Financial Goals

This PhD Promotes DEI with a Focus on Finances

July 1, 2024 by Jill Hoffman

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

Links mentioned in the Episode

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

Teaser

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

Introduction

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

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

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

Will You Please Introduce Yourself Further?

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

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

Finances During Childhood, College, and Beyond

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

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

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

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

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

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

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

Financial Challenges During Grad School

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

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

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

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

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

The Birth of the Money Club

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

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

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

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

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

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

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

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

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

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

Commercial

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

DEI and Personal Finance

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

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

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

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

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

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

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

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

Post-PhD Finances

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

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

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

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

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

Finances with Carolina

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

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

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

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

Best Financial Advice for Another Early-Career PhD

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

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

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

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

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

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

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

Carolina (48:55): Of course.

Outtro

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

This PhD Works Part-Time After Reaching Financial Independence in Austin Texas

April 29, 2024 by Jill Hoffman

In this episode, Emily interview Dr. Corwin Olson, who completed his PhD in aerospace engineering and achieved financial independence (FI) just a handful of years later. Corwin argues that using a traditional IRA is typically advantageous over a Roth IRA, even for a grad student, if they have aspirations to retire early in the 0% marginal income tax bracket. Corwin and Emily walk step-by-step through his family’s finances and his money mindset from the time he finished his master’s in 2009 with a “$0 net worth” to when they reached FI in 2021. Corwin tried out unemployment during the pandemic, but ultimately returned to work a part-time schedule because he still wanted to use his engineering skills professionally. Corwin’s story highlights how a PhD can achieve a highly satisfying job and work-life balance through a combination of financial freedom and career capital.

Links mentioned in the Episode

This PhD Works Part-Time After Reaching Financial Independence in Austin Texas

Teaser

Corwin (00:00): It’s not about not working. This is what I tell everyone I meet who has not heard about FIRE or FI much before. It is not about not working. It is about control over your life. If you are financially independent, then you get to dictate what you do, like broadly across your entire life. I really wanted that control over my life, especially since we wanted to have another kid and we did. Uh, and so when, uh, our kid number two came along, my wife dropped down to halftime and then, uh, about six months later, I also dropped to zero time. And then I went back to work halftime this spring. It’s a perfect, um, application of FI. We decided that we were gonna do something different and that gave us the ability to do so without stressing about money.

Introduction

Emily (01:24): This is Season 17, Episode 9, and today my guest is Dr. Corwin Olson, who completed his PhD in aerospace engineering and achieved financial independence (FI) just a handful of years later. Corwin argues that using a traditional IRA is typically advantageous over a Roth IRA, even for a grad student, if they have aspirations to retire early in the 0% marginal income tax bracket. Corwin and I walk step-by-step through his family’s finances and his money mindset from the time he finished his master’s in 2009 with a “$0 net worth” to when they reached FI in 2021. Corwin tried out unemployment during the pandemic, but ultimately returned to work a part-time schedule because he still wanted to use his engineering skills professionally. Corwin’s story highlights how a PhD can achieve a highly satisfying job and work-life balance through a combination of financial freedom and career capital.

Emily (02:21): This spring, I’m bringing back my 15-minute introductory calls! This is a chance for you and I to meet one-on-one. I want to hear your current financial questions and challenges. If I can provide some quick value by answering a question or pointing you to a resource I absolutely will. These calls are a way for me to keep a pulse on what’s going on financially in our community so that I can address whatever comes up through my seminars for universities and the free content I create. I used to offer these calls years ago to everyone who joined my mailing list, and they were so fun and valuable to both of us! I would love to meet you, so please sign up today at PFforPhDs.com/intro/. By the way, we’re taking a short break from publishing podcast episodes between Season 17 and Season 18. You can expect the next episode to drop on June 3, 2024. You can find the show notes for this episode at PFforPhDs.com/s17e9/. Without further ado, here’s my interview with Dr. Corwin Olson.

Will You Please Introduce Yourself Further?

Emily (03:35): I am delighted to have joining me on the podcast today, Dr. Corwin Olson of Engineering Your FI. Corwin is a PhD in aerospace engineering and he is now financially independent. And we met just a couple weeks ago. We’re recording this in November, 2023. We met at FinCon 2023, which happened in late October, and we ran into each other first at the taxes subgroup interest area, and I saw, um, his name and he saw mine and we knew we had to connect further. Um, so I’m just really excited to have a fellow engineer PhD on the podcast who is excited about personal finance and specifically fire. We’re gonna learn a lot from Corwin today. Um, so Corwin, will you please just introduce yourself, um, and your family to us a little bit further?

Corwin (04:20): Sure. Uh, married family, uh, two kids young on <inaudible>, two and seven. Uh, born in Dallas, Texas. Uh, but I’ve lived in Texas most of my life. So I’m currently in Austin, Texas. Uh, got my bachelor’s and master’s at UT Austin, university of Texas at Austin Aerospace Engineering back in the aughts. And uh, I also was fortunate enough as an undergraduate to become a certified NASA instructor, so that was a lot of fun. I got a lot of good leadership and speaking skills from that. Uh, worked to Washington DC for a few years and worked a company that did navigation for a big NASA mission, which was a lot of fun. Went back for my PhD in 2012. Uh, same school UT Austin and I worked on autonomous optical navigation around small bodies like asteroids and comets. Uh, then finished up my PhD in 2016 and continued on with UT as a researcher in one of the labs here at ut. And it was towards the second half of my PhD program. And then after getting my PhD that I got a lot more interested in personal finance and fire and discovered that whole community

Defining Financial Terms

Emily (05:24): Emily here breaking in during the editing process. Since Corwin and I about to jump into some heavy financial nerd-speak, I want to take a second here to define terms for new listeners. 1) FIRE stands for financial independence retire early and FI stands for financial independence. People in the FIRE movement strive for early financial independence so that they have the option to stop working, and by early I mean perhaps in your 30s or 40s. 2) An IRA is an individual retirement arrangement, and it is a tax break that the federal government offers to incentive investing for retirement. In 2024, you can invest up to $7,000 in an IRA if you’re under age 50 and have taxable compensation. When you open an IRA, you can choose a traditional version or a Roth version or both. With a traditional IRA, you get an income tax break on the money you contribute in the year of your contribution. The money then grows tax-free, and you pay ordinary income tax on the withdrawals in retirement. With a Roth IRA, you pay your full income tax on your contribution, and then the money grows income tax-free and you withdraw it income tax-free in retirement. The standard advice is to contribute to Roth accounts when you are in your lower-earning years and a relatively low income tax bracket and switch to traditional when in your higher-earning years and a relatively high income tax bracket. Corwin is going to argue that people who want to retire early should really prefer to contribute to traditional accounts, and that includes grad students in the 12% federal marginal tax bracket. OK back to the interview.

Contributing to a Traditional IRA vs a Roth IRA in Grad School

Emily (06:49): Now, you said something very provocative to me at FinCon, which was that I, I may butcher what you said, but it was something on the lines of pretty much everybody should just be using traditional retirement accounts. And maybe you were saying that in the context of people who are interested in pursuing FI. Can you re restate what, what caught my attention during our conversation?

Corwin (07:07): Well, I think my main motivation was to emphasize how much better traditional is than a lot of people think. They think, oh, I wanna pay my taxes now, might be larger later. And from everything I’ve read for lots of different places, especially in the fire community, if you do the math, it consistently shows that traditional seems to come out on top.

Emily (07:30): Of course, my follow up question to you at that time was what about the grad students Corwin? Mm-Hmm <affirmative>. So that is what you have worked on in the few weeks since we left FinCon preparing for this interview. So let’s talk now about a grad student kind of specific scenario. So we’re talking about someone who’s in graduate school, we’re gonna make the assumption that they’re in the 12% marginal tax bracket. I’ve always kinda said, uh, virtually every grad student I’ve ever spoken with, if they’re investing in an in an IRA, they’re using a Roth. It’s just like the popular option by far and there’s reasons for that which we’ll go into. Um, but you we’re just gonna do the math for us. So yeah, please tell us now like the scenarios that you were looking at and kind of the outcomes and where people can read your full post about this.

Corwin (08:13): Sure. So, uh, I did this most recent blog post on engineeringyourfi.com, traditional Roth versus traditional IRA contributions in grad school. And I put the Python code that I used to generate all these results in the post. You can go download it, take a look. I know a lot of grad students know Python, so that’s good <laugh>. Um, the broad strokes conclusion is generally, you know what people have said for many, many years. It all depends on your input versus output tax rates, right? So if you are a hundred percent confident that you’re gonna be withdrawing your money in a 24% marginal tax bracket later in life and you’re in grad school now and you’re in the 12% tax bracket, then yeah you should just put it into Roth if you’re totally sure of that, right? But I think what I like to push for is that actually, especially if you’re at all interested in financial independence at an early age, retiring early, taking sabbaticals, um, then actually it can make a lot more sense to go after traditional because it is actually a lot more feasible to have a 0% tax bracket is a FIREd person, early retired person, uh, by taking a advantage of the standard deduction and the really large typically, um, 0% long-term capital gains bracket. So I did a lot of plots and I showed, you know, not just the values of the traditional versus Roth, which is deceptive, right? ’cause you haven’t paid taxes on the traditional but also the cash out value of each. And there’s some really cool nuances and fluctuations after you hit 60 or 59 and a half, things simplify a lot, right? There’s no 10% penalty. But in general, um, I still would prefer traditional because I think with our expense levels we can very easily have a 0% tax bracket and it’s quite beneficial for us to go do that. So a lot more detail in the post though.

Emily (10:00): Yeah. So what I was kind of thinking through when I was looking at these results here, which are basically like, well, okay, you’re looking at your 12% current marginal tax bracket that you would presumably be paying as a graduate student versus when you want to withdraw from this account. Maybe that’s before retirement age, maybe that’s after, um, what is your marginal tax rate going to be? Then you looked at three assumptions, which was zero, as you’ve just been mentioning 24% and also 12%. Um, and once you actually pay the tax on this money, once you get it outta the traditional account, um, it was sort of, it was even right just as good if you were withdrawing it in the 12% tax bracket, right? Same, same. Um, if you manage to get down at that 0% tax bracket, then there’s a clear advantage for the traditional and if you’re a managing to be withdrawing money in the 24% tax bracket, there’s an advantage for the Roth. But what I was thinking about and maybe what could be a thought exercise for the listener is what is your tax bracket going to be in retirement? Because when you say something like 24%, like that might be your tax bracket in your, your peak, you know, earning years, working years for your family, something in that range. But a lot of people live on much less money in retirement. That is to say they have to withdraw much less money than they were earning because maybe they had a high savings rate going on. Maybe their expenses have dropped later in life because their kids are outta the house or whatever the reason is. Um, so it’s very hard to sort of predict what, what is your tax bracket going to be later in life? Is it gonna be as high as it is in your working years? Is it definitely going to be lower? Um, and especially sitting from the position of a grad student when you don’t really know what your career is going to be. So definitely like for those of you who want to nerd out about tax rates and would be open to the possibility of maybe not doing a Roth IRA during grad school, maybe doing the traditional, definitely check out Corwin’s post at Engineering Your FI. Um, but I want to talk further now about your personal story and why for you that 0% tax bracket, oh, the traditional would’ve been the better choice, um, was is something that you have, have, you know, achieved in this at a relatively early age. So yeah, let’s talk more about your like personal story. So you told us earlier that you worked for several years before pursuing your PhD. You weren’t into the fire movement at that time. Um, so were you doing things like contributing to your tax advantage retirement accounts? Like or was it something you didn’t even think about at that time?

Pre-FIRE Finances

Corwin (12:15): Yeah, so I was fortunate to get my master’s in 2009. Went down to a net worth of $0 <laugh> because I spent all my savings going through a big backpacking trip. But my uncle sent me this article, snail mail of course, you know, back in 2009 and it’s my Uncle <laugh> and it was this money article about how you should invest in index funds. And I’m like, Hmm, okay, what are these things? The markets had just crashed, you know, they were very low valuations. So I was like, you know, I should probably do this. At the very least, I uh, wanted to match my 401k for my employer, right. And my wife had started working around the same time. So we did that, but we also had to save for a wedding and we lived in Washington DC very expensive. So at the time we were not focused on maxing out our savings rate, but we did know we needed to start investing and that paid off quite heavily because the markets were so down. We started our careers. We were lucky to get jobs <laugh> in 2009, right when the market, the economy was, uh, suffering heavily. So yeah, we were fortunate

Emily (13:12): So you had a savings rate.

Corwin (13:14): Yeah, right. I don’t even know what it was. It was definitely under 50% <laugh>.

Emily (13:19): So. Okay. So let’s kind of fast forward to when you started your PhD. I think you said that was 2012, right? Yes. And so what was your mindset like at that time around, I mean, I’m presuming you took a pay cut, right? Uh, but maybe your wife maintained her income. Like just talk us through kind of the, the shift in household finances that occurred when you started your PhD.

Corwin (13:37): Sure. So I was very fortunate that because of my work experience and grades and all that, I was able to get this really nice NASA fellowship and I also was able to get a really nice UT fellowship. So I made a pretty nice salary in graduate school, 45K a year. Uh, so it is possible to do that <laugh> for the, uh, the folks who are listening out there. Uh, it’s, you know, not super common. Usually you’re looking at close to 20k, although maybe that number’s higher now because of inflation, you know? Um, but you can make a bit more money with these fellowships. That’s why I strongly encourage all grad students to go after them. Um, but yeah, I, uh, I was more into minimalism back then ’cause I didn’t know about fire and so I thought, okay, maybe this is how I need to, to live my life, be minimalist <laugh>. But yeah, it was still, you know, finances were not, were always on the back burner still at that point.

Emily (14:28): So you were still saving, but it was not a, a major focus until a few years later, is that right?

Corwin (14:32): Right, right, right.

Post-PhD Finances and the Financial Independence Movement

Emily (14:33): Okay. So let’s talk about when you were finishing your PhD. Um, what was going on with your family overall and then how your finances changed when you got that post PhD job?

Corwin (14:42): We were pregnant with my first child. Uh, and so he was born three months before my dissertation <laugh>, which was quite rough. And you know, my wife and I are thinking about what we wanted to do after I got my degree and she was enjoying her job. She wanted to continue there. I was thinking about the business, small business, thought I might do something entrepreneurial. And it was when I discovered the FI movement, it was a Mr. Money Mustache article as it is for so many people. Uh, that really launched me down that, uh, community path, uh, to find out about all of that. And then I realized, actually I think that’s what I want most out of life right now, <laugh>. So I was fortunate that there, um, was a high paying engineering job that I could take here in Austin, a a really good lab here. So, uh, I decided, well, I think that’s what I want. Also, we have a baby coming and this would be nice to have that stability for that. Maybe a little less stress <laugh> a few less hours. I always told people my easy job was going into the office, right? Uh, so that was where we decided, okay, let’s just do two full-time jobs and let’s really ramp up our savings rate. So we ramped it up to, I think on average about 70%. Um, and one of the reasons I was able to do that is I was very fortunate that I had access to an additional retirement account, 457B, which hopefully some of your listeners are familiar with. So we maxed out that we maxed out my 403B, my wife’s 401k. That helped a tremendous amount with getting that kind of savings, right? So, yeah.

Emily (16:17): Wow. I just, I wanna probe a little bit further on like, okay, you, you’ve had this career already, you’ve just finished your PhD and you decide I don’t wanna work anymore. Or like, I don’t wanna have to work anymore in a, in a relatively short period of time, right? ’cause most people, you finish a PhD, you’re looking at 30, 40, 50 year career after that point. But that is very antithetical to like the MMM like mindset. So what exactly was your goal and what was your motivation for pursuing that goal?

Corwin (16:45): So it was really about the latter thing you just said and not the former thing. You said it’s not about not working. This is what I tell everyone I meet who has not heard about fire or fi much before. It is not about not working. It is about control over your life. If you are financially independent, then you get to dictate what you do like broadly across your entire life. So my wife took advantage of that by essentially creating a new role within our company. She’s like, I’m not as enjoying this as much, but I would like to stay with y’all. I like the people I’m working with. I’d rather do this. And they said, oh, okay, well let’s say yeah, <laugh>. So she’s continued to do that and she really likes it. And I also really wanted that control over my life, especially since we wanted to have another kid. And we did. Uh, and so when, uh, our kid number two came along, my wife dropped down to halftime, and then, uh, about six months later, I also dropped to zero time. And then I went back to work halftime this spring and we could talk a lot more about that <laugh> as well. But it’s really just the, I mean, it’s a perfect, um, application of FI. We decided that we were gonna do something different and that gave us the ability to do so without stressing about money.

Emily (17:59): So this is just a very short timeline and I know you, you know, you had been saving since like 2009 at a lower rate, but really we’re talking like 2016 when you started your post PhD job, um, to, it sounds like about 2021 when you were able to really change like your work lives. Um, I mean that’s only five years. Like even the most aggressive, like fire people talk about 10 years, right? Not starting from zero. Um, yeah, so like this is just, it’s just amazing. I mean, I know the 70% savings rate, like that’s what did it, right? That’s a really, really high savings rate.

Corwin (18:31): Well, market the markets too-

Emily (18:32): But I’m just marveling over this short timeline. Mm-Hmm,

Corwin (18:34): <affirmative> Yeah, the market’s really exploded. If it had been a bad or even mediocre market during that time, we, we would not have done that. I mean, it was just because the stock market, we didn’t do anything other than bland vanilla total stock market index funds. So we didn’t pick stocks or anything like that to try to get lucky with, you know, which ones we’ve chose. So it was good fortune as well, big time.

Emily (18:57): I think in some ways your story is relatable, like you just said, using index funds. No crazy inaccessible investing strategies. Uh, furthermore, as you mentioned earlier, you took a straight W2 job, you didn’t, you know, strike out on your own and start the business. There can be upside to that. There can also be downside. Um, and so in, in that way it’s relatable, but come on, a 70% savings rate, like that’s the part that’s like, how are you doing this? So I want you to give me a couple of like structural things like how, how your life is that helps you achieve or at that time, right from, from those incomes you had then that 70% savings rate. I know you mentioned you use the pre-tax retirement accounts, that’s awesome. But it doesn’t, uh, change your actual spending. So like how are you keeping the spending down? Like where do you live, what do you drive? Like these kinds of things. Yeah, right.

Expenses with a 70% Savings Rate

Corwin (19:40): So we’re fortunate that we live in Austin, Texas, which historically has been a lower cost of living. Now it’s changing. We bought our house in 2013, which at the time we thought, oh, this is way too late. You know, we’re gonna pay so much more money than we would’ve a year ago or whatever. But our house is doubled in value since then. Our mortgage is so much lower than it would be if we bought in Austin now. Um, and we’ve also been consistently frugal. We were both raised pretty frugally, so you know, our five year spending inflation adjusted is around 50K ish. So now, uh, that does not include daycare. Uh, daycare is something that we do pay for, but that’s gonna end in like two or three years. So we kind of set that as a lump that together on the side kind of deal.

Corwin (20:28): Um, but it’s been primarily keeping expenses down. Uh, we do a lot of things like travel hacking, which I love, you know, figuring out ways to pay for travel without, ’cause if we didn’t do that, our spending would be a significantly higher. Um, and just, you know, variety of things. I’m always optimizing perhaps obsessively <laugh>. Uh, so yeah, it’s, it was something that we were able to uh, just continue to work at. We got Mint mobile for example, and that slashed our cell phone bill dramatically. We never even knew about it beforehand. And so it was just consistent, you know, inflation things go up. But every year we kind of go down for us a bit as we found optimizations for various things. Now I think we’ve pretty plateaued essentially. Um, we just bought a new roof, so <laugh> that brought up our spending quite a bit.

Corwin (21:20): Uh, but yeah, I mean it’s, I think that a lot of people are scared by the 50% or higher numbers and I’m always telling people, you should save at least 50% of your income. And I usually get eye rolls or stares or okay, this guy’s like off the wall. I dunno, I’m not listening to him anymore, but, which is bad, right? <laugh>. But I think it’s still something that I love to see people achieve or at least work to achieve. Because if you do the math, you’ve seen it probably before these various plots, like from zero, how long it takes to get financial independence. If you’re at 50% it’s 15 years. So, and higher percentages don’t shave that many more years off ’cause of that exponential growth. So I feel like that’s a nice sweet spot done with mandatory work in a decade and a half, I feel like that really gets, speaks to a lot of people.

