the business because I have all these pre-recorded offerings like I just discussed. So, my conclusion is that I would like to start back up with in-person seminars and workshops, but I’m going to be selective about the kinds of events I agree to and make sure that it’s going to be really fun for me to participate in. Conferences would definitely qualify. Ideally, like I had a chance to do with the discussion and Q&A sessions I just mentioned and will again next month with my workshop Hack Your Budget, the events would involve more interaction and less presenting.

05:47 Emily: I’ll wrap this up now with a heartfelt thank you to all of you who have recommended me as a speaker or recommended my tax workshops to your graduate schools, postdoc offices, grad student associations, etc. Finding the appropriate sponsors for this educational content and convincing them that it’s an in-demand topic is something that I could never do on my own. Thank you so much for planting those seeds. It’s the work that I do with universities, etc. that funds the whole business, including this podcast and the other free content I make available. If you would like to see it continue, and I hope you do, please consider making such a recommendation today. Thank you again, and that’s it for this update. You can find the show notes for this episode at PFforPhDs.com/s13e5/. Without further ado, here’s my interview with Selena Cho.

Will You Please Introduce Yourself Further?

06:50 Emily: I am delighted to have joining us on the Personal Finance for PhDs Podcast today Selena Cho. We are doing a budget breakdown today. So, we are going to hear how Selena manages her budget as a second-year graduate student at the University of Utah in Salt Lake City. So, Selena, welcome to the podcast. Will you please introduce yourself a little further for the listeners?

07:09 Selena: Thanks for having me, Emily. Well, hello everyone. I’m Selena Cho. I’m currently a second-year PhD student studying mechanical engineering at the University of Utah. I did my undergrad at UMass Amherst in mechanical engineering, and I’m actually in a transition phase where I’m switching labs.

Income and Household

07:27 Emily: We’re here to talk about your finances in Salt Lake City. So, please tell us more about your income and who’s in your household and those kinds of details.

07:38 Selena: So, I currently live in Salt Lake City. I’m originally from Boston. I grew up there all my life. And currently, I’m funded by the NSF GRFP. So, that’s $34K a year. And right now I live with my boyfriend and two other roommates in a four-bed, two-bath. The total rent is $2,500, and Sam and I are paying $600 each because we’re sharing a room.

08:06 Emily: Okay. Sorry, let me get this straight. You have four bedrooms and four people, but you are sharing a room.

08:12 Selena: Yes.

08:12 Emily: So, who has the extra bedroom? What’s going on there?

08:14 Selena: So the extra room is our gear room <laugh>.

08:18 Emily: Okay.

08:19 Selena: So, I guess I explain my hobbies yet. So, the household here we ski, we rock climb, we mountain bike, we cycle, we play tennis. Anything you can name, we do it. So, we also camp a lot too, meaning we have a lot of gear, which we have our fourth room dedicated to all of our gear. Yeah, <laugh>.

08:45 Emily: So, it sounds like you and your boyfriend and these other two roommates all share this like certain kind of lifestyle that apparently requires a lot of equipment that fills an extra bedroom and the garage in the house and so forth, all the storage. But in any case, your share of all this rent comes down to $600 per month. So, that’s what’s going into your budget, which seems like a pretty manageable amount of money, right? On that $34K GRFP stipend, right?

09:10 Selena: For sure. It’s actually the most expensive place I lived so far in Salt Lake City. But I would say the average rent in Salt Lake is around six to $800. I think that’s pretty fair, especially if you have roommates and stuff. Previous places I lived in were like $525 and like $435, and I think those were kind of like outliers in terms of rent because they were quite low. And originally, this place was listed for $2100, meaning it was going to be like $525 per tenant. But the landlord increased it actually to $2,800 and then we’re like wow, that’s a $700 increase. And we talked it down to $2,500, which was more manageable, especially on a graduate stipend.

Furniture Flipping Side Hustle

10:03 Emily: Wow. It’s good to know actually that negotiation is still possible even in an era of rapidly rising rents. Okay. So that is great. Is there anything else you want to add about, you know, your income or anything like that?

10:18 Selena: Sam and I like to pick up random furniture off the streets or wherever we find on KSL or Marketplace, and then we like to just sand it down and like make it pretty and then list it and resell it for, I don’t know, whatever price. So recently, we found a free teak table with eight chairs, an outdoor table setting, and we just like sanded it down, put some teak oil on it, and then we like resold it for $250, which was fun. <Laugh>.

10:52 Emily: Alright. So you have a little sort of monetized hobby, side hustle kind of situation. How much would you say that brings in on average on like a monthly basis?

11:02 Selena: Safe to say like around like $200, I think, a month at least. Because we also just like find random things and sell random things. And I guess that like really fluctuates. But the thing is we don’t really depend on it at all. It’s just more of like, oh now we have a little extra money to, I don’t know, go out to eat or something like that.

Financial Goals

11:22 Emily: Yeah, that sounds great. Well, let’s dive into your financial goals. So, we’ll talk about your expenses in a moment, but right now I want to know more like yeah, what are you doing overall to improve your personal financial situation? What kind of goals do you have going on?

11:37 Selena: So, I contribute to a Roth. So, I max it out. I think this year is $6,000, and I’ve been doing that for the past three years I think. So, I started in my undergrad, and my parents also started a life insurance for me. And so, I contribute that every month like a hundred dollars for a total of $1,200 a year. So, those are like my financial goals right now. I wish I had access to like a 401(k) where I can contribute but I don’t.

12:09 Emily: Well, I mean the $500 per month that’s going into the Roth IRA is already an awesome goal, awesome investing rate. So congratulations on your commitment to that. Do you do that regularly? $500 per month?

12:22 Selena: Pretty regularly. I think like if I can put in more that month, I will. Like I think early on in the year I just wasn’t spending that much money, therefore I was just like, guess I’ll just contribute to my Roth IRA this year. Because like I have, you know, a rainy day fund where I have enough in my savings where I can probably live off for a year. And then I also have like my checking account that has more than enough for me to live on with a year. And honestly I think I’m just like saving a little bit too much, and I should probably just contribute more to more of my investment accounts. Because I do have like your regular individual taxable accounts too.

13:04 Emily: Yeah, I was just going to say that would be a great next step if you wanted to invest beyond, you know, the amount in the Roth IRA, that a taxable brokerage account would be perfect. And you’re already there. So that’s great, it’s there if you ever want to to use it. Yeah, that’s one of the things that I teach in this framework that I use. I have like an eight-step financial framework that I teach, especially during my seminars. And one of the reasons I give ranges around like how much cash to have on hand is kind of for what you just mentioned, like sometimes it’s possible even as a graduate student to have too much cash on hand. Too much in the sense that it could then, you know, be used toward another purpose like repaying debt or used towards investments or something like that. And so, some people, because they don’t have a defined goal around that, they just keep accumulating and then it’s like well at some point it’s not really serving you to have that much cash. So, it sounds like you’re kind of at that like tipping point right there.

