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Are PhDs in a Financial Emergency?

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In this episode, Emily shares her thoughts on whether PhDs are in a financial emergency. It’s possible that you are facing a financial emergency because you’ve been laid off or your grants have been terminated or interrupted or there’s some risk of that happening in the future. In this episode, Emily explores 1) what she learned from attending the National Postdoctoral Association’s Annual Conference in March, 2) what steps she recommends that you take in your personal finances and your career if you are in a financial emergency, and 3) what she’s giving away this spring to help you in this turbulent time.

Links mentioned in the Episode

Are PhDs in a Financial Emergency?

Introduction

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.

This is Season 20, Episode 7, and today you’re getting my thoughts on whether PhDs are in a financial emergency. It’s possible that you are facing a financial emergency because you’ve been laid off or your grants have been terminated or interrupted or there’s some risk of that happening in the future. In this episode, I’m going to share with you 1) what I learned from attending the National Postdoctoral Association’s Annual Conference in March, 2) what steps I recommend that you take in your personal finances and your career if you are in a financial emergency, and 3) what I’m giving away this spring to help you as best I can.

The tax year 2024 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/s20e7/. Without further ado, here’s my episode on whether PhDs are in a financial emergency.

I attended the National Postdoctoral Association Annual Conference in March, and it was quite valuable for me to get to speak with postdocs and postdoc office personnel about what’s happening on their university campuses and with their jobs. Everything has been so chaotic this spring in terms of the actions of the new administration and the responses from the judicial and legislative branches, it’s really hard to keep up with. Thankfully, some of the presenters pivoted their planned sessions to address what’s been happening and academia’s response, and the conference helped me to clarify a few of my thoughts, which I’ll share with you in this episode. Part 1 is what I took away from the NPA conference. Part 2 is what you can do in your personal finances to best weather the present storm, and I’m going to include specific advice for different stages of PhD training and employment. Part 3 is what I’m giving to you over the next couple of months and why and how you can access everything.

Part 1: My Take-Aways from the National Postdoctoral Association Annual Conference

This was my first time attending NPA, and I attended as a sponsor, and I thought it was a wonderful conference. I attend conferences both for networking with potential clients and my own professional development, and in this case the timing was really good for me to get a sense of how universities are responding to the funding cuts and so forth. Because this conference was focused on postdocs, I didn’t hear much specifically about graduate education, but I’m sure I will learn more when I attend other similar conferences later this year. At this conference, I especially appreciated the talks from Tom Kibis from the NPA and Nicholas Dirks from the New York Academy of Sciences, the session co-led by Meagan Heirwegh from Caltech, Sofie Kleppner from Stanford, Julia Parrish from the University of Washington, and Zoe Fonseca-Kelly from Harvard, and my conversation with Alberto Roca of Diverse Scholar, as they most directly addressed the current situation.

My overall take-away from the conference is that everyone is bracing for a tough time economically. The tough time has already started but will get worse in the next fiscal year, which typically starts in July, if we continue on the track we’re on. Some universities have instituted hiring freezes, which may or may not extend to postdocs and graduate students. I’m sure we’ve all seen reports of graduate programs rescinding offers and just generally admitting fewer graduate students than has been typical in recent years. Positions that are funded by soft money, which means external grants and contracts, are most at risk of being eliminated.

Tom Kimbis, the CEO of the NPA, referred to the results of a survey of NPA members conducted in February; the survey results and an op-ed by Tom are linked in the show notes. The headline numbers from that survey are that 43% of postdocs say their job or position is threatened and 35% say that their research is delayed or otherwise in jeopardy.

The overall climate of the conference was of great concern for the postdoc workforce, particularly international postdocs. If we don’t see major pushback from Congress or via the judiciary, there will be a lot fewer postdoc positions available next year. Again, we’ve already seen the reduction in PhD program offers, and this is honestly the responsible step for PIs to take as they face uncertainty regarding their grants. So the postdoc itself as a training step is in jeopardy. And, broadening beyond this specific conference, the research enterprise as a whole in the US is under threat.

A lot of current postdocs will need to find new positions in the near future. Again, the highest level of concern is for international postdocs if temporary visas are harder to come by and fewer jobs are available overall. Will those positions be in academia or the federal government? We all know how few people were being hired as tenure-track faculty members before this attack on research, and that market is only going to get tighter, and I think hiring for non-tenure track academic and governmental jobs is also going to be quite limited. Understandably, institutions feel most responsible for their current employees and probably won’t want to extend themselves too much in hiring.

I don’t mean to give the impression that the conference attendees were throwing up their hands in defeat. There was plenty of talk about what people generally and postdocs offices specifically can do to meet the moment, and I heard some creative ideas about how to keep people on payroll to at least give them more time to find another job.

However, from what I heard, most of the discussion was around helping PhDs prepare for and land jobs in “industry.” What I didn’t hear enough discussion about was the likely upcoming recession and how that is already affecting hiring in the private sector. While the pain might be less acute in the private sector in comparison with government and academia, again, if we continue on this route, there will be an overall contraction in the labor market. PhDs typically have a very low unemployment rate, but I am definitely skeptical of industry’s ability to provide jobs to a glut of PhDs exiting the federal government and academia in the coming months. Some private companies are already conducting layoffs, even when not directly or substantially funded by the federal government. Of course, this will be worse in some sectors and not so bad in others, and I expect the most pain will be felt by PhDs in areas of research that are more dependent on funding from the federal government.

So the conclusion is: A lot of PhDs are going to lose their jobs, whether that’s called a layoff or a firing or a contract not being renewed. I suspect the unemployment rate or at least underemployment rate among PhDs is going to go higher than we’ve seen in recent recessions because academia is being targeted, and that PhDs are going to land in jobs that are different from their previous career aspirations. Many PhDs on temporary visas will have to exit the country, even if they would like to stay, because they can’t find an appropriate position fast enough when their current one ends. I’m not much one for prognostication and it really pains me to report such a grim outlook, but that is how I see it.

Part 2: Financial Steps You Should Take Right Now

I want everyone who works in academia or research to consider that they may now or soon be in a financial emergency and to take appropriate steps. Since the main threat at the moment is loss of income, rather than being underpaid or experiencing rapidly rising expenses, the steps are to serve both your finances and your career.

First, I’ll share some steps I think everyone should take, and then I’ll share some stage-specific suggestions. To begin with, please assess your finances holistically. What are your assets: bank account balances, investments, property, etc.? What are your liabilities: credit card debt, buy now pay later debt, student loans, a car loan, a mortgage, medical debt, IRS debt, etc.? What is your current income? What are your current expenses? Specifically, I want you to focus on one type of asset and one type of debt. What I’m sharing next is an abbreviated form of the financial framework that I teach in my live workshops.

The asset is your emergency fund. The best practice is to have a separate, named high-yield savings account for your emergency fund so that you can be super clear about the money available to you in the case of an emergency vs. the money available to spend on a monthly basis on regular expenses or annual basis on irregular expenses. Based on your current expenses, for how many months could your emergency fund support you if you were to lose your primary income? If your answer is that you don’t have an emergency fund or it’s smaller than three months of expenses, please make it your top financial priority to build the fund to that level. This is a slightly larger recommendation than I have made in the past specifically because of the unique threat we are under. You should consider yourself to be in a financial emergency until you reach this goal—more on this in a bit.

The debt is credit card debt. The best practice is to carry no balances on your credit cards, and in fact to use your credit cards as if they are debit cards, only making a purchase if you could pay for it right then with the money already in your bank account. If you could not immediately pay off all your credit cards and switch to using only debit cards, you are in credit card debt—even if you never pay interest. Following the creation of your 3-month emergency fund, your next financial goal should be to clear this credit card debt. However, I recommend that you keep the credit cards open as long as they don’t have an annual fee; you may need these lines of credit in the future if you do lose your income or incur a large, unexpected expense such as a move. Holding debt of this kind also puts you in a financial emergency.

If you’re a little further along in your financial journey, I want you to increase your emergency fund size to six months of expenses. That would be if you have no credit card or other high-interest debt, have other savings for near-term expenses, and have started investing. If all those elements are in place, you’re not in a financial emergency, but you should put some extra financial effort into building your emergency fund to six months of expenses. Once you’ve achieved that goal, you’re in a very strong financial position and don’t have to be quite so intense about keeping a high savings rate.

The next step is to assess your job security and career security. If you haven’t yet, this is the time to talk with your advisor or boss about the source or sources of your paycheck and the group, office, or company’s overall funding. You may learn that the source of your income is entirely or largely independent of federal funding, such as from a private foundation or tuition. You may learn that the source of your income is federal, but there are currently no concerns about its continuity. Or you may learn that the source of your funding is federal and is tenuous. We’ve already seen many grants cancelled or temporarily paused, and so you would probably know if you were in that group because you’ve either already lost your job or you’ve been switched to some kind of emergency or temporary funding. Or perhaps your advisor is currently funded but not optimistic about securing more grants due to the shifted funding priorities of the new administration. In those latter cases, assuming your emergency fund meets the levels I just outlined, throw your efforts into preparing for a job or career transition.

Now let’s get to some practical steps. We’ll do the financial first and then the career. If you’ve self-diagnosed that you’re in a financial emergency or have a financial goal that you should strenuously work toward, how should you do so? Let’s look first at expenses. Normally, when I teach about reducing expenses, I do so with a focus on long-term sustainability, so I talk a lot about right-sizing housing and transportation and other large, fixed expenses. Right now, I’m not so concerned about sustainability, because you have a short-term, highly urgent goal of increasing your emergency fund or paying off high-priority debt. That means slashing your discretionary expenses, essentially engaging in a limited-term fast from anything you can possibly spare.

The question you should ask yourself is: If I had no income right now, would I spend money on this? If the answer is no, don’t spend on it and put all the money you can free up toward your financial goal. I suggest that you stop spending entirely or as close as you can get on discretionary expenses such as restaurants, takeout, and delivery; entertainment; going out; travel; and shopping aside from the bare minimum. The exceptions are for expenses for your job search or career pivot, such as expenses related to interviewing or professional development. Delay every expense that you can delay, even what you might consider necessary expenses. Take a hard look at your subscriptions and cancel everything that you would cancel if you didn’t have an income. You can always restart them when you’ve reached your goal.

For me personally, it would be really hard, but if I didn’t have a fully funded emergency fund right now, I would cancel my gym membership, take my kids out of their pay-by-the-month extracurricular activities, cancel all our streaming services including Amazon Prime, skip my next haircut, and put off some much-desired-but-not-strictly-urgent home repairs.

You can also try to increase your income to reach your urgent financial goals. Normally, when teaching on increasing income, I say to focus on income-generating activities that also advance your career goals. That’s still great work if you can get it, but with our top-of-mind objective of adding to your emergency fund or paying off debt, you can pursue other types of work as well. Whatever gives you the best pay rate-to-time or pay rate-to-energy ratio is worthwhile. In fact, diversifying your income sources so that you are less directly or indirectly dependent on the federal government is a great idea in the short term.

Finally, I suggest planning where you would turn should you lose your income and deplete your emergency fund. If you would turn to debt, think through what is the least toxic type of debt available to you. Credit cards are an easy option, which is why I want you to pay them down but not close them, but as they come at such a high interest rate, they might not be your best option. If you have good credit, you might be able to get another type of loan like a personal loan or a home equity line of credit, but it’s going to be more difficult if you wait until after you’ve lost your income. If things got really dire, would it be possible for you to move in with a family member or friend until you get back on your feet?

Turning our focus back to your job or career, I suggest devoting serious time to professional development, and that goes whether you perceive your job to be at risk or not. Of course, the more unstable your job or career is, the more important it is to engage with this. If you don’t know already, you need to figure out, as I heard one person at NPA put it, your career plans B, C, and D and start setting yourself up to pursue them. If you are affiliated with a university, this means patronizing professional development events and the career center. Check if there are recordings of past events that you can catch up on as a full suite of topics is probably covered over the course of 12 to 24 months.

Networking is vital right now, and again that goes whether you anticipate a near-term job search or not. Yes, use LinkedIn and attend local meet-ups, but also make an effort to connect individually with people you know from past degrees or past jobs. It’s always great to catch up with an old friend or colleague, and it doesn’t have to be like “Can you offer me a job?” Just ask what they’re up to and if their industry has been impacted by the new policies. Then if you do need to come around again with a serious request, it won’t be so out of the blue.

By the way, when you’re networking, keep two things in mind: 1) What can you offer the person you’re speaking with? It could be continued friendship or information or access to your own network. 2) By keeping up with your network, you might very well be able to help a friend or colleague. So do this not just for yourself, but to help the people you know find great-fit jobs and careers. We should all increase our networking activities right now, not just if we have an urgent need.

So far I’ve only mentioned networking with peers and colleagues, but don’t forget that people outside of your profession can be part of your network and prove very helpful, especially if you are considering changing industries. To that end, speak openly about your career aspirations and industry concerns with people you know socially. In fact, it will be a great boon to your mental health if you lean into in person social groups and gatherings in this difficult time. Remember that you are much more than just a researcher; you are a well-rounded human being with unique hobbies, interests, beliefs, etc.

Commercial

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.

Financial Advice for Each Stage of Your Academic Career

We’ve spoken in general terms to this point about assessing your finances and your career stability and some steps you can take to prepare for a loss of income. Nothing I’ve said so far is extreme, and you will improve your finances and career by following the advice, even if you never lose your income. Now let’s delve into some stage-specific advice for those who have lost their income or whose income is at higher risk. We’ll start with people earlier in the PhD career track and move to later.

A) Prospective graduate students: If you’re still interested in graduate school after all this, more power to you. Go ahead and apply next fall or whenever is appropriate for you. But please apply for jobs as well in case admission or funding doesn’t work out. Seriously consider whether a master’s or PhD is more appropriate for your career goals and whether it might be worth paying for a master’s, even if your original plan was to pursue a funded PhD. I can’t yet tell how the landscape will shift between those two types of graduate programs. It might be worth taking a couple of years to work before you head back to graduate school; you will have more clarity about your career goals and what academia can offer you and will also be in a stronger financial position to start graduate school if you use your income intentionally. When you apply to graduate school, please apply widely for fellowships. Consider programs abroad as well as in the US. Also, listen to my advice for rising and current graduate students.

B) Rising graduate students: Some of you have gotten a really raw deal, and I’m sorry. The fact that this attack went down literally during admissions season was the worst possible timing for you. If you’re still headed to graduate school, take a really critical eye to the stability of your funding, and do your best to build financial and career security if you do perceive your funding to be tenuous. More on that next in the section for current graduate students. Also, as you start graduate school, do your best to keep your large, fixed expenses like housing and transportation as low as is comfortable for you so that you can maintain a savings rate. Your emergency fund, etc. could become a lifeline if things go south.

C) Current graduate students: If your funding does not seem to be secure, layer in financial and career stability in other ways. 1) Apply widely for funding opportunities, focusing outside the federal government. 2) Establish at least one side stream of income, if that’s legally and morally permissible for you. Ideally, this would be from a career-advancing activity. 3) Treat every year of graduate school like it might be your last, because it very well might be if your funding evaporates. What I mean by this is that you should have at least one big accomplishment to point to within the last 12 months that will translate well to your resume. That could be completing practical classes, mastering skills, finishing your master’s degree, publishing or patenting, etc. You should also be ready on very short notice to conduct a job search, so stay up-to-date on your professional development, career exploration, and networking. This especially goes for international graduate students, who have a very small window of time available to find another position before they would have to leave the country. 4) Submit the Free Application for Federal Student Aid. I certainly hope it doesn’t come to this, but if a small student loan will bridge you to the end of your degree which itself would vastly improve your job prospects, it may be worthwhile. 5) Do your research now on the social supports that would be available to you if you did lose your funding or have to leave grad school abruptly. For example, does your department, school, or university offer any kind of bridge employment or funding? Do graduate students qualify for unemployment in your state, and if so under what circumstances? Does your university offer emergency loans or grants to graduate students? Are there programs through your city that would help you pay for rent or groceries if you lost your income?

D) Current postdocs: Much of the same advice for graduate students applies for you as well, although thankfully you have the security of your finished PhD. Take those steps to shore up your financial and career resources, especially if you are an international postdoc. You should also check into whether you would qualify for unemployment in your state should your position end; don’t assume you will, especially if you are a non-employee.

E) PhDs in government, academia, and nonprofits: You know your situation best, but stay frosty. Like everyone else, you should understand how your position is funded to ascertain its potential instability and be ready to transition out at any time. If you haven’t already, I suggest starting the process of separating your personal identity from that of your job. These can become especially intertwined for tenured or tenure-track faculty. If you do have to separate, it will probably be super painful. I suggest listening to the new podcast Academics and Their Money by former podcast guest, Dr. Inga Timmerman.

F) PhDs in the private sector: Your job is probably the most secure of any that we’ve discussed so far, which is not at all the case in normal times. You will be everyone’s best friend right now if you devote some of your time to networking, doubly so if your company is hiring. It may benefit you in the future, but it will almost certainly benefit your friends and peers.

I have a couple of concluding thoughts, and for these I need to thank the most recent episode of the new podcast Optimist Economy, titled Is This a Recession or Not?, and the financial independence movement.

First thought: During a recession, if you manage to keep your job and assuming you didn’t expect to retire super soon, you are going to be financially fine. You might have some anxiety, and perhaps I’ve fed into that today, but you will come through it in good shape. The pain of recessions is felt mostly by people who lose their jobs, and typically, it’s not so much the losing of the job that’s the worst, it’s the time it takes to get another job, which is lengthened during recessions. That’s why I’ve focused so much time today speaking about how you can prepare yourself for the loss of your income. It’s a low-probability but high-risk event.

However, we have the added wrinkle in the PhD community of being super specialized in our research or skills and perhaps even the sector in which we expect to perform that research or use those skills. For PhDs in academia and government and nonprofit research settings especially, losing your job is so much more than a temporary disruption in income. It’s a rupture of your identity because of how much of yourself you had to put into breaking into that career path. In another time, you might have been able to get a similar job, but that just might not be the case right now if your whole field is contracting. Losing your job might feel like the end of your career. It’s not, it doesn’t have to be, but if you feel that way, it’s going to take some serious inner work to decouple your career from your identity and move on. In this, we can take some inspiration from the financial independence movement. Many early retirees have modeled this process of finding yourself outside of your career. It will look different for someone who is still working, but it is a good example.

Second thought: One of the scariest aspects of losing your job in the good old U S of A is that you likely lose your health insurance as well. That part of it is almost as horrible as losing your income, especially if you are chronically ill or have dependents. There are solutions, however, and again these have been well explored by the financial independence community. It may help you alleviate some anxiety to think through what you would do specifically about health insurance if you were to lose your position.

You might be able to hop onto your spouse or partner’s insurance or your parent’s insurance, depending on your specific eligibility and the cost of doing so. Some insurance plans offer a program known as COBRA, in which you can continue with your same coverage for up to 18 months after you lose your job. Your workplace likely offers COBRA, but your student health insurance plan probably doesn’t qualify. If you are eligible for COBRA, you have up to 60 days to enroll in the program and it covers you retroactively, so you could wait up to 60 days to see if you actually need insurance before starting to pay any premiums. The premiums are going to feel high because you have to pay the portion that your employer was paying previously in addition to the portion you paid before. Another good option is to purchase a health insurance plan through the ACA marketplace in your state. This is the fallback plan for most early retirees who stay in the US, and it is a good one, especially since you likely will just be on the plan in the short term. Finally, another type of plan that’s popular with early retirees is a health care sharing ministry, which is not proper health insurance but serves some of the same functions as health insurance. People like it because it’s less expensive than proper health insurance. I will leave it to you to look into further and decide whether this is a viable or preferable option for you should you lose your job.