Corwin (22:09): So I’m always pushing that, you know, try to get to 50% even if you’re not there, try to get there because you’ll gain so much more power over your life so much faster as a result. And that was really what was important to us. That’s what motivated us this entire time before we discovered fire. You know, my wife and I would be like, well is this important or not? We didn’t have like a unifying goal, so, you know, that caught us on the same page so much better. So fire’s good for your marriage for a lot of reasons. I think <laugh> also, I think, you know, money conflicts are one of the big things that drive a lot of marital stress. So that was another thing that was important to us. So, yeah, I don’t know if I really answered your question, but we just try to keep expenses down general.

Emily (22:48): Yeah, I think the key answer in there was the home purchase in 2013, but yeah, furthermore not upgrading, right? Because I know, you know, this is the temptation when you have your first baby or your second baby is we have to live in a bigger place. We have to drive a bigger car, a newer car, like there’s lifestyle inflation that’s, that’s baked into those like sort of um, life transition points, family transition points. And so at least with respect to your home, you’ve clearly, um, avoided that temptation of of lifestyle inflation.

Corwin (23:15): It’s hard though. We wish we had another room in this house all the time. <laugh>, especially when grandparents come to visit. This is my office slash guest room. So you know, when uh, when uh, we’ve got visitors, I lose my office and that’s annoying. But you know, it’s okay.

Emily (23:32): Do you think you’re gonna stay?

Corwin (23:36): Probably. Uh, so our son’s in elementary school now and I think if we were to buy a new house, we would probably need to move to a different neighborhood, different area. He’d have to change schools and it doesn’t seem like it’s worth it. We’ve thought about doing an add-on as well, so especially with interest rates the way they are now. So we’re, we’re camp mortgage. We’re team mortgage, so, uh, we’ve got a pretty low mortgage as well, so, yeah.

Benefits of Financial Independence

Emily (24:00): Yeah, so it sounds like you’re gonna try to find a way to stick it out in the same house and, and keep that mortgage. That’s amazing. Um, okay, well I wanna talk more about like the, the benefits you’ve experienced of the, the degree of fire that you have now, which was, you mentioned that you, your wife went to half time, you left your job for time, now you’re back working part-time. Can you just talk about how, um, this FI achievement slash the mindset stuff enabled you to find that like satisfaction with your work and the control over how you work?

Corwin (24:26): Yeah, so I, I was not, I was an unemployed bum for a year and a half and, uh, <laugh>

Emily (24:27): Stay home dad <laugh>.

Corwin (24:33): <laugh> I prefer an unemployed bum because it gets people like what, uh, but I think that after a while I also realized, you know, I spent close to 20 years developing all these engineering skills and it’s like I was doing a lot of other projects that were fun. I worked on this site engineering your FI and that was fun, but I also felt like it just felt so, uh, wasteful, I guess is the best word. Like not use those skills anymore. I missed a lot of the friends I had at the lab that I worked at. And so, um, I had lunch with my boss slash friend, a former boss slash friend from the lab. And you know, he told me there’s some really cool stuff going on, you know, would you be interested in maybe come back? So I spoke with him, I spoke with some of the other management and we greeted on this really nice halftime deal where I always get to leave by two o’clock.

Corwin (25:19): I always leave by two o’clock to, to pick up my son from school. We bike home from school. That was something I always wanted when I was a kid to be able to, you know, go home with my parents bike home, whatever, right? So I was like, that’s very, very important to me. And uh, it’s allowed me to continue working on my site. Other things, projects, just logistics at home. So it’s been really, really nice. My wife is same. She gets to volunteer at the school a lot because she’s working halftime. So it’s been a really nice balance. I wrote a whole blog post about the pros and cons of halftime part-time after fire because, you know, mathematically you don’t need to <laugh>. Um, so I tried to uh, lay out those ’cause I wrote so many pros and cons list <laugh> before I went back, so yeah.

Emily (26:06): Yeah, I have a similar work schedule. My business allows me to work about halftime same as you. I work kind of while my kid is in school and then we get the late, you know, the latter part of the afternoon together. Um, which I mean that flexibility is, is kind of like invaluable as a parent, honestly. Like, um, it’s, it’s very, very difficult once your kids get into elementary school to figure out how you’re gonna run everything if you have like two traditional nine to five like schedules. So I definitely see the appeal there, but like I was just saying, there’s multiple ways you can achieve this, right? Business ownership, working part-time being totally fi, um, maybe just having an alternative kind of work schedule. Like all these different possibilities are there, but the more, as you were saying earlier, the more kind of confidence you have that you don’t need your job <laugh> in exactly the format that you have it right now, the more that gives you the ability to negotiate for what would really work for you, which is so beautiful. So you don’t have to be all the way FI to get there. Um, you happen to be, but you can just be like on the path and be secure enough that, you know, you can take a risk with that kind of ask.

Corwin (27:07): Yeah, yeah. I talked, one of the other articles on my site is, uh, something called Flamingo Fire Flamingo Fi, which I was a big fan that first time I heard of it. It originally came from a blogger in Australia actually. And when I first encountered that, I thought this is a great balance of FI versus, uh, not being so aggressive with your savings. Early on, their philosophy was save up to halfway to the FI point and then, uh, work however much you need to to cover expenses. And then about a decade or so you’ll be traditional FI. So it’s more aggressive than coast fi, less aggressive than standard fi. Mm. And so I thought that’s a really nice balance. And so I feel like we’re kind of the fat flamingo fi version because we’re at standard fire closer to that. But with these halftime jobs, we more than cover our expenses and we expect, you know, probably within, you know, half a decade or so, something like that, we’ll probably be more of the fat FI level, whatever that means. So, uh, yeah, it’s, it’s nice to have these different levels and different ways to have power over your life. Big time.

Emily (28:12): I’m thinking about the phrase live like a grad student, live like a resident, you know, that like, um, live like you’re still a trainee even afterwards. Now. I think that really applies in your case because you had the very nice stipend. I mean, 45K in 2012 is like really, really, I was making like 28 K in 2012. Um, you have that like nicer sort of level of income while you were in graduate school plus your wife’s job and everything. Uh, but it sounds like you probably about maintained your lifestyle, um, even with increases in income aside from the additional expenses for childcare and so forth that come with the kids. Does that sound about right?

Corwin (28:44): Yeah, yeah. Roughly, if anything, we lowered it. Mm-Hmm. Because we found various ways to stop wasting money <laugh> on things like cell phone bills and other things. I found that you could call these companies that could compare your insurance rates across a whole bunch of different companies and, you know, always found it’s the lowest rate, et cetera, et cetera. You know, it’s like the more you know, knowledge you gain the, the faster the snowball starts, right? So that was a, you know, a big thing that we, you know, I always try to keep it in mind inflation <laugh> as well, because sometimes it’s going up, but you’re still going, you’re still doing good compared to inflation, especially recently. But, uh, but yeah, we definitely strove to not inflate after the PhD for sure.

Commercial

Emily (29:31): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2024-2025 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Orientations or very close to the start of the academic year would be a perfect time for tax education or general personal finance content. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

Corwin’s Book: Engineering Your PhD

Emily (30:58): Since you were just mentioning, we were just talking about your excellent stipend and so forth, you have a book, right? That’s relevant to graduate students. Can you tell us about that?

Corwin (31:06): Sure. Uh, so this is something I wrote back in 2019. Uh, it’s called Engineering Your PhD, an Actionable Guide to Earning Your Graduate Degree in Engineering. I had looked around online and I found books that were designed, written for PhDs and how to get your PhD the best <laugh>, but not a lot for engineering. There’s like maybe one or two others. And I had all this knowledge in my brain from when I got my PhD about how to do various things that I really wished I’d known before I started graduate school. So it was really more of like a passion project, like let’s get this into a more permanent form. Something I can hand to my kids one day if they wanna go to graduate school and say, Hey, engineering, at least you know, this is the collection of things that I thought were important when I finished up. So yeah, it’s on Amazon now and uh, um, I will say it’s not really my focus anymore to focus on academia. I’m much more interested in FI and fire and personal finance and things like that. It’s been a while since I was in academia. Now that’s hard to believe, but, uh, yeah, it’s still I think a well-written book according to my very biased opinion <laugh>. So if anyone interested in, uh, joining, uh, interested in checking that out, you’re certainly welcome to.

Emily (32:20): Editing Emily breaking in again! Corwin very generously is offering Engineering Your PhD free for download for five days after the publication of this interview. If you’d like to grab it, please go to PFforPhDs.com/S17E9/ and you’ll see the Amazon link in the list of links near the starts of the show notes. OK back to the interview.

The Future of Corwin’s FI Journey

Emily (32:43): So thanks for telling us about the book. Um, I wanted to ask one more question before we get to our final one, which is what, what does the future look like, right? You’re, you’re, you’re at FI, maybe you’re gonna continue building towards a fatter version of FI. You, you have your halftime work schedule. Like do you anticipate making any changes or are you just gonna cruise to a traditional retirement age at this? Like what do you think?

Corwin (33:04): I don’t know. That’s a good question. So for the foreseeable future, we’re gonna continue doing our part-time roles. I think that’s a good balance for us with young kids right now. But things could change in the future. Maybe we decide we wanna actually ramp up, we want to strengthen our careers, we wanna get more into what we’re doing in our jobs. Maybe we wanna go the opposite direction and do less or focus on entrepreneurial activities. You know, we live here in Austin, Texas where it gets very warm in the summertime. So I think we’ve toyed around with the idea of living elsewhere during the summer times when the kids are out of school. Uh, so that’s something that might be of interest to us, but that’s, you know, more like the summertime versus the rest of the entire year. So, you know, we could take sabbaticals from our, uh, part-time roles for a couple months, get outta the heat and then come back. That sounds really nice. Uh, and then who knows, you know, once my daughter graduates from high school, uh, in 16 years <laugh>, then, you know, the world’s our oyster. We might go elsewhere, we might go to Colorado or depending how hot the earth is at that point we may have to go further north <laugh>. Um, so yeah, we’ll, uh, we’ll have to see what happens.

Emily (34:15): Okay. I just love how like calm and like chill that answer was just like, I don’t know, we’re doing FI. We’ll see where it goes. We’ll do what we want. Um, and that’s really what fire affords you. Um, especially fire in, you know, professional fields like you have where you have so much career capital as Cal Newport would say by this point, right? You can deploy it in different ways, right? Um, so I love that.

Best Financial Advice for Another Early-Career PhD

Emily (34:36): Okay, so let’s get to our standard question. What is your best financial advice for another early career PhD? It could be something that we’ve touched on already in the interview or it could be something completely new.

Corwin (34:47): So a few things that are very standard boilerplate pieces of advice. Well, maybe one’s not so much. First thing is track your expenses. I mean, if you’re not tracking your expenses, that is the foundation for everything. If you have no idea how much you’re spending, then you’re not going to be able to make almost any progress on lots of different things, especially if you wanna pursue financial independence. ’cause that’s gonna tell you how much money you need to save. That’s gonna tell you your savings rate is all kinds of things. Uh, and you’re not gonna be able to reduce it if you don’t know how much you’re spending. Uh, another thing is, like I mentioned earlier, I’m always pushing for a 50% savings rate, if not currently, then aspirationally trying to get there because it’s such a powerful thing for your finances and getting to financial independence within a couple decades.

Corwin (35:30): Uh, also a big fan of not getting complicated with investments. Put everything into a low cost stock market index fund, like V-T-S-A-X. First thing I do when I look at a fund is go straight to the expense ratio. <laugh>, it’s the first thing I do. But the last thing I would say is maybe a little less, um, uh, traditional, which is I encourage people to build their own tracking systems, their own financial tracking systems. There’s so many tools out there, just an infinite number of tools you can pop your numbers into and get all these different things. But I feel like if you do your own thing, you’re building the skills up to track your finances that you have that ultimate customization for what you actually want, right? Even if it’s just spreadsheets, you know, that’s, that’s perfectly fine. It’s usually free. You’re not paying anything. Again, that’s good for your savings rate, right? Um, but I do recommend trying out some other tools as well, uh, to see if the numbers line at least closely or roughly <laugh>. So yeah, that’s be my top pieces of finance advice for grad students.

Emily (36:35): I really love. Well, but the first and the last one, right track and also build your own, um, tool for doing so and, and doing more than just tracking because at the moment that we’re recording this finance internet is a buzz because Mint has announced they’re shutting down their, uh, budgeting feature and they’re kind of transitioning over, I think completely to Credit Karma stuff. So I’ve been a mint user for like, I don’t know, like 13 or 14 years now. And not that I’ve been completely reliant on it, but to the degree that I have my own stuff going on, I’m really happy for that now. ’cause now I’m like, okay, what do I do? I have to like download all this data. It’s gonna be like unusable CSV files, like what is going to happen with this like track record? So, but as you were saying, like there’s other great tools out there. Like you need a budget, it’s so popular, but there is a yearly fee to it. And so if you don’t want to have that kind of subscription, build your own stuff, it’s not, I don’t know, it’s not that complicated. I guess it depends on how great you are with like, you know, spreadsheets and stuff. But, um, so I love that advice of just like, be ready for these services to shut down on you. It’s literally happening to me at this moment. Yeah. So don’t be totally reliant on outside, you know, um, apps and so forth.

Corwin (37:40): Yeah, I think if you’re smart enough to get into a decent graduates program, then I think you’re smart enough to create a spreadsheet that can track your finances at least at a crude level that you can be fully in control of <laugh>. So yeah.

Emily (37:54): Yeah. Um, I’ll take the opportunity to plug something of mine in the show notes. I’ve literally not announced this on the podcast yet, uh, as of this recording. But I made an a simple Excel spending tracker that incorporates a couple of my like philosophies about how to manage money, which are to, um, spend what you earned last month, <laugh>, like don’t spend what just came in, like wait until the next month to spend it. Hmm. Um, and also to incorporate, um, sinking funds or targeted savings like into that, that system. So I don’t know, people ask me for a long time, like if I could just send them a simple spending tracker and I finally made one a few weeks ago in response to someone at a speaking engagement who wanted it. So go to PFforPhDs.com/tracker if you wanna download that and take it and make it your own and build it out and have it do other things and take my ideas, discard my ideas, whatever you like. But if you want a starting point, like there’s a starting point for you Corwin, um, it’s been a such a fascinating conversation. I’m so excited for how your life has unfolding and how the PhD has played a role in that. Um, it’s so excellent and thank you so much for sharing your story with the audience and coming on the podcast.

Corwin (38:57): Thank you very much.

Outtro

Emily (39:08): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

This PhD’s Path to FIRE Has Evolved with Lifestyle Design and Having Children

March 18, 2024 by Jill Hoffman 1 Comment

In this episode, Emily interviews Dr. Amanda, a prior podcast guest who is on the path to FIRE. Since our last interview, Amanda and her husband moved to the Twin Cities and had two children. Amanda recounts the exciting start to her FIRE journey when she was a postdoc and contrasts it with the boring middle of pursuing FIRE now with long-term jobs and a growing family. Amanda and Emily discuss the extra expenses that come with children—and those that don’t have to—and how emergencies and other expensive projects mean that the progress made toward FIRE is different each and every year. Amanda and Emily conclude that pursuing FIRE really is more about the journey than the destination and all the benefits you experience along the way.

Links mentioned in the Episode

This PhD's Path to FIRE Has Evolved with Lifestyle Design and Having Children

Teaser

Amanda (00:00): Know that your life has phases and make the most of the phases you’re in. You know, I think as as I started learning about finances, I felt so eager to be in some of the phases that I saw other people. And I felt so frustrated being at the beginning or not having the kind of income or options that I wanted. And, you know, as I’ve been on this path for a while, I’m just learning that every phase of life has, uh, some really beautiful benefits and great things you can do. And then there’s things you aren’t working on. And it’s okay to not be accomplishing every goal, uh, all at the same time.

Introduction

Emily (00:46): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others.I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (01:15): This is Season 17, Episode 6, and today my guest is Dr. Amanda, a prior podcast guest who is on the path to FIRE. Since our last interview, Amanda and her husband moved to the Twin Cities and had two children. Amanda recounts the exciting start to her FIRE journey when she was a postdoc and contrasts it with the boring middle of pursuing FIRE now with long-term jobs and a growing family. Amanda and I discuss the extra expenses that come with children—and those that don’t have to—and how emergencies and other expensive projects mean that the progress made toward FIRE is different each and every year. Amanda and I conclude that pursuing FIRE really is more about the journey than the destination and all the benefits you experience along the way.

Emily (02:04): The tax year 2023 version of my tax return preparation workshop, How to Complete Your PhD Trainee Tax Return (and Understand It, Too!), is now available! This pre-recorded educational workshop explains how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. Whether you are a graduate student, postdoc, or postbac, domestic or international, there is a version of this workshop designed just for you. I do license these workshops to universities, but in the case that yours declines your request for sponsorship, you can purchase the appropriate version as an individual. Go to PFforPhDs.com/taxreturnworkshop/ to read more details and purchase the workshop. You can find the show notes for this episode at PFforPhDs.com/s17e6/. Without further ado, here’s my interview with Dr. Amanda.

Will You Please Introduce Yourself Further?

Emily (03:13): I am delighted to have back on the podcast today, Dr. Amanda. She joined us in two previous episodes, season one episode 11, and season five episode 15. So we’ve seen a couple of snapshots of Amanda’s, uh, financial journey so far that she’s been, um, so generous to share with us. And we’re gonna get another update today after a few years. So there’s been a lot of changes. Amanda is on the path to FI or fire, financial independence and early retirement. And so we’re gonna talk a lot about what that looks like for a PhD today. So Amanda, thank you so much for coming back on the podcast. It’s a pleasure to see you again. And will you please introduce yourself a little further for the listeners?

Amanda (03:50): Sure. Happy to be with you again, Emily. Uh, I am Dr. Amanda. I am currently an assistant professor in education. Uh, something kind of unique about my current position is I work fully remote, so I live in the Twin Cities area of Minnesota and I work for a university that’s out of state. But my students are EDD students, so they’re doctoral students in education, they’re teachers, school administrators, principals, they have full-time jobs, so they’re doing most of their program online. So I go to campus when they have their on-campus residency type stuff. But otherwise we’re all online and it works great for me. I love teaching online. I do a lot of dissertation support over Zoom. Um, so me sitting with headphones in a setting like this is, uh, kind of how I spend my days and I really like it.

Emily (04:42): And if you wanna hear more about that, the second episode I referenced season five, episode 15 is where Amanda talked about her job search and how she strategically moved to the Midwest, et cetera, for at least partially financial reasons. So I’m sure we’re gonna hear more about that too. Um, anything else you’d like to share with us?

Amanda (04:57): Uh, I have two young kids, which I believe last time I was on the show I, I don’t even think I had either of my kids. So I’ve got a one and a 4-year-old now. And, um, one of the things I really like about my remote position is it’s flexible. It allows me to spend a lot of time with them, uh, and be there for them. So that’s really great. My daughter goes to a nature preschool now in our neighborhood, which we just absolutely love. And then my son is, he spends most of his days with his grandmas.

Emily (05:28): And that was, as I recall, one of your reasons for moving there, right? Your proximity to family.

Amanda (05:32): Yes. So my situation was I had my, uh, husband and I had moved from Los Angeles where I was a postdoc at USC and he was a technical director in the USC games division. And then I took a position, uh, way across the country in Ohio and we get to Ohio and we move there and my job’s going great, I really like it, but he’s not finding the right thing. And then the perfect job for him, he designs educational games and Twin Cities public television, uh, PBS and the Twin Cities post this job where they’re looking for somebody to lead their digital and games content for, uh, it was a new show at the time. Now it’s Hero Elementary for anyone who has littles who watch Hero Elementary.

Emily (06:16): My kids love that show.

Amanda (06:17): Yeah. And we love it too. And it was just the perfect job. So that also happened to be 10 minutes away from where my family was living, and we knew we were kind of wanting to start a family, so it was like, you have to apply. And then my university was great, like things were going well, and they said, do you wanna try something remote? And this was pre pandemic, so it was a little experimental at the time. Now I feel like this is not an unusual scenario, it was at the time, but it’s worked really well. Um, so we’ve been doing that a lot of years and it just continues to work. Great.