13:52 Selena: Yeah, I also recently paid off my car. So, after graduating, one of my quote graduation gifts that I got was a car where I supposedly share 50/50 with my parents, but it turned out to be 75 me, 25 my parents. So I recently was like, I have so much cash on hand right now. Literally why am I not paying it off? So I did, which is fun because I’m planning on selling that car to get another car that fits my lifestyle. So, like right now, the car that I bought was $18K, and right now even by a dealer’s party or whatever I can at least get $20-21K. So, Private Party on Kelley Blue Book right now is between 23 to 26. And my car is really low miles right now and I’m just planning on reselling it because I can make a lot of money off of it and planning on getting a vehicle that’s currently costing around $12-14K. So, that’s like my current, I guess financial goal is me selling off this car and buying a vehicle that suits my life better.

Income Tax

15:12 Emily: Yeah, I mean I love that on all fronts. Like, you know, tailoring the possessions that you have to the life that you actually want and of course selling a car in this like weird market where it happens to be that you can sell it for more than you bought it for. Wow. Who would’ve ever expected that? But that’s awesome all around. Okay, I know you have one other, what I would call kind of a financial goal, which is to handle your income tax because you’re on the GRF stipend. So, can you talk about how you do that?

15:40 Selena: Oh, so I think you had like a free Excel sheet that calculated your income tax. So I just used that and I just trusted it and hoped it worked. And the IRA isn’t coming after me right now, so I guess I did it right. So I think based on the sheet I believe it’s like around, I say set aside about $200 a month for the income tax. And that’s something I just automatically do. I didn’t set up like a new checking account just for that because I personally don’t need it because I know that $200 is there and I know I’m not going to touch it. And that’s just me, personally.

16:23 Emily: So, it sounds like it goes in with your other sort of general savings that you mentioned earlier. Yeah. But you’re just sure to put aside an additional $200 every time you get paid.

16:32 Selena: Yep.

16:32 Emily: Awesome. Well, we will link to that spreadsheet and the email series actually that it comes in in the show notes. So, if anyone else is interested in grabbing it, I’m glad it seems to have worked for you for last year. Hopefully, it was pretty accurate. Yeah. Okay, so we’ll link to that.

#1 Largest Expense: Rent & Utilities

16:48 Emily: Okay, let’s dive into your expenses, and we’ll just go one by one. So, starting with your largest monthly expense, what is that?

16:57 Selena: Largest is usually rent and utilities. So, currently, right now my rent is $600 and my utilities, which is just gas, electricity, and Wi-Fi is about $30 to $40 I think per month. So, let’s say right now my rent and utility is $650, so that’s my largest expense normally.

17:24 Emily: Now, you mentioned earlier that this is the most expensive place you’ve lived so far in Salt Lake City. Can you talk about that decision to spend more on rent than like you absolutely had to?

17:35 Selena: Yeah, so I think I wanted to live in a place that had, you know, more sunlight and just had more room for all my stuff and also living with friends. So, the people that live in my house right now, I ski with them and I bike with them and I climb with them. And basically, it was a place where we had more than enough space for everyone’s stuff and also have room for like a little workshop. So like for the little side hobby of like flipping furniture. So you know, we have like a whole garage where we have like a workbench and like all our tools and stuff. And for me like doing that makes me happy. Like doing all like the climbing, all the outdoor activities and hanging out with my friends makes me happy and flipping furniture makes me happy.

18:29 Selena: So, for me, I can justify paying slightly more because I think my quality of life increased. Compared to like when I was paying $435 for rent and I had like a window, but the thing is it was like under like a loft, therefore there’s no direct sunlight. So my room was dark all the time, therefore I didn’t really want to spend time in my room and I just like was over at my boyfriend’s house more, and basically I was just like paying money, paying rent for a space that I didn’t even live in, which was like in my eyes like a waste of money because I didn’t even use it.

19:08 Emily: Yeah. So, another kind of lifestyle decision, definitely this one takes a little bit more, but overall your rent is only just over 20% of your gross income. Of course that’s not taking into consideration your taxes, but that’s nowhere near, you know, the kinds of rent percentages that we see for graduate students in, you know, higher cost-of-living areas. So like yeah, even spending a little bit more, you’re still like well under the, you know, maximums that you sort of theoretically should be under to have a balanced budget. So, you’re totally free to spend more than that if you want to. It sounds great.

19:39 Selena: Yeah.

Commercial

19:42 Emily: Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2022-2023 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/speaking/ or simply email me at emily@PFforPhDs.com to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

#2 Largest Expense: Groceries

21:05 Selena: I think like, I guess like moving on to my next expense, which is groceries. So, I cook all the time. I am a huge cook. I love cooking, and I love food because it was just like part of my family. We always ate well no matter what. And I was very, very like I only buy, you know, fresh produce. I never buy processed food. Because I just thought that I can make it myself. It’s so much more expensive to buy the box even though it’s more convenient. And I was like basically still saving a lot of money where I think my grocery bill per week was like, like $30 to $50 because I just knew how to buy groceries. Because like a lot of grocery stores, they would have like reduced bags of produce which was like a whole like, I don’t know, I would say like a five-pound bag of vegetables for like $1.25.

22:03 Selena: So, like I would buy that. And I have learned to spend a little bit more because that’s where I spend basically the most amount of money, next to my rent. And I’ve learned to, you know, like I go splurge at Costco a lot now because of it where I’m like, I deserve it because like I don’t spend money on anything else. So like why don’t I like eat better? Where I can, you know, like yeah I’ll buy salmon, I’ll buy a pack of salmon type of deal. And I used to like not even do that because I was like, oh you know, $20 is a bit too expensive for this. So like now I’ve just learned to spend a little bit more because I know I can afford it. Because previously I was just really like tight budgeting everything and I think, I wouldn’t say like I was like, you know, like sad about it but I think I wasn’t living my life as much.

23:06 Emily: I love another example of an area that you are, you know, you’ve sort of modulated how much you want to spend and found like a good balance for you right now. So, you mentioned I think that you were spending $30 to $50 a week on your like lower spending end. So like how much would you say you’re spending now?

23:21 Selena: I would say about $75. So, it’s not that big of an increase. So, $75 to like $100. The thing is I now split my groceries with my boyfriend. So, I would say normally groceries is between $300-400 per month.

23:43 Emily: Per person. Yeah.

23:44 Selena: No, no, no. Between the two of us.

23:46 Emily: Okay. Okay. So, your part is $150-200.

23:50 Selena: Yeah exactly. And I think because there’s like two of us, I feel like I’m like I can go buy more because there are two people, but the same time I’m really not expending, like it’s not a linear trend where like therefore you know, a second person means double the money. It really wasn’t. If anything, in some ways I save money because I’m able to like afford like expensive cuts of meats that I normally wouldn’t buy if it was myself.

Cooking and Meal Prepping

24:20 Emily: Interesting. I’m actually wondering how you fit in all this like cooking that you love to do with, you know, the work schedule obviously and then all the extracurriculars as well. How do you manage your time in that sense?