Part 3: What I’m Offering You for Free

A few weeks ago, I was feeling really despondent and powerless in the face of all these terrible changes, so I decided to embark on what I’m calling Giveaway Spring. I finished all my scheduled speaking engagements by the end of February, so I have an unusual amount of free time between now and the end of the academic year, and I’ve decided to give away a lot of it.

If you aren’t already on my mailing list and you want to sign up for any of these giveaways, please register through PFforPhDs.com/Giveaway/. You’ll receive an email with all the current giveaways being offered, and I’ll update my mailing list periodically as I add items. I’m planning on expanding the content I’ve shared in this episode into a full webinar, for example, and I’ll give a pilot of that webinar away to a limited number of people on my mailing list after I put it together.

Here are some of the items on offer as part of Giveaway Spring:

1) I’m offering free 60-minute Q&A calls to cross-institutional groups. This would be perfect for a professional society or interest group that has a lot of PhDs and PhDs-to-be. You don’t even have to be on my list to schedule one of those, just email me at [email protected].

2) I’m offering free 30-minute coaching sessions, four per week between now and early June. These are going fast so once you get the link, keep checking back as availability opens up on a rolling basis.

3) I’ve collected all my best free templates and downloadables into one easy folder.

4) I’m hosting a free AMA with Sam Hogan, a mortgage originator specializing in graduate students and PhDs, on April 8, 2025. You can register via PFforPhDs.com/mortgage/.

5) I’m giving away other people’s books! The first giveaway is for The Entrepreneurial Scholar: A New Mindset for Success in Academia and Beyond by Ilana Horwitz. I will keep cycling through my favorite personal finance and academia books throughout the spring. You can sign up for the book giveaway directly at PFforPhDs.com/BookGiveaway/.

6) I’m sharing free opportunities hosted by other groups or people as I find out about them. For example, Princeton’s GradFUTURES conference from a couple of weeks ago went out to my list, and right now via PFforPhDs.com/Giveaway/ you can sign up for an upcoming free webinar from AccessLex titled “Navigating Recent Updates to Student Loan Repayment and Forgiveness.” If you are hosting or know of free events or resources that are related to PhD personal finance or careers that you think I should pass along, please notify me—I would be happy to do so!

Again, the link to find out about all the current giveaways is PFforPhDs.com/Giveaway/. I would really appreciate you sharing that link with your peers. I’m trying to get two things out of these efforts: 1) goodwill within our community and 2) new mailing list subscribers. So you can really help me out with both of those goals by sharing PFforPhDs.com/Giveaway/ or any of the other links I’ve mentioned in this section.

I would be very happy to hear your reactions to the content of this episode if you would like to share them with me. Perhaps you’re hearing different messaging from your university or employer or you think I missed a good piece of advice. Please share any comments with me at [email protected]. Good luck this spring, this year, and this four years. I’m rooting for you.

Outro

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 me and show notes creation by Dr. Jill Hoffman.

Stipend Data and Strikes on the Path to a Grad Student Union

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In this episode, Emily interviews Garrett Dunne, a 5th-year PhD candidate in the College of Fisheries and Ocean Sciences at the University of Alaska Fairbanks. Realizing that they were being dramatically underpaid, Garrett and his peers used the data from PhD Stipends to advocate for a significant stipend increase in their department. Subsequently, they joined up with grad students in other schools within the University of Alaska system to unionize and bargain for better pay and health insurance. Garrett’s account of their relatively quick process includes several concrete tips for graduate students at other universities who are advocating to increase their stipends and improve their benefits, including who is in the best position to lead the charge.

Links mentioned in the Episode

Stipend Data and Strikes on the Path to a Grad Student Union

Teaser

Garrett (00:00): Disturbing and depressing is probably the best way I can put it. And so it, it does take students that are in that position of safety and strength to then advocate for the people who are a lot more vulnerable.

Introduction

Emily (00:19): 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 (00:47): This is Season 20, Episode 6, and today my guest is Garrett Dunne, a 5th-year PhD candidate in the College of Fisheries and Ocean Sciences at the University of Alaska Fairbanks. Realizing that they were being dramatically underpaid, Garrett and his peers used the data from PhD Stipends to advocate for a significant stipend increase in their department. Subsequently, they joined up with grad students in other schools within the University of Alaska system to unionize and bargain for better pay and health insurance. Garrett’s account of their relatively quick process includes several concrete tips for graduate students at other universities who are advocating to increase their stipends and improve their benefits, including who is in the best position to lead the charge.

Emily (01:32): The tax year 2024 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/s20e6/. Without further ado, here’s my interview with Garrett Dunne.

Will You Please Introduce Yourself Further?

Emily (02:44): I am delighted to have joining me on the podcast today, Garrett Dunne, who is a fifth year PhD candidate at the University of Alaska Fairbanks. And we are going to discuss increasing grad student stipends through a couple of different mechanisms. And I, I won’t say more than that now, but hopefully you’ll take away a couple of actionables that may be applicable at your own university as well. So, Garrett, would you please introduce yourself a little bit further for the audience?

Garrett (03:08): Hi, everybody. Uh, I am Garrett Dunne. Uh, I’m a fifth year, as you said, PhD candidate, university of Alaska Fairbanks. I study, uh, two species of a shark in Alaska. Um, I’m trying to improve the federal stock assessment for those two species. Uh, I did my undergraduate work at Eckerd College in St. Petersburg, Florida, and then I did my master’s degree at Northeastern University in Boston, Massachusetts. But did my field work in, uh, based outta Biloxi, Mississippi in the, uh, Gulf of Mexico. The naming has changed, but I’m gonna go with Mul- Gulf of Mexico. Um, and then I have been working on and off in Alaska for about the last decade, uh, primarily on fishes. I started with Salmonids and then transitioned into sharks, which is my true passion. But, uh, salmons where the money is made.

Emily (03:53): Wow, okay. You’ve lived all over the place. I was gonna ask if you’re an Alaska native or anything, but it sounds like you’ve been living there on and off for 10 years.

Garrett (04:00): Yeah, originally I’m from New England. I split my time between New Hampshire and Massachusetts, but I really have kind of lived all over the country. Um, and I settled in Alaska full-time about four years ago now,

The Impacts of Low Pay and Poor Healthcare in Grad School

Emily (04:12): Speaking of four years ago, that is when we first started our email correspondence. <laugh>, uh, the listeners, sometimes it takes this long to our podcast episode to get into production. So, so four years ago you emailed me about the project that I have going on PhD stipends, PhDstipends.com, which is a database of self-reported stipend information all across the US and actually outside the US as well. So let us know, like what was going on with you back in 2021ish, like what was the pay you were receiving the benefits and like what led you to reaching out about this dataset?

Garrett (04:47): Unsurprisingly, it was because the pay and, uh, university healthcare was underwhelming. So, uh, in 2021, uh, there was a bunch of different levels within my college. University of Alaska Fairbanks breaks up the way that they, uh, pay students one by college and then usually within the college. It’s multiple different levels, but for sake of ease here, if you averaged out what master’s students were making at different levels and PhD students were making at different levels, uh, in 2021, the average salary was, uh, about 21,500 annually for a graduate student at UAF. Um, and the, to further complicate things that really depended on, uh, what type of funding you were through, um, the UAF and kind of UA system is funded through a very large patchwork of different ways to be funded. I, myself have been funded as a TA, RA and fellow, uh, throughout my five years. Um, and at different times and in different orders. I started as an RA, moved to fellowship, moved to TA, and now I’m an RA again. Um, so it’s a bit complicated and the numbers change a little bit depending on what style of funding you have. Um, sadly, uh, after my first year of being an RA, I moved to a fellowship, um, and in some ways that was easier, uh, but it did not leave enough room for summer funding, so I was unpaid in the summers. So while my take home should have been 21,500, my effective take home, because of the lack of pay in the summers was about 17,000, um, which is quite low. And the cost of living in Alaska is very high. Um, the federal government adjusts, I think their numbers from I think 1.25 or 1.5 times the poverty line, uh, for Alaska and to, in 2021, the poverty line was $16,000 a year, um, in Alaska. So, uh, as a graduate student in the sciences, I was being paid a thousand dollars above the poverty line, and I was forced to take, uh, additional work on in the summers. Um, I didn’t mind taking on that work. It was something that I got to, uh, I I’ve always enjoyed and actually did before going back to graduate school. Uh, but it has significantly delayed my progress on my dissertation. Um, and so yeah, we kind of came to, uh, the realization as a college that we just were not being paid enough. Um, and too many people were living at near poverty levels, and we wanted to, uh, push the graduate school to do better. And most of this work was led by the student organization within my college, so the, the, uh, fisheries student organization where people realized that the healthcare was poor and that, uh, we were being underpaid. And because of this patchwork nature, people were going from making $21,000 a year to me then making 17 a year, and then I wasn’t even sure if I was gonna get paid the following, uh, year. So, uh, quite complex as far as things go.

Emily (07:44): Also, shocking shockingly low numbers for 2021, as you said, in a, a relatively high cost of living area. Um, wow. I mean, I know you just sort of offered part of the effect on your own personal finances, which is that you had to take outside work in the summer, which has then, you know, therefore you’re not working towards your dissertation and that’s gonna push things out. Um, would you be willing to share with us anything else that you experienced on that low stipend at that time or maybe that you observed your peers experiencing?

Garrett (08:16): Yeah, for me personally, it was just I had no ability to save. Um, and so I was living very much paycheck to paycheck. I was in the privileged position of coming into, uh, my PhD with no major debt. Um, so I didn’t have major debt from undergrad or large car loans or a, a home loan, anything like that. And, um, I was living paycheck to paycheck. Uh, and so for others that I had spoke to people coming in with undergraduate debt or master’s debt or medical debt, which is a huge problem in the United States, um, they were actively losing money. Um, and so they were dipping into their own savings to be able to have the privilege of going to the graduate school. And it was becoming a real problem. And once we started digging into it, one of the reasons that we were paid so low was that we realized that the college had not given a pay raise to graduate students since 2008. So we were in 2021, and we had not gotten a pay raise since 2008. And so in 2008, the pay was actually fairly competitive and did keep up at least somewhat with the cost of living in the area. But I used the data set that you provided to then look at how we were being paid nationally and even in compared to low cost of living areas. Um, at 21 5, we were being underpaid. And then you had students like me who were making just above the poverty line, uh, and we were obviously being deeply, deeply underpaid. And so we took this data set. I did most of the data analysis and just kind of made box plots and just looked at the fact that we were being paid underpaid nationally. Um, and within specifically art disciplines, I used your dataset, got rid of everything that didn’t have to do with kind of biological science, and we were still being underpaid, um, nationally. And again, we, we <laugh> we live in a relatively high cost of living area. Yeah, it is not one of the major coastal cities, but Alaska’s expensive and especially the stuff that graduate students need, food is very expensive. Housing used to be inexpensive. Um, that has changed actually just really in the last five years, especially in, uh, the major campus areas, which would be Anchorage Fairbanks in Juneau. Um, I don’t live in any of those partially because of the high cost of living. Um, but with food and shelter being expensive, uh, it really, really dips into our ability to, uh, survive up here, um, and not have to dip into savings or take out loans, which, uh, many other students did.

Emily (10:40): Yeah, so the, the data from PhD stipends, okay, first of all, I was in graduate school in 2008 <laugh>, and those numbers are still not that rosy. Um, especially I was even in a moderate cost of living area and I was being paid more than that. Um, yes. Okay, so <laugh>, your lived experience is were barely above the poverty line. People are having to, you know, do outside work and these kinds of things to, to get along here. That’s your lived experience. Then also, you look at this data set and you’re like, wow, wow, wow. Okay, everybody else across the board is getting paid more than us. What, what was the, and you did this data analysis and then what was the next step that you took, like with approaching the administration, for example?

Using Data to Negotiate a Long Overdue Pay Increase

Garrett (11:20): The last part of that analysis was looking and saying, okay, so we are being underpaid. And then, uh, actually adjusting, using the federal numbers to adjust what we were being paid to the current marketplace. So taking in co- uh, inflation and the fact that the federal government says that our poverty le- poverty level is higher. And so our average was 21500, adjusting for all of that. It was about 30,000 is what we should have been paid in 2021 compared to what it was in 2008, which I think is definitely more competitive. Still not that competitive, but more competitive. Um, and so our next steps after having those numbers, having this write up in all of this data analysis was mostly getting, uh, at first graduate students riled up. I mean, all of this came outta the fact that we kept having these student meetings and all these graduate students were saying, I can’t pay for the healthcare. I’m having to ch- choose. I’m having to ration meals I’m having to live in. Um, uh, one of the unique experiences, the University of Alaska Fairbanks is dry cabin living. And it is not something that a lot of people think about. Fairbanks gets incredibly cold. Uh, last winter we hit negative 50 Fahrenheit, so aggressively cold. So heating buildings is not always feasible. And so a lot of the cabins do not have running water. And so a lot of graduate students have had to resort to living in dry cabins that are heated in a variety of ways with no running water.

Emily (12:44): That’s a new one for me. Wow. Yes.

Garrett (12:46): Yeah. And so that had used to be the way that you could save money and attend the university is an experience. Um, and not everyone dislikes it, but it is a difficult one. Um, and those dry cabins have actually gotten quite expensive. And so, you know, even when I joined the university in 2020, uh, those were usually 400, $500 a month and you could get a small cabin for yourself. Uh, those prices have skyrocketed close to a thousand dollars a month for the privilege to live without running water. Um, and so during covid, the university shut down shower access, we have lots of students living in dry cabins, so that got everyone quite angry. And then we all got together, decided that the pay was too low, the healthcare sucked, got us all angry, and then we approached our faculty. Um, and not all faculty were supportive, but my advisor was quite supportive. And a couple of new faculty especially were supportive of this because, similar to your experience, which was they looked around, they went, oh wow, we’re not paying these students enough. And they had seen other university systems and seen the conditions for other graduate students and were very supportive of bringing that forward. And so we got a large portion of the graduate students, a number of the faculty, and then we approached the dean. Um, and that is how we pushed forward with it and said, you are criminally underpaying us. Some people are living at or below the poverty line. Something needs to be done. Um, and we did effectively, uh, petition for a, a pay pay increase. Um, it wasn’t everything we wanted, but it was at least a, a sizable increase.

Emily (14:17): How long did that take from, from the point of, um, I guess first approaching the dean to the pay increase? What was that timeline?

Garrett (14:27): The timeline for approval was surprisingly short. I think that was about a month, two months of negotiation. Um, we did have to wait to the next fiscal year for it to be implemented, however, so that took a a bit longer. Um, I think the problem was we had told the dean a problem for him was that we had told him that we were gonna start going to the papers. Um, the fact that we had students living in poverty and squalor, um, was a real problem and it was gonna look really bad for the dean and the university. Um, we were also significantly underpaid compared to the other science disciplines within the university program. Um, the other colleges, uh, in, in other sciences especially, uh, geoscience, aerospace, those kind of programs are quite well funded. And as I said, we hadn’t gotten a pay raise since 2008, so it was, uh, a bit of an issue.

Emily (15:19): So you used PhD stipends, but you also were gathering data from your peers at your university?

Garrett (15:24): Yeah, absolutely. And just saying that we were even being underpaid within the university system, so PhD stipends was absolutely one of the best ways we could say, look, not only are you underpaying us compared to these other colleges, but like you are underpaying us nationally and it’s expensive to be here. Um, so yeah, it was, it was kind of a double whammy.

Emily (15:43): One of the, I guess, points of criticism about PhD stipends that I’ve heard from other advocates is at least that what they heard when they presented the data was, this is self-reported. This has not been verified by anybody. Did you get any pushback like that or was it just so obvious in your case that we overlook that?

Garrett (16:04): Uh, I had to do a lot of cleaning of the dataset to make sure that we were getting out outlier values. ’cause there are definitely some things that have been mistyped and, you know, we had to take out some of the small values and some of the extreme values where you’ve got somebody who’s counting their stipend as like they’re being paid by a tech company to go back to school and they’re reporting that they’re getting 80,000 or $90,000 a year to go back to graduate school. We had to pull all of that out, but we really didn’t get much pushback on it because it was just so obvious that we were being underpaid. Even if some people were misreporting and there were some outlier values still contained within it, um, yeah, we didn’t get much pushback and the fact that they hadn’t given us pay raise since 2008, pretty much just it was self-explanatory, uh, that we, we something needed to be done.

Emily (16:47): Absolutely.

Commercial

Emily (16:50): 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.

The Unionization Movement at University of Alaska

Emily (17:41): And so the next step was you achieved this big win for your department, um, but then you rolled this into a larger movement. Can you tell us about that larger unionization movement?

Garrett (17:53): Yeah, yeah. And, um, I don’t want to undersell this. So we were kind of having this conversation within our own college and push for the pay raise, and we actually got them to, uh, agree to a biennial, uh, pay increase as well, pegged to inflation, which was really nice for us, so we didn’t have to fight for it as often. And as a part of this, we started kind of hearing murmurs in the background that actually the, uh, some of the liberal arts colleges had already started talking about unionization. So I don’t wanna say that we were the, we were the start of this, but we did join in with a lot of gusto. And so we heard that there were other organization groups. And so, um, one of the main reasons that that started in the liberal arts college is to my understanding, they were being paid at or below poverty line at their maximum amount amount of pay. So most of these students were making between like 14 and $17,000 a year, and that was maximum if their summers weren’t paid for. Um, they were making $12,000 a year, um, well below the poverty line for Alaska. And so they had a lot more reason to be even angrier. So they kind of got things started and then we joined in in that process. Um, and so that the murmurings of that happened, I think around the time I got started, uh, in 2020. And then by 2020, late 2021, early 2022 is when things kind of got moving. Um, and I’m, I’m happy to talk more about kind of that process if that’s something you wanna dive into.

Emily (19:29): Yeah. Maybe give us like, ’cause it’s, I mean, we don’t need to motivate this. We obviously see the problem with the pay for the graduate students. Um, I’m more curious about, you know, at the time of either, um, you know, voting to form a union or starting to approach the administration about the contract. Like just go over how that process went for you all. We’ve heard it a couple of times on the podcast before, but every story is a bit unique, so I’d love to hear yours.

Garrett (19:55): Yeah, yeah, the healthcare seems to be one of the biggest drivers for us. The, the pay was always bad, um, for, for most of the graduate students, and that was always an easy one. But we are under United Healthcare Student Resources, um, and United has a reputation, um, deservedly so for being quite poor and frequent to deny pretty much any type of coverage. It’s actually, how I got involved in all of this was I spent about two years fighting with them. And so we kind of took these people who were upset about pay and very much upset about healthcare, and we were getting a lot of pushback from United and the, um, student, uh, healthcare manager at the university. And so we decided to say that we were not getting anywhere as a group. And so we started talking internally and seeing what it would take to form a union. And so it was starting to take like, you know, the, the student organization out of the, the College of Fisheries and Ocean Sciences, which is the college I’m in, and finally meeting with the, um, you know, a lot of the liberal arts colleges, many colleges have this problem or universities have this problem where the different colleges are quite separate. Alaska is specifically difficult, um, because we are so spread out. It is a giant state. The UA system, since it is integrated, we actually had to, uh, unionize across all of the colleges. We could not just unionize UAF or UAA. And so it was trying to get all the graduate students from all the different colleges to gather in enough of a critical mass to then move forward. So that was step one was just trying to get these meetings and get enough, uh, frankly upset students <laugh> together to say, okay, so this is something that we actually do want to do.