Emily (06:50): I love this lifestyle design. Um, I’ve been listening to a lot of Cal Newport recently. Are you familiar with him? Yes. Yeah. So I’ve, I’ve read a few of his books. I’ve been listening to his podcast and he’s all about this like, I can’t remember the acronym, but it’s basically lifestyle centric career design, something like that. Um, but basically doing exactly what you’ve just, um, exemplified is getting enough career capital, in your case, the PhD, the professorship, um, to be able to leverage it to get the lifestyle you want at the point in your life when you need it, which for you was, you know, this opportunity for your husband and the, and the kids coming and all of that. So like, ugh, I wish he did interviews ’cause you would be a great interview for his podcast, but I don’t think he does that sort of thing.

Amanda (07:26): I mean, it is scary. Like when we were doing it, I remember thinking like, I agonized for weeks over trying to figure out how to ask if I could go to remote. But thinking I’m a first year professor, I was even just a few months in really, because this all happened within really right after we moved, um, we moved to Ohio in late July, August, and over Thanksgiving I helped my husband move to the Twin Cities ’cause he was starting there. So he was only there a few months, but I remember thinking like, I don’t have this capital, we can’t do this. How am I gonna ask? And then they brought it up and I remember feeling so relieved and thinking I probably could have asked, but I think sometimes as grad students, we, I know at least I felt like there was a way you’re supposed to do things.

Amanda (08:12): Like we were trained in sort of the R1 research world where it was like, you are going for a tenure track job. That is what you are going to do. You’ll move anywhere, do whatever it takes you to, you know, and especially as a couple, like you gotta find that dual hire. And I spent my whole time as a postdoc feeling like, I don’t know if this is what I want. And just, it probably took me a few years of listening to a lot of financial podcasts and lifestyle podcasts to really get comfortable with saying, what if we don’t do that? What if we did something different? What if we, this is crazy, try to live where we wanna live, which for us, you know, is the Midwest where family is, and we actually really like it here. We like the seasons. It’s not for everyone. The winters can be brutal, but, um, it took a while to get to feeling like we could make those choices.

The Beginning of Amanda’s FIRE Journey

Emily (09:03): Yeah, I see what you’re saying, because you might not think right, getting out of grad school, getting outta your postdoc that you have any career capital at that point. But honestly, if they made the investment of hiring you as a faculty member, like yeah, it’s a big investment for them too. So, and you were just ahead of the curve, right? Because everyone’s doing the remote like thing now, so it’s all worked out. I’m so glad to hear that. Let’s get into the topic for today. We’re gonna talk about your journey to fire and how the moment you’re in this, what they call the boring middle phase. So I want you to back up a little bit and describe to us what the beginning of the journey to fire looked like when it was exciting and no longer boring like it is now. Um, and we did get some of this in that first interview that you did back in season one, episode 11 about how you read Ramit Sethi book and started making some changes and so forth. So we got a little bit of that story, but describe to us a little bit more completely what, what you think of as the exciting beginning to the fire journey.

Amanda (09:54): Yeah, I guess I would say it kind of started for us when we moved to Los Angeles after finishing grad school because that was the first time we had, uh, jobs that weren’t assistantships. So we, we had a little bit of money and we very intentionally decided to, um, try to then hit, uh, you know, some of those higher savings rates we were reading about. So when we got, we lived in a really nice, uh, condo in la but it was small. It was only about 700 square feet. And we, um, our biggest expense then besides rent was doggy daycare because we’d been talking about adopting a, a pup, uh, all through grad school. And it was like, no, no, no, we’re doing this, we’re doing this now. Um, so we were paying for doggy daycare, but otherwise we just like to be outside.

Amanda (10:41): We did our own cooking and so we were really intentional about trying to keep our costs down and then hitting our student loans really aggressively. And we were, we were in school far enough back where we did have those like 7% interest rates that you’re seeing now. And so it was enough where we were looking at that going, we’d really like to pay these off. And so, um, you know, that was just something we really focused on is not, um, not blowing up our lifestyle too much when we were starting to make it was postdoc money. It wasn’t crazy money, but it was more than we were, more than we had when we were grad students.

Emily (11:15): Yeah, I think that’s one of those important messages about those career transition points, right? I mean, you, you hear the live like a student thing, but for people with PhDs, it’s like, you were living like a student for a really long time, but please, please, please just hold on, do a, a couple of lifestyle upgrades like you got the dog, but like, don’t go crazy with it when you’re still only making postdoc salaries or after that because you can really make some good traction against your financial goals. And especially if you’re feeling behind by that point. Um, you being immersed in the personal finance like community, you probably did feel behind, I would imagine, even though like objectively speaking, you weren’t . Um, but like having those kinds of influences, you were probably really eager to get started with the savings goals and the, and the student loan repayment and all that stuff, and that you Oh yeah, you can really make good progress on that when you’re keeping your lifestyle low.

Amanda (11:57): I remember looking at those compound interest, uh, charts and thinking, what have we done with our twenties ? Oh my gosh, we’ve been in school, we haven’t made any money, you know, now we’re 30 and we’re just starting. Oh, we messed it all up. And it took me a while to go, okay, you know what? It is okay, 30 is not that old. But I, I do think that sometimes that can happen to those of us in academia who do spend a long time in school and you know, oftentimes people have a lot in loans too, so it can feel like, um, it can feel like you’re starting from behind. We actually, um, we have this little lifestyle. We just run this little Etsy shop. Um, it’s tiny. It doesn’t make a lot of money, it’s just a lot of fun. We have a laser printer and we make game tokens and wood coasters, but we named it 30 below zero because at 30 years old our net worth was below zero. And it was just a reminder for us of where we’re starting. And so it’s the name of our Etsy shop. It’s just kind of funny, but we did, we felt behind.

Emily (12:58): So you were talking about that exciting beginning of, okay, we finally have some salaries, , where we can make, you know, some progress toward these goals and a simple lifestyle. I mean, Los Angeles is expensive, the rent and so forth. But you said other than that, in the doggy daycare, you kept things pretty reasonable. Um, was anything else sort of, um, exciting or different about that phase of your fire journey?

Amanda (13:19): Yeah, I would say we did something kind of different with our wedding. Uh, you know, that that was a good example of us seeing what do we value? Let’s not do what everyone else is doing. What do we wanna do? So we were living in San Pedro at the time, which is right, just a few miles from Catalina Island, and we could see Catalina Island when we would go on hikes with our dogs. You know, you’re looking off at the coastline and there’s the island. So we decided to get married on Catalina Island, but we just did this small immediate family. So we flew our parents and siblings out and that’s it. We had this tiny little ceremony, super charming on Catalina Island. We all, we booked them all, uh, rooms in the same hotel and we just spent a couple days hanging out there on the island, hiking, eating out. Um, but we never did a big thing with DJs and catering and that just, it didn’t feel like what we wanted at the time. And so that was an example of us just saying, okay, what do, who are we and what do we wanna do? What are our values? And how do we live this FI thing while also being true to who we think we are?

Emily (14:25): Hmm. Yeah. I can see how that does fall into the exciting beginning part of the journey because you’re taking this new step with your relationship, um, you’re, you know, combining things maybe in a way you didn’t before and thinking about your values and how you really want your life to look through this period of transition. And so that, that is an exciting time of really being able to think through and set some new patterns and and so forth and, and do something a little bit counter-cultural, like what you’re saying. Um, yeah. Anything else you wanna add about that period?

Amanda (14:52): Uh, no, not a whole lot. We just, we continued to do that. Um, when I started the faculty job, we, you know, I think a lot of people when they start a faculty job, especially I think in the Midwest, in a place where houses are affordable, it’s like, well, I have to have a house. But we just, in the first year we’re like, we don’t know this place yet. We’re getting to know this area. So we rented a modest apartment. We, um, this was a, a fairly rural area, so we were getting our groceries at Walmart, which was kind of new to us, but like doing our own cooking. And then when my husband took the job in the Twin Cities, he actually lived with my parents for a short time until I moved there. ’cause for a while we were in different states. Um, but we, at that time, we had a really aggressive savings rate because I was living by myself doing yoga with Adrian and walking the dog free entertainment, playing video games and cooking at home. He was doing the same thing, new job, living with my parents. So, um, at that time it was just kind of exciting to watch those student loan balances go down and feel like we’ve, we’ve got this, we can actually do the things we’ve been reading about doing.

Retirement Accounts and Student Loans

Emily (15:57): Yeah, that is very exciting. Okay, so you’re watching the student loan balances decline, you were also saving for retirement. Is that, is that true? Can you tell me like the mix of accounts that you were working with? Yeah,

Amanda (16:05): Yeah. Um, USC was kind of unique because, uh, my husband was working as an employee of USC and I was a postdoc, so he had access to their retirement savings and a match. And I didn’t as a postdoc, I don’t know if that’s changed since then. Uh, so we were, um, LA the la he was paying into his 401k and as soon as we actually, even as grad students, we were trying to max out our Roth IRAs or at least contribute to those. So we really did start right away when we were reading about this stuff as like, all right, let’s a Roth, we can do a Roth, you know, it’s not that much money or let’s just do what we can. Um, and so it was just starting to add to that. Then we added, um, when I started as a faculty member, I eventually got access to a 403B at my institution. So yes, we are definitely investing for retirement and trying to get that going while also getting the student loans paid off.

Emily (16:59): Now I’m curious because we’ve been talking mostly about the pre pandemic time period, but did you make any different decisions with the student loans when the administrative forbearance came into play?

Amanda (17:09): We had them paid off by then, actually. So, um, yeah, we went real aggressive real fast. Neither of us had, we both worked through college and grad school, so neither of us had, um, the sort of terrifying balances that you hear about some people starting with, which is good because, uh, you know, we are, we’re in tech, but we’re in ed tech education, so we also, um, you know, weren’t gonna be making the kind of crazy money that you kind of need to make to pay off those six figure, uh, loan payments. So it really didn’t take us more than a couple years to get those paid down. So I believe by the time the pandemic hit, we had already paid off our loans.

Emily (17:49): Okay. So student loans eliminated starting, or, you know, continuing and accelerating their retirement savings. And did a house purchase come into play at some point there?

Amanda (17:57): Yes, we bought a house at the very end of 2018. Um, our daughter was born in June of 2019, so kind of right around the time I moved from Ohio to the Twin Cities area, we bought a house, um, in the neighborhood where my parents live.

Current Finances, Lifestyle, and Non-Traditional Housing Decisions

Emily (18:14): Lovely. You mentioned your daughter born in 2019, and then your son’s about three years younger. Um, so let’s, let’s fill out the lifestyle now in terms of what your finances look like. What, what your lifestyle looks like. Um, now that you’ve got the job set and the kids are present or on the way, like what does this phase of fire look like?

Amanda (18:34): It’s slower and more boring. Uh, you know, if I’m being honest, um, we did, uh, upgrade the house and part of that is because my husband’s mom lives with us, she helps us with childcare. So we wanted to have a nice space for us. And what we did, this is, uh, kind of non, another non-traditional thing we did, we swapped houses with my parents, so they lived right in the neighborhood, but they were, uh, you know, they’re kind of thinking about retiring, they’re looking to downsize. ’cause they were still in kind of the home they’d raised, uh, my sister and I in. And so they had more space than they wanted and we were, uh, as we were thinking about having a second child, we were like, ah, this, we could do this. It’s gonna be tight. We could finish the basement and create these rooms. And it just sort of worked for, um, my parents were happy to buy the house that we had bought, which is a little bit smaller, but in the same neighborhood. And we bought, uh, the house that I grew up in or I moved when I was a kid, but, you know, somewhat grew up in, uh, you know, from my parents. And so it is a bigger house. Um, you know, there are, you know, it’s a, the expenses are a little higher for sure, but, um, yeah,

Emily (19:46): How, I don’t know. I just, I’m so tickled whenever I hear about families that are able to do these kinds of things for one another. There are some people in my husband’s family who have done something similar with their, um, children and it’s just, it’s so, it’s so lovely that you get to have that proximity and you get to live this more, a more communal lifestyle than is really, you know, typical for most, um, Americans. So it’s great to hear. Um, anything else? What, what’s going on now with the, the boring middle? You’re adding kids, you’re adding expenses related to the kids.

Amanda (20:13): Yeah, we pay for preschool now. Uh, we’re trying to contribute a bit to 529s and, you know, everything’s just a little bit more expensive, you know, this, this bigger house costs a little bit more. Um, we’re in Minnesota, the heating and cooling costs, especially the heating costs are, you know, they, they add up for sure. Um, I’ve become a little bit more into health and nutrition since having kids, and so I definitely buy bougie or groceries, , you know, we, uh, just quality of food, you know, we don’t eat out a lot lot. We really do cook at home, but, um, definitely we spend a lot more on groceries than we were spending a few years ago, but that’s, it’s an intentional lifestyle choice. Um, you know, for us, we are pursuing fire, and we can talk about this a little bit, but there isn’t a point at which we feel like we need to reach it. It isn’t like, oh, we really want to be completely fire by 2035 and, you know, um, it’s just sort of a direction that we’re heading rather than a very specifically defined goal.

Emily (21:20): I’ve, I’ve noticed with our family too, you know, we, we have kind of a, you know, a, a similar trajectory. We have two children, we own a house now. Um, we’re compared to when we were renting, even when we had the two kids, we were still renting for some time when we were living in Seattle. Um, an 850 square foot apartment with the four people. Oh. And then the pandemic started , so that was fun. Um, so like the housing cost for instance was a massive upgrade to go from that apartment to like the house that we purchased, but that’s because it’s a lot bigger. There’s just a ton more to like maintain. There’s a lot more considerations you have as a homeowner than as a renter. When you look at these like estimates that are occasionally put out, I guess, that are done yearly of like the cost of raising a child, you know, birth to age 18, a really, really big, big chunk of that estimated expense, which is like $200,000 or something.

Emily (22:06): A really big chunk of that is the housing expense , because you have to find room for this extra human that’s in your family or more than one human that’s in your family now. So that’s, I think, you know, you can, you can decide to be like frugal in a lot of ways if you want to, when you have children, like maybe you, um, you know, make other arrangements for childcare. You don’t spend as much in that area, but the housing is like, maybe it doesn’t come when they’re a baby, but eventually you’re gonna have to have a bigger space to accommodate those extra people. Um, so that’s been, not, not exactly surprising, but just like it has a really big effect. Like we for instance, don’t make, aren’t making nearly as much progress with our savings as we may have expected with the nice salaries that we have now because just, yeah, a lot of our expenses are a lot higher than it was for just two adults.

Amanda (22:47): Yeah. And my husband was just showing me this graph of uh, a graph mapping what people are spending on housing. So median rent and mortgage payments with uh, US household incomes and oh, that’s it. It’s a depressing graphic to look at. I mean the real reality is, is even if you’re doing everything right, uh, it’s, especially depending on where you live, housing is going to be a really substantial part of what you’re making. It’s fairly unavoidable. And like you said, when you have kids that space is just kind of non-negotiable. I mean, you know, there are a handful of families you hear, oh, you know, we have five kids and we still live in whatever square feet. And you know what, some people make that work, but I think for the vast majority of people you do kind of elect to say, ah, you know, maybe we won’t be saving as much as we would in a really ideal world, but this space helps us live a life that, you know, is calm and happy and feels right to us in the time.

The FIRE Journey with Children and Car Buying Decisions

Emily (23:49): What are the other ways that adding these children to your family has affected your fire journey?

Amanda (23:54): We still try to, um, you know, look for wins where we can. So, um, you know, I said we spend a lot more on grocery than we used to. ’cause I just really care about the quality of food. We don’t care that much about cars. I work remotely. My husband works part-time remotely thanks to the pandemic. So he went from having a job where he was in the office five days a week to now he’s only needs to be in the office a couple days a week. So we have two kids, but we only have one car. And right now, while our kids are little and they aren’t in a lot of activities, that works great for us. So we have a, um, completely paid off car. We paid off our car. That was another thing you asked about pandemic expenses in 2020, we made the last payment on our car.

Amanda (24:37): So now we don’t have a car payment and we’re not looking, uh, to upgrade. Like we didn’t feel the need to get a big SUV as soon as we had kids. And I know that’s something that a lot of Americans, it feels like a very American thing to do. Like we’re having a kid, we need an SUV, we are really happy with our economical hybrid and we’re still happy with it. So that’s one way we’ve tried to control our expenses. Like I look at what’s happened with the cost of cars in the past few years and uh, they look a lot like rent and mortgage payments. Look not that long ago, .

Emily (25:10): Yeah. I want to underline this strategy as well. It’s, it’s something that, that I’ve noticed too really common that you upgrade a lot of things. Some people upgrade a lot of things pretty much immediately when they, they know a child is on the way or once the child arrives, whether that’s the bigger car or the newer car or the bigger housing arrangement. Even if a baby is very, very small and you don’t necessarily need that right away. Um, although eventually of course you do. And some other thing, other like lifestyle upgrade as well, like same for us. Like we actually have, our car is a 2003, we’ve been, my husband’s owned it that entire time, so it’s over, you know, it’s 20 years old now, it’s a sedan. Um, and yeah, I think we were maybe thinking about switching out the car before the pandemic and then like you said, because of what’s happening with prices, we were like, whoa, let’s put the brakes on that.

Emily (25:54): Like, we don’t wanna engage in this market right now. Yeah, now my kids are five and seven and they’re getting to that stage where you said they have more activities, they have more stuff going on. We’re thinking maybe we do either need a larger primary car or perhaps a secondary car. I think what’s gonna happen is we’re gonna keep the 20-year-old car as a secondary car, right? Add, yeah, just add another, um, maybe bigger, maybe the same size of car. We actually just invested in solar panels, so we’re probably gonna get an electric car for that next, um, step. But it’s like we, we put it off, right? We put it off until this stage when it’s like, okay, it’s really, really seeming like it’s necessary at this point. And I mean, I cannot tell you like how much savings that is over the years. It’s probably multi thousands of dollars each year, if not like, perhaps $10,000 in that first year. And just delaying that expense every time. You can delay a big expense, you can stretch out the time that you use, you know that item over, you get more and more value and you’re able to direct your money elsewhere.

Amanda (26:48): I think there’s a choose Fi episode where they look at driving a car for, it’s not even a crazy amount of time. It’s like 10 or 15 years for the car, but not upgrading as soon as you’ve paid it off and just continuing to drive it. And they look at that over an adult lifetime, just that one decision. And I think ultimately they get at a million dollars or close to a million dollars just in the savings of not constantly having a car payment or driving the most expensive vehicle you could possibly afford.

Emily (27:18): It’s absolutely a huge difference. And like you said, lifestyle makes a big difference here. ’cause like my husband and I both work from home that we walk the kids to school, like we don’t really need, we don’t really drive except for like going to errands and driving the kids to their activities sometimes. So it’s not even, yeah, it’s just, we don’t put that many miles on the car, I guess is what I’m saying. Now sometimes it’s convenient to have two, but we’ve been doing a lot of biking recently. We’ve been doing some Ubering when we do need the second car and that feels expensive in the moment, but when you think about it over the long term, it’s so much less expensive than owning a second car that you rarely use.

Commercial

Emily (27:52): Emily here for a brief interlude! Tax season is in full swing, and the best place to go for information tailored to you as a grad student, postdoc, or postbac, is PFforPhDs.com/tax/. From that page I have linked to all of my free tax resources, many of which I have updated for this tax year. On that page you will find podcast episodes, videos, and articles on all kinds of tax topics relevant to PhDs and PhDs-to-be. There are also opportunities to join the Personal Finance for PhDs mailing list to receive PDF summaries and spreadsheets that you can work with. Again, you can find all of these free resources linked from PFforPhDs.com/tax/. Now back to the interview.

Emergency Fund

Emily (28:42): Now you mentioned, um, in our, uh, pre-interview communications that you are at the moment very grateful for your emergency fund. So can you tell us more about why that is?

Amanda (28:53): 2023 has demanded a lot from our emergency fund. Uh, literally on January 1st, I was driving the kids home from Target and our car broke down and it turned out it needed pretty much the most expensive possible repair for that car. And it’s a hybrid, so it ended up being about $6,000, which is it. We had kept up the maintenance. They had just told us a few months before that this car was in great shape. Uh, we were not anticipating any car expenses, there was nothing we’d been deferred. So it was a real surprise to us. Uh, but given what had happened, as we just talked about to the cost of cars over the pandemic, we were looking at it and going $6,000 doesn’t even get us that far to a comparable similar vehicle. And so we decided to do that repair and uh, you know, luckily we had the emergency fund, so we were able to, uh, pay for that.