24:32 Selena: Well, I cook every night <laugh>. I don’t think I normally like schedule it, it’s just like a natural thing for me to do. It’s like it’s dinner time, therefore I’ll cook. So, when I go grocery shopping, I already have an idea of what I want to eat that week. And then usually all the ingredients that I get, I don’t like getting ingredients specifically for a recipe. I dislike doing that. I feel like you spend a lot more money when you do that. And I’ve learned to just work with what I have, because it’s not going to drastically change the taste of the dish at all. So, I’ve just like learned to get an idea on like what I want to eat. So let’s say like the week is like “Mexican week,” then like I know that I’m getting tomatoes, I’m getting avocados, I’m getting onions and stuff and all that stuff I can cut myself.

25:28 Selena: And that’s like stuff I can make a big bulk of, because I can make a whole big batch of beans, a whole big batch of pico. And then maybe at Costco, I buy the $4.99 rotisserie chicken, which is a steal. And I would get that and I would just basically break down the chicken myself and just like have it in the Tupperware all week. So then throughout the entire week, all I really need to do is just put my burrito bowl or my salad together, because I already have it pre-prepped. Or like, I like finding recipes I can make big bulk of, like Mediterranean. I can make a lot of chickpeas. I can roast chickpeas really fast. I can make all these like yogurt sauces like in you know, mason jars and stuff. And that’s stuff I can eat the entire week. So, I think it’s a lot of like buying stuff that you can easily maintain through the week. Like I would spend like an hour or two maybe on like a Sunday or whenever I buy groceries and break it down and then really all I need to do is just heat up stuff or maybe like make an additional salad where it just still feels fresh to eat.

26:46 Emily: I’m so glad I asked this question because when you were describing how you were eating earlier, I definitely was not picturing this. But it sounds like you are doing batch cooking, bulk prep and then your, you know, cooking or meal assembly each night is really just drawing on some of those ingredients you had prepped earlier in the week. So, it’s like a pretty fairly fast and easy like assembly at that point, which I think is great for coming home from work or whatever you’ve been doing that evening. So, that makes a ton of sense to me. Is there anything else you want to say about your grocery budget?

27:17 Selena: Don’t hardcore meal prep. I think my definition of meal prepping is making individual things that can be paired with other things. For instance, my chipotle yogurt sauce that I make. I can use it on a salad, I can use it as sauce on a burger, I can use it in a sandwich or anything. I like to make items that are very versatile and that I can change up what I’m eating so that it doesn’t feel like the same meal every dinner or lunch. I would say that’s my tip for people for meal prepping. It’s not have chicken, broccoli, and rice every single meal. It’s making stuff that can be used with other items is my advice.

28:11 Emily: Yeah, when I was sort of studying up on meal prepping a couple of years ago, that was a real insight that I got at that time, what you just articulated. I had first imagined meal prep as being what you just said, like actually assembling the same meal you’d eat like every day for a week. But instead, you can do the shift that you did, which is just assemble the components and then use the components in different ways. Like you said, salads or sandwiches or wraps or bowls or you know, whatever it might be. Yeah, that makes a ton of sense. Thank you.

#3 Largest Expense: Eating Out

28:40 Emily: So what is your third largest expense?

28:43 Selena: I would say eating out. So, I like to try different restaurants, and I keep that to like once a week type of deal. And I have a budget of probably I would say like $100-200 a month for eating out. Because I just grew up trying different restaurants, so that’s something I continue. And my partner and I, you know, enjoy doing it and exploring restaurants. And we didn’t want to be like hindered by the fact, you know, like, oh you shouldn’t eat out because it’s expensive. It’s like, I think the idea is that since we budget for it, we can spend money for this thing because we care. We, you know, enjoy it and that’s what we do. So, we budget about, you know, $100-200 a month to just eat out, try different restaurants, and not feel guilty about spending that money.

29:41 Emily: Yeah, I mean look at, you know, the elements we’ve mentioned so far. Like your income being what it is on the GRFP, your rent being reasonable, you have, you know, your car paid off, you cook almost all of your meals. So, spending, that’s only like $25 to $50 per person per meal if you’re only eating out once a week, which is like, yeah you’re trying like a pretty decent restaurant. Like that’s not convenience eating, that’s like a good like dining experience, right? So, I love this that, I don’t know, I’m just, every item I’m just like, oh wow, you’re really thoughtful about this and you really like tried to, you know, figure out what you want your lifestyle to be. This is great.

#4 Largest Expense: Gear

30:14 Emily: Okay, fourth expense then.

30:17 Selena: Gear. Gear like camping, ski passes, bike. So, I would say more these are kind of more one-time expenses. So, let’s say like, I think the most expensive thing I ever purchased was my bike, which was like $850. And you know, that’s a large amount of money to be spending on one item. But, you know, I’ve used that bike a lot to justify the purchase of that bike because it’s, you know, part of my lifestyle now that every weekend we go biking during the summer, or during the week we go for morning rides before work. And then in the winter it’s skiing season or snowboarding. I do both. So, a ski pass last year on the student discount from the U is $450 for the base icon pass and I’ve skied 25 days on it, so that’s like $18 a day for skiing, which is worth it in my head because I enjoy it very, very much.

31:23 Selena: And then coming out here I got, you know, a new pair of used skis for me. So I think, and I got a pair of good ski boots. I would say ski boots are probably the first purchase you should make that’s big for yourself, especially if you’re skiing because that’s the most important thing is ski boots, how comfortable they are. And it was like, should I buy like a cheap pair or should I buy a relatively good pair that fits me very well? And I decided on the latter, where I think I spent I think like $250 on it. But this pair of boots is going to last me for at least five to 10 years. So, that’s how I justified that cost. And then my skis, I got them for a hundred dollars used, and I can wax it myself and sharpen it myself.

32:17 Selena: So, I save another 50 to a hundred dollars there for tuning. This year, I think the ski pass I’m planning to get is like $750, which is very expensive for just, I know it’s only one mountain which is Alta. And it’s a lot of money, but we enjoyed skiing at Alta the most. So, why don’t we just only go to Alta compared to all the other places that we already visited and went for a few days? So, we decided to spend a little bit more so we can ski the place that we actually want to ski.

32:51 Emily: So, how much would you say that average like monthly/year category comes out to?

32:58 Selena: I would say about like $100-200 if it’s like spread out throughout the whole year. Because these purchases are kind of random at random times, because they’re not common occurrences.

Handling Irregular Expenses

33:11 Emily: Yeah. You mentioned when we were chatting before the interview started that you don’t use a system of targeted savings accounts, which is something I suggest for like a budgeting way to handle these like irregular expenses. So, why don’t you tell us how you do handle these irregular expenses?