Garrett (21:35): The next step from there was then saying, okay, we need to start picking people who have time and ability to then, um, become officers and really lead the charge. Uh, I was one of the officers during that push, um, but I was definitely not one of the leaders. I I was just kind of there to help do paperwork, reach out to people, move forward and, and get in contact with people. And the, once we kind of had officers, the, the me- major next step was getting the word out and finding union representation. And that was, honestly, that’s one of the biggest key steps that in retrospect I see is just you can’t do it alone. You need lawyers and you need someone who’s actually been through the unionization process before because all of us officers were very engaged, very motivated, but we needed somebody to actually guide us through. Um, and so we approached two unions, one of which we never had much interest from, and then UAW so United Auto Workers, which I did not think would be heavily involved with graduate students in the United States, which they are, um, was really excited about working with us. And, um, kind of we got in touch with them, found somebody who was gonna be, you know, our, our union rep for this process and their set of lawyers, and that’s really where we got the ball rolling.

Emily (22:48): Wow. Okay. So the ball’s rolling on the unionization process. Um, I think the next step is like a, a card drive, like a signature drive kind of thing, and then, and then it’s starting to talk with the admin, right?

Garrett (23:01): Absolutely. Yeah. Yeah. And so card drive was next, and that was again, trying to make sure we had that critical mass of pissed off students before we kind of even got that ball rolling. Um, and that was really difficult, especially up here because I’m more in the Anchorage area and so I had cards shipped down to me UAF primarily. They have the bulk of the graduate students for the UA system. And so we were the primary university for driving this. We were shipping most of the cards everywhere, but it was really trying to make sure that we had representation of these officers in all these different places so we could go to offices, hand out cards, talk to people, um, because graduate students are bombed with emails, the best thing you can do is call people in this day and age, text people, um, emails sometimes work, but we didn’t always have the best response there. And it was really the officers in the background making sure we went through every graduate student collecting everyone we could and just reaching out over and over again to get those cards signed. Um, it was an incredibly successful drive. Um, the graduate students in the UA system are quite upset with kind of the general state of things, um, and that’s not always the university’s fault. There’s more information there we can always chat about. Um, there were some very large cuts in 2019 to the university system that have made it very hard to make things better for everyone, including faculty and staff. Um, but we got the cards together and then, uh, yeah, I mean we had representation and then we could approach the university, and then we went directly into bargaining, um, and we bargained for a contract if I’m not misremembering, within five months, which is unheard of. Um, getting from card drive to a, um, a, a formal union in, in a contract within a year is impressive. So we went quickly into bargaining and then had a contract within a year. Um, and we have signed and it is formed.

Factors that Accelerated the Unionization Process

Emily (24:48): Yeah, I’m also surprised by that, um, speed, especially given what you just said about there being university-wide, like funding cuts just prior. So like, what, what do you think, what were the factors that made that happen? And especially fast for you all?

Garrett (25:04): I mean, we were protesting a ton. Um, we were protesting on the University of Alaska, Anchorage campus, UAS and UAF, uh, UAF especially because we have the largest population of graduate students. We were regularly picketing the deans of the colleges and the deans of the college and ju- and the university. I mean, we were just being very loud and obnoxious. Um, and we were talking to several papers up here, um, really just getting the word out that we were very, very unhappy and that was the best thing that we could’ve done. Um, partially because the university is so resource strapped as well. Um, we got more than what we initially asked for as far as inclusion within the graduate school. Um, so we, it’s, uh, it’s a difficult thing to deal with, but you know, the TAs and RAs are very easy to say yeah, they’re employees of the graduate school, the fellows, as I talked about, it’s a much more washy area, but we actually managed to get all the fellows included as well, um, as well as some staff.

Garrett (26:03): There were a lot of weird kind of one-off students that are partially employed by the university also in graduate school, and we got a lot of those included as well. Um, the, the university did not play their hand particularly well, and the state was, uh, very sympathetic to a lot of our arguments. So, so it went quite well, uh, for us there. Um, yeah, and, and the speed was just because the university was tired of dealing with us. Um, we really wore them out. Uh, we did not get everything that we wanted within the contract. Uh, one of the big things that we had to jettison for the year was the, uh, healthcare. And so that’s what I care about most. But we had already signed a contract with United for that year, and so if we wanted a contract that at least locked in a floor for all graduate students for pay and a lot of other, you know, representation, grievance policies, things that really are, uh, a huge part of what a union provides and streamlining all of that, we had to wait for this year, which we are now going into bargaining for.

Emily (27:02): Hmm. So everybody, all parties knew that that was still gonna be renegotiated as soon as possible.

Garrett (27:07): Yeah, we wanted to, and absolutely it’s why I got involved and I was disappointed to see that that was the case. But the, uh, university just didn’t have time. They had already signed the contract with the United, so yeah, all parties knew that we were gonna be coming back to the bargaining table within the next year or two to, uh, work on that. Um, one of the fun things that we discovered through this whole process of discovery and requesting information from the university was for years we had been told that, you know, actually no, we, we look at this every year. We find the best healthcare for you guys and we’re really on it. And through discovery, we found out that literally they just check the mark. They, they ask for requests from three possible institutions, they pick the cheapest one and go with it. And turns out they’re pretty much just rubber stamping united every year because they United shifts most of the cost to the graduate students so they can provide the lowest cost to the university, uh, on the healthcare. For the record, we are also required to buy this healthcare. There is no way to opt out. Um, and it’s, uh, become quite expensive. It’s about $1,500 a semester now, and it was about a thousand dollars a semester, um, previously, and that’s before copays and, and all of that. Um, yeah, it’s, it’s poor coverage.

Post-Unionization Stipend Amounts

Emily (28:17): Okay. So forthcoming progress on the healthcare front, but in terms of the stipend, can you tell us like what’s the new minimum or like maybe what you’re making now versus what you were making before?

Garrett (28:29): Yeah, yeah. My, my experience is probably not the best one to go for, um, because I’ve now switched back to an RA ship and so I’ve gone back up to being paid, um, uh, quite a bit better and through the summers. So I’m no longer living at that kind of 17,000 and having to take on summer work. Uh, my new pay rate is closer to, uh, 25,000 a year, um, which is more reasonable. It’s not amazing, but it’s definitely more reasonable, um, if you average out all of the different pay steps that they still have within our college because while we put a floor through the union for the whole university system, um, our pay actually wasn’t affected all of that much. We just now get a regular annual increase peg to inflation, um, rather than, um, we, we didn’t see a pay raise ’cause we were already above that floor. Um, uh, the average now is about 27,000 a year. Um, and some graduate students are now making over 30,000, which, if you remember from when we were chatting earlier is in 2021, arguably kind of where we should have been, um, if we had actually, uh, kept giving pay raises with inflation that said inflation’s been rampant over the last four years or so, uh, post covid or, you know, whatever we wanna call this era of time. Uh, and so I would argue that we’re now should probably be paid in kind of the mid 30 thousands, um, if we were really trying to be, uh, competitive. But it is significantly better than it was, uh, although the healthcare is not where we would like it to be.

Emily (30:05): Okay. So on your personal side, the work that you did to, with your peers to, you know, advocate for increasing the stipends within your department, um, that was sufficient to bring everybody above the minimum that then was set by the union. So really it’s like both efforts were important, like that unionization part of it is not gonna allow you guys to drop below any floors. It’s going to make sure that everything is reevaluated on an annual or biannual basis. Um, but you had already done a, a great amount of legwork for your closer group of peers, but now we get to extend this to a much wider group within the university.

Garrett (30:42): Yeah, absolutely. And that was the case is the College of Fisheries and a lot of the science colleges didn’t see much of a pay raise. Um, we did get those locked in, you know, annual or biannual increases, uh, but it was really trying to keep especially our, our liberal arts colleagues from living in poverty. And so that was one of the privileges of being able to be a part of this was I was able to work before I went back to graduate school, I had savings and I was less concerned with, uh, retaliation from the university. And it was something that I felt good that I was able to provide was help, uh, help push through to help our lower paid colleagues who really just didn’t have a lot of, uh, leeway and, and ability to then argue, uh, without worrying about retaliation from the university. Um, and there were several times where retaliation seemed to be very much on the table. Um, the power dynamics of going through, uh, a unionization push was not what I expected it to be. Um, and it was, uh, difficult for sure.

Power Dynamics During the Unionization Process

Emily (31:41): Can you share any more about that observation?

Garrett (31:43): The power dynamics of, of some of these people who are leading colleges and paying paid hundreds of thousands of dollars against students who are living at or below the poverty line, taking out loans to survive and are deeply concerned that if they get sick or are living with chronic illness, they’re gonna fall into deep medical debt. Um, is, uh, it’s disturbing and depressing is probably the, the, the worst, yeah. The best way I can put it. Um, and so it takes often students that are in positions that are a little bit more stable and have support. Like I said, my uh, advisor was very supportive of both our push for, uh, a pay raise within the college and the unionization push, um, that I felt safe. And so it, it does take students that are in that position of safety and strength to then advocate for the people who are a lot more vulnerable, um, because they, they simply, the power dynamics don’t allow for them to be as loud.

Emily (32:42): Yeah. Thank you for pointing that out. I hope that for any listeners who are interested in this, who there’s not yet union representation for their campuses, that they’ll take a, you know, an eye to themselves and see am I in this more privileged position? Am I in a safer position to be able to advocate on behalf of my peers or am I, am I not? And I need to, uh, advocate within my peer group for somebody else to take on these, uh, bigger roles. But I’m really glad to hear that you felt like you were able to do that and, and carry through it with all this, um, wonderful progress. Um, would you say, so earlier, you know, you mentioned that like the main thing for you having the lower stipend was that you weren’t able to save anything. Are you able to save now?

Garrett (33:26): I am, yeah. Which is quite nice. Um, and primarily I’m saving up for unexpected car repairs and it is not a significant amount of savings, but it is, uh, much more stable and I don’t have to worry about going to the grocery store anymore, which is very nice. Um, and not having to shop all of the worst possible least expensive brands, <laugh> is also, uh, a bit of a relief. Um, and so I mean, one of the ways I was able to survive at that very low pay rate was, and I think this ties into uh, a question we’ll probably talk about more, is by creating a very, very detailed budget. I mean, I have a monthly spreadsheet that has all incomes, all outflows and then an annual up or down. And that’s how I kept track of the fact that I was actually generally losing money at that lower stipend level was that you could see, you know, month to month I was losing a couple hundred dollars. Um, I was in the lucky place to have some savings, so I was able to dip into that rather than taking out loans or asking money from friends and family. Um, but that is not the position for many graduate students that I spoke to pre uh, unionization push. So

Emily (34:32): Yeah. And do we really wanna select for graduate students who have worked prior to graduate school who have family support, et cetera, et cetera, or do we want graduate school to be a place that anybody can financially survive?

Garrett (34:45): Absolutely. Yeah.

Best Financial Advice for Another Early-Career PhD

Emily (34:46): Great. Well, Garrett, this has been such a wonderful story. I’m so glad that you came on to share it with us. Um, I would love to hear, uh, from you the answer to the question I ask of all my guests at the end of interviews, which is, what is your best financial advice for another early career PhD? And it can be something that we’ve touched on already or it could be something completely new.

Garrett (35:04): Yeah, I, I think I’m gonna echo a lot of the themes we’ve had during this interview. Um, is first is to pay attention to the entire compensation package. It’s not just to the stipend, but also especially for us, in my experience, the, uh, healthcare that’s provided, how expensive that’s gonna be, what your expected out of pocket is gonna be. Um, does university provide it? Do you get, pay it through your grants? Um, and then you need to really understand the cost of living in the area that you’ll be, uh, doing your work from. If you’re lucky enough like me to be able to do things remotely, you can reduce some of your costs, but a lot of universities I know don’t allow for that. Um, and so you need to see what your pay is gonna be, what your healthcare is gonna be, and any other kind of sneaky costs and, uh, costs of living are gonna be. Um, for me, uh, it was a benefit to wait to return to grad school, um, make sure that I had some savings and was able to, uh, have resources available in case of an unexpected car repair or a surprise cost, a surprise injury. Uh, and so I would encourage some graduate students to consider whether going directly to graduate school is the best option for them, depending on financial situation. Um, my fi- my, uh, budget spreadsheet or using an application for keeping track of your finances, I think is huge. Um, it, it really, really helped me when I was living at kind of the most, uh, spare ends of when I was being paid. And um, and then one of the biggest issues for me, and we haven’t really touched on this, but also looking at how long that funding that you have, uh, for your graduate program lasts. Um, I came into graduate school with only one year of funding and so every year I’ve had to reapply and it’s been a huge stressor for me and, and a big financial strain not knowing whether I’m gonna be in graduate school next year. I do not know if I’m gonna get paid. I don’t know if I’m gonna have my classes taken care of. I’ve been really lucky. I’ve managed to get all the way through and every year I’ve managed to find some form of funding, but it’s been really tight and very close in a couple ways. And so I think that is one of the things that’s most important is making sure that there’s enough money for at least your first many years and that it’s stable. Um, we live in a climate now where funding stability is much more in question and it’s definitely worth asking that, um, before you decide to go to any program.

Emily (37:22): Absolutely. Um, for like prospective graduate students, you know, looking at the offer letters and starting to do, uh, visits or interviews or what have you, um, what’s the best way do you think for them to find out some tricky things like that? You know, what is this insurance policy actually gonna cost me out of pocket? Um, that kind of information within this compressed time period of like the admission season.

Garrett (37:45): Yeah, absolutely. And that is the real hard part is you’re juggling multiple universities, multiple offers and trying to figure out how to navigate it all. Uh, graduate student groups are probably one of the best ways I’ve found. ’cause often that’s where a lot of the grievances are held and that’s where I got together with my colleagues and kind of figured out how to start pushing forward towards action. So any of the graduate student groups in the colleges that you might be going to great people to reach out to, um, other graduate students within your lab, um, often I would argue the ones that are farther along tend to understand the systems a little bit more and be a little bit more honest about the difficulties that they’ve had within the system. Um, and that those are probably my two biggest resources. They tend to be the most honest about both the benefits and drawbacks of those institutions. 

Emily (38:32): Yeah. They’ve had time to see maybe some edge cases play out, like, uh, oh yeah, this is normally how things go, but like 10% of the time it goes this other way, you know. Um, well, Garrett, again, thank you so much for agreeing to come on, um, to the podcast and talk about this whole process. It’s been a long, you know, time in, in making this story, but I’m really, really glad to hear this, uh, not a final outcome, but this point in the process and how, how things have been for you and your peers. So thank you so much for your work and for sharing it with my audience.

Garrett (39:03): Yeah, it was a pleasure and thank you so much for having me. Um, I’m just hoping we can make, uh, the graduate student experience better for everyone.

Outtro

Emily (39:21): 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 me and show notes creation by Dr. Jill Hoffman.

Financial Hacks Unique to Graduate Students

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In this episode, Emily interviews Kyle Smith, a sixth-year graduate student at Penn State, about the financial strategies and hacks he’s used during grad school to increase his income and optimize how he spends and manages his money. In addition to side hustles and credit card and banking bonuses, they discuss how graduate students can benefit from using 529s and 457(b)s in a unique way. Kyle’s message is that finding ways to spend a few percentage points less on much or all of your expenses really adds up over time to confer financial security in the present and increase wealth in the long term.

Links mentioned in the Episode

Financial Hacks Unique to Graduate Students

Teaser

Kyle (00:00): By saving a few percent off your living expenses, having your emergency fund earn a few extra percent, saving a few percent on your taxes for money, that’s gonna grow a few percent every year until you retire. Um, these things, when combined, uh, really start to add up and let you, uh, get to a place where you have enough money, that you have more financial stability and more flexibility, uh, to do the things you want. Um, and really a lot of it comes from having enough of an emergency fund saved up that you can do these sorts of strategies.

Introduction

Emily (00:39): 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 (01:08): This is Season 20, Episode 3, and today my guest is Kyle Smith, a sixth-year graduate student at Penn State. Kyle and I go deep on the financial strategies and hacks he’s used during grad school to increase his income and optimize how he spends and manages his money. In addition to side hustles and credit card and banking bonuses, we discuss how graduate students can benefit from using 529s and 457(b)s in a unique way. Kyle’s message is that finding ways to spend a few percentage points less on much or all of your expenses really adds up over time to confer financial security in the present and increase wealth in the long term.

Emily (01:49): The tax year 2024 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. While I do sell these workshops to individuals, I prefer to license them to universities so that the graduate students, postdocs, and postbacs can access them for free. Would you please reach out to your graduate school, graduate student government, postdoc office, international house, fellowship coordinator, etc. to request that they sponsor this workshop for you and your peers? 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. Please pass that page on to the potential sponsor. Thank you so, so much for doing so! You can find the show notes for this episode at PFforPhDs.com/s20e3/. Without further ado, here’s my interview with Kyle Smith.

Will You Please Introduce Yourself Further?

Emily (03:24): I am delighted to have joining me on the podcast today, Kyle Smith. He’s a sixth year graduate student at Penn State, and we are going to talk about, well, I’m gonna reference the title of another podcast, I listen to All the Hacks. We’re gonna talk about several different, numerous different kind of financial hacks that Kyle has used throughout graduate school to increase his income, decrease some expenses, optimize finances in a few different ways, and Kyle’s been at it for several years, so he has a lot to share with us, some very unique strategies that we hardly ever touch on in the course of the podcast. So you’re definitely gonna hear some new stuff today. Um, Kyle, thank you so much for volunteering to come on the podcast. And will you please introduce yourself a little bit further for the listeners?

Kyle (04:03): Yeah, my name’s Kyle Smith. I’m a, uh, sixth year graduate student at Penn State. Like you said, uh, I got first introduced to your podcast right before I was starting, uh, graduate school, so I’ve been able to learn from some of your tips over the years. Um, my research, I’m in the anthropology department, uh, looking at dog human interaction. So for my research I’ve gotten to go to the dog park and watch people’s dogs and, uh, study how they think and interact with people, um, which has been a lot of fun.

Motivation Behind Pursuing Financial Hacks

Emily (04:31): Yeah, that does sound like fun. Um, okay. We are going to, as I said, talk about some different financial hacks that graduate students may be able to apply in their own lives. But before we get into your list that you sent me, um, I wanted to know why have you pursued all of these and kept going with, you know, some of them that worked out? Like why not just take your stipend and work with it as is and not put in the effort to find these extra, you know, extra workarounds? So tell us about that motivation.

Kyle (05:02): Yeah, I suppose really kind of my whole life, I’ve just been more of the saver sort of mentality. Um, you know, just whatever money I got, I would usually just save it up. Um, I think I tend to have less expenses that I wanna spend money on compared to a lot of people. Um, but then, so I’ve just tried to, you know, just kind of accumulate enough excess that I have the flexibility that when there is something then that I wanna spend the money on, um, that I have enough of a buffer to do. So. Um, so really been just kind of, uh, trying to optimize things to just accumulate a little bit more, uh, focusing a lot on retirement and especially saving for retirement in a way that gives them flexibility with what to do with that money, which we’ll get into it a little bit later. Um, and just realizing that, you know, any money that you’re saving up now and investing, uh, for the future will be worth a lot more later. Um, so, you know, if you’re fine to do a few things to save on some of your expenses, that that really adds up over time.

Emily (05:59): Absolutely. And I do wanna point out that, um, in the list that you sent me, there really isn’t too much about what I would call like true frugality. We’re actually not talking about decreasing expenses in terms of like giving up, uh, quality or downsizing or anything like that. We’re really gonna be talking about earning more or like financial type ways to spend less without getting less. Is that a fair way to characterize the list?

Kyle (06:24): Yeah, I would say so. With the things I’d mentioned. I mean, I definitely do, you know, try to, you know, spend less money on, you know, don’t eat out super often. Uh, split living expenses with people, um, never lived solo. So, you know, there’s strategies like that that have saved some money. Uh, but um, yeah, a lot of the things I just try to figure out ways where if I have a recurring expense I can save a few percent on it. Um, you know, if I have some money sitting there, I can get a few extra percent on it. Uh, and finding that those really add up over time.