Amanda (29:51): Uh, fast forward just a few months later in the summer, uh, we found out our dog needed a pretty substantial surgery. And again, we’d, we’d worked hard after spending down some of that emergency fund to build it up, uh, you know, even over those few short months. And it’s just, we felt so good being able to not have to consider whether we can afford that surgery. Um, you know, and just, and not needing to worry about financing, but knowing we could focus on, yes, let’s do this procedure. Let’s get her the care she needs, let’s get her feeling better. And so that was just phenomenal for us. And you know, that was a good reminder. I am very happy to live below my means so that when things like this happen and things are going to happen like this in life, we just don’t need to worry about it.

Amanda (30:39): It’s, yes, we have this money, we’ll pay for this surgery. Um, and so that was just, um, really, we were very grateful to have the money to not have to worry about the cost of that and to just be able to pay for it in one fell swoop. And then, uh, just last month we decided to do an installation project. So we had new installation put in an erratic, we did a, a home energy audit in the summer and found out that we have about five inches of attic installation and they recommend 15 here in Minnesota. So, uh, you know, given the severity of our winters, we were like, yep, we’d better do this right away. Let’s get that insulation taken care of. So that wasn’t an emergency, but again, just having savings and having the fact that there’s a good chunk of money every month that we just put away for stuff that we know will come up later has just been so fantastic for us this year.

Emily (31:35): Yeah, that, that really speaks to the, um, utility and the stress relief that comes with having margin in your life. That’s financial margin, that’s time margin, that’s energy margin. Not everybody has that. It’s, it’s difficult to, to intentionally get your life to the level where you have margin in those areas, but when you do and then those things come up, you’re so, so grateful that you did that advance, you know, work and, and design and so forth to, to have that happen. Um, I like to say regarding emergency funds, that an emergency fund is what stands between something bad happening in your life and something bad happening in your life and there being significant financial consequences for it. Um, like your dog’s, um, surgery for instance. For instance, um, so like you, if you hadn’t had the money, you, you may have had that really tough decision about what do you yes.

Emily (32:22): Do you lose this, this pet and do you lose this Yeah. Member of your household. Um, but you didn’t have to agonize over that because you had the money. So it just provides so much, so much peace. And I lived for a long time with very scant emergency fund because I was in grad school and I was focused on other things, but like I, we have much larger one now and it, it does afford a lot of peace of mind, especially with the extra responsibilities that come with the home ownership and the car ownership and the kids and all the stuff that we’ve been talking about. So it definitely needs to sort of scale with your lifestyle.

Amanda (32:52): Yes, it does. We definitely have more set aside and uh, more things come up for sure. But yeah, I personally am happy to slow down on things like vacations or uh, you know, we just talked about cars, you know, if we had another car that’s money that probably wouldn’t be in that emergency fund. And just for me, I sleep so much better at night knowing that money is there for whatever is going to come up where we’re going to need it. And you know, I know not everyone, um, comes to that same conclusion. Um, and I think that post pandemic, there’s been a lot of this, um, you know, YOLO mentality and I totally understand that, that people are wanting to prioritize experiences, but I just have to say personally, I’ve landed on, I’m much happier with, um, some money just being there and waiting for what we need it for.

Emily (33:48): And the thing is like the expenses of the emergencies, whatever they’re gonna happen, whether you’re prepared for them or not. And so putting in that earlier effort at whatever stage you’re able to, to build it up then buys you the peace of mind indefinitely going forward as long as you can maintain the fund because again, the emergencies are gonna happen, but it’s whether or not it’s how you feel about it and how you can approach it, that is making all the difference. And again, it doesn’t have to be like a continual sacrifice for decades to maintain that emergency fund. ‘Cause again, once you build it up, all you have to do is pay for those emergencies. You would’ve paid for them anyway somehow. So I’m curious about that actually, because you said something like you worked hard to build the emergency fund back up after the first, you know, depletion of the fund for the car expense. So I’m just wondering like how you did that. Was it changes in your spending? Was it reducing your savings rate in other areas? Was it working additionally? How did you do that?

Amanda (34:37): Yeah, it was largely, um, cutting back a little bit on the percentage we’re putting away for retirement. Um, you know, there was a point during the pandemic where we maxed all those accounts out and that felt really great. This is not a year where we’re maxing out Roth HSA and 401k, 4 0 3 bs. Um, I would love to have another year like that. Um, but this isn’t that year and that’s okay. Um, you know, ultimately we just decided, and, and we didn’t stop contributions. We just kind of cut, cut back a little bit on that percentage to get the emergency fund back up to where we felt comfortable with it.

Emily (35:18): Uh, once again, I see a parallel in our stories here because we maxed out our available retirement contribution room for the first time ever in 2021. So that was like 2 401Ks, my employer side of my 401k and two Roth IRAs. We did it again in 22. In 2023. This is not happening again, . Um, because as I mentioned, we had the solar panels which we’re paying for upfront, like we’re not financing them. So we had to pull that money partially from savings and partially from cashflow to be able to do that. And so that alone, plus I just mentioned we may have a car purchase in our future, like yeah, uh, we’re still doing like one 401k, we’ll still do the two IRAs, but how much we contribute to that second 401k is not too clear at this point in the year. We’re recording this in, um, October, 2023, by the way. So, but that hap that’s, that’s how life is. I mean, it’s not all like perfect numbers on a spreadsheet, like perfect numbers in your financial plans, same thing happens every single year, right? You have to adapt in some ways. And now that we’ve had that taste of like what maxing out felt like those couple of times, I’m pretty sure we’ll get back to it at some point.

Amanda (36:18): It feels good, right?

Emily (36:19): Just not 2023

Amanda (36:20): Mm-Hmm, Well, congrats on the solar panels. That’s a bucket list project for us. And, uh, you know, to be able to pay for it without financing, it is not something that many people can say. So congrats to you.

Emily (36:31): Yeah, and that was, uh, it, it’s not all thanks to us, it’s partially some leftover parental gifts from when we bought the house. We got some gifts, we didn’t spend all of it on the down payment that is now being redirected to a literal investment in the house. But here in southern California, like our electricity bill is really outta control. So like the solar panels clearly are an ROI within just a few years. So it’s a, it it is literally an investment as well as, um, just like something we want to do.

Amanda (36:56): Yeah, I I was just hearing that, that the ROI is very good in California with your high energy costs, pg and e and um, and abundant sunshine in southern California.

The Future of Amanda’s FIRE Journey

Emily (37:06): Yeah. And I can only imagine it’s gonna get worse in terms of energy costs. So it’s, it’s again, looking long-term planning kind of thing. Um, so yeah, we’re excited about that. Okay, so we’re talking about the boring middle of five. We got the kids, we got the kids’ expenses, you know, you’re doing your best you can on your 401Ks, you know, managing with life’s, you know, circumstances that are thrown your way. What is the future of your fire journey? Or maybe like you mentioned earlier that you’re not looking for like a specific super soon end point. You’re very happy with your lifestyle in many ways. So like why do you still identify with pursuing fire and what do you think might change when you get to that official where financially independent point?

Amanda (37:45): Yeah, we don’t have a specific destination, but what we are pursuing is options and flexibility. We just know for us, uh, that someday, you know, thing things happen with life and with jobs and with health. So one day, maybe one of us, we’re both happy with our jobs right now, someday, maybe one of us is in a toxic work environment. Maybe, uh, something happens with our health or the health of one of our kids, or maybe one of our kids develops some really interesting crazy hobby that, uh, you know, might require some kind of specialty training or some travel or something like that. We don’t know. But, um, we want to be able to say yes to things that life will throw at us in the future. And so for us, this FI journey isn’t about we want to move to Portugal or Thailand in 2035. It’s, we want to be able to say yes to opportunities and to never have to stay in a situation that that isn’t good for us. We always want the option to be able to make changes so that we can, uh, just live a happy, supportive life that’s good for us and good for our kids.

Emily (39:03): I, I feel like the fire movement broadly over the past few years has moved in the direction of what you’re describing. It, it, you know, 10 years ago it maybe felt much more, um, boxed in , right? Like, this is my savings rate and I have X many years until I get to this point and I’m quitting my job. And that whole attitude, and as more and more people attempted that journey, they realized that maybe the journey couldn’t look exactly like that, or maybe they didn’t even want the end point that they had imagined like earlier. Um, so many people I think are attracted to fire because they’re unhappy with their job in some way. And if you do the work of getting into a job that supports your lifestyle, as we were talking about earlier, then there’s not such a strong impetus to get out, you know, ASAP.

Emily (39:45): But like you said, that things can change with your job and with your health. And so I think it’s so smart to not, and this is what we’re doing too, like not count on I’m gonna work till I’m 72, I’m gonna work till I’m 65, and my finances depend on my ability and the market’s ability to keep providing me with work opportunities until that point. Um, and I don’t know, our, our listeners right now are probably somewhat younger than we are, but I’m 38 and I’m, I’m not exactly, I’m not tired, I’m not slowing down, but I can see in the future that I don’t necessarily want to live this way for many, many, many more decades. And that, you know, going, seeing what our parents have been going through health wise and other people around us, like, you can’t, you can’t count on that necessarily. So, like you said, just to give yourself options earlier and earlier is, is a great gift.

Amanda (40:27): Yeah, that’s exactly how we feel. And I do think you’re right, the FI community has sort of shifted in that direction, and I always struggled with this idea of what’s your fi number and your FI date, because it, there were just so many assumptions about, uh, a consistency of your spending. Um, you know, something that I’ve learned over the past few years, I mean, what my expenses looked like as a grad student were nothing like what they looked like as a postdoc or anything like what they looked like right before we had kids. You know, now we have kids, we support our kids. Um, my mother-in-law lives with us, like life changes every year. And so I don’t know what my expenses are going to be in a few years, and that’s okay. But I do know that having built up a net worth isn’t something I’m likely to look back and go, wow, I really wish I hadn’t done that.

Amanda (41:17): So, um, yeah, we’ve never been able to pin down exactly what, um, you know, specific, um, I’ve never calculated a fi date or a fi number because there’s just too many assumptions in there that I’ve never felt comfortable saying. I know what those assumptions are, but we know that life will provide us with interesting opportunities. My husband and I are both lifelong learners. You know, we’re in education, we love to learn new things. I can’t rule out that one of us might wanna do a complete career pivot, go back to grad school or something someday. If, if that’s something one of us wants to do, I hope we’ll be able to do it.

Emily (41:52): Exactly, exactly. Similarly with us, like I’ve never calculated, well, I’m, I don’t, I don’t call myself like on the fi journey, but I’ve also never calculated a fi date or a FI number because like, frankly, my husband and I bought the house we currently live in and we are not planning on living here. Once our kids are out like well outta the house, we’re gonna downsize, and who knows what that’s going to look like. So like, even when you draw closer and closer, um, to achieving that, you know, what you think might be the net worth goal of, you know, achieving fire, um, you can still make big changes and, and you may need to, and especially with the, the family unit that keeps evolving with time. Um, like you said, there’s just, every year is different. And so yeah, we may be on the journey , um, for a while. There’s not really like an end point necessarily. And so many people, again, in the fire community who maybe they did leave their jobs, they find that they’re still earning money in just other interesting ways. And so it’s like, well, you didn’t even need to reach that number necessarily. You just needed to reach, uh, coast Five, for example, or some other point where you felt comfortable changing your work situation.

Amanda (42:51): Yeah, I think it’s a very rare person in the fire community that someone retires and stops earning money, at least from what I hear in the books and the podcasts. No one knows that person. They aren’t really out there. So yeah, people find things to do. Oftentimes that comes with some kind of an income or, you know, financial incentive. Um, but again, to have the ability to pursue that, to take a risk on building a business or go back to school to learn a new skill, whatever it is, um, we just wanna be able to say yes to it in the time that it feels right.

Emily (43:25): I love it. I love the vision, I love the description of your lifestyle. Sounds lovely to me. But, you know, , we found many common commonalities between us during this episode. The listener may, uh, not want a lifestyle that looks anything like either one of ours, but the whole point here is just that you can use your finances to help you achieve that lifestyle, whatever it is that you, um, most desire it to be by having that margin, having that savings rate and the things that we’ve talked about so far. Thank you so much, Amanda. And is there anything else that you’d like to add before we conclude the interview?

Amanda (43:55): No, just thank you for your time. I’ve really enjoyed the opportunity to talk to you to catch up a little bit on your story as well.

Best Financial Advice for Another Early-Career PhD

Emily (44:02): Absolutely. And let’s, let’s end with the question that I ask all of my guests, which is, what is your best financial advice for another PhD? And that can be something that we’ve touched on in the interview, or it could be something completely new.

Amanda (44:14): Yeah, I would say this is something that we’ve touched on a bit. Um, know that your life has phases and make the most of the phases you’re in. You know, I think as, as I started learning about finances, I felt so eager to be in some of the phases that I saw other people, and I felt so frustrated being at the beginning or not having the kind of income or options that I wanted. And, you know, as I’ve been on this path for a while, but still have a long way to go, at least to that, you know, completely financial in independent space, um, I’m just learning that every phase of life has, uh, some really beautiful benefits and great things you can do. And then there’s things you aren’t working on and it’s okay to not be accomplishing every goal, uh, all at the same time.

Emily (45:02): Hmm, absolutely. And that, um, extension of our discussion reminds me of, uh, the book Die With Zero by Bill Perkins. Have you read it? Oh my gosh.

Amanda (45:09): I have not, but it seems like everyone in the community has, so it’s most definitely on my reading list because I’ve, I’ve yet to hear someone say it hasn’t transformed their thinking and just changed how they’re approaching, uh, their life and their values.

Emily (45:24): It absolutely did for me as well. I would say that was like my book of 2022 that like changed my thinking. Um, and this isn’t necessarily about specifically tying financial goals to different life stages, but just tying things you want to do to different life stages. And it really made me think differently about the opportunities that were available to me when I was in graduate school, for example, um, or out of graduate school, but before having children and what, uh, regrets I have from those times. But also what I’m glad that I took advantage of because I could see that, you know, opportunities close as you move through different phases of life. And so it’s just, um, I don’t, it wasn’t like a sad book for me, but just really helping me think about how to maximize the stage that I’m in now and thinking about what can be put off until later stages of life in terms of, um, accomplishing them, whether that’s with your finances or in other areas. So I do highly recommend that book, um, to every reader. It may make you feel better actually about the, the stage that you’re in if you’re still in graduate school or something like that. So thank you for the thought. Thank you for the opportunity to plug one of my favorite books. Um, and Amanda, thank you so much for coming back on the podcast.

Amanda (46:25): Thank you, Emily.

Outtro

Emily (46:35): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

Financial Advice from PhD Career Development and Financial Wellness Professionals

August 28, 2023 by Jill Hoffman 1 Comment

In this episode, Emily shares the microinterviews she recorded at two higher education conferences this past summer. The conference attendees, virtually all of whom work at universities and most of whom have PhDs themselves, responded to this prompt: “What piece of financial advice are you glad you followed or do you wish you had followed as a grad student or postdoc?” Listen through the episode for excellent financial strategies that have stood the test of time for the interviewees.

Links mentioned in the Episode

Financial Advice from PhD Career Development and Financial Wellness Professionals

Teaser

00:00 Beth H: So thinking back to grad school, the things I’m glad that I did is is really just stick to the fundamentals of looking at what my income was and make sure I was budgeting it, saving. I was investing in my Roth IRA and now 20 years later, has made all the difference. Even the $50 a month I found back then is setting me up for financial success now.

Introduction

00:30 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.

01:01 Emily: This is Season 15, Episode 6, and today I’m sharing the microinterviews I recorded at two higher education conferences this past summer. The conference attendees, virtually all of whom work at universities and most of whom have PhDs themselves, responded to this prompt: “What piece of financial advice are you glad you followed or do you wish you had followed as a grad student or postdoc?” Listen through the episode for excellent financial strategies that have stood the test of time for these interviewees.

01:36 Emily: The two conferences I attended were the Graduate Career Consortium Annual Meeting or GCC and the Higher Education Financial Wellness Alliance Summit or HEFWA Summit. GCC is primarily attended by university staff members working with PhD students and postdocs in career and professional development. The HEFWA Summit is attended by university staff members working in financial wellness and financial aid across undergraduate and graduate populations. These two conferences were excellent networking opportunities for me on top of the built-in professional development. However, there are plenty of universities who were not represented at these conferences. Would you please consider recommending my financial education seminars and workshops at your university? My most popularly requested events for the upcoming academic year are How to Survive and Thrive Financially in Graduate School or Your Postdoc, How to Not Hate Your Fellowship During Tax Season, and Up-Level Your Cash Flow as a Graduate Student or Postdoc. Please direct an appropriate potential host within your graduate school, postdoc office, grad student association, etc. to PFforPhDs.com/financial-education/ where they can learn more. Thank you in advance!

03:00 Emily: You can find the show notes for this episode at PFforPhDs.com/s15e6/. Without further ado, here are the microinterviews recorded at GCC and the HEFWA Summit.

What piece of financial advice are you glad you followed or do you wish you had followed as a grad student or postdoc?

Tax Implications: Kaylee Steen, University of Michigan Medical School

03:19 Kaylee S: My name is Kaylee Steen. I work at the University of Michigan Medical School. The piece of advice that I would have financial advice for postdocs would be that if you are on a training grant, you need to be aware of the tax implications and the fact that they they’re not going to withhold your your paycheck for tax purposes. And so that will change or make your W-2 non-existent. And that can be really complicated. So make sure that you talk with your training grant administrator about the implications for taxes and any other kind of financial implications.

Value as a Student: Stevie Eberle, Stanford University School of Medicine

03:57 Stevie E: Stevie Eberle, executive director and assistant dean of BioSci Careers at Stanford University School of Medicine. During graduate school and postdoc training, I really wish I had understood my value that as a student I actually had value and I had the right to say no or to ask for more. That being said, as soon as I learned my value, I, I ran with it. And I have taken every opportunity to actually ask for more or to reject offers that don’t offer either enough or anything to. Examples were recently with an event that I was planning where it was a DEI related event and they were going they wanted me to do this for free. It was a 300 person event and I said no until they offered me something and I ended up getting a very nice package out of it. Another example was when I was I wanted a promotion and everybody around me had this and I had had the same title except for me. And everybody was making a certain amount of money except for me. And I had all the data and they were not listening to me and they told me, You love it here. Let’s face it, you’re not leaving. And I said, Oh, that is not true. I love it here if I’m being paid equitably. So I found something else. And then they were surprised. And then I miraculously got a promotion and more money. So what I was saying is I wish I’d known, but as soon as I knew I ran with it.

Retirement Savings: Alicia Roy, Gladstone Institutes

05:39 Alicia R: My name is Alicia Roy. I work at the Gladstone Institute in San Francisco and I received a piece of advice that came from a cohort member’s parent telling them to open a Roth IRA immediately, which I had also heard from my parent. But hearing it from multiple places really helps. And the two of us did it together. We sat down with our laptops next to each other and we’re like, How? How does this work? Where do we go? And I think that really helped me actually open that account and actually make that happen for me. And I’m really glad that I did that along, for now. Now is actually a pretty long time ago. At the time I was like, Is it already too late? And I now have colleagues. I’m in my mid thirties and I have colleagues who still haven’t opened one and I’ve had one for over five years now and that already makes me feel a lot better about the future.

Financial Habits: Melissa Bostrom, Duke University

06:32 Melissa B: My name is Melissa Bostrom, and I’m the assistant dean for graduate student professional development at Duke University. What piece of financial advice am I glad I followed during graduate school? Well, I really kept myself to a budget and really watched my expenses and made sure that I saved money for surprise expenses, emergency expenses like car repairs and also conference presentation opportunities. And I feel like those and a little bit of buffer in my budget really helped me take advantage of opportunities when they arose. And some of them are very positive and others car repairs not so positive.

Housing: Yasmine Farley, UC San Diego

07:10 Yasmine F: So hello, my name is Yasmine Farley. I am a senior associate director at UC San Diego. And the piece of financial advice that I guess I’m glad I followed or wish I would have followed while I was in grad school. When it comes to I’m glad I followed was being flexible in my housing arrangements and making sure that I was getting the cheapest option. I didn’t really know what I was getting myself into when I first moved for my Ph.D. program. And so then being willing to chat around with colleagues, classmates and move in with one and then looking for others each year really helped to cut costs for me. And what I wish I had followed during grad school is to not take out as many loans. I had a full ride. However, I took out loans so that I could live and pay for rent and food and gas. But I wish I would have taken out the bare minimum so that I wouldn’t be saddled with all the debt that I have now.