33:28 Selena: I don’t think I personally plan for it. It’s more of like, because I already set aside money for my Roth and then like my savings, I’m good with my savings right now where I don’t feel like I need to contribute more. Because I already like set aside money for rent, groceries, Roth, and everything else. I know that I have this budget already that I can just spend money on. Because like I have the savings where I don’t touch it. That’s like my rain day fund. And then I have my checking account where it’s like more than enough for like really big purchases. And the checking account is the only account that I really touch throughout the whole month. And basically whatever is in that account, I can use because I already did everything beforehand.

34:23 Emily: I see. So, if I can express that in my own words, you know, you have your investing goals going on, you have your savings set, you have a need to draw down from savings that’s more like sort of emergency or like longer-term savings. And then you have your checking account, and just by glancing at your checking account, you can see how much money is sort of built up there. Because it sounds like you know, you’re living beneath your means in a sense of every single month you’re probably building up some buffer, more buffer in that checking account. And then occasionally you’ll have like these larger drawdowns if you have like a big purchase to make. But just by looking at the balance, you can see whether or not you have money available for a larger purchase. And you, it seems like, sort of naturally think about the course of a year.

35:03 Emily: You know, you mentioned earlier, oh you do these activities in summer, you do skiing and snowboarding in the winter, so you know you’re going to have some larger expenditures, maybe at the beginning of those seasons, but it’s something you can see coming. It sounds like a lot of this is coming intuitively to you or it’s something you’ve practiced very naturally for years. Whereas like I get very like analytical and like spreadsheety about this because I’m not like naturally that way. Like I would just spend money if it was available to me. So, I have to like hide it from myself to make sure I don’t spend it, right? Until the time comes when I do.

35:36 Selena: Mm-Hmm <Affirmative> that’s fair. And also, because I spend like the extra money for nicer items for my gear, these are one-time purchases for the next five to 10 years. So, like I would say last year was quite an expensive year for me because I bought a lot of new gear. I bought a bike, I bought skis, I bought boots and then like all the equipment, all the clothing that comes with it. But the thing is, I did not need to spend any of that this year because I already made that purchase. So like yeah, like sure I already saved on money, and the only thing I need to really buy now is just like ski passes, which are very expensive but it’s the only thing I need to buy. I don’t need to buy anything else.

36:21 Emily: Yeah. So really, that like, we called it a gear category earlier. I would actually just, leveling that up, it’s basically just entertainment. It’s just your flavor of entertainment, which is going to be buying ski passes and stuff like that. Because you really did the gear purchasing, you know, in the past as you just said. And going forward it’s just going to be like access to the, you know, places you want access to.

Note About Transportation

36:40 Emily: Well, this just sounds fantastic. Do you want to add a fifth expense this list, or do you want to stop there?

36:48 Selena: I don’t have any other expenses, maybe gas but <laugh>.

36:53 Emily: Well yeah, I was going to say we didn’t have any transportation expenses in this top, you know, four. So, would you put that at five, gas? Or like car insurance?

37:01 Selena: Not really, because I bike to work. So, and also, University of Utah, all the students and faculty have free access to the public transportation. So, whether it’s the bus or the TRAX system, which is like a train. And so, that’s free for all the students. And at all the places I lived in, I made sure that it was near public transportation. So, whether like I can walk to it or I can bike to a bus, which all the buses also have a bike rack on them, so I can just bike to the bus and then ride the bus to school and then I bike back home. So, because of that I don’t need to spend much money on gas besides like on weekend trips. And I would say like right now gas is like, what, $4.20 right here, I think? So, usually a tank is between like $40 to $60 for me. And I do that according to like my, you know, spreadsheets and stuff. I only do that once or twice a month. I have to say, I bike to school regardless of the rain or storm. Last year, I biked every single day to school or to work, whether it was snowing or not. Because I can always get to a bus at least.

38:25 Emily: So, it sounds like, I now see what you meant earlier when you said you were thinking of, you know, exchanging your car for one that better fits your lifestyle, because this is not a daily commute car, right? Or it is a daily commute car, but you don’t have a daily commute so you don’t need it for that purpose. You really want a car that’s going to fit your, as we were talking about earlier, the camping and the going up the mountains and so forth, all of that stuff. So actually, like the gas spending is almost really under that category that we talked about before under entertainment, because you’re using it for those weekend trips and everything and so, it’s access to the places you want access to for your entertainment purposes. Yeah.

38:58 Emily: Well, that sounds so great. Okay. Any other comments you want to make about your expenses?

39:05 Selena: So, we recently discussed the, like stipends at Utah in the department. And I would say like the rough estimate for the stipend is around $22-24K for other students. And like having that in my head, I also made sure to like kind of live within those means as well, because like, you know, the GRFP is only for three years, so therefore like if my PhD takes, you know, four or five years, I have to probably live on that stipend. So, I made sure to live within those means.

39:43 Emily: Yeah, that’s a great idea to make your fixed and larger expenses like your rent to fit within that lower stipend amount.

Best Financial Advice for Another Early-Career PhD

39:51 Emily: Let’s go to the question that I conclude all of my interviews with, which is, what is your best financial advice for another early-career PhD? And it could be something that we’ve touched on already in the interview or it could be something completely new.

40:07 Selena: I think when you’re applying to schools, know your lifestyle. So for me, I, you know, got into schools that are, you know, in big cities, you know, like Washington, the Bay Area, Boston, and Philly. And all of those cities were just very high-cost living, rent-burdened, you know, places. And they didn’t have the outdoor access that I wanted. Because I know that I’m going to be, you know, going somewhere on the weekends I know that I will be. And I wanted the access to be there, whether it’s, you know, climbing or biking. And I didn’t, you know, want to live in a rent-burdened city. I wanted a city that, you know, fit my outdoor lifestyle. And Salt Lake was that city for me. Where, it’s getting pretty expensive, but it’s not nearly as expensive as, you know, Boston where I grew up in. And for Boston, like I needed to drive two hours up to New Hampshire if I wanted to go climb outside.

41:13 Selena: And then like, you know, all the ski mountains are, you know, New Hampshire, Vermont, and Maine, which are all at least a two-hour drive. And then in Salt Lake it’s a 30 to 40-minute drive with traffic up the mountains, and I have four resorts near me right now that are less than one hour away. So, there was that for me. And I think while like the lab and the project is very important, the most you spend your time on is you know, your life outside of the lab. And I think it’s very important to be happy outside. Because I know that I need to be active for me to be happy. And I think people need to take that into consideration when picking grad schools. Because I’ve seen many of my friends that are, you know, very sad in the cities because they can’t really do anything, or things that they want to like back in undergrad going outside and stuff. So, that’s what I recommend.

42:11 Emily: Obviously, you know that I love this advice so much of really as you said, knowing yourself, knowing your values. I think your, like joy in your lifestyle has come across so clearly as we’ve been talking through how you break down your budget. Because your budget does reflect what your values are and what you want to be spending your time and your energy on. Of course, work is part of that and you chose a great university to go to. But as you said, work is actually a relatively small <laugh> fraction of how we spend our time. And so, what you’re doing outside of that is going to have a huge impact on your quality of life. And so, I’m just so pleased to hear this advice from you, and I I hope that a lot of, you know, whoever is listening to this who’s a prospective graduate student will really take that to heart and think critically to themselves about what they want their life to look like in graduate school, and hopefully apply to some places that are going to be able to, you know, offer them that lifestyle.