Emily (06:57): Yeah, and I especially wanna point this out for like the listeners who <laugh> have, have felt like they’ve maxed out on spending less. Like I’m doing everything already that I can to spend less and I’m not interested in cutting any further. How can I earn more or optimize more to, you know, free up more money for my goals? Right. So that’s really what we’re talking about today. Okay. So let’s jump into your list. The first thing you told me is that you volunteer for research studies. Tell me about that and how much you’re earning from it.

Grad Student Financial Hack #1: Participating in Research Studies

Kyle (07:27): Yeah, there’s, it’s been a while since I’ve done any of those. Um, but you know, when you’re on campus in a university you can walk around the hallways and see there’s, you know, signs sometimes where they have looking for research participants. Um, you know, so a lot of times I’ll just pay attention to that and um, follow up with that if it seems like something that’s worth pursuing. Um, you know, plenty of studies are kind of short and you can make a quick 20 bucks or some are a little more involved, but you can make hundreds over time. Um, you know, so there was one in particular, uh, that I got quite a bit from because they were doing a longitudinal study of graduate students that started my first year of graduate school. Um, so there were kind of recurring surveys that they would have you do, they’d have you come in sometimes, uh, for some invis- in-person, uh, sampling, such as like cutting your hair to look at your cortisol and stuff like that. Um, you know, so I saved up few hundreds of dollars, uh, through studies like that. There was one I did where they were did an MRI scan of my brain that they also pay you a little bit higher for, uh, ’cause you’re in a cramped box. So yeah, just looking out for opportunities like that allow you to sometimes save just a little bit extra money here or there. Uh, and then if you have a strategy where you’re trying to save anything extra for retirement, uh, or for the long term instead of uh, you know, getting an extra $20 and immediately spending it, then that really adds up over time.

Emily (08:46): Mm-hmm <affirmative>. Either way, whatever you wanna do with it, it’s your extra $20 here or there. I mean, like you said, in any sort of large research university, there’s gonna be studies like that. I think one of the other bonuses is that sometimes they’re actually pretty interesting to participate in. Um, like you actually learn something about yourself or about the study or, or what have you. Have you found that to be the case?

Kyle (09:05): Oh, definitely. Um, you know, it’s been interesting just getting to see a different side to research from the research that I’m doing and the research that I read about. But actually being a participant in it, um, can be pretty interesting sometimes, especially when you see connections with like what you’re doing. Like I had look at the hair, cortisol, the dogs, and I was giving my hair for the hair cortisol. Um, there was actually a study I did when I was an undergrad. I volunteered and they as part of it, uh, took my DNA and I got my 23andme results back in addition to getting paid for doing it. So that was an interesting thing,

Emily (09:37): Definitely. Wow. Gotcha. Okay. Next item on your list was a side hustle, a true side hustle. Tell us more about that.

Grad Student Financial Hack #2: Editing as a Side Hustle

Kyle (09:46): Uh, yeah, this was kind of funny ’cause it was just came out of nowhere. I got an email in my inbox one day, um, saying that the person was a Chinese academic who was looking for American students to help edit manuscripts by Chinese academics. Uh, and asking if I was interested. And I immediately thought that it looked like some sort of scam phishing email. There was a strange address. Um, you know, people offering you money that you’ve never heard of before is usually something to be a little wary of. Um, but it seemed, you know, I thought about it and I was like, well, it might be legit. So I tried to look up the person and looked up his papers. Um, I found that, um, people in the acknowledgements had been thanked for helping translate, so I actually reached out to those people before him and was just is that guy legit, and they, they told me they’d work with them and had good experiences. Um, yeah, so that was just kind of an occasional thing. Sometimes I would do a few of these in a month, sometimes they didn’t offer me any for a while. Um, but yeah, just, uh, he seemed to have some connections to other researchers and try just to reach out to Americans, uh, to help just edit the English. I’ve done a handful of those over the past few years. They usually paid around 150 to $200 per manuscript depending on how long it was.

Emily (10:55): That’s an amazing pay rate. Yeah,

Kyle (10:57): No, it’s been, that’s been a good way to, it’s not a reliable enough thing that I can count on that as predictable income, but just occasionally they reach out and they’re like, Hey, can you do this paper?

Emily (11:07): I really like this type of side hustle that just opportunities come your way and depending on your schedule and your availability, you can just say yes or no and that’s great. It’s nice to not be committed to something when you go through busy or periods as a graduate student.

Kyle (11:21): Yeah. Whenever they’ve reached out about editing these, they’ve asked first if I’m available before sending it and you know, there were a couple times where I’m like, no, sorry, I’m too busy this week.

Grad Student Financial Hack #3: Credit Card/Banking Bonuses

Emily (11:31): Absolutely. Okay, next item on your list is kind of a bigger one. Um, credit card and banking bonuses. Tell us about your strategies here. Yeah,

Kyle (11:40): There, there’s a few websites out there that accumulate these sorts of things. Um, doctor of credit is one where they have bank bonuses and credit card bonuses that are, uh, being offered at that time. Sometimes you get some in the mail so you know it’s worth checking your junk mail about these. Uh, and a lot of times different banks will, or credit cards will offer you like a couple hundred dollars if you sign up for a bank account or open a credit card with them and spend x amount of money in the first certain amount of time. Uh, and in many cases these can be, uh, fairly profitable ways with not that much effort. Um, usually there’s some sort of requirements attached to it, so you have to pay attention to those and carefully note down, uh, what the requirements are and if you can meet those and that you’re not gonna be incurring more expenses than you’re getting back. But for instance, a lot of banks, they’ll say like $200 if you direct deposit at least a thousand dollars. So I just update my direct deposit for that month, you know, have my next paycheck go into there and then, you know, change it back after that. And there’s, if there’s not ongoing fees for maintaining it, um, then that’s sometimes just an easy way to get some money.

Emily (12:47): Okay. Yeah. Let’s pause a little bit on the banking bonuses. Um, so you just gave one example of like, oh, I just had to update my direct deposit to go to a different place. Um, sometimes you might have to keep that up for a few months. I think for some offers like this or other ones I’ve heard of, you have to keep like a certain balance in the account for a certain amount of time. So I’m wondering if you have done anything like that. Have you had to move like a chunk of money somewhere and kept it there to get a bonus?

Kyle (13:13): Yeah, there’s sometimes little requirements like that. Sometimes there’s a minimum bonus for a certain amount of time. Um, some of these, when you run the math, it doesn’t really make sense to do, but others, you know, I can keep a thousand there for three months and then get a few hundred dollars out of it. Uh, assuming you’ve got enough money saved up that you have some flexibility there. It’s a strategy that makes more sense. If you’ve got enough of an emergency fund that um, you have a few extra thousand dollars to spare, uh, some of them require a certain amount of transactions. Um, you know, there’s oftentimes easy ways around this. You can like set up your main account to just transfer $10 in and take it out automatically if you need to have a certain transaction each month, um, in order to not have a fee. Um, some of them are tied to like use your debit card, you know, 20 times in the first month and I just go to the gas station and buy a dollar of gas, buy a dollar gas, buy a dollar of gas just in a row. Um, so there’s ways to trigger it. And if you look on sites like Doctor of Credit, they usually detail, uh, what these are.

Emily (14:11): Hmm, that’s so interesting. I hadn’t heard about those little strategies just to fulfill that requirement like very quickly. That’s very helpful to not have to like think about it over a long period of time and remember, oh, I’m supposed to be using this card versus like this one to do this.

Kyle (14:24): Yeah. I think the way they get you with these things is they’re hoping that, um, it’ll be too much for you to do all that. So they either won’t have to pay the bonus because you trip up or that you just, um, you know, you’re not paying enough attention and then you start accumulating some monthly fee because you weren’t doing their one transaction a month or whatever.

Emily (14:43): So you just have to be really organized. Yeah,

Kyle (14:45): Yeah. You just have to be really organized, pay attention to what exactly the rules are and just make sure you’re following those to a T.

Emily (14:50): Yeah, absolutely. Okay. So let’s take like a credit card example then, since we just talked about bank accounts now. When I was in graduate school, it was quite a while ago, so credit card offers were different than they are now. I know. I was always concerned about being able to reach those signup bonuses like spend 1, 2, 3, 6, whatever it is, thousand dollars over two to four months. These kinds of things are common. Um, and I also, I don’t think in graduate school I ever paid an annual fee for a credit card. I do now <laugh>, but that was something I was just sort of like the whole category. I was just like against it at the time. Right. So like, tell us about that. Like how do you balance knowing that you’re gonna be able to meet these signup bonuses? You know, do you have any tricks about, you know, spending or timing the spending or whatever? Um, and also, yeah, how, how do you weigh the pros and cons if you, if there are some costs associated with it?

Kyle (15:38): Yeah. Um, I just try to pay attention to what my actual level of spending is and what the requirements are. And if there’s something where I don’t think I can meet the requirements won’t do it. I don’t have as many credit cards as some people who really pursue the strategy. Um, but there’s some that are quite easy to meet, like, um, some of the ones from Chase tend to be some of the most sought after ones and you can only get a certain number of credit cards per often before your credit score starts to go down and you start getting rejected. Um, but you know, some of the chase ones you have to spend $500 in the first three months and you get $200 or something like that. And that’s easy enough for most people do if they put all their groceries on it for a few months. Um, there’s some that have had bigger amounts, so some of the chase ones are more lucrative where you can get a thousand dollars signup bonus or so the amount fluctuates. So you have to look at the time, but you have to spend $4,000 in three months. And I don’t spend that much in that amount of time, especially ’cause uh, you know, you’re not paying the rent on the credit card typically. Um, but there are strategies that you can do and I think you’d only wanna do this if you’re the kind of person who knows that you’re gonna specifically be doing the math to spend the right amount to make it worth it for you instead of just spending a bunch of money and thinking, oh, I’m saving money because I get it, uh, a bonus. So what I’ve done when I, you have to spend like the, you know, a larger amount of money, you know, getting a thousand back on 4,000 spending is still worth it if you can make it work. So what I’ve done is just put everything that I can on it during that time. And then when it gets closer to the deadline, um, there’s various grocery stores and pharmacies sell these $500, um, prepaid debit cards with about a $5 fee, um, which normally doesn’t make any financial sense, but if you’re getting essentially 25% back, then you can put the last couple thousand dollars of that on these prepaid cards and then just use those for your expenses for the next few months. Um, so you can kind of preload your spending of that amount and let it stretch over your expenses for for many more months. Um, I’ve also, you know, paired this for if I know I’m gonna be booking some flights for the holidays or some other expenses. So when the timing of when you get these cards can matter a bit too.

Emily (17:47): Yeah. So not only for either one of these strategies, you have to stay very organized. You also have to really know your budget. You have to know what your spending is going to be over the next, you know, three or six months or whatever so that you can understand, yes, I’m gonna have enough spending or I’m not quite going to have enough. So as you said at the end, I’m gonna be able to use this strategy. But prepaying, you know, by buying gift cards or whatever, um, debit cards that requires you to have that money up front. So another area where we talked about like getting that first, you know, thousand two, three, $4,000 in like an emergency fund or just a general savings fund is so, so helpful to actually help you generate even more side hustle money. Like you’re really putting your money to work for you. Now we’re all of course hoping that an emergency wouldn’t come your way in that time when you have some money tied up in a de- in a debit card or whatever. Um, but anyway, it gives you more flexibility. So it’s just something that like builds on itself. Um, so if you get that first thousand, like then maybe the next, you know, few hundred is easier to come by ’cause you can use some of these like tricks and hacks

Kyle (18:45): For sure.

Emily (18:46): Um, and you also were just telling me that you paired this strategy with paying estimated tax on your fellowship. Can you tell us what that strategy was, uh, when, when you were using it?

Kyle (18:57): Yeah, so if you’ve not been listening to this podcast as much and you’re not aware of the estimated taxes, uh, sometimes if you’re on a fellowship, um, they’re not withholding your income tax and you’re responsible for paying that several times a year. Uh, I was on a fellowship like this my first year of graduate school. Some people are on it, if they have the GRFP for three years, depends on your situation. Um, and they let you, um, pay these payments either straight from your bank account or you can pay it with a debit card for like a $2 or so fee I think it is. Um, so again, if you’re able to buy these prepaid debit cards in such a way that you’re earning a decent percent back and then you can use that to pay your prepaid taxes for a small fee, you know, you do the math and see if the, if it works out in your favor, but especially if you’re getting a big bonus or if you have a big percent back on that credit card, then uh, it can end up saving you quite a bit more money than you’re spending in a fee. Um, there’s some credit cards too have like different rotating benefits. Like I have one that has a category that changes, uh, four times a year and sometimes they are giving you a bunch of money back for PayPal and they also normally give you money back for a pharmacy and those stack on top of each other. So if I can get 7% back at a pharmacy by buying a pre-K card and then use that for my taxes that they immediately refund to me, uh, that saves you a decent bit of money. Uh, the last time I tried that, they didn’t let me buy the prepaid card with the credit card at the pharmacy, uh, or with PayPal anyway. Um, so you have to, you know, your mileage may vary as they say, and the, the kind of rules for these things are changing all the time. But if you look at, uh, sites related to, you know, people who are doing these sorts of strategies, you can kind of find out to some extent what works and doesn’t at that time.

Emily (20:42): Yeah, all the like buying of gift cards, buying of prepaid debit cards, those kind of, um, ways to get up to those minimum spends. It’s a common suggestion, but the routes to doing it oftentimes get shut down. <laugh>, it, it makes sense that these things don’t always work in perpetuity, but as you said, there are resources available where you can learn how to pivot.

Kyle (21:01): Mm-hmm <affirmative>.

Emily (21:02): Yeah. Is there anything else you wanna add about the credit card or the banking bonuses?

Kyle (21:07): One thing with regards to the banking is, you know, another strategy is not just the signup bonuses, but banks that are gonna give you a certain amount of, uh, interest on what you have in that account. Uh, most banks tend to give you very low percentages these days, uh, but you can sometimes find some that give you a few percent back. I have most of my money, uh, in an account offered through Vanguard called Cash Plus, uh, that gives I think three or 4%, uh, per year of what you have in there as interest. It’s kind of a clunky account. It seems like it’s not as made to interface very well with other banks. So there’s been some frustrations with using that. But if you have thousands of dollars saved up as an emergency fund and you can get 4% of that back every year, you might as well park that money in a, in an account where it’s gonna be, uh, giving you a decent percentage back. And that just goes back to the whole theme of trying to optimize, uh, your finances by a few percent here or there, especially in the long term.

Commercial

Emily (22:07): 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.

Grad Student Financial Hack #4: 529 Contributions

Emily (22:58): Okay, now we’re gonna get into the strategies that I’m really excited about. So the first one is a 529 strategy. So Kyle, tell us, what is a 529 <laugh>? Why would a graduate student be using one? You know, how are you using it in a way that’s very different from how it’s like advertised? 

Kyle (23:14): So a 529 plan is something that was created to help incentivize parents to save money for their kids’ college. Uh, if you’re familiar with retirement accounts, it’s kind of similar to that where you’re getting some tax benefits to be investing money for a long-term goal. Uh, but in this case it’s higher education. Um, the, like I said, the intention seems to be more about saving for your kids’ college, but they have some flexibility about this. It doesn’t have to be your child, it can be your grandkid or your spouse or even for yourself. Uh, and while the intention is that you’re, uh, going to for expenses farther down the road, usually, uh, the minimum amount of time it has to be in there, it seems to be about a week. And it’s not just college that this works for, they let you, you use these funds for K through 12 education that has tuition and also for graduate school. So a lot of states have tax deductions for people who contribute to these plans because they’re trying to incentivize people to invest in higher education. Um, the idea is if you’re a parent, you contribute, you know, a few thousand dollars each year, uh, invest it, and then when you’re taking time that money out for your kids’ education, uh, you don’t owe taxes on that after all the growth and you’ve been saving some money on your state taxes along the way. What I’ve been doing is a tip I learned from, uh, your site years ago where you create an account where you’re both the account owner and the beneficiary, you contribute money to it, withdraw it a week later after the hold lifts, and then you can, if you’re using those money for qualified educational expenses, you’re allowed to deduct that from your state taxes. So the qualified educational expenses, you know, you need to look up and make sure it works, but basically it’s room and board for a graduate student, it’s tuition’s allowed too. But since most graduate students aren’t paying tuition, that’s not as helpful. Uh, I believe you can also do a certain amount of, uh, student loan payments as well. So, you know, I’ll just every few months, uh, contribute some of my money into this account, withdraw it a week later, uh, and then just keep track of how much I’m spending on food and rent and then just kind of do this so that the amount that I’ve contributed and withdrawn, uh, is, you know, as close as I can get it to the amount that I’m spending on room and board without going over it. Uh, and then when it comes time to pay my taxes in Pennsylvania, I can deduct in theory up to $19,000, uh, of contributions from my taxes, assuming that that doesn’t, you know, go that I’m not using these for things that are other than the qualified educational expenses. And since the Pennsylvania income tax is 3.07%, uh, you know, that adds up over time. I think in total I’ve saved about $2,000 on my estate taxes over the years by doing this.

Emily (26:07): Wow. Okay. I can see now why you’re being careful to keep track of how much you’ve actually spent in qualified education expenses. So I didn’t know about Pennsylvania specifically, but some other states I’ve looked at, the benefit might be limited to like $5,000 or like a few hundred dollars even. So with having such a high limit then yeah, it really makes sense that you are trying to, as you said, get as close as you can to matching your actual qualified education expenses so you can try to deduct as much as possible for that year. Um, that may not be as much of a challenge in other states is what I’m saying. ’cause maybe your rent alone for a few months would already max out like that benefit. Uh, we’re using the term qualified education expenses, which very, very astute listeners will know that when we talk about qualified education expenses, we always have to say what the benefit is that is defining that particular instance of qualified education expense. So qualified education expenses from a five for 529 accounts, as you mentioned, include things like living expenses, uh, you know, room and board. Um, it’s defined, but qualified education expenses for other benefits are like only tuition and required fees and so forth. So just be sure that you’re looking at the right definition, the right list when you’re trying to figure out what your qualified education expenses are for 529s. Um, so anyway, your particular benefit in Pennsylvania sounds incredible because that limit is so high. Other states the limits will be different. Sometimes it’s a credit, not a deduction. Um, some states don’t have any benefit and we are talking about a state level benefit, not a federal benefit. So the state that I, that I live in, California doesn’t offer any tax incentives for contributions to 529s. So, you know, you may be stuck with a state that doesn’t participate in this in any way, and then this isn’t gonna work for you. But if you live in a state with income tax <laugh>, then you should certainly look up whether there is any 529 contribution benefit. And I’m just, you know, struck by the fact this is another example where because you have freed up, you know, a thousand, 2000 whatever amount of money that you’re able to move around and do these different things that like these 529 contributions, you’re able to then spend less so, so much more money, like how that little bit of financial flexibility is buying you even more and more and more financial flexibility. So for those listening, I would just say if you haven’t saved that first 1, 2, 3, $4,000, like work on that hard because then you can, these other ideas are then open to you after that point. That’s so awesome. Now I have been wondering about that residence time of like the money being in the account, um, because you know, in your case, like you don’t wanna contribute $19,000 and let it sit there for the whole year, right? You wanna do small bits like frequently throughout the year. Um, so how did you come to find out what the minimum time it had to spend in, in the account to, to, you know, qualify for this deduction?

Kyle (28:49): I don’t remember how I first found out if it was somewhere in the, you know, the documentation about opening it or if I’d seen other people mentioning it. Um, the one thing to note, like you said, the state laws vary quite a bit, so you just have to look up how it applies to you if it does. But the, um, some states require it to be a specific plan from their state and others let you do any 529 plan. Pennsylvania doesn’t care what state it is. So I just did it through I think the Kansas plan because I already had a Schwab bank account and Schwab runs the, uh, Kansas plan, but you know, there’s others through Vanguard or whatever the case may be. So you need to make sure about that. But at least the one that I’ve done through Schwab, the, it just needs to be there for one week minimum. And like you said, I’m not gonna put my entire living expenses for the year all in at the same time. Um, but every month or two, um, if you just have enough money saved up for, you know, the next month’s living expenses, you can put it in, in the middle of the month, take it out, and by the time you’re paying your bills at the start of the next month, um, it’s still back there. Um, so you wanna have, you know, some extra money saved up, but it doesn’t need to be a ton.