Socializing: Anonymous #1

08:18 Anonymous #1: One piece of financial advice for graduate school and actually for life, but that I developed with my spouse when he was doing his Ph.D. Was that be very thoughtful about who you are socializing with and what kind of approaches to finances they have, what kind of class background do they have, and genuinely try to find people who are spending less money than you, you know, for their socializing, for their life and hang out with them and get to be friends with them, use them as models for how to budget and save money and most of all, not spend money. So stay away. Stay away from the free spenders or the or the loose spenders and stick with the people who spend very little to not at all, especially around socializing.

Retirement Savings: Maggie Nettesheim Hoffmann, Humanities without Walls Consortium

09:20 Maggie NH: Hi, Emily. My name is Maggie Nettesheim Hoffmann. I’m the associate director of Career diversity for the Humanities Without Walls Consortium. Which is a grant for a Mellon funded, grant funded project at space at the University of Illinois at Urbana-Champaign. But I am located at Marquette University in Milwaukee, Wisconsin. I think what I wish I had done while I was a grad student was to continue to think about my investments after leaving a career that I left, that I had spent about six years in before starting graduate school. So as I shared with you earlier, I used to work in wealth management for Financial Advisor based at what was then an affiliate of MetLife and no longer exists. And I worked in that role during the Great Recession from about how I was in that role from about 2005 to 2011 when I started graduate school. And right like I was completely in that world thinking about investments, watching people have to make really challenging decisions just to save their homes. Right. Seeing people pull out money from their 401k plans before they hit hit the age that you’re supposed to raise when you can start drawing contributions from your 401K. And they did that in order to continue to make their mortgage payments. Right? So I was I was there and watched people go through those decisions to save themselves and their families, or at least to protect themselves and their families after in some cases losing their jobs for up to two years, which was not an uncommon phenomenon during the recession. But then I started grad school and right like every little bit of money that I made through my stipend and my assistantship I had to use to meet my material needs, as opposed to continuing to think about how do I put a little bit of that into savings or how do I put a little bit of that into my existing 401K or what I now have A 403b plan since I work in higher ed. So I wish I had continued to do that because now I’m kind of faced with all three. I’ve got about 25 years before retirement and I don’t know that my investment savings are going to be where I need them to be when I retire in my mid to late sixties. Right? And so that’s I think the advice I would give to students or even faculty who might be listening to your podcasts. You have to be thinking about what, how much income are you going to need to draw from your retirement accounts when you get to 65, especially for our generations who might see cutbacks in things like Medicare or Social Security, how much money are you going to need to live when you’re retired and you might not? Right. So I think that’s that’s what I wish I had done.

Retirement Savings: Delaney Dann, Scripps Research Institute

11:58 Delaney D: Hi, my name is Dr. Delaney Dann, I work at the Scripps Research Institute. My piece of financial advice is as much as possible. Maxed out your Roth IRA during grad school and your postdoc.

Retirement Savings: Eric Vaughn, University of Rochester

12:13 Eric V: Hi, this is Eric Vaughn from the University of Rochester. My piece of financial advice would be start investing early so you can retire earlier.

Financial Habits: Penny Baga, Vanderbilt University

12:25 Penny B: Hi there. My name is Penny Baga from Vanderbilt University, and I encourage everybody to spend less than what they make.

Funding/Income: Elizabeth Harrington Lambert, Vanderbilt University

12:34 Elizabeth HL: So I’m Elizabeth Harrington Lambert from Vanderbilt University. And I think the absolute best piece of advice that I can give you is apply for funding before you need it. And don’t apply for 20 awards, but apply for three or four. Give yourself a plan B, a plan C and a plan D.

Funding/Income: Jessy Ayestas, University of Kansas

12:53 Jessy Ayestas: So, hello, I’m Jessy Ayestas. I am awards and outreach coordinator at the University of Kansas and also Fulbright scholar. So my piece of advice for any anybody thinking of attending grad school would be to consider applying for fellowships for scholarships, for grants. That will definitely facilitate at least the first years of your graduate education. And if the support that you receive is for a timeframe that is smaller than the time that you will be in grad school, then definitely try and think about the options that you will have and what opportunities may be available at your institution to continue being funded until you complete your program.

Financial Habits: Lindsey Cauthen, Baylor College of Medicine

13:35 Lindsey C: Lindsey Cauthen. Baylor College of Medicine. And I’m the head of career development. So I think the piece of financial advice that I’m glad I followed was really thinking about exactly how you spend your money each month and being very, very intentional about the way that you spend it and accountable. Right. So when I was in grad school, I had my own place and I was able to go on vacation and I was able to manage my money well, and that was because honestly, I had parents that taught me how to do so. So I had the proverbial envelope system and everything had a place. I think what I also did was I bought life insurance back in that time. That was really, really good life insurance. And I’m so glad I did that. And I did a little bit of investing and I didn’t have any debt coming out of undergrad. So that made a huge difference. And I didn’t come out of grad school with any debt either. So that’s made a big difference at this point.

Funding/Income: Colleen Gleeson, University of Texas at Austin

14:41 Colleen G: I’m Colleen Gleeson. I am the assistant director for advanced Degree Employer Engagement at the University of Texas at Austin So when I did my master’s program, I didn’t really get any funding, and I just thought that was the end of that. But now, having worked with worked with master students on the other side, I’ve seen how current master students have asked, researched and just pushed to actually to get more funding and to advocate for themselves and to identify additional funding resources. So I wish that someone had told me to be more persistent because there is there are funds out there. You just have to you just have to put the time and the research into it.

Funding/Income: Derek Attig, University of Illinois, Urbana-Champaign

15:22 Derek A: I’m Derek Attig I work in the Graduate college at the University of Illinois, Urbana-Champaign. And as a graduate student, I’m really glad that I saw that opportunity is to get income. Even small amounts of income from a variety of places, because it gave me a lot of skills as also as well as just consistent, reliable money coming in.

Retirement Savings: Peter Myers, Washington University in Saint Louis

15:47 Peter M: My name is Peter Myers. I’m at Washington University in Saint Louis. The piece of advice that I’m glad I took as a postdoc is to put everything I can into a Roth IRA.

Employment: Kelly Graham, New York University

16:01 Kelly G: Hi, my name is Kelly Graham and I am from New York University. One of the best pieces of financial advice that I ever got and that I followed was that to go work at the university that you want to get your degree from because then you can go for free. Most universities offer tuition remission, so identify the university I wanted to go to. I got a full time job. I went to school for free and I built my resume at the same time.

Funding/Income: Erin Brown, UCLA

16:29 Erin B: Hi. So I’m Erin Brown. I am the associate director of Graduate Career Services at UCLA. And I guess the piece of financial advice that I wish that I had followed when I went to graduate school is I should have done my research and I should have applied for every extramural grant or fellowship that I could have found. I think it would have made my life so much easier after graduate school. I think that what I did was I used my savings to finance graduate school, and that money would have been really helpful when I left graduate school because I feel like I ate up all of the savings that I had while I was in grad school.

Funding/Income: Baron Haber, UC Santa Barbara

17:11 Baron H: my name is Baron Haber I’m the assistant director of Professional Development for Graduate Division at University of California, Santa Barbara. So one piece of financial advice that I wish I would have followed during graduate school better is I wish I would have had a calendar that was alerting me to deadlines for fellowships and other extramural funding opportunities. Like I always found out about them like two days before the deadline and then, like, talk myself out of trying to throw together an application. So I think I could have taken more advantage of applying for those opportunities if I had been more organized and kind of like known to be anticipating these things. And also that if I would have just had like standard statements prepared for those sorts of things a little bit earlier on in my career by the time I figured out I should be doing those things, I was like beyond the university requirements for that. So

Funding/Income: Shawn Warner, UC Santa Barbara

18:06 Shawn W: My name is Shawn Warner. I’m the director of Professional development for the Graduate Division at UC Santa Barbara. And one piece of advice I’m very glad I followed was when I was considering applying to grad school, I talked with someone who was about to finish their grad program, and they said, Do not do a study program unless you are paid to do so. And so I was unfortunately applying to grad school in 2009 during the recession, and I applied lots of places and I only got a financial funding offer from one. Thankfully, that was my number one pick and that’s where I went and I’m very glad I followed that piece of advice.

Financial Habits: Katy Peplin, Thrive PhD

18:50 Katy P: Hi, I’m Katy Peplin from Thrive PHD. You can find me at thrive dash PhD dot com. I work with graduate students all around the world on being a scholar and a human and the piece of financial advice that I am so glad that I followed during grad school was. Pay attention to your finances. I know so many people got sort of caught unawares by tax bills that they didn’t have, like living expenses that they weren’t prepared to handle. And I was really grateful that I kept an eye on. My budget is activating and nerve wracking as that could be sometimes when I was low on summer funding and always took extra jobs to make sure that I felt as secure as I could because I knew I wouldn’t be able to study if I was panicked about where I was going to eat next week

Financial Habits: Roshni, Johns Hopkins University

19:36 Roshni: Roshni from Johns Hopkins University. And I’m answering the question what piece of financial advice did I wish I had followed during grad school or post-doc? And that would be to not be afraid about talking about money. Culturally, it’s not the norm from where I grew up. And so if I knew to get over some of the intimidation around money, I may have made more empowered and more informed decisions.

Commercial

20:04 Emily: These action items are for you if you recently switched or will soon switch onto non-W-2 fellowship income as a grad student, postdoc, or postbac and are not having income tax withheld from your stipend or salary. Action item #1: Fill out the Estimated Tax Worksheet on page 8 of IRS Form 1040-ES. This worksheet will estimate how much income tax you will owe in 2023 and tell you whether you are required to make manual tax payments on a quarterly basis. The next quarterly estimated tax due date is September 15, 2023. Action item #2: Whether you are required to make estimated tax payments or pay a lump sum at time tax, open a separate, named savings account for your future tax payments. Calculate the fraction of each paycheck that will ultimately go toward tax and set up an automated recurring transfer from your checking account to your tax savings account to prepare for that bill. This is what I call a system of self-withholding, and I suggest putting it in place starting with your very first fellowship paycheck so that you don’t get into a financial bind when the payment deadline arrives. If you need some help with the Estimated Tax Worksheet or want to ask me a question, please consider joining my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers the common questions that PhD trainees have about estimated tax. The workshop includes 1.75 hours of video content, a spreadsheet, and invitations to at least one live Q&A call each quarter this tax year. If you want to purchase this workshop as an individual, go to PF for PhDs dot com slash Q E tax. Now back to our interview.

Retirement Savings: Sonali Majumdar, Princeton University

22:11 Sonali M: Hi, everyone. I am Sonali Majumdar at the Graduate Career Consortium Annual meeting. I’m Assistant Dean for Professional Development at Princeton University. And I just wanted to say in terms of, like, what I wish I had done as a graduate student and postdoc in terms of financial decisions, I wish I had created a Roth IRA and started my investment portfolio early. That’s the best way to. It. Also incentivizes and motivates you to save and invest, and I wish I had done that sooner. So that’s my little advice.

Financial Literacy: Diane Safer, Albert Einstein College of Medicine

22:48 Diane S: So, hi, I’m Diane Safer, the director of career professional development for graduate students and postdocs at Albert Einstein College of Medicine. And I think the idea of just welcoming new post-docs and graduate students to the idea of financial literacy right from the start so that they understand, considering especially that postdocs are international and don’t know about saving for retirement and how to live on a paycheck, that’s not a lot in New York

Housing: Kathryn Sawyer Vidrine, University of Notre Dame

23:16 Kathryn SV: I’m Kathryn Sawyer Vidrine from Notre Dame, and I wish that when I was starting graduate school in South Bend that I had just gone and bought a house instead of dithering about it because I wasn’t sure if I was going to stick around.

Housing: Tom Meyers, University of Notre Dame

23:32 Tom M: So my name is Tom Meyers. I’m also from the University of Notre Dame. And to Kathryn’s point, one thing I do with graduate students now is when I get incoming graduate students, I tell them, you can rent an apartment that’s a studio for 1100 dollars a month across campus, or you can drive five miles and pay a mortgage of 858.77 every month.

Retirement Savings: Karin Lawton-Dunn, Iowa State University

23:51 Karin L-D: Hi, I am Karin Lawton-Dunn at Iowa State University. And this question is, what piece of financial advice do are you glad to follow during your graduate program? And that was a long time ago for me. But I did have a I did work three years professionally before. And my colleague, we came back to grad school and she cashed out her 401K and I left mine in and I’m getting closer and closer to retirement and I’m very thankful I left that in. So I do not cash out 401Ks.

Retirement Savings: Megan Brock

24:22 Megan B: Okay, so I’m Dr. Megan Brock, and I think that I wish I would have I would to really look into the retirement plans that people offer you, because as a new grad moving into the field. I’m in the state of Georgia, you pick a program and you’re in it. There’s no switching up. The only way that you leave is if you leave the system. So where everybody else has something that they can if they want to purchase a home, they could pull out there for a1k or whatever type of retirement plan. Well, I’m a teacher retirement system and then I’m, you know, my pension, so to speak, is invested for ten years. All my friends can go out, purchase a home and have that saved up because that’s like kind of and of course, it’s for retirement. But, you know, a house is an investment, right? I can’t do that. I didn’t think about it. I was like, Oh, it’s easy to click the button and now you’re in. And now there’s no way that I can kind of help myself. The first generation, everything first, you know, the first person in my family to be able to do this is like, I can’t I can’t leverage that kind of like professional benefit of having retirement savings accounts. I didn’t select that option. So, yeah, I would say like, you know, just ask people about their options. The pros and cons, pause, don’t feel rushed. Because it will seem like you have to fill your paperwork out by a certain deadline, but you can always ask for those types of extensions. You can always ask to meet with, like whoever the H.R. officer is. You can always ask for that, you know, more time to get it sort of position for whatever school system that you’re going to be with. And so that’s my biggest like, dang, I wish I would have known that other that other than like living within my means. But like, the biggest thing is like, this is a marathon, not a sprint. And it we have to be prepared to be the people who can honestly retire at 50 and 60, like enjoy the rest of our life if we plan accordingly and not just like pick something that’s the easiest option. So that’s my piece of advice.

Retirement Savings: Christine Krieger, National Institute of Diabetes and Digestive and Kidney Diseases

26:13 Christine K: Hi, I’m Christine Krieger. I’m with the training office, with NIDDK and my question is, what piece of financial advice are you glad you followed or do you wish you had followed during graduate school or as opposed to. So the advice I wish I had followed was that you are always welcome to follow your dreams. Just open a Roth. From the very beginning.

Funding/Income: Katie Homar

26:40 Katie H: So I’m Katie Homar, and my advice is take advantage of small travel grants from student organizations and campus offices to travel to conferences and grow your professional network.

Financial Habits: Mabel Perez-Oquendo, MD Anderson

26:52 Mabel P-K: Hi. My name is Mabel Perez-Oquendo. I am a current admin public fellow at MD Anderson. So one piece of advice that I wish I knew when I was doing my graduate school is to have saving accounts. And this is because, like, unexpected things happens. And also we want to have some like personal work life balance and we want to like travel and we want to take vacations. But if we don’t have that saving account, how we can accomplish that goal. So I wish that someone told me, Hey, you shall save part of your salary to go out and have fun and travel when you feel overwhelmed. So that is my piece of advice.

Negotiation: Hecmarie Meléndez-Fernández, West Virginia University

27:35 Hecmarie M-F: Hi, my name is Hecmarie Meléndez-Fernández, and I’m a recent Ph.D. grad at West Virginia University. And the one piece of financial advice I wish I had followed was to negotiate your benefits package for your job. There’s always room for negotiation. So.

Housing: Amanda Figuera, University of Washington Tacoma

27:55 Amanda F: My name is Amanda Figuera. I’m the senior director of Student Transitions and Success at the University of Washington Tacoma. And during graduate school we got creative with housing arrangements, and so I shared a one bedroom condo with a roommate who was doing lab work. And so we had like a hoteling bedroom almost in the living room. And that was one way that we were able to afford the cost of living in Seattle.

Employment: Mallorie Smith, Mississippi State University

28:19 Mallorie S: My name is Mallorie Smith. I’m the financial wellness program coordinator at Mississippi State University. And one piece of financial advice that I’m glad I followed as a grad student was that I sought out employment with my school that I wanted to attend first. And because of that, I got free classes two free classes this semester, and I was able to get my MBA that way. And now I’m about to get my Ph.D. in the same way for free. So all I’m paying for is textbooks, and I know where to find that cheap.

Moving: Helen Colby, Indiana University

28:49 Helen C: Hey, I am Helen Colby. I’m an assistant professor of marketing at Indiana University School of Business, and I am the chair of the Heck for Research Committee. And the piece of financial advice that I didn’t get in grad school that I wish I had gotten was to plan for that post-graduation move because I was in grad school in New Jersey and I got a postdoc in Los Angeles. And I realized about three months before I actually started the job that I was going to have to pay to move all my stuff across the country and put a down payment and pay first month’s rent and live for a month because I got paid monthly as a postdoc. But I didn’t get my first paycheck until I had been working for a month. And I was already a little strapped because I was in grad school and my husband’s in law school, I wouldn’t have any money. And then to move, that was very complicated. So we worked it out by being broke and side hustles and the one credit card we had that had a $1,000 limit on it. But if I had thought about having to move as opposed to just this is great, I’m going to have a better job that pays more. Not a lot more, but more. I would have planned for that better and at the very least spread my side hustling across more.

Financial Habits: Matt Hertenstein, DePaul University

30:04 Matt H: Hi, my name is Matt Hertenstein, a college professor at DePaul University, received my Ph.D. at U.C. Berkeley in 2002 the piece of advice that I wish I had followed in graduate school would be. Even then, I had a little bit to save, and I wish I had done a little bit better job at putting that away into a retirement account and started the snowball. Then rather than waiting a little bit

Debt: Eric Monday, University of Kentucky

30:35 Eric M: Eric Monday Executive Vice President for Finance and Administration at the University of Kentucky. I think the financial advice that’s most helpful when I think back to my grad experience is a professor told me do not take on an extreme amount of debt. You know, figure out a way, even if it takes you a little bit longer, don’t take on a lot of debt. So that’s the advice that helped me the most.

Debt: Byron Kerr, Texas State University

31:01 Byron T: Hi, I’m Dr. Byron Kerr with Financial aid and scholarships at Texas State University, and I received my Ph.D. from Florida State University in Tallahassee working on my Ph.D. I had developed a lot of debt over the years, like a credit card debt, and to get out from underneath that, I reached out to a nonprofit credit agency that helped negotiate with the credit card companies to help me get that debt that paid off.

Financial Habits: Anna Sheufelt, Duke University

31:23 Anna S: My name is Anna Sheufelt. I work at Duke University, overseeing the educational programing and outreach for the Office of Student Loans and Personal Finance. The piece of financial advice that I wish I would have followed when I was in graduate school, I would be to spend less and save more. It sounds pretty simple take to managing money, but I really wish I would have built up that financial foundation because once I increase my knowledge of other things I could be doing with my money, I would have been in a position to just act. And I sort of had to continue with that foundation of, Nope, I have to save first because I didn’t do a good enough job when I was in my master’s program.

Financial Assistance Programs: Gilbert, University of Texas at Austin

32:04 Gilbert: My name is Gilbert. Financial advice I wish I would have followed was maybe just looking more into assistance programs or basic needs programs here in the city of Austin, especially coming from an area that where the cost of living was pretty low. And we went to a city that has one of the highest cost of links in the nation. I wish I would have looked more into like rental assistance programs, and Austin has a couple of them that will help people with low income cover partial or full rental cost and also just any assistance with regards to just basic needs like food and Internet subsidies. That would have helped me focus more on my graduate program. Also, it’s in Edwards and working at U.T. and not have to worry about budgeting too much and sacrificing like someone’s and some needs to continue going to grad school and living here in Austin.

Financial Literacy: Anne Xiong, UC Berkeley

33:02 Anne X: So, yeah, my name is Anne Xiong. I am the program manager for Financial Wellness Program at U.C. Berkeley. Answering this question, it is what piece of finish or otherwise are you glad you followed or do you wish you had followed during grad school? So yeah, there’s a reason is kind of related to the reason why I’m very passionate about financial wellness education because I didn’t have any. So I wish I had have someone that taught me more about money management so I can start to pay more attention to manage my finances. When I was in college, in grad school, I just felt like if I had someone provide me with more guidance, I probably will and was less staff and more resources. And then when I started my first job, I probably will just have a better start. So. Yeah.