43:06 Emily: And in your case, you’ve paired it of course with also having a fantastic fellowship that pays you, I’m assuming above, you know, what the base stipend would be in your department, and so forth. And so, you really got kind of the best of both worlds of having like a decently high stipend in an okay cost-of-living area and getting to do all these other fantastic things with your time. So, I’ve just been so pleased to hear about your lifestyle. So, thank you so much for volunteering to come on the podcast, and it’s really been just a joy to talk to you!

43:36 Selena: Thank you for having me! I enjoyed my time here.

Outtro

43:43 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

In this episode, Emily interviews Janelle Coleen Dela Cueva, a rising second year graduate student in structural engineering at UCSD. Janelle breaks down her budget, including her largest four expenses and aggressive investing goals. Janelle’s gross stipend is approximately $2,500 per month, and she is able to save almost 40% of it due to subsidized university housing and strong habits that minimize her variable expenses. She still lives a comfortable life with weekly eating out, frequent international travel, and car ownership.

Links Mentioned in this Episode

• Set Yourself Up for Financial Success in Graduate School (PF for PhDs Workshop)
• PF for PhDs S13E3 Show Notes
• PF for PhDs S11E1: This Grad Student’s Defensive Financial Planning Paid Off During the Pandemic (Money Story with Maya Gosztyla)
• PF for PhDs Speaking Engagements
• Emily’s E-mail
• PF for PhDs S2E9: How to Make Money without Working: Credit Card Rewards and 529s (Money Story with Seonwoo Lee)
• PF for PhDs S7E8: This Grad Student Travels for Free by Churning Credit Cards (Money Story with Julie Chang)
• Skyscanner
• Skiplagged
• Momondo
• PF for PhDs Subscribe to Mailing List (Access Advice Document)
• PF for PhDs Podcast Hub (Show Notes)

Teaser

00:00 Janelle: I have a week off this summer. So, I want to spend that in Costa Rica around August. And then in December, I hope to visit family in the Philippines and Thailand. So, I will be traveling there for December.

Introduction

00:26 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 13, Episode 3, and today my guest is Janelle Coleen Dela Cueva, a rising second-year graduate student in structural engineering at UCSD. Janelle breaks down her budget, including her largest four expenses and aggressive investing goals. Janelle’s gross stipend is approximately $2,500 per month, and she is able to save almost 40% of it due to subsidized university housing and strong habits that minimize her variable expenses. She still lives a comfortable life with weekly eating out, frequent international travel, and car ownership.

01:35 Emily: I have a new workshop available exclusively for prospective graduate students! It’s called Set Yourself Up for Financial Success in Graduate School, and it comprises twelve modules that I will release throughout the 2023 application and admissions season. The modules that are available to join right now are:

• Funding Models for Graduate School
• Why and How to Apply for Fellowships
• Your Financial Vision for Graduate School, and
• Stipends vs. Cost of Living

Each module comes with a video on the subject matter, a private homework exercise to further explore the material, a reflection exercise that you share with me, and invitations to upcoming live discussion and Q&A calls with me. To read more about and purchase any of the currently available Set Yourself Up for Financial Success in Graduate School modules, go to PFforPhDs.com/setyourselfup/. I know that this material is invaluable for prospective graduate students, so if you are in contact with any, please share the link with them! You can find the show notes for this episode at PFforPhDs.com/s13e3/. Without further ado, here’s my interview with Janelle Coleen Dela Cueva.

Will You Please Introduce Yourself Further?

03:02 Emily: I am delighted to have joining me on the podcast today. Janelle Coleen Dela Cueva. She is a rising second-year graduate student in structural engineering at the University of California in San Diego. I also live in the San Diego area, North County. So, this is a local conversation for me. And today we are doing a Budget Breakdown, which we have not done in a while. So, Janelle will share with us her top five expenses as well as her financial goals and so forth. So, I’m really going to enjoy this conversation. Janelle, will you please introduce yourself a little bit further for the audience?

03:31 Janelle: Okay. So again, you know, my name is Janelle. I’m a rising second-year PhD student. I’m going to be doing that in the fall. Currently, my major is structural engineering with a focus on aerospace structures. I live in the San Diego La Jolla area in grad housing, and I have a roommate in my household. My income on a monthly basis is $2,510. And my position would be a GSR, so graduate student researcher.

Investment Goals

04:11 Emily: I was so impressed when you wrote in that you have major investment goals going on, as well as just managing your expenses, you know, in a high cost of living area on not the biggest stipend. Tell us about these investment goals that you have.

04:27 Janelle: Yes. Okay. So, for my investment goals, I have multiple goals, one of which is retirement. And that, you know, includes a Roth IRA and contributions to that monthly. And then a second goal would be to buy a house or maybe start a business. And so, I keep a separate investment fund for that specific goal.

04:51 Emily: Okay. So, you sort of have two locations for your assets. One is inside a Roth IRA, and one is in a taxable type investment account, just a normal investment account.

04:59 Janelle: Yes. A brokerage.

05:01 Emily: Yes. Let’s talk more about both of those. How much money are you putting towards that Roth IRA on a monthly or yearly basis?

05:08 Janelle: I am maxing out my Roth IRA at a $500 contribution every month.

05:14 Emily: Wow. So impressive. Something I never managed to do when I was in graduate school, even though the maximum was lower at that time, I was never able to max out. So, that is awesome. What inspired you to reach for that goal so early in life?

05:28 Janelle: I don’t know. I think I felt that everybody was working, and outside of a PhD, everybody was working in industry and I just felt this need to catch up as like a little bit of pressure to catch up with everybody. And so, I started saving a lot more money.

05:47 Emily: Okay. So, you’re kind of looking at your peers who didn’t take the grad school route and saying to yourself, okay, what can I do to sort of keep on track with what they’re doing?

05:56 Janelle: Yes.

05:56 Emily: Okay. That makes sense. And what about this other brokerage account? How much money are you contributing there? What are you investing in?

06:04 Janelle: For this other brokerage account, I invest around $423. It’s a very specific number, and the brokerage includes you know, dividend stocks and crypto.

06:19 Emily: Alright. What’s with the specific number? Is that just based on what you had in your budget, or is that tied to some other larger goal?

06:27 Janelle: This number is just what works in the budget. I just had some extra cash when I, you know, subtracted everything out.

Short-Term Financial Goals

06:35 Emily: Yeah. Well, that’s incredible. I mean, investing, going on, you know, close to a thousand dollars a month on a grad student stipend. Wow. We are going to find out in a moment how you’re doing that. Are there any other financial goals that you’re working on right now, or maybe financial goals that you’re not working on so that you can do these investment goals?

06:52 Janelle: I have two other financial goals that are short-term. So, I have an emergency fund, and I also have a vacation fund. And the vacation fund is about $200 a month. And the emergency fund, I stopped contributing because I reached my goal, but it was about three month’s worth of living expenses.