Emily (30:03): Yes. Wow. What a powerful strategy. And so you’ve been, have you been doing this the whole time you’ve been in graduate school?

Kyle (30:08): Yeah, I, I first heard of it I think either in the beginning of graduate school or slightly before. Um, so I’ve just been doing that the whole time. Uh, it saved me quite a bit of money on my state taxes.

Emily (30:18): Yeah, you said about $2,000, that’s something like 400 per year approximately, right?

Kyle (30:23): Yeah, something like that. I, uh, I got married last year. Um, my, my spouse is also, she was a graduate student. Um, so once I was married I started contributing for her expenses as well, which saved us a little bit extra. Um, but yeah, if you’re doing this, uh, in graduate school in Pennsylvania, you know, saving 3% on all your rent and food expenses each year really adds up.

Emily (30:47): Yeah, it definitely does. Oh my gosh, I’m so grateful for this example. Thank you so much for sharing this with us.

Kyle (30:52): One important thing to note with the 529 plans, uh, is because they’re not really set up for people to be using it in the way that I’ve been using it is you gotta pay attention to certain details. Like in my account I’m listed as both the account owner and the beneficiary. Uh, so you have to make sure that you are contributing as the account owner and removing money as the beneficiary, uh, because it gives you the option to also remove it as the account owner, uh, I guess for people who contribute it and then decide that they didn’t wanna contribute it. Um, but if you’re removing it as the account owner, uh, then they’ll say that you’re not actually contributing it. Uh, so then you won’t get that tax benefit. So you just need to pay attention to that detail.

Grad Student Financial Hack #5: 457(B) Retirement Accounts

Emily (31:31): Yes. Another example of where being organized and detail oriented is very necessary for making this strategy work. Okay, awesome. And then the last strategy you mentioned to me was about using a 457 retirement account, which is not one that gets a lot of airtime. So tell us what’s different about this account? Why do you choose to use this, um, either uh, first or in, you know, to supplement your other tax advantage retirement accounts?

Kyle (31:58): Yeah, so I was working for a few years before I started graduate school. So I already had a Roth IRA and an account from my employer. Um, they thought I was contributing money and saving up that way. Um, and then when I started graduate school, I was still contributing to the Roth IRA at first. Um, but then I saw, I just think I got some letter in the mail just mentioning employee benefits that I had access to and one of them was a supplemental retirement account and I was like, what is that? Um, so I looked it up and something that a lot of graduate students encounter is that they’re not eligible for most employer sponsored retirement accounts, so they can’t sign up for, you know, a 401k and get their employer matching their contributions or anything like that. Um, but uh, I found in my case this probably holds at some other universities as well that there’s something called a supplemental retirement account where they’re like, we’re not gonna contribute any money to this as your employer, but you’re allowed to put money into it. Um, at first this wouldn’t seem like it has that much of an advantage compared to just your own IRA because you’re managing that yourself. Why would you worry about involving your employer? But I noticed when I was reading the benefits that the 457B seems to have some really specific advantages that are actually quite nice and that I don’t think you can really get, uh, through any other account that I’m aware of. Um, so if you’re not as familiar with, uh, retirement accounts, uh, they, whether they’re an individual retirement account, an IRA or an employer sponsored plan, uh, there’s usually two types, either Roth or traditional. So Roth, you’re paying your taxes on your income now, um, and then contributing it to the account where it can grow, uh, without getting taxed on your dividends or anything when you’re investing it. Uh, and then when you withdraw it when you retire, uh, you don’t owe any tax on it. Traditional is the other way around where you’re saving on your taxes for what you contribute. You don’t have to pay income tax on it, it grows without getting taxed on the dividends. And then when you withdraw it in retirement, you, uh, owe tax on it at that time. Um, so there, there’s two different strategies depending on whether you wanna pay your taxes now or pay your taxes at retirement. And a lot of people seem to recommend the Roth accounts in situations where it actually doesn’t really seem to make sense. Um, the typical advice that you hear is, oh, if you’re, you know, a graduate student or somebody else with a relatively low income, you’ll probably be, uh, earning more money in retirement or when you’re older, so you might as well do the Roth now, uh, and save on your taxes ’cause you’ll owe more tax on it later. Um, there’s really no way of knowing exactly what your taxes will be in retirement because you don’t know how policy will change and how your lifestyle will change. Um, but let’s say for instance, you’re in the 12% tax bracket now and you’re in the same one when you retire. Um, if you contribute to a Roth account, you’re saving the 12% or you’re paying the 12% now and then you withdraw that tax free later. Um, but if you’re contributing to a traditional account, you’re paying, you’re saving the 12% now and then you pay o tax when you retire. But if you’re in the same tax bracket, the first chunk that you pull out goes to your standard deduction and you don’t owe tax on it, the next chunk you pull out is in the 10% bracket. And not only after that, uh, do you owe the 12% tax on it. So your average tax rate will actually be probably lower than your marginal tax rate. So it’s a little more advantageous in many circumstances to do traditional. Uh, one of the disadvantages with traditional, as opposed to Roth, is that money is tied up until you’re 59 and a half and you’re not allowed to remove it early without owing both the income tax on it and also a 10% penalty. Uh, with Roth, one of the nice advantages is you can take that money out, um, that you’ve contributed early without owing any penalties on it. Uh, that’s only a contribution. It’s not what it’s grown from being invested. But the unique thing that I found out about the 457B plan is it kind of is the best of both worlds. You get the tax benefit now, um, which like as I just laid out, is probably in most cases gonna be saving you money on your taxes overall. Um, but uniquely with it you can actually withdraw the money you contribute before retirement age as long as you’ve separated from that employer. Uh, and as a graduate student, I’m not planning on being employed by Penn State for the rest of my life just until I finished my PhD and then after that point I’ll have access to that money should I want it. Um, and I think that this is a really nice advantage because it’s nice to have the flexibility. You know, if years down the line I have a loved one who gets sick and I want to quit my job and you know, for a year or two live off of what I have saved up, I would be able to do that and I would just owe my income tax and not any extra fee. If I get to age 50 and decide I wanna retire, then instead of waiting until 59 and a half, if I have enough money, I could just go ahead and do that and use this account. So it gives you a lot more flexibility about how you wanna use it. Um, yeah, the, this does get withheld from your paycheck, so you have to a month in advance go in and say how much you want withheld. Uh, I’ve kind of adopted a flexible approach about this where I just look at my, uh, expenses and budget and how much money I have and I’ll be like, I have more money saved up than I need, so I’ll make my contributions a little bit higher. Or, oh, I had an unexpected expense this month with car repairs or something, I’ll make it lower. Um, but I’ve been trying to save up through that and uh, I think on average contributed in the like eight to 9,000 per year, uh, into this account, which is actually more than the space from an IRA.

Emily (37:25): Thank you so much for that thorough explanation. Um, I totally agree. So, because I think most, most Americans, if they have any kind of workplace based retirement plan, it’s gonna be a 401k or maybe if they’re a federal employee or something, TSP, but a lot of people who are employed by nonprofits, um, and also government agencies at whatever level, um, might have access to a 403 B and maybe also a 457 as you do, but, but because it’s such a small like kind of percentage of the population, this account doesn’t get a lot of airtime, you know, when retirement accounts are discussed. So you’re exactly right that like this benefit of being able to remove the money early without penalty is pretty unique. Um, that is to say without having a special circumstance, like you can remove sometimes for education or like stuff like buying a home, stuff like that, but, but without any reason, right? You just, you just have access to it whenever you want it. You don’t have to justify it. It is a really unique thing and especially attractive for people who are going for early retirement or as you said, might just wanna access a chunk of money for whatever reason, for special life circumstances or, um, what have you. So it is really unique. It sounds to me like you are using this as your primary tax advantaged retirement account, right? Like you’re, you’re not using a Roth IRA or anything similar in addition.

Kyle (38:39): Yeah. Ever since I found out about this account, I’ve only contributed to that for retirement. Uh, I still have the Roth IRA from before that’s been accumulating money in the meantime. Um, but because of the advantages of this and that I’ll only have access to it for the time that I’m a graduate student, uh, I’ve just been prioritizing anything that I’m saving for retirement into this account.

Emily (38:59): Absolutely. And I do wanna point people to season 17, episode nine, my interview with Dr. Corwin Olson. So he and I had a, a long discussion in that, um, episode about what you were just mentioning, how sometimes contributing to a traditional retirement account, even when you’re in graduate school or a fairly low tax bracket, uh, makes sense, makes sense in certain situations. It’s still not something that I’m gonna say is my number one <laugh> best thing to do. I still firmly believe in the Roth IRA for most people who are going to expect that higher income marginal income tax bracket in retirement. But certainly like we talked about with Corwin, like people who are planning on retiring early have to do a lot different kinds of considerations about filling up like the standard deduction aspect of their, um, income and the 10% bracket and the 12% bracket and so forth. So it’s kind of a different calculation. Um, but I appreciate you bringing that to light again and yeah, why this could be certainly a legitimate choice even for a graduate student.

Kyle (39:56): Yeah, and as far as I understand too, the fact that I have a Roth IRA, um, from before actually pairs well with this because, you know, I could withdraw from the 457B up to the standard deduction or up to the 10% tax bracket, and then if I’m still spending money beyond that withdraw from the Roth IRA without owing any extra taxes.

Emily (40:15): Absolutely correct. Yeah, I, that’s one of the reasons why I say that it’s great to have both traditional and Roth money available to you when you get to retirement so that you can do that kind of tax optimization. And we’re even talking about pre-standard retirement age in the case of the 457 that you, you would’ve access to it, as you said, as long as you’ve separated from your employer. So that’s a really exciting account to use. Um, as you kind of mentioned early on, you do have to be an employee of your institution to have access to this. So like you mentioned your first year you were on fellowship, I’m suspecting this letter came after you transitioned over to an employee type position. So for those listeners, um, for those listening, if you are an employee, then certainly this is something to check into. I would hazard a guess that, um, large public universities part of state systems like the one that you’re at are more likely to offer this kind of benefit than private universities, or it might depend on your state as well, like maybe some state systems do, some don’t, but I have heard of this for, you know, certain employees at um, large public institutions.

Kyle (41:19): Yeah. My understanding is that, uh, it’s more of a benefit of public universities, so you wouldn’t find it everywhere and some universities might just not offer it, but worth looking into if you’re employed by a public university.

Emily (41:32): Absolutely. Before I ask you my final standard question, I was just wondering, with all these strategies you’ve been using over the past five, six years, what’s been the effect? Like, have you, you’ve mentioned numbers here and there, but like have you significantly increased your income or your net worth or reduce your stress or like, what, what has been the effect of actually employing these strategies? And I guess also the cost, like how much time do you spend on these kinds of activities

Kyle (42:01): Overall, the result of these has been, you know, thousands of dollars that I’ve saved up. And because any extra money that I’m saving up, I’m putting into retirement accounts that’ll continue to compound. So, you know, a thousand dollars saved now will be even more thousands of dollars at retirement age. Um, so it’s really kind of had a snowballing effect, uh, where just a little bit saved results in making it easier to save more money, uh, which will result in more money with investments further down the road. Um, so I found it to be definitely worth pursuing. Uh, my net worth has definitely increased quite a bit in graduate school, although part of that was having a Roth IRA from even before I’d started graduate school. Um, and like you said about, uh, benefits to stress and wellbeing, I think that’s a very strong part of it as well. Uh, by having enough of an emergency fund, uh, saved up that you can do these sorts of strategies and have money to contribute for, uh, 529s or bank bonuses or whatnot, um, and having enough extra money like that beyond your monthly living expenses is really a source of stress relief. Uh, it’s nice to know that uh, if something unexpected comes up, I’m not gonna be unable to pay my bills that month. You know, and there’s circumstances where, you know, for instance, one point in graduate school, both my parents injured themselves within a few days of each other and I flew out, uh, to help take care of them. And you know, having enough money that you can just book a last minute, uh, flight without having to, you know, be unable to pay your bills, uh, is really a source of stress relief

Emily (43:40): About the cost question. Like how much time would you say you spend doing the stuff? Like per week or per month?

Kyle (43:45): Really not that much, I would say. Um, a lot of these things, especially over time have gotten better at optimizing. Um, you know, in terms of like contributing to a 529 plan and stuff like that. Um, you know, once you’ve got it set up, it just takes a few minutes to say, you know, transfer a thousand dollars into this account and then just put a reminder on your calendar to do taking it out next week. Um, so some of these are pretty low effort. I would say that the bank bonuses and credit card bonuses take a lot more time and that’s something that I’ve not been doing as much lately, especially as I’m trying to finish up my dissertation. Um, but it’s something that, you know, was a nice extra source of cash here and there, there, and you can kind of devote time flexibly to it depending on if you’ve got extra time to look up if there’s any good signup bonuses right now. Um, but then since you’re not depending on that income, if you’re don’t have the time or don’t wanna deal with it, then you don’t have to.

Best Financial Advice for Another Early-Career PhD

Emily (44:47): Yes. Oh, such a wonderful position to be in. Thank you so much for sharing all of the things that you’ve learned and tried out and, you know, found what works and what didn’t for you, um, over the course of your time in graduate school. This is really amazing. I really hope the listener is gonna take away at least one thing to experiment with <laugh>. Um, so let’s wrap up with, um, my final 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 touched on in the interview already, or it could be something completely new.

Kyle (45:14): Yeah, if I had to sum up everything that we’ve touched on in this interview, it’s that things that are small amounts of money here and there and just a few percent of recurring things, uh, really add up over time. Um, that by saving a few percent off your living expenses, having your emergency fund earn a few extra percent, uh, per year, um, saving a few percent on your taxes for money, that’s gonna grow a few percent every year until you retire. Um, these things when combined, uh, really start to add up and let you, uh, get to a place where you have enough money that you have more financial stability and more flexibility, uh, to do the things you want. Um, and really a lot of it comes from having enough of an emergency fund saved up that you can do these sorts of strategies. Um, so especially anything that you can do to save up extra chunks of change if you don’t have an emergency fund. And then once you get to the point where you, you know, got four or five months of your living expenses you’ve saved up in the bank, you can start to play around with some of these other strategies to let that money snowball.

Emily (46:18): Wonderful. I love it. Thank you so much, Kyle, for volunteering to come on the podcast.

Kyle (46:23): Yeah, of course. Thanks for having me.

Outtro

Emily (46:34): 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 me and show notes creation by Dr. Jill Hoffman.

This Grad Student Channeled Her Financial Exuberance into Teaching and Coaching Her Peers (Part 2)

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In this episode, Emily interviews Elle Rathbun, a 5th-year PhD candidate at UCLA. This is a continuation of a conversation started in the last episode. Last year, Elle shifted her financial education efforts into an official position with the UCLA financial wellness office, through which she delivered presentations and provided one-on-one coaching. Having a 75% position with the university required her to adjust how she managed both her time and money. Elle and Emily conclude the interview by sharing ideas for how the listeners can start helping their peers at their own universities with respect to their finances.

Links mentioned in the Episode

This Grad Student Channeled Her Financial Exuberance into Teaching and Coaching Her Peers

Teaser

Elle (00:00): Because I, I grew up with so much anxiety regarding spending and money that is, I, I think it was actually really good for my health, mental health that I sort of figured out where, where to cut, um, that anxiety from just because I needed to be able to save time in order to do my job, um, to do both jobs and get enough sleep.

Introduction

Emily (00:28): 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 (00:57): This is Season 19, Episode 6, and today my guest is Elle Rathbun, a 5th-year PhD candidate at UCLA. This is a continuation of a conversation started in the last episode. Last year, Elle shifted her financial education efforts into an official position with the UCLA financial wellness office, through which she delivered presentations and provided one-on-one coaching. Having a 75% position with the university required her to adjust how she managed both her time and money. Elle and I conclude the interview by sharing ideas for how the listeners can start helping their peers at their own universities with respect to their finances.

Emily (01:37): You’re probably listening to this podcast because you’re interested in improving your own practice of personal finance, and you want to learn the best PhD-specific strategies to do so. Well, you don’t have to listen through the entire episode archive to do so. Instead, go to PFforPhDs.com/advice/ and enter your name and email there. You’ll receive a document that contains short summaries of all the answers ever given on the podcast to my final question regarding my guests’ best financial advice. The document is updated with each new episode release. Plus, you’ll be subscribed to my mailing list to receive all the latest updates there. Again, that URL was PFforPhDs.com/advice/. You can find the show notes for this episode at PFforPhDs.com/s19e6/. Without further ado, here’s part 2 of my interview with Elle Rathbun.

Financial Wellness: Struggling with Motivation

Emily (02:47): I’m curious what you learned once you, or you said you had to get up to speed on student loans and so forth. That makes sense. Um, once you started talking outside of your like biosciences peer group, were there any, aside from the financial things you already brought up that were more like taxes and bureaucratic kinds of things, any financial patterns that you noticed or issues about the PhD community more broadly at UCLA? Like what were people struggling with or what, what do they have questions about aside from retirement, aside from taxes, aside from pay checks.

Elle (03:14): One of the main things was motivation. Um, and so this is mostly to speak about the wellness side of it, but it has a huge impact on the financial side of it. And so, um, people just didn’t seem, it’s really hard to convince someone to save for something that’s like 30 plus years out, right? And so, um, a lot of the people I talked with, um, they, they just needed to feel a little bit more motivated or they’re like, I know I need to start investing. I have no idea how. Um, but also I think credit cards were a huge aspect of it as well. Um, I think there’s a lot of misinformation, um, about how to pay off credit cards, um, and when to pay off credit cards. Um, and so, so I think credit card, like debt in general, um, and student loans, uh, as well as just motivation of how to get organized to the point that you then felt comfortable going forth and either paying off that debt or investing or just saving or just spending, um, certain things. And so there was that, there was also just what, what resources are available. Um, UCLA is phenomenal in terms of offering so many student resources. Um, besides financial wellness, we also have, uh, like loan services where you can talk about your student loans and figure out a repayment strategy, but student legal services was incredibly helpful to me when I was figuring out, um, some stuff with like my employment and, and the pay schedule and overpayments. Um, and, uh, so I think there are just so many resources that students are not necessarily aware of or they needed to be reminded of. And so just being able to point them in the right direction, um, was a huge thing that we talked about. Um, and it wasn’t a huge burden to me. I was like, oh, there’s an office specifically for that, and they’re much more capable of talking about that. Um, so I would just redirect them to there.

Emily (05:03): That’s one of those great advantages of being a student that you might not realize until you’re no longer affiliated with the university is like there are so many resources available to you and a lot of them are free or low cost because they’re designed for students. And yeah, once you exit the university system, you’re on your own and you have to pay for everything. So like, yeah, get all your checkups, your financial checkups, your legal checkups, whatever needs to happen, like before you leave the university.

Elle (05:27): Yeah, absolutely. And I will say also that there are people who before graduate school, whether they’re master’s program, uh, or PhD or what have you, um, they would, they worked right? They, a lot of them worked in the UC system. And so when I helped a, there were a couple people who I helped create a, a Roth IRA with, I would just, they would screen share or I would sit next to them, um, and they would see, because uc use- the uc system uses Fidelity as, uh, its brokerage institution. They would see a retirement account with like tens of thousands of dollars in there. And they’d be like, is that mine? And I’m like, yeah, that’s yours. That’s all yours. Um, this is the type of account it’s in. This is, these are some of the restrictions. Just know it’s there and know where it is and know what you could do with it. Um, and so that was actually really nice to see that, um, you know, a lot of people don’t necessarily pay too much attention to their withholdings and um, and things like that, which is totally fair. People are busy, but also, um, you’re, you’re paying into that for, for a reason. And so it’s already there. You may as well may as well know that it’s there and know how to use it.