Mindset: Kirby Williams, Advantage Publications

33:59 Kirby W: So I’m Kirby Williams, and I am the owner of Advantage Publications. We do financial education, Learning Materials. So I, I didn’t realize until just now why my father always said that if you would pay for high school in college and we would have no loans and that wasn’t very important to him. But that if we want to wanted to go to grad school, that that would be on us to pay for. And I think he really wanted us to see the return on our investment. But, you know, it’s a whole different feeling when you have to pay the bills for it. And he didn’t want us to stress about that for college, which is a wonderful gift that he gave us. You know, you didn’t have to stress about that. Um, but at some point you have to grow up and you do stress about it, and you should stress about it because it’s your career and it’s your life. And if you’re not going for something that gives you joy, then all the career and, you know, stress and the money, stress and the time is wasted.

Financial Habits: Becky Sparks, University of Tennessee, Knoxville

35:02 Becky S: My name is Becky Sparks. I’m with the University of Tennessee, Knoxville, and my advice that I wish I had followed is to save as much as you can while you’re in grad school. I know that’s a very difficult thing to try to do, but your future self will thank you and take it from me who did not take that advice. You will definitely be glad that you did Absolutely

Funding/Income: Robert

35:27 Robert: Yeah. So my name is Robert. I had a lot of helpful advice from people in my department and also people at the university who were able to direct me to different ways to apply for different fellowships and other kinds of opportunities to help me pursue my research in ways that I didn’t really know where there. So that was looking beyond the department, looking for other opportunities for external scholarships, external fellowships, and then finding those two and finally get me to complete my research in the end with that funding.

Student Loans: Sara, Baylor University

36:00 Sara: Hi, I’m Sara. I am at Baylor University. And then my big piece of advice that I followed after leaving my graduate program and currently is I utilize public service student loan forgiveness. And I think a lot of grad students who are either going into academia or the government or any type of nonprofit or education work often don’t know that they can really lower that Student loan monthly repayment if they go down an income driven repayment plan and then utilize. Public service student loan forgiveness. So definitely check that out as we’re going into student loan repayment.

Financial Habits and Retirement Savings: Beth Hunsaker, University of Utah

36:47 Beth H: My name is Beth Hunsaker with the University of Utah’s Financial Wellness Center. I’m the associate director, So thinking back to grad school, the things I’m glad that I did is is really just stick to the fundamentals of looking at what my income was and make sure I was budgeting it, saving. I was investing in my Roth IRA and now 20 years later, has made all the difference. Even the $50 a month I found back then is setting me up for financial success now.

Tax Implications: Ben Raines, Ohio State University

37:19 Ben R: So Ben Raines Program Coordinator for financial education and a student life at Ohio State University. So I was lucky to have a graduate tuition stipend as part of my one at the university. And I’m glad that I went through and thought about how much $25,000 taxable income would affect my income over the course of a year. And while that was unpleasant, I was at least prepared to have my take home income go down $800 a month for six months of the year.

Funding/Income: Michael Dedmon, National Endowment for Financial Education

37:47 Michael D: My name is Michael Dedmon. I’m the research director at the National Endowment for Financial Education and a Ph.D. candidate in political science at Syracuse University. Graduate students approach the Ph.D. journey and get a different range of support from their institution, depending on sort of where it’s ranked, the kind of resources they have, and then where they hope to place their graduate students. I know that for me, I was a teaching at a pretty teaching heavy department where almost all of the financial support was really, really tied to doing that teaching. I wish that I would have realized earlier on the importance of seeking out external sources of funding, and I wish that I would have advocated more for myself. I wish they would have advocated more for fellow graduate students with the graduate school and with my department to provide those resources because of how critical they are, because it’s very difficult to do your work, to finish your degree, and to produce the knowledge that the university wants if you don’t get that additional support. But also the process of achieving and getting that support is really critical. And so I think the universities like the country over, especially the ones that are outside of the top ten that don’t have right, those kinds of resources need to think better about how to support graduate students in getting resources to specifically support their research.

Employment: Gilbert Rogers, University of Oregon

39:01 Gilbert R: My name is Gilbert Rogers, Senior assistant director of financial Wellness at the University of Oregon. So the piece of advice I wish I would have followed during grad school or during my doctoral studies was to seek out an employer that would pay for that. I didn’t know I would land in higher education. I was currently still working in corporate finance, and that’s where I first kind of caught wind of all the loans and loan debt. So I didn’t have zero debt until my doctoral degree. So that’s a piece of advice I work out.

Outtro

39:37 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 Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

This Grad Student Deferred Her Acceptance to Work on Her Finances

February 20, 2023 by Meryem Ok Leave a Comment

In this episode, Emily interviews Brittany Trinh, a PhD student in chemistry at the University of Wisconsin-Madison. Brittany originally applied to grad school in fall 2018, but she elected to defer her acceptance for two years in favor of taking a job. Brittany shares how she developed her finances, side business, and professional life in the 2.5 years she worked prior to matriculating. She started graduate school in fall 2021 in a much stronger financial position—and more confident in herself—than she would have in fall 2019, even though it was a bit of a rough transition. At the end of the interview, Brittany explains for whom deferment of grad school acceptance is a good option.

Links Mentioned in this Episode

Set Yourself Up for Financial Success in Graduate School (Workshop)
PF for PhDs S14E4 Show Notes
PF for PhDs Tax Center
Brittany Trinh’s Website
Brittany Trinh Twitter
Brittany Trinh Instagram
PF for PhDs S11E8: Semester-Proof Your Academic Side Business with Digital Products (Money Story with Dr. Toyin Alli)
Brittany’s E-mail Address
Upwork
PF for PhDs Subscribe to Mailing List (Access Advice Document)
PF for PhDs Podcast Hub (Show Notes)

PF for PhDs S14E4 Image: This Grad Student Deferred Her Acceptance to Work on Her Finances

Teaser

00:00 Brittany: I think the biggest thing was just, one, knowing how the PhD stipend is, and just the whole grad school process. I was just really afraid about like how like setting up my like financial future when like the stipend makes it kind of difficult to do that, savings and things. Like it is possible. But just at that time, I knew that like with my job, I could do that a lot faster than like going to grad school right away. And we know that like with time and investing, like time is like the most valuable thing.

Introduction

00:41 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 14, Episode 4, and today my guest is Brittany Trinh, a PhD student in chemistry at the University of Wisconsin-Madison. Brittany originally applied to grad school in fall 2018, but she elected to defer her acceptance for two years in favor of taking a job. Brittany shares how she developed her finances, side business, and professional life in the 2.5 years she worked prior to matriculating. As a result, she started graduate school in fall 2021 in a much stronger financial position—and more confident in herself—than she would have in fall 2019, even though it was a bit of a rough transition. At the end of the interview, Brittany shares from her perspective for whom deferment of grad school acceptance is a good option.

01:57 Emily: If you’re a prospective graduate student currently in the thick of admissions season, I encourage you to check out my asynchronous workshop, Set Yourself Up for Financial Success in Graduate School. You can pick and choose which modules are most relevant to you now and over the coming months. For instance, if you’re staring at a cryptic funding offer letter, you might want to join “Interpret and Compare Offer Letters.” If you’re not sure if your stipend offer is really livable for a certain city, you might want to join “Stipends vs. Cost of Living.” If you know already that your top-choice program is offering a sub-par stipend, you might want to join “Negotiate Your Stipend and/or Benefits.” You can learn more about Set Yourself Up for Financial Success in Graduate School and the various modules at PFforPhDs.com/setyourselfup/. You can find the show notes for this episode at PFforPhDs.com/s14e4/. Without further ado, here’s my interview with Brittany Trinh.

Will You Please Introduce Yourself Further?

03:06 Emily: I am delighted to have joining me on the podcast today Brittany Trinh. She is a first-year graduate student at the University of Wisconsin Madison in chemistry. By the way, we are recording this in April, 2022, but I’m expecting to publish it in early 2023. So, for reference, you know, Brittany will now be a second-year graduate student at the time of publication, we expect. Okay, Brittany, thank you so much for joining me. Will you please introduce yourself further to the listener?

03:31 Brittany: Hi, yeah, my name is Brittany and I’m, like you said, currently a PhD student in chemistry at UW Madison and part of the Boydston group studying metal-free ring-opening metathesis polymerization. And before that, I was getting my BS chemistry at the University of Houston and then also working at a polymer company for about two and a half years before I became a grad student.

Timing of Grad School Application and Deferment

03:58 Emily: Excellent. And that is the subject of our interview today. So, Brittany applied for graduate school, got in, and decided not to go for a bit. So, we’re going to talk about that deferment process and why it happened and how it happened and how she used that time to better her finances and be in a stronger position when starting graduate school. So, I love this topic. Okay, so starting off, what was the timing of this? Like when did you apply for grad school? Were you also applying for jobs that same time? Just like walk us through the beginning of this process.

04:28 Brittany: Yeah, so I actually graduated a little bit later. So, in the fall of 2018 was my graduation semester, so that’s when I started applying for jobs and grad school at the same time. And then throughout that process, I actually only applied to one grad school, which was UW Madison because of like a fee waiver I got from a preview program. And simultaneously applying for a bunch of jobs and we all know how job searching goes.

04:59 Emily: Interesting. So, when you, because you were graduating like at that end of fall semester timing, were you already anticipating that you would have to have a job between, you know, let’s say January and August or whenever it was that you would matriculate if you had gone directly to graduate school?

05:16 Brittany: I think that I wanted to do something but I wasn’t expecting to honestly get into the graduate program because I did get the job offer by October, 2018. So, I had already like accepted the job offer before I even knew that I was getting into grad school.

Receiving an Acceptance Letter

05:38 Emily: Okay, great. So, when you got the acceptance to UW Madison, what were your thoughts at that time? Were you thinking that you wanted to enroll or were you already thinking by that point that deferring was going to be a good idea?

05:51 Brittany: So, this is actually a really funny story. I got my acceptance letter the same day that I came home from like my first day at work. And I was super surprised because I did not think I was going to get in. And so, of course I’m like kind of freaking out and thinking like, well, what do I do? You know? But ultimately I decided that it was better for me to just stay at my job because I literally just got started. And so, I wanted to see if there was an option for me to defer just for some time so I could get the work experience but then still pursue grad school later.

Role of Finances in Decision

06:27 Emily: And what role did finances play in that decision to defer?

06:33 Brittany: I think the biggest thing was just, one, knowing how the PhD stipend is and just the whole grad school process. I was just really afraid about like how like setting up my like financial future when like the stipend makes it kind of difficult to do that savings and things. Like it is possible. But just at that time, I knew that like with my job I could do that a lot faster than like going to grad school right away. And we know that like with time and investing, like time is like the most valuable thing. And then of course there were other some like emotional things related to that. Yeah, and I think the thing was that my job offer was really good and I just really could not turn it down. And that was why I ended up deferring my grad school enrollment.

07:32 Emily: Yeah, I think it definitely makes it easier to imagine what else you would be doing if you didn’t go directly to graduate school already being in that job, which is awesome. I’m wondering, did you have any particular financial concerns? Like I know generally things are hard, right? For grad students and finances, but I don’t know, were you like looking at like student loan debt that you wanted to pay down? Or were you like, “Oh, I have zero in savings and I really want a certain amount in savings.”? Like was there any specific element of your finances that was a top concern?

08:01 Brittany: Oh, yes. So, I am very fortunate that I did not have any like student loan or other like personal debt. But for me it was definitely zero savings. Because I obviously just graduated from school, and I had just like a little bit of savings from like summer research or things like that. But yeah, I really wanted to build up my emergency fund, my 401(k), and just kind of let it sit there while I’m in grad school and things like that. Those were like the main concerns.

Informing the Grad Program About Deferment

08:37 Emily: Okay. So, we’ve talked about like the decision to defer why you did it, what you were planning on doing with your time anyway. How is it actually like telling your program <laugh> that you got into that that was your plan, that you would like to exercise a deferment option? Like, I don’t know, like how did those conversations go?

08:55 Brittany: Yeah, so I don’t remember exactly like how I came up with the idea of deferring. But I think maybe I’ve seen it somewhere. So, I think I was just like searching the department’s website to find any reference in like the handbook or their FAQ or whatever about the deferral process. And so, I remember seeing this on their FAQ page saying that like, yes, it is possible because they’ve granted it to people before, you just have to like let them know and it’s up to two years. So, what I did was I waited until I went to the official visit weekend and I wanted to talk to the graduate program coordinator personally as opposed to like over e-mail. And it was actually a little bit awkward because it was at like a poster session when I approached her because the schedule is like pretty packed.

09:45 Brittany: But she had just finished chatting with another student and so when I came up to her, I introduced myself and explained to her my situation and I just said like, could you tell me more about the deferral process? Like I would love to come here, but like as of right now, I’ve just started my job and it’s only been like two months and I don’t really want to leave that yet. And in the end she was very kind and reassuring about it and she just told me it’s totally possible just like stay in contact with her and she would like follow-up with me and let me know what the steps were.

10:15 Emily: It’s actually like, I hadn’t thought about this before, but sort of thinking about it from the program director’s perspective, you’re going to be an even stronger candidate when you actually join the department in like a year or two or whatever having had that relevant work experience. So, it actually feels like they’re getting like a bargain or something, like, we’re going to get an even better grad student than like the one we accepted. Like that’s amazing. So, I can see how that would maybe be attractive. But something I hadn’t asked you yet is, when you were admitted to the program, were you admitted already like knowing who your advisor was? Or was that a process that would maybe happen during like your first year?

10:52 Brittany: Yeah, so when I was admitted, we don’t know who our advisors are yet. It’s just like you’re just generally admitted, and then once you enroll whatever semester, that’s when you go through like the whole rotation process and stuff. So, that wasn’t a concern at that point.

What About Funding?

11:07 Emily: Yeah, I can imagine if, you know, for anyone listening to this who’s maybe going to consider this, if you’re admitted directly with an advisor, that’s the way I was admitted to graduate school, then it’s like two levels, like you have to make this okay with the department level, their program level, and also with your advisor. And the other like sort of wrinkle in there is like, what about your funding? So, what was your funding situation and did the deferment matter at all in like, you know, was your funding automatically going to come again? Or did you have to like apply again? Or how did that work?

11:36 Brittany: Yeah, so I think when I was accepted, they offered me full funding as a student and then they also gave me an additional fellowship which was a surprise to me, but when I followed up with her about deferring and such, I just asked her what the situation was like. Because I would understand if they decided to rescind the additional fellowship which I think was like an additional $4,000 or $5,000 just for the first year because I deferred, but actually she said, “No, your funding will [I guess] transfer.” And I was really surprised. And so I think it, it just is a matter of just asking very directly. Like it was a little uncomfortable for me to be so forward about it because I didn’t want to seem like, you know, I’m just only concerned about money, but it was something that they offered me and I just wanted to see if that was still available to me.

12:36 Emily: Yeah, well that’s great. I mean, it sounds like this person was like very receptive to the process. I mean, even them having it on their website is a good indication that yeah, this is something there that happens from time to time, and they can handle it. And especially like you were saying, just being admitted generally to the program I think makes the whole process easier since you’re not negotiating with like a certain person with a certain number of spots that are available or whatever the case might be.

Finances During Gap Years

12:57 Emily: Okay. So, let’s move beyond like the decision to defer and talk about what you did with your time about two and a half years, you said, between when you started your job and when you ultimately entered graduate school. So, we talked earlier about like the financial reasons for why to pursue this job instead. What actually ended up happening during that period of time with your finances?

13:18 Brittany: Yeah, so during that time while I was working, I was able to save over like $60K in my 401(k). And so, I’m like really proud of that, and a lot more like for emergency funds, my future house, as long as like PhD expenses because I know that like moving would be expensive and like school fees and such. So, I wanted to have like an additional fund for that that I could tap into in case I needed it. The other thing was I also just learned a lot more about my own financial habits and values and such. And so, all of those were like really good to know before coming to grad school just in terms of like spending and how you save and such. And then of course the last thing was like, I started my business, which was really a fun learning experience.

14:12 Emily: Yeah, let’s put a pin in the business for just a second. I definitely want to talk about that further. But I just want to like congratulate you because it sounds like you made great use of the time that you’re working to like build up 401(k) balance and the savings and all that. And just like hearing all that, I’m just so happy for you like starting graduate school in such a strong financial position. You’re not precarious in the same way many other graduate students are. Especially having those like investments in place because, I mean, maybe you’re still adding to them, but even if you weren’t able to add your investments at all during graduate school, like I mean five years or more in graduate school, like that money is going to grow. I mean, we’re like assuming the market behaves like sort of average over a long period of time, but it’s going to grow like a lot, like at least 50%, maybe even, you know, closer to doubling during just that period of time that you’re in graduate school. So, it’s amazing to have that wind at your back is what I call the financial wind at your back of having investments. So, that’s just awesome.

15:04 Emily: One thing I did want to ask you though is that like since you had this plan of eventually going to graduate school, were you concerned at all about like your lifestyle or like experiencing lifestyle deflation upon entering graduate school? Because I know that I’ve heard that as like a reason against deferring or against taking time between undergrad and graduate school. It’s like, oh no, what if I become used to spending $60,000 a year and I can’t do that in graduate school, that’s going to be painful. So like, what was your thought process around that, like lifestyle setting aspect of the question?

15:38 Brittany: Oh yeah, that’s a really good point and question. Some other people also brought this up to me as well. But for me there was a little bit of a transition, which I guess we can talk a little bit more later, but the reason why I was able to save so much was because like I was already, I never saw that money because it was always like going direct deposit to my 401(k) or to my savings accounts and things like that. So even though yes, I was making like was like $65K a year or so, I didn’t see that $65K every year. It was like most of it’s already gone to savings. And so I was kind of living as if like I was making more of like $40K or something like that. And so, it wasn’t as bad. And then again, like I mentioned, I learned a lot about like my own habits and values and such. And so then once I came into grad school, I was able to kind of realign that with my current budget.

16:42 Emily: Yes, that makes total sense. And yeah, just having those extra couple of years of experience, as you said, learning about yourself, learning about your own like systems and habits and mindset and so forth with respect to money can be so super helpful with that.

Commercial

16:55 Emily: Emily here for a brief interlude! Tax season is in full swing, and the best place to go for information tailored to you as a grad student, postdoc, or postbac is PFforPhDs.com/tax/. From that page I have linked to all of my tax resources, many of which I have updated for tax year 2022. On that page you will find free podcast episodes, videos, and articles on all kinds of tax topics relevant to PhDs. There are also opportunities to join the Personal Finance for PhDs mailing list to receive PDF summaries and spreadsheets that you can work with. The absolute most comprehensive and highest quality resources, however, are my asynchronous tax workshops. I’m offering four tax return preparation workshops for tax year 2022, one each for grad students who are U.S. citizens or residents, postdocs who are U.S. citizens or residents, postbacs who are U.S. citizens or residents, and grad students and postdocs who are nonresidents. Those tax return preparation workshops are in addition to my estimated tax workshop for grad student, postdoc, and postbac fellows who are U.S. citizens or residents.

18:11 Emily: My preferred method for enrolling you in one of these workshops is to find a sponsor at your university or institute. Typically, that sponsor is a graduate school, graduate student association, postdoc office, postdoc association, or an individual school or department. I would very much appreciate you recommending one or more of these workshops to a potential sponsor. If that doesn’t work out, I do sell these workshops to individuals, but I think it’s always worth trying to get it into your hands for free or a subsidized cost. Again, you can find all of these free and paid resources, including a page you can send to a potential workshop sponsor, linked from PFforPhDs.com/tax/. Now back to the interview.

Web Design Business

18:58 Emily: Okay, let’s come back to the business. So, what is the business that you started during this time before entering graduate school? And I guess, you know, did you have it in mind that you would continue it after starting graduate school?

19:12 Brittany: Yeah, so the business that I ended up creating is a web design business specifically for scientists, researchers, and academics, helping them build their online presence and their websites and such. And so, I started this business unofficially in April of 2019. So that’s like about four months after I started working. That was like kind of the, beginnings of it, but I didn’t start like actually getting clients until September. And that’s when I officially launched. And then since then, I’ve been working with a lot of clients one-on-one and doing workshops, collaborating with organizations and such and all those like fun things that come with an online business. And throughout the process, I made about like $15K in revenue, which most of it was reinvested into the business. But I always did have the intention of continuing it in grad school because I wanted to have that additional income.

20:14 Brittany: I think that was like the thing that really was also another concern for me was that I didn’t want to feel limited by my stipend and I wanted to do other things. One of them being visiting family because I’m in Wisconsin now and I’m from Houston, so, you know, flying home at least like three or four times a year is kind of a priority for me. And so, if I’m able to have like this extra side income, then I don’t need to worry about it, like cutting into like my daily expenses.