07:19 Emily: Yeah. Perfect. I know you’ve had some exposure in the past to my like eight-step like financial plan. It sounds like you’re working at least a few of those steps. I don’t know if you had that idea beforehand or you got it from me, but either way, I’m really happy that you are working that plan. So yeah, for now your emergency fund is full. If you have an emergency and have to deplete it a bit, that’ll become a goal again, it sounds like to, you know, contribute until it’s back up to that three-month level.

07:43 Janelle: Yes. And then once that occurs, it will eat away at the vacation fund. So, it’s either/or.

#1 Largest Expense: Rent

07:50 Emily: Gotcha. Okay. Well, I think we’re ready to talk about your top five largest expenses every month. So, let’s start with the largest one, the number one largest expense. What is that?

08:01 Janelle: My largest expense is rent.

08:03 Emily: Yeah, no surprise there.

08:05 Janelle: It’s really high <Laugh>.

08:06 Emily: How much are you spending on rent?

08:09 Janelle: The rent bill for my apartment is $1380, but I pay half of that at $690, because I found a roommate.

08:23 Emily: So, when you say roommate, like how big is your apartment? Is it a one-bedroom studio? Is it two bedrooms? How large are we talking?

08:30 Janelle: It’s a two-bedroom apartment with one restroom, but the restroom is in two rooms. So, one for showering and one for using the restroom.

08:40 Emily: Gotcha. Okay. So like a two-bedroom, one-bath situation. So, a pretty normal kind of thing to share with a single roommate. So, the way you phrased that, it sounded like this apartment is yours, but you have found someone to share it with, is that right?

08:55 Janelle: Yes. So, the entire lease is under my name and I got a two-bedroom because it had a lot of space, but I really looked for a roommate to cover the second or like half the rent.

09:10 Emily: Yeah, absolutely. And is your roommate another graduate student or someone else?

09:15 Janelle: My roommate is somebody else. She went to undergrad with me, so I knew her, but she doesn’t go to UCSD.

09:23 Emily: I always find it like, sort of interesting to investigate for me, like how graduate student housing works. Like who’s allowed to live there and so forth. It sounds like you, as the graduate student, then the lease is under your name, but you can, you know, sublease to whoever you like. Is that right?

09:38 Janelle: Yes.

60% Rent Hike at UCSD

09:38 Emily: Okay. Well, honestly though, a two-bedroom place for, I think you said $1380 a month is really not that bad. Like, I mean, how do you feel about that price?

09:50 Janelle: I feel that it’s not bad given the rising cost of rent in the area and just in California in general. I got really lucky with this rent because I signed up for it before UCSD got the 60% hike in rent.

10:12 Emily: Yes. We heard about this actually back in season 11, episode one with Maya Gosztyla, who is another UCSD graduate student. She also was saying that she had graduate student housing at a relatively low price, but she sort of told us as part of that interview, actually, I think, as a follow-up from the interview that this price hike was coming. So, can you give us an update on that? It sounds like you said you got in before the price hike, but what’s going on for other students?

10:38 Janelle: For other students, the price hiked a month after I signed my lease. So, I signed the lease for August, and the month after, September, the price hiked 50%. And it was because San Diego passed a rent control law, and that law went into effect this year in 2022. So, UCSD increased the rent by 60% just in time before this law went into effect.

11:08 Emily: I see. So, kind of on their side as the landlord, they’re seeing that in the future, their rent hikes are going to be limited. So they got all the rents up to market rate or closer to market rate in advance of that. So, sort of a perverse effect of that law, I would imagine.

11:23 Janelle: Yes. I wouldn’t say it was market rate for the apartments that they’re renting out, but on top of that, they are also increasing the rent to 3% every year, which is the maximum that they can increase rent every year from now on. And for my rent, it’s not into effect yet, but next month it will be going up to $1450, I think.

11:51 Emily: Gotcha. But you expect your rent, it sounds like is locked in with that 3% annual increase for as long as you stay in this current lease, right? As long as you stay with the apartment.

12:01 Janelle: Yes.

12:02 Emily: Okay. And do you have any plans? Like, do you, as of now plan to stay there for the rest of your PhD?

12:07 Janelle: Yes. I plan to stay here for the rest of my PhD, because the apartments outside of UCSD are much more expensive.

12:16 Emily: Yeah. So, I understand you have experience with this, right? Because you also went to undergrad at UCSD and you were not living in graduate housing as an undergraduate student. So, can you talk about what you were paying even, you know, a year or so ago?

12:28 Janelle: Yes. It’s less than, but the living situation is better. I paid $400 a month for my last apartment as an undergrad, but I shared the room with two other people, so it was a triple and then there was another room in that apartment with one person. So four of us lived in that apartment. One room was a triple, one was a single.

12:55 Emily: Wow. Okay. So, inexpensive, but definitely a trade-off there in terms of privacy and ability to concentrate and all of that stuff. So, yes. A better living situation for you now. Alright. So, it doesn’t sound like the strategy of getting in before price hike is replicable at this point. Unless you find, like your roommate has with you, a roommate who is locked in under this lower, like prior agreement. Other than that, all these new leases are going to be quite a bit more expensive.

13:23 Janelle: Yes. It was incredibly lucky.

#2 Largest Expense: Food

13:26 Emily: Yeah. Alright. What is your number two expense?

13:31 Janelle: My number two expense would be food. I aim to do $200 a month on food, groceries, and meal prepping, but I always go over that from eating out.

13:46 Emily: Okay. So $200 per month is like approximately your grocery cost. And then you have some additional costs for eating out on top of that.

13:54 Janelle: Yes.

13:54 Emily: Well, still, you know, that’s not terribly a lot of money for a single person. Can you tell us some of the strategies that you’re using around keeping that cost down?

14:05 Janelle: Yes. So, on a, you know, 2000 adult calorie diet, I try to shop, you know, as healthy as possible. So, produce is actually not that expensive. And then on Sundays, I meal prep enough meals for the entire week, and that level of like planning obviously helps me save a lot of money.

Meal Prepping Helps Save Money

14:34 Emily: Mm-Hmm <Affirmative>. How does it do that?

14:37 Janelle: So, when I meal prep ahead of time, it stops me from eating out all of a sudden, and eating out because I’m hungry and I don’t have food. So, it takes the convenience out of eating out. Or, you know, post-meeting or, you know, going to a restaurant near me. And this also helps with, you know, nutrition goals.

15:04 Emily: Yeah. Tell us a little bit more about like what you’re eating when you do these meal preps.

15:08 Janelle: I eat pasta and, you know, side of vegetables with some sort of protein, sometimes beef or chicken that I prepared in bulk.

15:23 Emily: Yeah. So, that’s like a lunch or a dinner. Do you take this food, I presume, you take this food to campus for lunches? What’s your like sort of rhythm of eating?