Emily (06:30): That speaks to the power of pay yourself first, that you can literally forget that money was being removed from your paycheck for that, you know, great purpose and oh, discover it like free money later. You didn’t even, you didn’t even miss it. That’s the whole point.

Elle (06:44): Absolutely.

Working for Financial Wellness as a PhD Student

Emily (06:45): I’m also curious about the logistics of you working, um, for this office. And I understand you’re not working with them anymore, right? So it was maybe a nine month, eight month kind of period, right?

Elle (06:56): Yeah, uh, the beginning of November to the end of June.

Emily (06:59): Okay. Were you paid W2?

Elle (07:02): Yes.

Emily (07:02): Okay. And so how did this work with your existing funding or your existing stipend?

Elle (07:06): So my income was W2, um, for the first, when I first became employed through the Department of Neurology, which is the department my PI is associated with. Um, and so they would both appear, so I had to get explicit permission from my PI to sign off so I could have a higher percentage of effort. Um, so it was basically 10 hours a week or 25% effort for this financial wellness position. Um, and then I was at 50% effort for my graduate student researcher position, uh, with neurology. Um, and then things had to become rebalanced because that grant that I applied to did get funded. And so, um, so then I was partially had partial effort on, uh, for neurology. The 25% financial wellness remained the same. And then I was a certain percentage on my own grant, which was not W2. But now is.

Emily (08:02): Yeah, that’s the highest percentage I’ve heard of a graduate student going up to in terms of employment. So it’s not at all surprising to me that you had to get like the special permission and everything to do it. And then in terms of like your own work and your own time management, did that 10 hour per week that you were devoting to the financial wellness office, was that like over and above a 40 or more than 40 that you were already working?

Elle (08:22): Yes, very much so. Um, and so it is one of the things that I had laid out in that initial email to my PI requesting to, to be able to apply for this, and then eventually, if I got it, um, that he would sign off on this. Um, and he’s been nothing but supportive. He’s been phenomenal, um, in this whole process. Um, but one of the things I laid out was this is not a zero sum game. This will not take away from my time or effort in lab. Um, I am one of those people who the more things I have going on, the more productive I become. Um, and, uh, so, so I maintained many hours in lab, um, and that never faltered during my time. One thing that I had to come to terms with was I had to be okay with spending more. So I knew that if there was a way to save time in my personal life, um, even if that meant spending a little bit more, I had to take it. So I didn’t meal prep as often, um, and I didn’t drive out of my way to get the cheaper gas because that takes like 20 minutes. Um, and so, so there were things that I just had to come to terms with. Um, I, it was definitely a net gain. Um, I was paid $24 an hour for that position, and so, um, that added up in a month. But, um, because I, I grew up with so much anxiety regarding spending and money, that is, I, I think it was actually really good for my health, mental health that I sort of figured out where, where to cut, um, that anxiety from just because I needed to be able to save time in order to do my job, um, to do both jobs and get enough sleep, um, and serve as a mentor to, you know, my undergraduate students and a rotation student who is, um, uh, working on my project. Um, and just to make sure I wasn’t slipping in any ma- major areas, I had to be able to, to pay for saving time.

Emily (10:13): So this, tell me if you thought about it this way, but I guess the way that I would think about this is that despite the fact that it was associated with the university, you had to get the special permission you’re paid by the university and all of that. Essentially what you were doing is you had a side job, you had a side hustle, maybe you were doing it, you know, during your regular, what other people would consider their, you know, nine to five. You had permission to do it, but essentially it was a side job. And really what this is, is kind of a hobby that you decided to monetize, right? So like, it’s something that you clearly had been devoting time to before that point on a volunteer basis, and then you switched at least some or maybe all of that effort into this paid position. Um, and so it absolutely makes sense to me. Like it’s essentially like you took on a side hustle, right?

Elle (10:56): Absolutely. Yeah.

Emily (10:57): And then the other thing that I’m thinking about this is that, um, just what you were talking about there of like making the decisions of like, okay, I need to manage my time a little bit differently. I need to manage my money a little bit differently because I had this extra position. Probably all the work that you’d been doing in YNAB and everything really helped you make those decisions because you already had a really good perspective on what you’re spending, how you were managing your time and so forth. And so it was probably very easy for you to make decisions about what you could shift now that you had more money, but a little bit less time.

Elle (11:27): Yeah, it did. It made me, I, I sort of looked at my budget and said, okay, um, if I didn’t meal prep, how much would I spend on eating at the hospital cafeteria or, uh, getting something from the store or, um, just, you know, going somewhere else and, and dining out. Um, and so, so I knew exactly how much I was comfortable increasing my food budget, my gas budget, um, and uh, I think those were the two main things. Um, but I also had to look at my calendar. So I think part of it is financial. Absolutely. And part of it was also where is this coming from in terms of time? So I stopped giving strangers advice on Reddit, <laugh>, that was one of the boundaries for me. I’m like, okay, um, I can still read stuff and still look for opportunities, um, and resources, um, but I’m gonna spend less time writing paragraphs. Um, so

Emily (12:14): I also had to create a Reddit boundary with myself because I loved it so much. I could not continue at all.

Elle (12:21): <laugh>. Um, yeah. And I’ve, you know, and after, uh, ending the position, um, that I, I sort of slipped back into that. Um, and so, but really figuring out where that time was going to be coming from was essential. Um, and just relying on every day I would just like wake up. I had no idea what I did the day before. I had no idea what I was doing that day. I just had my Google calendar tell me everything. Um, and so, um, so yeah, it was really, it was, it was very busy. Um, but I loved it so much. I don’t think there’s ever been another time or activity in my life where I felt like I was making such a huge positive difference in other people’s lives. Um, and so that was incredibly rewarding to me.

Emily (13:02): But you’re not with them now, right? Because I think you said

Elle (13:05): I’m not with them now

Emily (13:06): Sometimes, like the structure changed, but you, you ended the position basically last June.

Elle (13:11): Yes. So, um, I got my NRSA funded, um, and that started in 2024. And so the NIH has the stipulation that I can’t work more than 25% elsewhere. Um, and there was a little bit confusion around that. Um, I thought, great, I can, that’s financial wellness, 25%. Um, however, I’m at 21% effort with neurology. So essentially what it boiled down to is, um, if I had taken the financial wellness position for this coming year, I would be at 46%, which is significantly different. Um, and, and then, so, so I wouldn’t be able to take that position. Um, and I would still be able to continue it theoretically, um, if I was willing to, to decrease my neurology appointment. So essentially I would be paid less for the same work. ’cause I’m really working, um, for neurology no matter what.

Emily (13:59): Yeah, the PhD has to get finished.

Elle (14:01): Yeah, exactly. I’m like, well, I have no other choice. Um, but so that was, so that became the question to me is, uh, am I willing to essentially not get paid anymore to keep this position? Um, and because I had to make sacrifices in my life that cost more, um, I wasn’t able to, I decided against, um, against maintaining and keeping that position. Um, and so, um, I I’m so excited, like financial, well, they’re right across the street from my, my lab. Um, I told them I will be at their events. I’m still in touch with, uh, coaches in that office and with the director. Um, but, uh, in terms of can I do 10 hours a week for the next year, um, without additional pay? Um, the, the answer to that was no.

Emily (14:44): Yeah. And so I’m wondering, you know, you mentioned your Reddit usage came back <laugh> once the, uh, once the position ended. Have you made any other shifts to like sort of scratch this itch in the personal areas of your life? Like, are you back to chatting with your peers more like what’s changed?

Elle (14:59): Absolutely. Um, yes. So, um, I think my peers are tired of listening to me. Um, I do post a lot on our Slack. Um, we have a, I I created financial, uh, channel on our slack. So if there’s something that I discover, um, for instance, you can pay taxes with PayPal, um, <laugh>. And, um, uh, so, so that’s one way I scratched the, the, the NSID or the neuroscience and PhD specific itch. Um, I also started volunteering for junior achievement in SoCal, and so that’s more focused on educating, um, young people, so middle schoolers and high school students. And so that’s been incredibly rewarding. And I just started this summer, um, because I knew I, this, there is an itch to scratch and their headquarters are fortunately really close to where I live. Um, and so, uh, and so just doing a lot of like, work in the community, um, and, and talking to individuals and sort of just always being open. I like if I’m introducing myself, um, not necessarily the first thing I say, but also it’s always, it’s a huge part of my identity in that like, I have a passion for personal finances. And so, um, and so I just have friends who aren’t associated with the university at all, who are then open to budgeting. I have friends who do a lot of like freelance work in the entertainment industry, and so I talk about YNAB with them. Um, and so I think just sort of putting myself out there, I I, there are things that I don’t need to share. I don’t need to share what, what banks I bank with or my net worth or anything to have a, have a good discussion in that like, oh, I love my budget budgeting software, or, oh, I have so many thoughts about student loan repayments, um, and things like that. So yeah, just putting myself out there and, and doing more work in the community, but on a more flexible schedule and timeline.

Commercial

Emily (16:46): 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 2024. These educational workshops explain how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. For the 2024 tax season starting in January 2025, I’m offering live and pre-recorded workshops for US citizen/resident graduate students and postdocs and non-resident graduate students and postdocs. Would you please reach out to your graduate school, graduate student government, postdoc office, international house, fellowship coordinator, etc. to request that they host one or more of these workshops for you and your peers? I’d love to receive a warm introduction to a potential sponsor this fall so we can hit the ground running in January serving those early bird filers. You can find more information about hosting these workshops at P F f o r P h D s dot com slash tax dash workshops. Please pass that page on to the potential sponsor. Now back to our interview.

Writing a Book About Lessons Learned During Financial Coaching Sessions

Emily (18:02): So I see a lot of, um, parallels with my situation when I was in graduate school, um, engaging in many of the same activities. Um, what I was doing at the time was blogging about personal finance, because blogging was a thing back then, um, 10 plus years ago. So I think because I had this blog and it wasn’t like anonymous, like I would, you know, link to it, you know, on like my personal, like social media page or something like, and I would talk about it with my peers too. I was open, it was clear to other people that I was open to talking about this stuff because I talked about it on the internet. Um, now fast forward, you know, we’re in 2024, blogging is not so much of a thing now, but, uh, creating social content is, so you’ve talked a lot about creating actual in-person face-to-face connections, you know, with your peers and with the, the people you’ve met through the financial wellness office, and that’s amazing. I’m wondering if you do any content creation or if you’re interested in that, um, sort of for the wider internet.

Elle (18:55): Ah, great question. I am actually writing a book, um, which is nowhere near, uh, being ready for a manuscript or anything. Um, but something that came up as, uh, a QuestBridge scholar and a PhD student is that a lot of people just need to know where to start. Um, and I, I think a lot of people, and probably a lot of listeners know like, okay, I know I need to invest. I know I need to save, I know I need to pay off debt. Um, but it’s really hard to know what order to do things in, um, and to feel comfortable in whatever you pick. And so, um, I’m sort of putting together lessons that I’ve learned for, from those coaching appointments, um, into a book that will hopefully be available for very, very cheap or free, um, and, and sort of putting that together in a more synthesized, very thoughtful way. Um, I do avoid social media, um, just for my own like mental health and benefit. Um, Reddit is really as far as I go, Reddit and LinkedIn. Um, but I’ve never really like posted on LinkedIn, um, except for like one review article that I wrote. And so, um, but yeah, so I, I do want to have like a choose your own adventure book. Um, hopefully physical, but maybe just published, um, as an ebook as well. Um, and that’s sort of the brainchild of conversations I’ve had with, with fellow QuestBridge students and with the founder of QuestBridge as well. So they’ve been hugely supportive even after I’ve long graduated from undergrad in, in helping alumni try to figure out where, where to go from here. Like, okay, great, you have, you started your new job, um, now what? And, and I think it’s, that’s not, that’s not a unique situation for people to be in. I think that’s very widespread. So, um, yes, uh, that, that will eventually come out. Um,

Emily (20:37): I’m so glad to hear that my question was not a suggestion, honestly, <laugh>, because social media can be, as you already know, because you’re not really using many forms of it, um, such an incredible, uh, time suck. And it also doesn’t necessarily, some people can blow up from it and, you know, make it their whole thing or their whole business or whatever. But I think because you have this other career <laugh> that you’re pursuing, um, a book is an amazing like, place to put all of your like thoughts and knowledge and, and observations and what you would guide other people to do. And it’s such a, I I’m a reader, like I love consuming books. And so I just think it’s a wonderful format, like for teaching, and you can obviously have a great teaching experience through a book and not have it take over your entire life <laugh> the way that social media can. So I actually really love like the balance of your striking, and you obviously need to strike that balance because we’ve talked about the time management, like you can’t be on socials like all day long because you have so much to do. Um, so I’m, I’m really, I’m really glad to hear that and I would love to, you know, when it’s finished, like I’ll help promote it, like let me know, you know, podcast listeners I’m sure would be interested in, in seeing it as well. So that’s amazing. I’m really glad you’re working on that project.

Elle (21:42): Thank you. Yeah. Um, I’m very, I’m very excited about it and I think I, I, in terms of content creation, I do do it like I do investing. I set it, forget it. Like I don’t want to have to maintain something, um, because I know that it’ll just always be omnipresent. Um, and, and so I would like to focus on, on my research, um, but I absolutely want to to sort of, uh, compile everything that I’ve learned and, and put it out there because I’m gonna do it anyway. Um, may as well be something that’s accessible.

Supporting Financial Institutional Knowledge at Your University

Emily (22:12): Yes. I’m so glad to hear that. Maybe there are some other listeners to the podcast who, like you listening for a long time, you know, got really excited about personal finances, wanted to, you know, read the books. Consume other <inaudible> Learn a lot and they have a lot of insight into how things work at their university in particular, and all the idiosyncrasies that go along with their, their own experience as a graduate student at their university. Um, do you have any suggestions for listeners on how they might do some of the things that you’ve done or similar things, just how to help their peers because they have so much of institutional knowledge and how can they pass that on?

Elle (22:47): Yes. Institutional knowledge is the first phrase that popped into my mind. So, um, do whatever is sustainable and if there’s one particular person who’s driving this, um, or one particular person, for instance, like a student affairs officer who will be at the university for a long time or even a professor, um, if they are okay with just like owning a Google Drive, that’s really what my resources are. They’re just all in a Google Drive. I can share it with anyone, it’s publicly available. Um, people can share the links to it. I don’t care if anyone from outside of UCLA sees it, it’s great. Um, but sort of just, I think whether it’s an individual effort or a group effort, just start. Um, so if you give a presentation, um, even if it’s 15 minutes of how to sign up for direct deposit or how to enroll in your university’s retirement plan, et cetera, um, just write it and just put it somewhere. And I think once you have somewhere to put it, then it makes writing it even easier. And a lot of the content I’ve created and a lot of the resources I created took me maybe an hour, sometimes less, sometimes a little bit more, but just having a place to stick it where it could be organized. Um, and then I can create copies of, for instance, I create copies of my managing finances presentation for orientation every year and I edit it. Um, but it always just gives me a launching point. And so, um, finding a place to stick that institutional knowledge and then just, just doing it or hosting a conversation, um, creating an outline of, um, of what you might wanna talk about with your peers. Maybe there’s a question you don’t know the answer to that, um, that maybe just a discussion with a few people who are older or have been in the program longer, um, that they can answer, I think is, is huge. Um, so few people know exactly what they’re doing, <laugh>. Um, and so I think the more we talk about it, especially with people in similar situations with us as us, um, are are is incredibly useful just to have those conversations and then, you know, someone can just take notes and then stick it in whatever Google drive or box account, um, that they have. But, you know, it’s, it’s surprising how quickly those resources build up once you just dedicate yourself to, okay, every time I have a discussion that’s a little bit more structured, every time I have a presentation that’s a little bit structured, um, this is where I’m going to put it, um, I think is useful. Even if that’s like a, something that’s pinned on a Slack channel, which is currently what mine is. <laugh>. Yeah,

Emily (25:13): I think that makes so much sense. Um, especially the part about like where you started, which is to find like a sponsor who’s going to, whose tenure at the institution is gonna last longer than any one individual graduate students. Um, I love the idea of asking a staff member or a faculty member to house that, um, so they can for, you know, years and so to speak, generations of students to come can keep pointing to it. Another suggestion to throw in there is to maybe involve a student organization, like your graduate student organization in your school or your university or even at the departmental level, if that’s where you went to start, like that’s where you started. Those institutions, although the people change, the group itself stays on for, you know, decades. And so that could be another place too, how these kinds of resources, and I love that the way you phrased it as like, um, sort of a collaborative effort. Like yeah, you might be creating some resources or having some conversations, but also if you make it known that this is the place where these sorts of things go, other people can create them too. Anything they learn can go in there. So our episode from season 18, episode three with Dr. Carolina Mendoza Cavazos, she talked about, again, this institutional knowledge, um, and how it built up with her over time, very similar to the story that you’ve told as well, like some of those weird things about pay schedules and, you know, tax withholding and all this stuff. Um, so, so practically useful and yet until you’ve lived through it, you don’t know that it’s coming. So like, yeah, just a place to house these resources so that people can get prepared for that month or two where they’re not gonna have paycheck, which is so scary. Or like with, which I talked about with Carolina, like lapses in benefits if you don’t handle like a transition between funding sources properly, like just giving people a heads up that stuff is coming is so, so important. So I love this idea. Thank you so much for suggesting it. Um, anything else on that topic of like how people can help their peers if they’re excited about this topic?

Elle (26:56): Um, I think if you don’t have a financial wellness, uh, program or office at your university already, I think talking with administration, whether that’s, um, of your program or even higher, um, the, the way financial wellness at UCLA was started is like 10 years ago. Um, student feedback was, please give us a resource that where we can learn about things like credit, like credit cards, we’re getting this great education, but also there’s things in our daily lives that we need to know that we currently don’t have a great way of learning, at least through the university. So, um, if your financial, well, if a financial wellness office exists already at your institution, I think just going and seeing what resources they have. Um, I didn’t know that financial wellness created all these workshop presentations that are publicly available, um, to anyone even outside of UCLA. And, uh, so just seeing, seeing what resources they have, um, getting involved, if it’s also a passion of yours, um, which I’m sure a lot of listeners of this podcast it might be. Um, but if it doesn’t exist, if that office doesn’t exist and that resource doesn’t exist yet, make it known that you want it and, um, you’re definitely not alone in that. Um, I think just having a lot of names on a letter could at least get the ball rolling for those future generations of students because it worked at UCLA. Um, and I think it’s sort of, uh, continuing across the country as more and more financial wellness offices and programs pop up and, and start really helping students in a way that really matters.

Emily (28:25): Yeah, so I’m part of this, um, community, I guess called the Higher Education Financial Wellness Alliance, and it’s, it brings together financial wellness professionals from universities and colleges across the country. So when I attend like their conference, it seems to me like everybody has a financial wellness office. Maybe that’s not the case, but I will tell you that a lot of universities have financial wellness offices. It’s just that they might be focused on the undergraduate population. Now at UCLA, it sounds like they had like a position for like a graduate student, you know, two, two graduate student peers, um, peer counselors at a time, which is amazing. I’ll tell you that that’s not common. But the more and more graduate students who go to their financial wellness offices and say, we want these resources, and by the way, we want them tailored to our specific situation because it is different than an undergraduate situation. Um, the more and more they hear those requests, they will try to meet them, um, eventually <laugh>, but I think right now a lot of these offices don’t see graduate students ever. And so they don’t, it’s like the two popula-, they’re just not talking to each other, right? It’s not that graduate students don’t need this information, it’s just that they’re not going to that specific source and asking for it, but they should. So yes, I agree.