20:48 Emily: I just love how intentional you were with the choice of the business to start. And also just using again, your time before starting graduate school to establish it. Like you mentioned, you know, your revenue was like largely put back into the business as an investment and that actually makes a lot of sense to do that while you were working your job because the point at that time was not to get income from it, it was to, I assume, it’s to establish the business so that you can really reap that income once you have your graduate student stipend that you’re living on. So yeah, I just, this is so great and like of course also the subject matter of your business is still like related to like academia and like science and so forth, so it’s still like, it’s something that isn’t totally out of left field for like a graduate student to be doing, right? So, I love that choice because you can still sort of market it and it makes sense like even once you start graduate school. So, just to commend you on all of that. That’s great. Is there anything else that you want to say about the business? Where can people find you by the way, if they want to work with you?

21:43 Brittany: Yeah, if you want to work with me, you can find me on my website, brittanytrinh.com. Or you can also just connect with me on Twitter and Instagram, which is b r t t n y t r n h. So, that’s basically my name without the vowels. Yeah, so all the things about like website design start building and starting your website. That’s what I love to do and yeah.

Starting Grad School

22:09 Emily: Okay, great. So, let’s go back to our timeline. So, you’re doing great with your finances, you’re liking your job and so forth. How did you decide that it was finally time to start graduate school?

22:20 Brittany: So, the program that I applied to, or at least in my time, it was a limit of two years for deferral. So, what happened was the graduate program coordinator contacted me at the one-year mark which would’ve been fall of 2019 for me to enroll in fall of 2020, to ask if I was still interested. And I said, I am, but I still wanted to defer another year. And she was like, okay, that’s that’s totally fine, just keep in contact. And so then again, she did that in fall 2020 and well, we all know what happened then. And so at that point, at work things were kind of slowing down because of COVID, and I was just thinking, you know, maybe this is a good time now to go back to school. Because I also felt like I could not progress in the way that I wanted to at my workplace with my current credentials. And just in general, if I wanted to move up in the chemical industry, having a PhD would strengthen my application.

23:20 Emily: You know, we didn’t even mention that earlier, I guess because in your case this was a deferment of an acceptance instead of like a choice to just wait to apply to graduate school. But I love that you also ended up using that time to confirm that you really did need a PhD like for the career because of course you could have just bailed if you said, “Oh no, I have plenty of room for advancement, this is great, my BS is awesome, maybe I’ll do a master’s on the side.” Whatever it is. You could have gone that track, but yeah, I love that you really are sort of once again intentionally like choosing the life and career that you want to have, and use that time to like confirm this is the right path. So, that makes so much sense to me. I understand you did have to technically apply again to Wisconsin, right? So, in that fall of 2020, right? So you’re submitting another application to them. Were you also looking around at other grad schools? Because as I said earlier, now you’re a two-years better candidate than you were the first time around. So, tell us about that too.

24:11 Brittany: Yeah, so this was something that I brought up with the graduate program coordinator at Wisconsin. I was wondering if I was allowed, like if the deferment meant that I was kind of confirming my acceptance and she said, “No, feel free to apply to other schools that you want.” And I was like, okay, that sounds great. So then I did end up applying to four other schools, really reach schools like MIT, Colorado Boulder, Rice, and University of Michigan. And so, I applied to those four other schools, but in the end, I still went with Wisconsin because I thought that they were the strongest program for what I wanted and needed for my own career.

24:57 Emily: Yeah, that’s great and it makes sense. I mean, I guess maybe someone else considering a deferment would still have to check with their program, but it doesn’t really make sense that you would be obligated to go. It’s more like they’re obligated to you <laugh> to still like accept you. Right? But you’re not really obligated in the same way to them. So, that makes sense. Okay. So, you technically apply again, you apply to some other schools. You still decide on Wisconsin. Did you go to a second visit weekend? Did you get to do that again?

25:21 Brittany: Yes, but because of COVID, it was virtual but I still came anyways to, originally it was to look for apartments, but it ended up just being hanging out. And actually, I did meet some professors during that trip, and one of those professors is now my advisor, <laugh>.

25:39 Emily: Okay. So that worked out on multiple fronts.

Financial Transition

25:41 Emily: So, let’s then talk about like the transition to graduate school, like specifically through a financial lens. You mentioned earlier that you did have to make some adjustments. But you have the savings in place, you know, for the moving fund, all that. So, how did that transition go?

25:57 Brittany: So, it was definitely rough in the first semester. Like you mentioned, there was a little bit of a time period where I had to transition my finances in that curbing my spending was a thing. So, I was trying to keep a closer eye on spending, especially like online shopping, clothes, and things like that because obviously I wasn’t making as much as before. And then on the other side of my business, I also made the decision to kind of put it on the back burner for the first semester because I was trying to focus on just transitioning, TAing, coursework, and finding a lab group. So, all those things were happening and I was like, my business does not need to be going on right now. The other thing was that I experienced a little bit of financial anxiety which was mostly avoidance.

26:47 Brittany: And this was because I just didn’t want to think about like how much I was spending now that my budget or my income was a lot less. But obviously that’s not the greatest way to go. So earlier this year, like in January I just decided to, you know, kind of clear all those things up on like my spending habits and things and trying to keep track of like, what do I spend for groceries and all those things and kind of get a good better handle on that. The other thing was that like related to the financial anxiety, it was mostly about like financial future because now it’s like I don’t have as much money as I did before to put towards savings, but I definitely still want to keep saving, which was why I decided to kind of get a better handle on my spending. So then I can see like, okay, can I save like $200 a month? Right? That would equal out to be, I think the $6,000 for like a Roth IRA contribution per year, is that right?

27:49 Emily: It would be $500 a month.

27:50 Brittany: Oh no, it’s $500 a month. Yeah. So yeah, actually $500 a month, not $200. But yeah, so those are some of the things that I wanted to do.

28:00 Emily: Yeah, that makes sense. I’m glad you’re being like, so like open about this and honest about it because I bet other people who had a similar experience would have similar emotions around it of like, you know, feeling more insecure and more anxious even though you knew it was coming <laugh>, like still to see like the smaller numbers in the bank account and like your savings going down because you’re, you know, you’re spending on moving expenses and whatever else is going on. But really glad to hear that you sort of eventually like kind of firmed up on the mindset and the processes and so forth. So, that’s great and thank you so much for sharing. And have you re-ramped up with your business? Again, we’re recording this in April 2022. So now that you’re in like your second semester, is that more, is that something you’re spending time on now?

28:43 Brittany: Yes, definitely spending more time on it. Really wanting, I’m really trying to push for teaching more workshops. I’m still taking on one-on-one clients, although it’s just a little bit different than before. So, definitely taking that first semester off to kind of recalibrate to see like how do I want my PhD experience to go and what I want to get out of it has also helped me realign my own business goals as well. So, that’s been really fun.

29:10 Emily: Okay. Well, this is an unexpected tie-in, but in season 11 we published an episode with Dr. Toyin Alli sort of along these same lines of like moving from one-on-one services to more scalable like passive products. So, interesting. If anyone is like jibing with what Brittany is saying, then check out that episode with Dr. Toyin Alli where we talk more about these like strategies.

For Whom is Deferring a Good Option?

29:32 Emily: Okay. So, kind of to wrap up here, for whom do you think deferring is a good option?

29:39 Brittany: I think deferring may be a good option for anyone who’s like at all doubting their decision to do a PhD because that’s how I felt. Like I did not want to do a PhD yet, at the time that I was accepted for not just financial reasons, but also a lot of like emotional and like mental health reasons. I felt a lot of burnout from undergrad and I wasn’t sure if I could complete a PhD successfully given where I was at at the time. And I don’t really think that the decision to do a PhD should be taken lightly, right? And so if you’re not sure, like you’re honestly better off taking that time to work at a job and figure out like what you like to do or like in my case, like do you even really need a PhD for what you want to do? And like just in general learning more about the industry that you want to work in and ultimately you should just do the PhD, or I guess when you decide to do the PhD, it’s because it’s an experience that you want to have in your life. So, getting to like a more like affirming position rather than like feeling FOMO about not doing a PhD.

30:53 Emily: Love that. I had, so I didn’t defer my acceptance to grad school. I just waited to apply until, I was planning on taking two years between undergrad and grad school. I ended up applying so that I enrolled just one year after I finished undergrad. But for some of the same reasons that you just mentioned, like I felt like I was a stronger candidate having had like extra work experience. I wanted to see what science was like in a different kind of setting than what I experienced during undergrad. All of that still just confirmed for me that I did want to do the PhD. What you did that I did not, was really working on the finances in that time because I did a post-bac program, which paid me basically what a grad student stipend is. So, there were no financial advantages there, but there were those other advantages still that you mentioned. So, that’s so great.

31:35 Emily: And where could people find you if they want to follow up? You mentioned your business website earlier, do that again, but let’s say someone wanted to follow up more on like the personal side about deferring or something. Where can people find you?

31:44 Brittany: Yeah, so definitely you can still visit me on my website, brittanytrinh.com. Or you can email me at [email protected] if you want to like send a longer message. And also just again, connect with me on my social media accounts. You can just tag me or DM me as well.

32:02 Emily: Sounds great.

32:03 Brittany: Totally open to share more. Yeah.

Best Financial Advice for Another Early-Career PhD

32:05 Emily: Good, good. Okay, so, we’ll finalize here with the 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 talked about in this episode or it could be something completely new.

32:19 Brittany: Yeah, so I would say that my best financial advice is to find a skill that you like enough to leverage for extra income. So, a lot of people do like tutoring, writing, editing, whatever. And like one of my, like my roommate, she like does like cover art for like, you know, for like for publications and such. So, it’s like having those types of skills or just having something that you like to do. Especially like if it’s something that doesn’t require too much time or effort from you, it’s always more, it’s more beneficial to you anyways. And like you don’t have to build like a whole business, but it’s good to know that you have another way to make extra money if you want to.

33:05 Emily: Yeah, that’s interesting you say that because I mean, I totally agree. I’m so on board with this advice <laugh>. But like furthermore, you’ve built like a business and you have like a brand and all of that, but someone doesn’t need to go to that level to make extra money on the side. Like they could do more like freelancing or like put themselves on, is it called Upwork now? Is that the current name for the website?

33:24 Brittany: Yeah, Upwork.

33:24 Emily: Yeah, Upwork. So, they can put themselves on Upwork or something like that where like you’re finding clients but you don’t need to necessarily build a whole infrastructure around it. At least not at the start while you’re just like trying things out. So, I love that, just like thinking about what skills you enjoy that you have that might be a little bit unique in the marketplace. I definitely see how your skills with like the website building is unique and something very needed. And especially if you can speak like the language of, you know, your clients, that’s a big advantage. Anyway. I love your business so that’s awesome. Brittany, thank you so much for joining me for this interview! It’s been wonderful! I hope the listeners got a ton out of it. Thank you so much!

33:56 Brittany: Thank you for having me!

Outtro

34:03 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.

This First-Year PhD Student Prioritizes Investing While on Fellowship

December 5, 2022 by Meryem Ok 1 Comment

In this episode, Emily interviews Michele Remer, a first-year PhD student at Michigan State University, about her financial goals for graduate school. Michelle graduated in spring 2020 and worked a few different jobs during the pandemic, so she was able to generate some savings and open a Roth IRA prior to starting grad school. Thanks to a summer 2022 internship and one-time bonus on top of her ongoing fellowship, Michele is in a strong financial position at the start of graduate school. Michele shares her investing goals and values and why she’s considering buying a house hack in the spring. She also breaks down her budget and shows how she’s keeping her large, necessary expenses under about 40% of her gross income.

Links Mentioned in the Episode

Michele Remer LinkedIn
PF for PhDs S13E1: PhD Home Buying Updates for 2022 (Expert Interview with Sam Hogan)
Sam Hogan E-mail (Mortgage Originator)
PF for PhDs S13E8 Show Notes
PF for PhDs S10E1: How This Grad Student Plans to Contribute to His Roth IRA Using 529 Money (Money Story with Ben Wills)
PF for PhDs Tax Workshops
PF for PhDs S8E4: Turn Your Largest Liability into Your Largest Asset with House Hacking (Expert Interview with Sam Hogan)
PF for PhDs S13E2: This PhD Student-Nurse Is Confident in Her Self-Worth (Money Story with Brenda Olmos)
PF for PhDs S10E18: This Grad Student Purchased a House with a Friend (Money Story with Courtney Beringer)
I Will Teach You to Be Rich (Book by Ramit Sethi)
PF for PhDs S5E15: How a Book Inspired This PhD’s Financial Turnaround (Money Story with Dr. Amanda)
PF for PhDs Subscribe to Mailing List (Access Advice Document)
PF for PhDs Podcast Hub (Show Notes)

S13E8 Image: This First-Year PhD Student Prioritizes Investing While on Fellowship

Teaser

00:00 Michele: And then I also was able to start my program during the summer and I did an internship in D.C. which, technically, I wouldn’t be allowed to do because you are only supposed to, you can’t work more than 10 hours a week with your fellowship at Michigan State. But because it was part of a class, I was able to overcome that requirement. So, I had money from my internship to like live on in D.C. and then I also had that like fellowship money that I could use for like saving and investing.

Introduction

00:38 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 8, and today my guest is Michele Remer, a first-year PhD student at Michigan State University. Michelle graduated in spring 2020 and worked a few different jobs during the pandemic, so she was able to generate some savings and open a Roth IRA prior to starting grad school. Thanks to a summer 2022 internship and one-time bonus on top of her ongoing fellowship, Michele is in a strong financial position at the start of graduate school. Michele shares her investing goals and values and why she’s considering buying a house hack in the spring. She also breaks down her budget and shows how she’s keeping her large, necessary expenses under about 40% of her gross income. By the way, we recorded this interview in late October 2022, and since its recording, there has been a lot of student loans news. As of November 27, 2022, the day I’m recording this, the $10k or $20k degree of cancellation that Michele and I discuss has been blocked by court challenges, which are likely to be resolved in the Supreme Court. Additionally, the administrative forbearance has been extended into summer 2023.

02:26 Emily: Speaking of the possibility of home ownership in 2023, Sam Hogan is now offering lunch-and-learn seminars on how graduate students and postdocs can purchase homes. Sam is a mortgage originator specializing in graduate students and PhDs, an advertiser with Personal Finance for PhDs, and my brother. He’s been a guest on this podcast numerous times, most recently Season 13 Episode 1. If you live in a city where graduate students and postdocs sometimes buy homes, please consider arranging for Sam to come to your campus for a lunch and learn on mortgages and the home-buying process. He’s put these on for a couple of groups this fall and has more booked the spring. He gives a short presentation and then answers questions about individual borrowing scenarios. Sam has done a ton to help grad students and postdocs with usual academic incomes like fellowships and summer pay gain access to mortgages so they can realize their dreams of home ownership. You can reach Sam about the possibility of coming to your campus—or with your own mortgage question—at [email protected] or 540-478-5803. You can find the show notes for this episode at PFforPhDs.com/s13e8/. Without further ado, here’s my interview with Michele Remer.

Will You Please Introduce Yourself Further?

04:03 Emily: I’m delighted to have joining me on the podcast today Michele Remer. She is a first-year graduate student at Michigan State University, and we are going to be talking today about kind of what her finances look like as a first-year graduate student and what her plans are for the future. So, Michele, it’s a delight to have you on. Will you please introduce yourself a little bit further for the listeners?

04:24 Michele: Of course. Thank you for having me by the way. So, as you said, I’m a first-year PhD student. I’m in the Fisheries and Wildlife Department at Michigan State. And I got my undergraduate degree from a small liberal arts college in Minnesota back in 2020. So, I’m a pandemic graduate. And then I was supposed to go into the Peace Corps but it ended up not working out due to the pandemic once again. So instead, I did some other seasonal jobs, which included AmeriCorps. I also want to preface this by saying that I have had some assistance from my parents for expenses in college and post-graduation as well.

05:03 Emily: Yeah, let’s talk about that more. So, it sounds like you had about two years between your graduation college and when you started graduate school. I’d love to learn more about those jobs that you did during that time and kind of what your finances looked like through that period.

05:17 Michele: Yeah, so my first, well I graduated 2020 and I still had my job through my university. It was a GIS job so I was able to do it remotely during the pandemic. So, I was just living at home with my parents and didn’t have any big expenses there, which was really nice. And then I got a job with AmeriCorps in a Conservation Corps out in western Utah. So, that’s where I went next. And that one was <laugh>. I was basically just breaking even for that job because it was volunteer and it was also a pretty low like stipend that we received. But I was able to get free housing, and they gave us like a free tent. I just had to provide the gear and a plane ticket. So, I think it worked out pretty well for me, especially because with the pandemic I was getting stir crazy in my house so I welcomed the opportunity to go somewhere new during that. When everyone else was kind of stuck inside. I was able to be out in the woods and <laugh> doing conservation projects.

06:26 Emily: And was it like a full year? Was it a full year that you were with AmeriCorps?

06:30 Michele: So, this was about seven months was my term. And then also for AmeriCorps, you get, they call it education award. That’s what it’s called. So, I got about $3,000 for my education that I was able to put towards my student loans.

06:47 Emily: Oh nice. That’s a good flexible usage.

Money Mindset Coming Into Grad School

06:52 Emily: Okay, so we’ve had I think one previous guest who was in AmeriCorps, if we can find the episode, it’ll be in the show notes. But I’m very interested in like your mindset I guess going into graduate school, having just had that AmeriCorps experience. Because I know that, I mean as much as graduate student stipends need to be higher, AmeriCorps is like whoa, you are really, as you said, it’s kind of a volunteer position that they basically just kind of give you housing and food money, right? So, can you talk about yeah, your mindset coming into graduate school, having had that experience with respect to your finances?

07:25 Michele: Yeah, I think it was actually really helpful for me personally because, so my undergrad, it was a residential school so like all of my food and stuff was like at a cafeteria and everything and included. And with this job, I like had to like cook dinner and everything. And so, that really taught me how to like meal prep and just like living on such a low wage, I was able to be really smart about like how I was handling my groceries and everything. And then like while we were on project, like, so we would work eight days and then we would get six days off. So for those eight days they provided all the food. So basically you were just like, didn’t have any expenses for eight days of the week and then, or eight days at a time and then six days you would have expenses, but we were able to like also have leftover food from that. So, it was this kind of like, and I also don’t really buy a lot of other things. Like I still to this day I basically just buy food and that’s my only other expense besides like housing with like occasional other like luxuries now that I have some more money. But yeah, so I think it was a challenge but it actually kind of set me up well for grad school.

Stipend at Michigan State

08:42 Emily: Yeah, very interesting. So, give us a picture of your finances when you started at Michigan State. So like, you know, did you have any assets? Did you, you already mentioned student loans, maybe you had other liabilities as well. And also what is your stipend at Michigan State?

08:57 Michele: Yeah, so my stipend first of all is $30,000. And I also got pretty lucky too because I got a $5,000 fellowship for getting accepted into the environmental science and policy program here. So, I can kind of lump that on top. And then I also was able to start my program during the summer and I did an internship in D.C. which, technically, I wouldn’t be allowed to do because you are only supposed to, you can’t work more than 10 hours a week with your fellowship at Michigan State. But because it was part of a class, I was able to overcome that requirement. So, I had money from my internship to like live on in D.C. and then I also had that like fellowship money that I could use for like saving and investing.

09:51 Emily: So, am I understanding that you were being double-paid during that time? You were receiving your fellowship and your internship pay?

09:58 Michele: Yeah, I was. The reason why like we decided to do the fellowship. Like I was talking to the administrators about this and everything and the class, because technically, the internship was part of a course. And so there was like a $2,600 tuition fee that I would’ve had to pay if I was just doing the internship. So this way the fellowship, because the fellowship also covers my tuition. So, in this way it covered my tuition and then I also was able to receive the money, the stipend money with that.

10:29 Emily: Nice. It sounds amazing. And that $5,000 that you mentioned, so your sort of baseline, standard stipend on the fellowship is $30,000 per year. Did you get that $5,000 as like a lump, it’s kind of like a bonus, like a lump sum at the start, is that right?

10:42 Michele: Yeah, it’s supposed to be a lump sum. I actually haven’t received it yet, but yeah, I think that’s just going to be like a lump sum to my account once they process it.