15:34 Janelle: Yeah. So, in the morning, I eat a bagel, so that’s breakfast, and I take a packed lunch to school and that’s lunch. And then in the evening, I do another packed meal prep at home. So, I can eat three meals a day. But this level of planning, it gets old when you eat the same thing over and over again. But what helps is that I try to plan out three different types of recipes on a Sunday and then just cook them all in bulk and then eat them throughout the week.

16:12 Emily: I see. So, like, even for instance, for your dinners, you have like, like three different dinners that you’re sort of rotating through? Or are you saying three different meals, like breakfast, lunch, and dinner?

16:22 Janelle: Yeah, for dinner, I have three different types of food that I cycle through. And then for lunch, I do the same thing just based on what I’m feeling. I have three different meals to choose from.

16:33 Emily: Gotcha. I’m always fascinated by this like meal prep process, which I’ve never like, sort of examined it, but I’ve never like fully devoted myself to it. So, I’m always really curious when other people are doing it successfully. So, thanks for those details.

Commercial

16:49 Emily: Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2022-2023 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/speaking/ or simply email me at emily@PFforPhDs.com to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

#3 Largest Expense: Car

18:11 Emily: Okay. What is your number three expense?

18:15 Janelle: My third expense would probably be gas.

18:19 Emily: Yeah. So, let’s talk about your transportation situation. So, it sounds like you own a car.

18:23 Janelle: Yes.

18:24 Emily: Is it paid off?

18:25 Janelle: The car is paid off, so paying off the car is no longer an issue. So, this gas expense is $150 a month, or I guess not just gas, but car expenses is $150 a month. $70 goes towards the insurance, and the rest of it goes towards gas, but gas prices have been increasing a lot. So, I’ve been opting for you know, walking and taking the bus.

Why Own a Car?

19:00 Emily: Okay. But you do own a car. So like, let’s talk about that decision, like in the first place. Is it an option for you at all to not own a car, like maybe some of your peers do? Or like, why do you own a car?

19:13 Janelle: I own a car because my family lives in Los Angeles, and I think it’s really important for me to visit them, you know once every two weeks. Genuinely, I don’t need a car. And over time, I’ve really reflected on, maybe this is not a good expense to have because I can take the bus everywhere here in San Diego, and I can walk to school.

19:43 Emily: Hmm. Okay. So, it’s really just those trips to LA that are like the reason that you still own the car.

19:49 Janelle: Yes.

19:49 Emily: And the gas price, like the gas cost is like all for those trips.

19:53 Janelle: Yes. Yes. It’s all from those trips.

19:56 Emily: Yeah. I’m very familiar with this as well, because as I said, we live in North San Diego County and we have relatives in Orange County who we go to visit with some frequency. And we use our car for other things, but that’s one of the major reasons why we choose to have one. But like you, ours is paid off. The insurance cost is not very high. And so it’s like, oh, okay, well, yeah, you could, in your case, trade off the $150 per month car expense for maybe some increased costs of like public transit or however you’re going to be getting up to LA instead. Maybe that’s also public transit. But yeah, I don’t know. It seems like a small line item to me in the first place.

20:33 Janelle: Yes.

Alternatives to Car Ownership

20:33 Emily: Yeah. So, you feel good about the car ownership?

20:37 Janelle: Not necessarily. I think I could find a way to go to LA without the car. There’s a UCSD ride share Facebook group that I used to use in undergrad where it’s $20 a seat to LA and back to San Diego. And, you know, I feel that the car was a very frivolous expense.

21:00 Emily: Hmm. So, when did you acquire the car?

21:03 Janelle: I acquired it last year, around April.

21:10 Emily: So, April, 2021. So like, just before your graduation from college?

21:14 Janelle: Yes.

21:15 Emily: Okay. Interesting. Okay. Well, I’m glad it’s at least on your mind of like a debate, and good for other UCSD students or maybe other students in the San Diego area to know like, Hey, like you can set up your life. It’s okay to let go of a car if you really don’t need it. So, cool. Give us an update on whether you decide to keep it, or if you decide to sell it. I guess it’s a good time to be selling if you decide do that.

21:35 Janelle: It is. It is really good for a used car.

#4 Expense: Miscellaneous

21:37 Emily: Yeah. Okay. Well, what’s your number four expense?

21:42 Janelle: Yeah. My number four expense is just general necessities, clothing, and you know, recreation stuff. I put them all in the same line item, so clothing and going out to do activities are under the same item, which is $200.

22:04 Emily: So, that sort of general like spending money kind of line item, like as long as you keep, it’s all sort of discretionary in a sense that like you could spend it this month, you could spend it next month, but as long as you keep it within 200, like you’re good. You’re meeting your budget goals.

22:19 Janelle: Yes. That $200 encompasses like a lot of random things. As long as it’s like an item or it’s for recreation, for example, buying clothes or buying random medication at CVS. And it also includes, you know, let’s say I want to do a fun rec, going to the park to go rock climbing would probably also be in there.

22:46 Emily: Okay. Yeah. So, like pocket money sort of thing.

22:50 Janelle: Yes.

22:50 Emily: Yeah. That sounds great. And good on you for, you know, limiting yourself to this certain, I sort of think of it as like guilt-free money. Like as long as I stay within this boundary, I can spend it however I want. I don’t want to feel guilty about it at all. I like that, like budgeting sort of in that sense, when I first started doing that, giving myself permission to spend and not like overanalyze. Like, does this, you know, help me meet my goals or not, or whatever, whatever. I knew as long as I stayed within this boundary, I could like, feel good about any purchase that I wanted to make. So, I really like that kind of line item.

23:20 Janelle: Yes.

23:21 Emily: Alright. And your number five line item. What’s that?

23:24 Janelle: My number five line item, I think that’s it. I think it just goes savings, rent, vacation, groceries, transport, and recreation. There’s not a lot to fit in a $2,500 paycheck.

Vacation/Emergency Fund

23:38 Emily: True. Because we already got down to the miscellaneous spending. Well, let’s talk a little bit more about like that vacation fund. I think you said it was $200 a month, is that right?

23:47 Janelle: Yes. Yes. It’s $200 a month. And in a given year, it goes to like $2,500, honestly. Sometimes, it eats away at the emergency fund, which is a trade-off, but that vacation fund has let me travel to 10-plus countries by myself. It doesn’t seem like a lot, the $200 a month, but it can buy so much outside of California.

24:14 Emily: Yeah. So, going to 10 countries. Over how many years did you do that?

24:20 Janelle: Okay. So, I started at the end of my sophomore year. So, I guess from now maybe three, three and a half years.

24:29 Emily: Yeah. Okay. So, over three years, has the budget line item stayed at about $200 that whole time?

24:36 Janelle: Yes.

24:37 Emily: Okay, so we’re talking $7200, $7500 total, and you visited 10 countries.

24:44 Janelle: Yes.

24:45 Emily: How did you do that?