Elle (29:33): Amazing. Yeah, I think if you, if you never speak up right then, then um, it’s great to have, yeah, one Google Drive folder housed by like a professor, but, um, think about how great it would be to yeah, expand, uh, a university’s financial wellness program to include or be more inclusive of, um, graduate students. I think there’s always going to be work to be done, but um, I think it needs to start with, with a voice.

Best Financial Advice for Another Early-Career PhD

Emily (29:55): Awesome. Okay, well let’s end 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’ve already touched on in the interview, or it could be something completely new.

Elle (30:09): Yes. Um, I thought a lot about this, um, because I knew the question was coming. Um, but I think, you know, there’s, there’s of course the, the starting a Roth IRA and budgeting, but I think the main advice I would give is to make time. Um, I think it’s so easy to put off something because this is sometimes scary for a lot of people. If you’ve never invested before, if you’ve never even heard of something, um, just make time, set a schedule maybe for me, I set aside two hours every week where I focus only on, or sorry, two hours every two weeks to focus on only my finances. So I pay off my credit cards, I check my credit report sometimes. Um, and, um, I, I look at, I update my net worth tracker, I look into if there’s a credit card that might have a good bonus. Um, I sort of see where I am in terms of my budget and my, my goals. Um, and then I also look at like potential investing opportunities. My, my investing is strategy is pretty set, um, and that I don’t want to really touch it, but, um, but when I was first starting, I think just making myself make time for it and then dedicating only those like two hours of just educating myself, figuring out what an index fund is, um, what, what I wanted to do, uh, in, in terms of like tax strategy, all that stuff, paying taxes, et cetera. Um, I think make, it starts with, with making time to do it, um, and not putting it off.

Emily (31:39): I love that piece of advice. Some people call this a money date, um, a recurring money date that you have by yourself or with your partner or whatever your applicable situation is. Um, I would also add in there like, I mean, all the things that you listed are things that, um, you can do either every time you have the money date or maybe they’re sort of seasonal or occasional. Um, but I would also add in, uh, consuming content. So like maybe that’s okay, I have two hours set aside every two weeks and it took me 75 minutes to do my tasks and I have another 45 and I’m gonna read a book, or I’m gonna listen to this certain podcast, whatever, just to like further that. And I, I love that, you know, keeping that space on the calendar, you obviously, um, do block scheduling with your calendar time block planning. Um, so that’s like an amazing way to do things and just to have that protected time because then if something does come up in your financial life, like I had something come up recently, which is that, um, my 401k provider is no longer my 401k provider. They ended the program for everyone. So like, I had a lot of administrative things to do to like, get this 401k moved elsewhere. And so just having that protected time on your calendar is great when something like that comes up because you can sit, you don’t have to steal time from, you know, some other aspect of your life. It’s already recurring there. So I really love that suggestion. Um, Elle, thank you so much for coming on the podcast, spending this time with us. I hope the listeners really enjoyed this episode, got a ton out of it and are inspired like I am to continue the work. So thank you again.

Elle (32:58): Thank you so much. Yeah, it’s, I’ve, I’ve been hoping to come on this podcast for so long and I was just always like, maybe I’m not ready, but, um, I hope, yeah, I hope this is useful to your listeners and thank you so much for having me. I, I really had fun.

Emily (33:09): Awesome. And a note to the listeners. Yes. So Elle and I happen to meet each other in person and I said, why do you not come on the podcast? Like, let’s make that happen. And as she just said, she’d been waiting and waiting, waiting to volunteer and yeah, there’s never gonna seem like a perfect time. Your story is done and whatever. Just go ahead and volunteer pfforphds.com/podcastvolunteer. That’s the form you can go and fill out and uh, I would love to have you and have another wonderful conversation like the one we just said. So yeah, I hope uh, more people volunteer and more people will take up the mantle for what you’re doing as well.

Elle (33:38): Absolutely. Thank you so much.

Outtro

Emily (33:50): 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.

How This Life Sciences PhD Fosters Entrepreneurship

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In this episode, Emily interviews Dr. Marquicia Pierce, who holds a PhD in molecular physiology and biophysics from Vanderbilt University and an MBA from Northwood University. In the ten years since finishing her PhD, Marquicia has worked in various capacities to foster life science start-ups and small businesses, and she is now the owner and principal consultant for Ruby Leaf Media, a science communication company for people who want to turn their tech story into a business story. Marquicia recounts the courses and projects she pursued during graduate school that set her up for her post-PhD career and how she balanced her advisor and committee’s expectations with her career ambitions. She also details the multitude of government, academic, and private sector resources that are available to founders and inventors and the skills and mindsets that a PhD can bring to entrepreneurship.

Links mentioned in the Episode

How This Life Sciences PhD Fosters Entrepreneurship

Teaser

Marquicia (00:00): Get in a great habit of, um, not only just looking at the numbers, but what is the story behind the numbers? If I was to say, have a narrative around this, what did, what did it mean? And it’ll help you uncover what your priorities are. Something that’s not working. Like I, I spent so much money on this, but I don’t know if it’s really working. You’re kind of already gut checking and doing like an audit, if you will.

Introduction

Emily (00:31): 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 (01:00): This is Season 18, Episode 1, and today my guest is Dr. Marquicia Pierce, who holds a PhD in molecular physiology and biophysics from Vanderbilt University and an MBA from Northwood University. In the ten years since finishing her PhD, Marquicia has worked in various capacities to foster life science start-ups and small businesses, and she is now the owner and principal consultant for Ruby Leaf Media, a science communication company for people who want to turn their tech story into a business story. Marquicia recounts the courses and projects she pursued during graduate school that set her up for her post-PhD career and how she balanced her advisor and committee’s expectations with her career ambitions. She also details the multitude of government, academic, and private sector resources that are available to founders and inventors and the skills and mindsets that a PhD can bring to entrepreneurship.

Emily (01:52): I’m looking for a couple more interviewees to round out Season 18 of this podcast! If it’s been in the back of your mind to do so, this is your official invitation to please volunteer to be interviewed. I love that on this podcast I get to feature PhDs and PhDs-to-be who are almost exclusively regular people and learn and share their real-life stories and strategies. Please go to PFforPhDs.com/podcastvolunteer/ and fill out the quick form, and I’ll be in touch over email. I look forward to interviewing you in the coming months! You can find the show notes for this episode at PFforPhDs.com/s18e1/. Without further ado, here’s my interview with Dr. Marquicia Pierce of Ruby Leaf Media.

Will You Please Introduce Yourself Further?

Emily (02:51): I am delighted to have joining me on the podcast today, Dr. Marquicia Pierce of Ruby Leaf Media, she’s the owner there. And Ruby Leaf Media, as she described to me, is a science communication company for people who want to turn their tech story into a business story. And just in our pre-interview chat that Marquicia and I had, it was so fascinating to hear about her career journey. I know you’re gonna get a lot from this as well. So, Marquicia, welcome to the podcast. Would you please introduce yourself and your company for our listeners?

Marquicia (03:18): Thank you so much, Emily, for having me. This is such a great opportunity, um, just to chat, sit down and chat with you. You’ve been providing such great valuable resources for, uh, a lot of my colleagues, so I appreciate the opportunity. Um, so yes, so my name is, um, Dr. Marquicia Pierce. I am a life scientist by training. My, uh, training was in molecular physiology and biophysics. And, uh, ever since my time in the lab, I, I found that I really enjoyed being able to take those concepts from the lab and bring them out to the community. So, um, as we’ll get into, uh, some of the, the context here, um, my background includes, um, being a military brat who, who knows that community can be, uh, made and you have an obligation to, to bring something to that community. And so, um, I’ve just been able to fortunately, have been able to do that for a lot of different, uh, high tech companies that are started by PhDs and they’re trying to cross over from the lab to, uh, bringing value to, to their community, wherever that is.

Experiences During Grad School That Went Beyond Basic Research

Emily (04:20): And this is gonna be a really fascinating interview, um, on just all the opportunities there are in front of graduate students and PhDs for doing just that, for, um, advancing their careers and translating their work. And this is gonna be amazing, but I wanna hear more about your kind of personal journey as well. So going back to graduate school, can you tell us a little bit about like the, um, the things you did that were above and beyond just your basic, basic, you know, research as a graduate student that were like side hustles or like, like extra projects that you did just experience that you gained that helped you, that helped you along in your career path?

Marquicia (04:54): Absolutely. I love this question. Um, so I did my PhD at Vanderbilt University in Nashville, Tennessee. And during that time, I knew two things for certain. I knew I wanted to incorporate some type of business into what I was, um, what I, what I was studying at the time. I was looking at how vitamin C moves in the brain, uh, on a molecular level. We were looking at different proteins that made that po- possible, if there were any, uh, phenotypes or if there’s any characteristics when you didn’t have these nutrition, um, in your, in your diet. And I love that I could connect that to and translate that to my family, like, Hey, if you don’t eat these particular nutrition, these things might happen. Um, and, uh, I remember very specifically, my, my grandmother had major symptoms of diabetes during the time that I was, um, getting my graduate program, uh, completed. And I distinctly remember one day thinking through, I know down to the molecular level what’s happening with her symptoms and her disease progression, what would happen. But I feel so useless and helpless ’cause I don’t know if there’s a particular innovation or something that could, that could help. And that I think that kind of solidified for me that there has to be a way to take what we’re learning and translate. Um, many people have done that, but that’s when it clicked for me. And so, um, I knew I wanted to incorporate business. Uh, I wanted to get an MBA, but at the time, there wasn’t really a great place to insert that into my, my program. So I ended up, um, auditing engineering, a lot of engineering management courses in the undergrad engineer engineering school, and being able to work with them on their marketing, their tech management courses.

Marquicia (06:39): Uh, I was able to be involved with one of their capstone day for seniors where they were, um, trying to put together a research project, um, around a particular technology. We were working with a small businesses in the ecosystem. Um, uh, I had a fantastic member, uh, mentor around that, Dr. John Beers who, who facilitated that connection. And so in the lab we were doing what we needed to do, but I was auditing courses, um, around that particular thing. I was involved with, uh, tech, tech Venture Challenge where we were tasked with we being other students from the medical school, the graduate school, the law school, the business school. We were all trying to get behind a particular Vanderbilt, um, or small business in Nashville invention and make a case for this could be a business that could be sustainable and provide value to the community. Um, those are, those are things that I think were pivotal to add on. You always wanna have science plus something that you, you, uh, enjoy. And also like creative graphic design types of things. So I was, uh, a lot of those art science, um, classes as well. Uh, but yeah, definitely had a lot of projects while I was getting my PhD that helped spark that fodder, if you will, for, you know, what do I do after I get my PhD.

Entrepreneurial Opportunities for Grad Students

Emily (08:02): And in your, outside of just your own personal experience in graduate school, can you think of other like, types of opportunities that graduate students might encounter that would provide similar benefits?

Marquicia (08:13): Sure. So, um, a lot of the student competitions are a great place to start. If you just want to, to dip your, your foot in. How do I work with other interdisciplinary teams, law students, business students on a project? These could be anything from a hackathon to, uh, which, you know, you spend a weekend trying to figure out a business proposal to, um, auditing a course that even, even though they’re undergraduates, that’s, that’s a great opportunity to kind of bring in some of those concepts that are complementary to your PhD. Um, we had a, we had a, uh, academic alliance that was between, uh, Vanderbilt and the entrepreneur community as a whole that, um, it was called Life Science, Tennessee Academic Alliance, where you could get involved as a, a mentor or you could, you can bring in speakers to your, your class. You could, uh, host this tech venture challenge.

Marquicia (09:08): Um, those are great opportunities if you just wanna see if that, that opportunity is for you. Um, a lot of, a lot of times now that was, that was 10 years ago, uh, I’m seeing a lot more, uh, fellowships or courses that you can take while you’re doing your, your, your PhD that will incorporate, Hey, here’s a small business proposal, a market research, um, uh, project, uh, at, at in Michigan, there is a group called My Lead. It is graduate students, postdoc students that do just that. They work as a small boutique consulting agency where they put together, uh, a market research plan. They dig into the de the details and the data both on the science side and the business side and be, and are able to work with other companies in that way. So, um, those smaller projects, six, three to six months or a semester long, uh, is a, is a great way to kind of get your feet feet wet. With that.

Pushback For Participating in Activities Outside of the Lab

Emily (10:05): I’m wondering, um, did you encounter any cultural in terms of, uh, the field that you’re in, the life sciences, any, uh, pushback to you participating in these outside of the lab activities? I’ve just noticed that the life sciences, um, among the STEM fields would probably be the most resistant, um, to those kinds of things. But it sounds like Vanderbilt itself was pretty well set up to facilitate this. I’m just wondering what your observations were around that sort of like, culture of do we engage with business, do we engage with startups, like from, you know, the research side of things?

Marquicia (10:41): That’s a great question. So I know that there were, there were parts of, um, the community that really was open to, you know, there’s, there’s opportunities to kind of engage in these particular ways. We very often had that same conversation, like, how, how much do I say? I don’t want to necessarily, um, have an update about this in my committee meeting, uh, <laugh>. It could very well in that particular case be, um, seen as a distraction. You know, you’re, you’re here for getting your graduate studies done, you stay in the lab, especially if things aren’t working, it’s very hard to justify, you know, um, yeah, well, I won’t be able to work on it, you know, I’m, I’m trying to do this particular class. Um, I think that’s why auditing the class was really helpful. And, um, uh, the way Vanderbilt was set up, it was, uh, their IGP or the interdisciplinary program was very used to these different departments had courses that was as attached to it that we were, depending on our specific route, able to go to.

Marquicia (11:47): Um, and so there was a little bit more set up for if you wanna audit a class, um, we can, we could help that. But I still have to get permission through the graduate school to audit an undergrad class. And that included a conversation with my PI and my director of graduate studies who very, at the beginning, very naively, I said, you know, Hey, I, I think I would like to get my MBA. They were really open to, that’s a, that’s a great thought, uh, in theory, <laugh>, you know, but not necessarily having a pathway for to, to that happen. But yeah, it was very much, uh, I felt like I’m living two lives, and if, if you’re going over to the dark side of consulting or industry or management of, uh, investment banking, something that in, in included that, it was, it was kind of, um, you have to be very careful and impactful of how, how you were able to ex explain that. Um, you know, this is a class that I’m taking, it will be over at this particular time, uh, for one of the projects, uh, as intern, I have to say, well, I, I would be willing to take a pay decrease because I’m not, I’m not putting in the same amount of hours per week. So it, there were, and whether or not that that’s discouraged or encouraged, um, especially if you’re going on year six, six of your PhD, it, those can be very awkward <laugh> conversations, to say the least.

Resources for Academics Who Want to Start a Business

Emily (13:09): Well, thank you so much for sharing kind of your experience in that area. I hope it’s, I hope it’s encouraging to people who are facing similar like questions of, it’s, it’s worth pushing it through. It’s worth having these conversations. Maybe you don’t need to tell them everything that’s going, you know, tell them what they need to know, but, you know, get your work done and, and still, because these, these, these extra quote unquote experiences are the ones that are the most valuable for your career. I, I would say, we’ll see in your own story how this, um, develops. So can you say anything more about, um, the, the resources that are available for, let’s say, graduate students or postdocs or people who are still associated with academia who want to start a business, how, how the, how academia can be set up to help them do that. Um, and what are like the pros and cons of accessing those resources?

Marquicia (13:54): That’s a really good question. Um, if you are in academia, you do have a lot of resources that say if you were not, and you were trying to get something, uh, into, into the marketplace on your own that you might not be aware of. So first of all, if you’re a student or a faculty member, um, the things that you would want to be on the lookout for is if there are any, uh, connections you have with your tech transfer office. Because first and foremost, you’ve probably signed some contract or you have something spelled out with your, your place of employment that any intellectual property or even idea or anything that you work on is, is owned by the university point blank period. So you’re, the process for being able to, um, if, if it’s connected with your research, bring that into a business, they, they have a process for doing that.

Marquicia (14:47): They usually, the tech transfer office will, will, uh, facilitate. Um, it includes, Hey, I have this idea. It is just here, I’m disclosing it to you. I haven’t formed a company. I have this idea. It’s, it’s outside of my research scope. What information or what types of resources do you have, uh, for, for this particular setup? Um, at Michigan State University where I did my postdoc, there was actually a research foundation that, um, helped if you were a student, a faculty member, or even a staff person that was at, at the, OR alumni that was affiliated with the university, and you want to start a company, they were there for you to provide resources like, uh, entrepreneur and residents would be a person who’s gone through that process. They will help you build out a business plan, build out your value proposition, which basically says, how do I, how do I make a business that creates value for other people?

Marquicia (15:39): How do I monetize it and sustain it? There will also be your guide for, here’s some state resources, here’s some academic resources in terms of money <laugh> to fund either other students, undergraduates or postdocs that can help you work through this idea. And they will actually be the, um, work in tandem with the tech transfer office, um, to say, Hey, this, this is related. This could be something that we would need the university to continue to help fund the research for think medical devices, therapeutics, um, things that it takes a university and maybe a team to research. They, they work together. Anything that has to do with clinical trials, you would have to need, you would have to use a village <laugh> that, that EIR or the entrepreneur residents can help guide you through. Um, so there’s academic ins, uh, resources, so tech transfer office, student entrepreneurship groups.

Marquicia (16:36): Um, I’ve had a lot of students that I’ve worked with that are working with a family company, they’ve been able to go through with their student, um, business groups, the, the business schools there. They have pitch competitions that give very real money, 10, $20,000 sometimes. And then also connections around that. How do you get your marketing out, your packaging, your, um, your, your story for pitching to other investors? Hey, you have this food company, Hey, you have this idea. Who in your alumni network can help bring some of, uh, some insights to this? So there’s, there’s resources there, uh, at the school. And then in the, um, community, you have, um, state resources that wanna see particularly life science, high tech innovations, push their economy forward. So there’s grants on that particular side for, uh, if you’re just in this particular region working on a high, high tech, high growth company, scalable company, which a lot of life science companies are, um, here’s what we can offer to you.

Marquicia (17:38): Here’s the connections, market research, um, legal consultants, regulatory consultants, um, how do you put together a website? Those are, those are resources that are available on that end. And then one last thing, I know I need to be brief, brief about this. There are, uh, government particular, uh, outside of the different accelerate accelerators for those things, there are government funding. It’s called, uh, small Business Innovation research, or S-B-I-R-S-T-T-R grants that can specifically, if you’re connected with the university, they, um, would provide high risk, um, uh, financial, financial resources to high risk, um, innovations. Those take a little bit longer to do, and you definitely want a team to help guide you through that. But those are also, that’s also money that you don’t have to give up equity or parts of your company to access. And I’ll, I’ll pause there.

Commercial

Emily (18:35): 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.

Ownership of Ideas and Technology Created With and Without University Resources

Emily (20:02): Yeah, I think that you led right into kinda the next question, which is like the more, um, I guess aside from technology that was developed under your employment with the university, that would then be, you know, co-owned with the university. Let’s say you had an idea outside of it, not related to directly your work, the university wouldn’t own it. Um, the more kind of help you reach out for, depending on the type of help that you get, you may be giving up, um, ownership in your idea. Is that right? Can you speak a little bit about that? I mean, maybe there’s different, you know, giving up equity is different than getting a grant, for example. Can you talk about some distinctions there?

Marquicia (20:39): Sure. So at the very, um, at the very early stage in early stage in life sciences are, um, say you have a device, a medical device, you have a prototype for that device, but you haven’t tested it out on humans. You haven’t done a clinical trial or you have a therapeutic that you, you’ve maybe tested it out on mice, um, but you haven’t, you haven’t moved it towards, um, seeing if it holds up in, in humans. Most of the time you’re doing that stuff with the university. But, uh, if you, if you aren’t and you’re still in that early stage, um, the, the choices that you have are, you can go for grants and in kind services they call this non-dilutive funding, where you don’t dilute your ownership. And, um, there’s regional and government funding for that. And then sometimes accelerators or, uh, venture venture groups will have a program in which they are developing something or they’re developing co-developing with you something that can fast track that time to the market.