Finances: Assets and Liabilities

10:52 Emily: Okay. This is great. I so wish that more or all graduate students could get started with like, hey here’s some money just like for you to have for savings because you’re probably going to need this down the line. Because the stipend is really not, you know, necessarily enough to generate a decent savings rate, although, you know, we’ll get to yours and what your plans are with that. So let’s, if you don’t mind, could we share some numbers, like what assets did you have at the start of graduate school? What liabilities did you have?

11:16 Michele: Yeah, so I think I came in, so the AmeriCorps job that I had, I finished that. I did that right after college. So, I took another seasonal job where I was able to minimize my expenses a lot more and then I had another part-time job before starting. And I think the best thing that allowed me to build up savings was that I like basically reduced my housing expense. Like every time I got a new job it was either like free or it was like max $300 a month. So, I was doing really well in that area. So then I was able to, I had about $6,000 in my Roth coming in to grad school. And then I also have, let’s see, I guess for my other assets I just have like, oh I also just put in $2,000 into I-bonds too for my student loans after I graduate.

12:11 Michele: And then I also have some other savings just from, because I was saving up more money to pay off my loans as well. But now with the pandemic or the student loan forgiveness, I should be sitting in a much better place because after my education award using that and then the 10 grand that I’ll get from student loan forgiveness, I’ll be in a really good spot. And so, now that’s freed up a lot more money that I was going to put towards my loans because I’m super debt-averse, so I had saved up all this money to pay off my debt right away.

12:45 Emily: I see. I want to talk more about the student loans in just a second, but you don’t have any other debt, I would take it then, aside from the student loans?

12:52 Michele: No, no. Like I have a car, but it’s paid off. And yeah that was my only other sort of I guess liability since I don’t have a home or anything.

13:05 Emily: Yeah. Okay. So I want to point out for the listeners that we were recording this in October, 2022. So by the time this comes out, I’m hoping that people will have received the cancellation but as of the time that we’re talking, I don’t think anyone has started to receive it yet, although the application is open. So yeah, hopefully in the coming months. Did you already apply Michele?

13:24 Michele: Yeah, I did. I signed up for the email alerts. I was one of the first people, I think.

13:28 Emily: Okay, perfect. So, your cancellation amount hopefully will come through before the end of 2022 is the idea I think. Yeah. And so, and the rest of your student loans, the ones that weren’t being taken care of by these other sources, are they just going to be in deferment during graduate school? Or are you going to work on paying it down?

13:43 Michele: Yeah, I only took out subsidized loans, so they’ll be in deferment.

13:48 Emily: Okay, perfect. Yeah, for anyone listening, subsidized loans, well, if they’re in deferment you’re not going to make payments, and then if they’re subsidized the government pays the interest on your behalf so they won’t start accruing interest until when you come out of deferment, presumably after you graduate. And it’ll be pretty easy to hopefully take care of them at that point. So, that sounds awesome.

Making Investing a Priority

14:04 Emily: Okay, so you have some savings, you have started your Roth IRA, you bought some I-bonds, that’s great. So, let’s talk more about this investing situation. I understand you want to continue investing during graduate school. Why are you making that a priority?

14:18 Michele: Yeah, I think it’s a priority for me because I want to have the flexibility to take whatever jobs I want. And so, like with the AmeriCorps thing, I was able to take that job because, well for one, the student loan payments were on pause and it was kind of just like a good opportunity for that point in my life. But I also want to be able to take other opportunities that may not pay me as much because I’m really passionate about doing like environmental jobs that sometimes you don’t really get that high of a salary for. And so, I just want to make sure that I’m in a good financial spot in order to take those positions that I want.

14:58 Emily: So, is the idea that you’re going to start saving and investing for retirement now because perhaps at some later points in your life your salary won’t be really necessarily much higher than it is now? Or is it to be building up assets so that later you don’t have the pressure as much of having to save, you know, so much for retirement later on? It could be both, but I’m curious about your decision-making here.

15:21 Michele: I would say it’s both. I think, too, just everything I’ve read about personal finances, it’s time in the market over timing the market, and so I wanted to start as soon as possible so that I don’t have to worry about like starting after grad school. And like maybe if I don’t get a very high-paying job and I still like can’t contribute as much as I want to, this starting early allows me to have much more time to like accrue interest and just a bigger retirement savings account and that also would let me be more flexible in case I need to take like a career break of some kind or anything like that.

16:04 Emily: Yeah, I have to say, like so I’m 37 now, I’ve been out of graduate school for eight years about, and this is really like I can already see this playing out in my own life because I did start saving into a Roth IRA or investing when I was like 22, right out of college. And it’s really like because of some other stuff going on in like my and my husband’s financial life, like we, you know, saved diligently during graduate school. It was never, I’d never even maxed out my IRA so it wasn’t even like a large dollar amount, but for a graduate student it was a lot. And that portion of our portfolio in the time since then, like it’s a really big portion of our portfolio even though we have started since buying our house like last year we’ve really ramped up our retirement contributions because we no longer had like the down payment savings to be considering. But it’s like still amazing how much of our portfolio has just been those long time ago contributions that have had plenty of time to compound. And even though we’re saving a lot right now, and in the decades to come, like it’s still going to be a huge part of our portfolio despite being you know, dollar amount-wise not that much in contribution. So, I really commend you for getting started with this early. Is it your goal to max out every year? Like what number have you put around how much you’re going to contribute?

17:19 Michele: Yeah, I’m already maxing out every year so I put in $500 a month automatically so that I don’t have to like worry about forgetting doing it. And then I also am planning on increasing next year since they just announced that it’s going to be $6,500 instead of $6,000.

Getting Started with Investing

17:39 Emily: And many of the listeners who are, you know, considering getting started with investing or trying to get started now might be curious like how did you exactly get started? Like where did you choose to house your money and you know, what do you invest in? Obviously you’re not giving anyone advice but just like the path that you took.

17:54 Michele: Yeah, so for me I really wanted to make sure that I was going to be investing in funds that I believed in, like ethical investing for me. So, to do that I chose Fidelity as my I guess like taxable or tax advantaged account that I wanted to use. I’ve since learned that Vanguard has lower cost like target date funds if you’re interested in those. But I think Fidelity is a good one for graduate students because they have more fractional investing so you can invest with as little as like $10 a month, but for Vanguard you need to have I think a minimum of a thousand. So that’s why I chose Fidelity. And then as for the funds, I just chose ones that were offered by Fidelity because that those have lower expense ratios. And then also I chose environmental funds so there’s like, they have a US Sustainability Index Fund, International Sustainability Fund and then an Alternative Energy Fund. Plus some other ones. I got a little trigger happy when I was first starting out but yeah.

19:06 Emily: Okay. It sounds like though, are you like a hundred percent in equities with this with your IRA investments?

19:13 Michele: Yeah, so I have mostly stock funds right now since I’m still pretty young and I can afford to be more aggressive. I do have one bond fund which I’ve learned as I’ve been researching more that you want to have more bond funds in your Roth IRA cause it’s a tax managed account and so if I start a taxable brokerage account then I’ll switch to more stocks in that one.

19:38 Emily: Yes, this is asset location optimization, this is a really advanced strategy. But just in case anyone, any listener doesn’t want to put as much thought <laugh> as Michele has into this process, I mean it’s great to put thought into it but if you just want to get started and don’t have the time right now, whatever you choose, as long as it’s like broadly pretty appropriate, like you were just saying. Largely stocks, you know because you’re just starting out and you have a long timeline to retirement. What’s most important at this point is just to get started. And your exact asset allocation and everything, you can figure that out down the line. Because right now, the way that your portfolio is growing is mostly by your contributions <laugh> later on, you know, a couple decades from now, it’s mostly going to be growing because of the compounding interest. But for now, it’s really your contribution. So even if you’re not like a hundred percent the most optimized in what you’ve chosen, it’s okay. It’s really the thing is just to get started and to get that nice savings rate going like Michele has with her, you know, $500 per month current target. So, that sounds awesome. And are you also doing any other kinds of investing outside of your Roth IRA?

Investing Outside of Roth IRA

20:46 Michele: Yeah, so right now, like I said before, I have the I-bonds. So, my goal is to have about I think maybe like $4,000 in I-bonds so that hopefully the interest will accrue enough that when I graduate I can take those out and pay for the rest of my student loans. And then I’m also looking into doing a taxable brokerage account but I’m still exploring that because I’m still figuring out how the taxes would work on that.

21:17 Emily: Sure. Would that also be for long-term investing like for retirement? Or would it be maybe for like a shorter-term goal? Nearer-term goal?

21:24 Michele: I think that would be a longer-term goal just because I don’t want to have to worry about like taking it out and losing money because I didn’t like pick the right investment. So, I would rather leave it in there for retirement.

21:39 Emily: You’re actually taking a fairly similar approach to what my husband and I did when we started graduate school. We, as I said, we had our Roth IRA investments going at a certain rate. And then we also, I had student loans as well that were subsidized during graduate school. And so, initially I was just like, okay, forget about those. Like I don’t even need to think about those. Not like you’re doing, you’re planning from the beginning but at some point along the way in graduate school I realized, oh it would be nice to have money set aside to pay this off once they come out of deferment. And so, that became a goal as well for us. And then we also opened a taxable brokerage account. So, lots of different kind of layers to this.

Union Efforts to Obtain 403(b)

22:13 Emily: Okay. Is there anything else you want to share about your investments?

22:17 Michele: I guess I also want to, I’m part of the union here on campus now. I’m like our department representative, and one thing that I want to work with them on is getting a 403(b) account for grad students at Michigan State. Because I know that there are some other schools, a lot of schools don’t have them for grad students, but there are schools that do and I think that that would be something that would be really beneficial, not only for the grad students but also for the university to attract more people to come there. So, I think that that’s something that we could work on together to hopefully achieve <laugh>.

22:56 Emily: Yeah, that would be really exciting. I definitely want to hear an update from you about that. I mean I hope you’re successful certainly, but even if you’re not, I would love to know why like what their reasons are for, you know, not including graduate students. Because as you said, in very few places graduate students are included, and I don’t really know why they would bother like excluding them really.

23:16 Michele: Yeah, I could see maybe like, I know that the ones I’ve been looking at, they don’t provide a match. But I think they already have like a 403(b) set up for like employees. So, I think just like allowing grad students to open an account even if you don’t do a match, I think it would still, I think that would be pretty easy to do, but I don’t know. I haven’t looked into it super far yet.

23:38 Emily: A match would be, I would be shocked if I ever <laugh> Yeah. If I ever saw a match for a graduate student. Even postdocs oftentimes don’t get matches. Some of them do, especially if they’re like state employees. But yeah just the first step of like, because when I read these like plans and so forth, because I often do this with schools that I give seminars at. I’ll go into and just do a little check and see if students might have the opportunity to contribute to a 403(b). And most of them say explicitly students cannot contribute or you have to have at least a 50% appointment and they, you know, put all the students at 0.49% appointments. They have these kinds of like workarounds to specifically exclude graduate students. But why? I don’t know, is it just an administrative burden for them? I really don’t know why because I’m sure there wouldn’t be that many graduate students who would, you know, elect to use it even if they had the option. Although even just, I mean psychologically, just knowing that you had the option would actually help, I think. Students start thinking about, oh is retirement something I should be preparing for in this stage of my life? So, I love this idea, and I really want to hear an update about it.

24:41 Michele: Yeah, I think that would also maybe help like with negotiations for like increasing stipends as well.

24:50 Emily: Alright. Okay, great. To be followed up on.

Commercial

24:55 Emily: Emily here for a brief interlude! I’m hard at work behind the scenes updating my suite of tax return preparation workshops for tax year 2022. These pre-recorded educational workshops explain how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. For the 2022 tax season starting in January 2023, I’m offering three versions of this workshop, one each for U.S. citizen/resident graduate students, U.S. citizen/resident postdocs, and non-resident graduate students and postdocs. That third workshop is brand-new this year, and I’m very excited about it. While I do sell these workshops to individuals, I prefer to license them to universities so that the end users, graduate students and postdocs, can access them for free. Please reach out to your graduate school, graduate student government, postdoc office, international house, etc. to request that they sponsor one of my tax preparation workshops for you and your peers. I’d love to receive a warm introduction to a potential sponsor this month so we can hit the ground running in January serving those early bird filers. You can find more information about licensing these workshops at P F f o r P h D s dot com slash tax dash workshops. Now back to our interview.

Budget Breakdown

26:36 Emily: Okay, so we’ve talked about your investing goals. How are you formulating your budget to support those goals and to support all the other things you want to be doing in your life right now?

26:47 Michele: Yeah, so actually, the reason why I want to do a budget breakdown is because I’m really bad at actually doing a budget, so this helped me to track my spending. So, right now, I guess like my fixed costs, so my rent, I’m living with two roommates. So I have, my portion of the rent is $375 a month. And then with like utilities they’re kind of high here so I’d say that brings me to like between like $450 to $500 for my portion total, sorry, when I add rent and utilities <laugh>.

27:27 Emily: Just to interrupt, because that is such a low amount of rent, I have not heard a rent amount that low in a long time. Do you have your own bedroom or are you sharing a bedroom?

27:35 Michele: No, I have my own room and then it’s actually like a really nice setup because it’s a house, and so we still have like our laundry and like a dishwasher and like a yard. So yeah, when I found this place I was like, this is great. <Laugh>.

27:50 Emily: Is that through a private landlord?

27:52 Michele: Yeah.

27:53 Emily: Okay. Yeah, I’m always curious in different cities about like, where can you get the best deal? Is it going to be a corporate place, is it going to be, you know, a mom-and-pop landlord? So yeah, that’s great. Did you find this house? Or did these roommates exist and you found the room?

28:06 Michele: So, my roommates are both also in, not my department but a similar department to me. So, they had sent out like an e-mail on the listserv, and so I reached out to them through that.

Food and Furniture

28:18 Emily: Amazing. Love it. Okay. What’s your next expense?

28:22 Michele: Yeah, so I guess my next biggest expense would be my food which I kind of just lumped together, like going out to eat and groceries. So, I guess my first month it was $450 and then my second month was $385, so I guess roughly $410 right now. And then also with my moving, I didn’t bring any furniture with me so I actually got pretty good deals on all of them. So my total for that was $170.

29:01 Emily: You spent $170 in total on furniture? Was it just like a mattress or like what?

29:07 Michele: No, I got like someone was selling their bed at a rummage sale, so I got that pretty cheap. And then I got a desk, a chair, and two dressers. Yeah, Facebook Marketplace.

Transportation

29:21 Emily: I’m just delighted by this great job. <Laugh> Yeah, Facebook Marketplace. Okay, great. Yeah, have you incurred any other expenses? I think you said earlier you basically only buy like housing and food, so what else is on your list?

29:35 Michele: <Laugh> and then I guess like transportation. So, my gas money and then I’m flying home for the holidays and I’m also going to be taking the train home so I have to like buy those tickets. So, for this month it was like $282 and then last month it was like $110 for gas. And then I guess too, one other thing I should mention is I like bike to the university so that I don’t have to buy the parking pass and I can just park for free at my house when I go to the store and all that stuff, so.

30:19 Emily: So, I think we’ve covered the big three, right? Housing, food and transportation. You mentioned that you own your car outright, so you know, you’ll pay insurance on that but not a whole lot in terms of fixed costs. But even just with those three, I think you’re still under a thousand dollars a month probably. Which is quite reasonable given your gross salary, let’s just say it’s $30,000 per year. $2,500 per month. So, keeping your like larger necessary expenses under 40% of that is great. You’re doing very well. What are you doing with the rest of it? Like are you choosing to spend discretion early? Or is this just going to go into investments and savings?

Discretionary Funds

31:00 Michele: I’m still trying to figure that out. I guess I also have had like different like fees come up just from like, so I’m trying to figure how to incorporate that into my budget from like the TSO and different organizations on campus. And then I’ve just like since moving, I’ve been like finding little things that I like want to get. Like I just got some new headphones and needed to replace like my watch band and everything. So, I still don’t know how to budget the rest of my money just because I don’t like have a good grasp on it yet, but I’m hoping that I could spend like $200 a month, like discretionary and then just like either invest or save the rest of it.

31:51 Emily: Yeah. Given how low you’re keeping your fixed expenses, especially your housing and this like very decent fellowship, yeah it seems like you have a lot of choice over what you can do with that excess cash flow, so that’s great. I don’t, you know, many graduate students are not in such a fortunate position. That sounds awesome. Does this fellowship last the entire time you’re in graduate school? Or is your stipend expected to like drop at some point?

32:14 Michele: So, for this fellowship, it covers the first and the fifth year. But then like you’re supposed to work with your department to find funding for the middle three years. So, I’m supposed to always have like, at least in my offer letter it said I’m always supposed to have like the base rate somehow.

32:31 Emily: Which is 30,000 per year.

32:33 Michele: Yeah.

Best Financial Advice for Another Early-Career PhD

38:34 Emily: Okay, so let’s finish up, Michele, with the question that I ask all of my guests, which is, what is your best financial advice for another early-career PhD? And that could be something that we have touched on already in the episode or could be something completely new.

38:49 Michele: Yeah, I think my best financial advice would be to automate everything as much as possible so that you don’t miss payments or if you are investing you don’t miss your investment goals. I know most credit cards you can set up an automatic payment so that you don’t miss that at all and then you can also link your accounts together so that you can like send money from your checking account to your savings account automatically so that you don’t miss anything or spend the money that you wanted to save. And I think this also can help with fixing like if you have any problems with like overspending or just like if you get super busy in your PhD like you probably are, then you don’t have to worry about like saving your money.

39:34 Emily: I love that advice. I totally concur. It took me some time, I think, to trust myself with automation, but I’m really glad that I got there. Was there anything that you wanted to add about your bank that you wanted to say?

39:47 Michele: Yeah, I did. So, I highly recommend reading I Will Teach You to Be Rich by Ramit Sethi. I think that’s how you say his last name. Because he gives a lot of recommendations for personal finance in general but for banking. So, like I just opened up the checking account that he recommended, which is called the I think it’s the Schwab High Yield Checking account and you get a brokerage account with that, but you don’t have to invest in it if you don’t have the money or if you don’t want to invest with them. But that checking account gives you 0.4% interest, which is like awesome. And then you also get ATM reimbursement everywhere and you also, I don’t think there’s like overdraft fees. So yeah, it’s just a great account. And then also for savings accounts, he recommends like I open a Capital One 360, and there’s also like an Ally Bank account that you can get like over 2% interest right now. Yeah, because I was looking into the Aspiration account because of their, they don’t lend to fossil fuel companies, but the downside of that is I heard a lot of people talking about how they like couldn’t get their money out and so that kind of scared me a little bit, but I might look into them again once they’re more established because they’re a pretty new bank.

41:06 Emily: Yeah. That’s good to hear. And thank you so much for the recommendation of the book, I Will Teach You to Be Rich. There’s actually a 10th anniversary edition that came out, I want to say within the last year or two. So, recommendations like banks, like I’m sure those have all been updated in the new edition, so if you’re looking for that kind of recommendation, you should definitely get the new edition and not the original edition from like 10 plus years ago. Or I would imagine you can just go to his website, which is probably, I Will Teach You to Be Rich or Ramit Sethi or something like that. And he’ll have those kinds of recommendations, but that’s awesome. And yeah, I think, I read that book again recently after the new edition came out and it’s great. It’s very, very direct and actionable and he’s so confident in what he tries to teach you. So like, it’s really compelling, it’s a compelling book. And a previous podcast guest mentioned that reading that book was like her sort of catalyst for like starting to get her personal finances under control. We’ll link that episode as well in the show notes. But I think it had to do with banking. I think the first thing she did was change her bank and felt really like great about that decision and like just sort of snowballed that energy like going forward. So, that’s awesome. Thanks for the recommendation.

42:10 Michele: Yeah, no problem. Yeah, the banking was really helpful, too. Just using like an online bank that doesn’t have as many like brick and mortar locations, they save a lot of money and give it back to you. So, that was a really helpful tip from him.

42:21 Emily: Totally. I started using an online or an internet-only bank I think about a year after I graduated from college when I knew like I’m going to move for grad school and then I’m probably going to move again. And then maybe, you know, I just saw a lot of moves like in my future and didn’t want to be sort of tethered to like regional, you know, availability of brick and mortar banks. So, all great suggestions. Michele, it’s been such a pleasure to talk with you. Thank you so much for volunteering to be on the podcast!

42:45 Michele: Of course. Thank you for having me!

Outtro

42:51 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.