24:48 Janelle: Yeah, this is very difficult to say. I guess I plan it ahead of time with like a cost analysis, very comprehensive and all of the, you know, food every day, accommodation every night, and then plane tickets. But the cost of living outside of California, everywhere else in the world is a lot cheaper. So, if you think about it, if you’re spending $400 a month, you know, feeding yourself here in California. That goes a long way somewhere else. Where, for example, I stayed in Vietnam for I think two weeks, and per night, I stayed at a hostel. And even private rooms would be $10 a night, but a hostel where I shared the dorm with other people would be $3 a night. And then food every day was less than 10 bucks a day.

Travel Hacking

25:48 Emily: Yeah. Well, you still have the expense of getting there though. So like, are you doing travel hacking or are you paying cash for flights? How does that work?

25:56 Janelle: Oh, okay. I just started doing travel hacking. So, there’s this thing called credit training. If you keep up a good credit score, you can sign up for credit cards that give you cash rewards for traveling. And then once you obtain those rewards, you can cancel your credit card at the expense of your credit score. So, if you have any long-term goals like buying a house, obviously don’t credit churn your credit score. But given that credit churning that I started doing just this year to obtain a new credit card for traveling, after the period passed where the score deducted, I think around 20 to 30 points, I was still able to bring it up to 780 by keeping up monthly payments and being very responsible with that credit card and not, you know, spending credit that I don’t have in cash.

26:57 Emily: I love the strategy of travel hacking. We’ve had a couple of previous guests on the podcast, Seonwoo Lee and Julie Chang, and we’ll have those links in the show notes, who have talked about their systems in detail. Now, those were both pre-pandemic interviews, I think. Or I think Julie’s was like in the pandemic, but she was talking about like pre-pandemic strategies. I’m just like getting back into this myself, because we took a big pause from travel hacking. One, because the pandemic, and two, because we were buying a house and so we didn’t want to be messing around with our credit scores, but like since closing on the house, we’ve sort of been dipping our toe back into it. And it’s so fun. And I’m trying to think about like our, you know, 2023 and what trips we want to do then. Like, what’s coming up for you? Do you have any trips planned right now?

27:39 Janelle: Yes, I actually have, hopefully, I haven’t asked my boss yet <laugh> but my PI, I want to. I have a week off this summer, so I want to spend that in Costa Rica around August and then in December, I hope to visit family in the Philippines and Thailand. So, I will be traveling there for December. Another travel hack that I would like to add in. If you open Google incognito mode and then search up the flights through Skyscanner or the Skiplagged website or the Momondo website and compare all three, you can find generally the cheapest ticket. And so, the cheapest day to fly is Tuesday. It’s hundreds of dollars cheaper to fly on Tuesday than any other day. And then the cheapest day to buy the tickets are between 6:00 AM on Saturday to noon on Saturday.

28:42 Emily: Alright. I will be noting that and using that for my travel hacking endeavors going forward. It sounds like most of your travel is international, right? Because if your family is in like the LA area, it sounds like you’re probably not doing that much U.S. like travel, right?

28:57 Janelle: Oh yeah. It’s expensive to travel in the U.S. Whether it’s gas from driving to a road trip or whether it’s flying, the accommodation here is a hundred plus a night. It’s very difficult. I think it would be a lot cheaper to just go international.

Taxes and I Bonds

29:18 Emily: Hmm. Alright. Good to know. Yes. Okay. So, we’ve kind of come to the end of our like budget breakdown. It sounds like we covered your entire budget actually just with those top five plus the goals and so forth. But I wanted to ask you about one other thing, which was taxes. Because I think you mentioned when you said your income earlier, that’s like your gross income, like before taxes are taken out. So, how do you handle taxes on your stipend?

29:42 Janelle: For taxes on my stipend, I take out $127 every month and I put it aside and do my taxes when it’s due, I think this April and then, so I have a cash fund for the taxes ready. And so, you could put that cash fund in a high-interest account, so you can earn interest on it. And it’s not just sitting and getting eaten away by inflation. But another thing is that I put it on Gemini, GUSD stablecoin, which is a crypto that is one-to-one with the U.S. dollar, but it’s a 6.9% APR. So, I earn interest on all of my funds from taxes, vacation, stuff like that.

30:31 Emily: Hmm. Interesting. Yeah, I’ve been hearing more and more about the strategy, not something I have started doing myself, but obviously very enticing with that kind of interest rate. Not guaranteed though.

30:42 Janelle: Oh, another thing I could add is there are also I bonds for the U.S. government. Right now, between I think April to July, I’m not sure about those months. Don’t quote me on that, but there is a 9.6% APR for putting in like cash deposits on I bonds at a $10,000 maximum. But the issue with that is that you have to keep it there at least five years or get a three-month penalty removed. Yes.

31:14 Emily: Exactly. One of the reasons I’ve been hearing about I bonds for, I don’t know, half a year or so now at least, but yeah, but I haven’t done it because I’m a little nervous about the like, ah, well, all this, you know, saving is saving to spend for me. Like my cash is because I intend to spend it. So, how comfortable am I, you know, tying it up somewhere else. So, anyway, it’s a good question for each individual when you’re thinking about where to house your savings and how to get it to work for you a little bit.

Best Financial Advice for Another Early-Career PhD

31:41 Emily: Alright, Janelle, thank you so much for this budget breakdown! It’s been really fascinating for me, especially being sort of close by. I want to conclude our interview with the same question that I ask of all my guests, which is what is your best financial advice for another early-career PhD? And it could be something that we’ve already talked about in the interview, or it could be something completely new.

32:00 Janelle: Yes. My biggest advice would be to save whatever you can, and to put those savings somewhere where the money works for you. Where it’s not just getting eaten away by inflation, whether that be stocks or crypto or, you know, bonds, but definitely save what you can because that money is going to be useful, whether it’s for an emergency or if you want to, you know, change your life.

32:32 Emily: I love it. And the other sort of flip side of like having saved money, like having savings is great for what you just mentioned. You want to make a change or, you know, you have an emergency, whatever. It’s awesome to draw on that money. But the other side of it is the act of saving forces you to create margin in your life, like you’ve done, right? So like, you’re saving almost a thousand dollars a month for the sort of more long-term things. And you also have some short-term savings going on. So like, if you needed to pivot in the short-term and something happened, like you have some margin there to be able to eat into if necessary, if something came up. And so that, like, I just love, just like we need like time margin in our life. We also need financial margin in our life and energy margin and all the rest of it, which is so hard to maintain, but you’re doing a great job with your budget and it’s been really fascinating to chat with you about it and just congratulations on all the success. And I hope that, you know, you have it continued going forward as well.

33:27 Janelle: Okay. Thank you! It’s been really nice talking to you and getting to meet you in person and I, you know, listen to you in the car, driving back here, driving to LA.

33:39 Emily: That’s good to hear. I <laugh>, I love to talk with people who have listened to the podcast before. It’s kind of a kick for me to know that we already have a relationship that’s been established a little bit. So like, we can have conversations like this, which is really fun. So, thank you so much for volunteering!

33:54 Janelle: Thank you!

Outtro

33:59 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.