Marquicia (21:42): So some examples of this could be like Y Combinator or, you know, um, uh, Techstars or something where in order to have access to this, this great structure that they put in, uh, and maybe even some funds to get together, they would require a percentage of your company small, it could be many that are between five to 12% of that company. Um, the thing is, if you are, if in, if you’re in the life science space and you’re that early stage and you’re already giving up equity, you have a very long runway <laugh> to go to where every, at every milestone the company gets a little bit more valuable. And if you, you’re already given up equity at those earlier stages, you don’t have as much for the, the really heavy duty milestones, a clinical trial, uh, you know, a a distributor agreement to also incorporate or leverage giving up some of your equity. Um, so it’s, it is a very different, uh, thing for the life sciences or an academic project to, to kind of evaluate these options. Uh, if you’re really early on, you haven’t gotten a lot of the feedback or regulatory spot you could consider yourself early and the latest you can push off giving off a pa- piece of your company, the better because it’ll be valuable hopefully later on. And, um, you’ll still have that, you’ll retain that, um, that ownership.

Common Skillsets and Mindsets Between PhDs and Entrepreneurs

Emily (23:09): Well, thank you so much for giving the listeners kind of a taste of that, um, those decisions that need to be made earlier on. It, it sounds like, um, being, you know, having an academic affiliation can be so helpful because you are in many ways still considered like a learner no matter, no matter what stage you’re at. And so there’s so many resources available to help you along that path. So I’m, I’m curious now about your personal journey and also the journeys you’ve observed in others, um, from, I believe you mentioned earlier that you started your company sort of out around the time that you finished graduate school. You’ve also had a lot of other positions along the way that have, you know, added to your career. Um, and so I’m wondering for you as an entrepreneur and someone who works with entrepreneurs, what kinds of, um, skill sets, maybe mindsets are common between PhDs and people who start and run businesses? Um, like what’s help? What did we learn in the PhD that’s helpful for later entrepreneurship, those kinds of things. And that could be from your personal experience or the people you’ve known.

Marquicia (24:09): Sure. I’ll start with my personal experience. So the very first time I was introduced to like, we have to set up a company around this technology was during my postdoc. So after I left Vanderbilt, I went to Michigan State University under a, a industrial postdoc position where, um, the goal was I was working with two academic re- tenure track professors, <laugh>, trying to get a company up and going and started. And so, um, the skillset that I brought to the table and that I was trying to hone, um, was, was interesting. ’cause I was, while I was getting my PhD, I was also getting my MBA, so I was learning what were some of the frameworks that business people used, how do they talk about how they use a process, and then how do, how does that work in the lab? Or, um, how do I need to translate that from what we were doing in the lab?

Marquicia (25:00): And so, um, I would also often go back to the framework for problem solving and commu- and gr- and great communication were, um, very much similar. They just were talking about different things. So I’ll, I’ll explain. So, um, in the lab I’m working through, okay, is a small molecule, uh, useful. We do a battery of tests to distinguish why, um, based off a couple of characteristics. It might be this one is, um, it works well with cells, it’s less toxic and, you know, um, it’s, it’s easy to make. I’m being arbitrary. The way I would translate that story, um, going through my, my MBA type of framework would be, well, what value are we creating and, and specifically, who is it for? So the molecule, these, these features that we have that we were very, um, we’re trying to, trying to point out and be distinct about, now I have to turn them into benefits.

Marquicia (26:01): Well, uh, it, it’s this type of molecule that means that it’s, it’s less toxic. What does that mean to our business uh, story? Um, the people who would use it, the physicians or even the patient themselves. Well, that means that if we can keep it within the cell, it’s not messing around with your, your gut and causing you nauseous or, you know, killing other healthy cells, that means that you could take less of it. And, you know, that means for the physicians, they might adhere to the, to the drug cadence a little bit better for the patient. It means that I’m not getting upset stomachs as as often, I don’t have to, you know, get as many injections. Those are the types of communication skills where you, you are working through the same rigorous process, but you’re just trying to communicate it in a little bit different way. Um, that you, that you see when you’re filling out that story as a, as a PhD, well, I’m doing this study who, who’s in my audience? Or who’s, who’s my audience? Usually it’s your community members, right? So they wanna say they wanna see what happened, what are you doing next? And then, you know, what, what can we help you with? Same thing with a, a VC <laugh> or a, a grant writer. You have to say, what was the background, um, in their particular words, what are you working on? What is, what’s the value that you’re creating? And then where can we go from next? What’s the big milestone? So you’re, you’re able to think through a structure, uh, that’s very similar. It’s, it just needs to be translated a little bit different. Um, but being able to communicate that is, is a strength. Uh, being able to work with multiple teams that are very bright people, but they don’t work where in the same lab and the same methods and tools that you work with, you need to be able to talk their language.

Marquicia (27:41): You have to do that in, in the business world as well. And the scientists and engineers who are able to cross that gap or the ones and coachable for doing that, understanding that, okay, this is a different language. You can apply the, the practice of it, but you have to say it in a certain way. The ones that are open to learning that those are the ones that can convince other people that this is something of value. Get on our team, give us funding, give us resources, uh, that, that helps them to move that, that tech forward.

Emily (28:10): That’s fascinating. Thank you so much. Was there anything else you wanted to add on that question about skills or mindsets that transfer?

Marquicia (28:18): Um, the only other thing is that, uh, usually when I talk about my PhD and I, and I hear other people’s story and they, it comes off very linearly. We can only say one thing at a time. We did this and then we did this, and then we did this. But in reality, your, your skillset that you’re picking up with these different experiences, they aren’t a straight line. They look more like a Gantt chart. It’s like, I was trying this and then I got, I got into graphic design by being the newspaper editor for the department or something like this. And then I, that kind of went to see what policy was doing. So I volunteered a semester at this and you know, you don’t really know if they overlap or if it will lead to that big next step, if you will. But, um, that’s okay.

Marquicia (29:00): It’s, that’s what makes the journey yours is how you find out what’s create, um, how, uh, what you resonate with and the skills that you learn and these offset project or offshoot products or something that you, I was just interested in. Those are the ones that, that when you’re talking to a hiring manager or a, a program manager for that next big gig, those are the things that will resonate with them too. So, um, uh, just know that it won’t be a straight line. You’re not gonna be able to line up, uh, everything until you’ve kind of stay taken a step back and said, well, well actually, that set me up really well for this. I didn’t even know I liked doing this particular thing. So that’s, that’s all I would say for that.

Ruby Leaf Media

Emily (29:42): Absolutely. It’s just a great encouragement to, um, devote I would say a certain amount of time, a certain consistent amount of time throughout your PhD to these, like outside of the lab type activities, um, just so you can explore yourself and explore your environment and figure out what you like. And, um, as you said, you don’t know where it’s going to lead, but that’s a reason to just experiment. And I certainly did this, I didn’t do this as much in my earlier years of my PhD, but certainly by the last couple of years I was more like actively reaching out and trying different things, including the things that led to personal finance for PhDs. Um, because I wanted to figure out where I wanted to go next, and I knew I wasn’t gonna get there by just like keeping my head down and like staying in the lab all the time. Um, that wasn’t where, uh, I was gonna be headed, so. Okay. Would you please tell us a little bit more about Ruby Leaf Media and how people can get in touch with you if they would like to follow up?

Marquicia (30:31): Sure. So I, I started Ruby Leaf Media, um, shortly, like around the time I was finishing up graduate school because I wanted to continue doing these small projects around market research or, you know, putting together a, a industry report and getting paid for it <laugh>. So, uh, basically I, I started Ruby Leaf Media to, um, have that vehicle for that and I really wanted a place to infuse some creativity. Uh, at the time I was really, um, interested in how can you turn, uh, something that’s really technical into something that could be very beautiful and inspiring to your, the people that are closest to you, your family, your, your, uh, community. And so, uh, create creativity versus, um, you know, just being very defensive and, and, um, tactical about what you’re saying. I wanted to kind of merge the two. And so being able to have my own company that worked at that intersection of, uh, storytelling that businesses usually will have to do in some type of, some shape of way was my, my reason for getting started.

Marquicia (31:41): Um, today I work with, uh, a lot of ecosystem partners, accelerators, um, academic universities or academic institutions, I to, I should say, that are trying to instill some of these ideas, um, in some of these concepts and just some of this creative, um, mentor learning or peer group learning, if you will, uh, with their, with their portfolio companies or with their, with their founders. And so, um, being able to, to provide structure for that, either through a program or being able to give them tips on how do you pitch, uh, for a particular funding opportunity, how do you put that story together? That’s what, that’s, um, what my team and myself are, are really interested in doing. And we’re really interested in being able to do that for a lot of different, um, providers so that you can get that group learning experience. Um, right now, uh, the best way to look to, to figure out and see all of the different companies that I’ve worked with actually is actually my LinkedIn profile. <laugh>.

Best Financial Advice for Another Early-Career PhD

Emily (32:48): Very good, thank you. The last question that I ask of all my guests is, what is your best financial advice for another early career PhD? And that could be something that we’ve touched on already in the interview, or it could be something completely new.

Marquicia (33:01): Um, the advice part, uh, it kind of goes around budgeting. So graduate students, uh, well, when I was a graduate student, we got paid once a month and, um, I think probably a lot of graduate students started doing this. They’re doing something similar, but it really helped me got get into the idea of, um, a little bit longer term planning than two weeks or, or even one week, like what are some of the goals that we have for this particular month? IE what bills do we have to pay? What are we trying to get, get done? And, um, it set the habit of budgeting month by month and then, um, being able to bring that over to my business. Budgeting is absolutely one of the, I mean, I feel like a lot of your resources kind of talk, talk, talk through this, but, um, just getting a great habit of, um, not only just looking at the numbers, but what is the story behind the numbers?

Marquicia (33:59): Uh, just kind of walk through. I I, I kind of like when I go through my budget, like, okay, if I was to say, have a narrative around this, what did, what did it mean? And it’ll help you uncover what your priorities are. Something that’s not working. Like I, I spent so much money on this, but I don’t know if it’s really working. You’re kind of already gut checking and doing like an audit, if you will. Uh, and, and it’s, and it’s really helpful with business ’cause it’s like, I’m paying for all these subscription services, or I’m trying, I’m trying to get this marketing campaign off the, off the ground. I think it’ll be done with this quarter, but I’m already 15% into the budget. Did we do what we needed? Just kind of talk it out, <laugh>, just have a narrative around, around your finances and just, just say it out loud. We’ll help you uncover, you know, what’s, what’s working, what’s not working, what are some of your plans? Like, if you find yourself saying things over and over, it’s like, that’s, I keep saying this, uh, that’s, that’s been helpful for me.

Emily (34:55): You know, I, I don’t think I’ve ever heard that suggestion before. Like, not only within the podcast, but like in all the personal finance, you know, material that I read. I don’t think I’ve ever heard someone say, you know, in the budgeting reflection process to tell yourself a story and to create a narrative around how did this period of time go? Did I accomplish what I wanted to accomplish? And I find that to be such a good suggestion and I think I’m gonna start doing this <laugh>, um, because it feels very like non-judgmental. Like it’s, it’s just this is how things went. I’m gonna review that. I’m gonna tell myself the story of it, and next month I have the chance to start over again and make a different story next month if I want to or tell the same one if I thought it went really well.

Emily (35:37): And so, yeah. Yeah, that’s so creative and, and I obviously it plays back into this whole interview that we’ve had and the importance of communication and what you do now. So like, it shouldn’t surprise me that this advice, uh, you know, came from you in particular, but I think it’s, that was, that was really amazing. Thank you so much. Um, Marquicia, this has been such a fascinating interview. Um, thank you so much for volunteering to come on the podcast and to share kind of all of these wonderful, you know, experiences you’ve had and the resources you’ve been able to, um, tap into and just suggestions for other people who want to go on a similar path. Thank you.

Marquicia (36:08): Thank you so much for having me. I really appreciate what you’re doing and this is great. I wish I had been listening to your podcast when I was a grad student.

Outtro

Emily (36:24): 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.

Can You Earn Money from Publishing a Scholarly Book?

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In this episode, Emily interviews Dr. Laura Portwood-Stacer, a developmental editor with Manuscript Works specializing in authors publishing with scholarly presses. Laura has personally published two books with university presses and has a third under contract and has worked with hundreds of other authors. Laura describes why a prospective author would choose a scholarly press over a household-name publisher or self-publishing. Laura and Emily systematically discuss how publishers earn money, how authors earn money (directly and indirectly) from their books, and the costs of publication. While publishing with a scholarly press is primarily a labor of love, Laura gives ranges and examples of how much an author might earn from royalties and an advance, if any, depending on the type of book they publish.

Links mentioned in the Episode

Can You Earn Money from Publishing a Scholarly Book?

Teaser

Laura (00:00): But if you have research that is applicable in industry or policy, or places that have kind of other kinds of funding, you can command more money than you ever would make from the book itself, in speaker’s fees, or consulting fees or things like that. So, you can sort of think of the book as a strategic investment in your reputation and your platform that then would allow you to expand higher goals In other venues.

Introduction

Emily (00:34): 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 (01:02): This is Season 17, Episode 5, and today my guest is Dr. Laura Portwood-Stacer, a developmental editor with Manuscript Works specializing in authors publishing with scholarly presses. Laura has personally published two books with university presses and has a third under contract and has worked with hundreds of other authors. Laura describes why a prospective author would choose a scholarly press over a household-name publisher or self-publishing. Laura and I systematically discuss how publishers earn money, how authors earn money (directly and indirectly) from their books, and the costs of publication. While publishing with a scholarly press is primarily a labor of love, Laura gives ranges and examples of how much an author might earn from royalties and an advance, if any, depending on the type of book they publish.

Emily (01:53): 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/s17e5/. Without further ado, here’s my interview with Dr. Laura Portwood-Stacer.

Will You Please Introduce Yourself Further?

Emily (02:58): I am delighted to have joining me on the podcast today, Dr. Laura Portwood-Stacer, who’s the owner of Manuscript Works. Laura and I kind of met on Twitter. She was recommended to me by another past podcast guest Dr. Katie Peplin. And Laura is a developmental editor of sorts. And so we’re gonna get into more of that line of work. And actually in preparation for this interview, I read her excellent book, the book proposal book, which is all about people publishing books with scholarly presses. So that is the subject for our interview today. Laura, would you please introduce yourself a little bit further for the audience?

Laura (03:30): Yeah, I’m so happy to be here. Um, so yes, my name is Laura Portwood-Stacer. For the past nine years, I have run a company called Manuscript Works, where I help authors, um, navigate the book publishing process, specifically scholarly authors. Um, building on my background as an academic, um, I got a PhD. I published my dissertation as a book. Um, and now I’ve moved on to helping others navigate that process, which can be very anxiety provoking and you know, there’s not a lot of guidance out there, so I’m trying to fill in that gap.

Scholarly Publishing, Trade Publishing, and Self-Publishing

Emily (04:02): Yeah, and so any listeners who want to go down this route, certainly again, I’m recommending the book proposal book. I found it very, very enlightening. Um, but we’re actually gonna be talking more today about the financial side of this because of course this is a personal finance, um, podcast. And because, um, that was left a little bit vague, I think, in your book, so I’m gonna see if you’re willing to share some, uh, more specific numbers or number ranges with us, um, as we’re going through the interview today. Um, so first of all, I just wanna help the listener understand the distinction between what we’re calling a scholarly press and then the publishing industry that they may be more familiar with, and then the self-publishing industry. So can you just tell us a little bit about how someone who thinks they would like to publish a book at some point, how they might know which is the right route for them to go?

Laura (04:47): Yeah, so I’ll say, uh, scholarly publishing is, um, sort of a narrow subset of the larger sort of traditional publishing industry, and it’s really focused on a certain segment of reader and a certain, um, distribution channel. So your readers, if you’re publishing with a scholarly press, your readers are going to be other scholars, um, people who are doing research, who are citing previous research in their own research, who are building on your research to write their own books or their own articles or, um, grants or whatever it is they’re doing. Um, and, and the distribution would be mostly directly to other scholars who might, you know, purchase from a publisher or purchase from an online retailer. Um, and institutional libraries, public libraries, um, uh, places that are sort of invested in furthering scholarly knowledge, right? So the focus is on scholarship, not necessarily on entertainment or, um, you know, personal improvement or the kind of things that you might pick up a book from Barnes and Noble for. Um, it’s really has sort of a professional scholarly bent to it. Um, whereas probably most of the publishers you’ve heard of that are household names that are not university presses. Um, they’re gonna be more focused on commercial books that people are, you know, just gonna wanna spend money on buy as gifts. They’re not necessarily serving that, um, intellectual purpose in the same way. There are some books that cross over from like scholarship to, um, a more broad audience. Um, and we can talk about where those kinds of books get published. Um, uh, but, but yeah, so that’s sort of the distinction between a trade publisher and a scholarly publisher. And a trade publisher, of course, is gonna be mostly selling in bookstore online retailers. They’re focus is not gonna be libraries or universities. Um, and then self-publishing is sort of a totally separate avenue. Um, and you know, I guess the difference there is that the, the distribution is kind of all up to you as as the publish as the writer. So you would need to find your readers. Um, you’re not sort of tapping into that built-in infrastructure of a scholarly publisher or a trade publisher.

Emily (07:19): I see. That makes total sense. And what really, I mean, maybe this is obvious to other people, but what impressed me with reading your book was like, oh, I’m really seeing how much work the publisher is putting into each one of these books that goes out. And of course, the audience that they have in mind, like you were saying earlier, and that is in the self-publishing realm, completely up to the author whether or not you’re going to invest in other people to help improve the work and and so forth. But that’s all part of the, the process when you go with, um, either a scholarly press or a trade press, right?

Laura (07:51): Yes. Yeah, and I’ll say that’s, you know, often there’s a perception among scholars that, you know, presses just profit off of our work and, and we provide this for free and we don’t make any money off of our books, so what are we getting out of it? But one of the big things you get out of it is that infrastructure that is already in place at the publisher where they know how to peer review the books, improve the content, um, produce the book so they look nice, then distribute it to the places that are most likely to buy it. All of that stuff is like, happens on the publisher’s end. Yeah.

Emily (08:23): Absolutely. Thank you so much for clarifying that. Okay. Now I wanna hear a little bit more about your books that you’ve published. Sure. What the process is kinda like, and then also what you do now for clients.

Laura’s Book Publishing Journeys

Laura (08:33): Yeah, so I have published two books to date. Um, I have a third under contract. Um, so my first book was a revision of my doctoral dissertation. Um, pretty typical straight straightforward process there. Um, I pitched it to a small independent publisher that got, um, absorbed by a larger commercial academic publisher. Um, so it was ultimately published with that larger publisher. Um, you know, it went through peer review. I did not receive an advance for that book. It has made minimal royalties, you know, a little bit over time, but not much. Um, but I wrote it for, you know, career reasons to just sort of get my research out there to make me more attractive on the job market. You know, kind of the typical reasons that a scholar would try to publish their dissertation. Um, my second book, which uh, was published, let’s see about eight years later, was the book proposal book, um, which is, um, it’s, you know, it’s a practical how to kind of book, uh, it’s, it is sort of research based in that it draws on my own sort of personal experience helping authors get their books published and write book proposals that impress the publishers they want to impress. Um, and you know, I did some research into the publishing industry to sort of inform that, the advice that’s in that book. Um, but, you know, it’s a different kind of, readership has a different kind of purpose. That book has been much more lucrative than the dissertation based book. Um, and we can talk about some of the reasons why, uh, if, if you want to get more into that. Um, and then my third book is currently under contract, so that means that I’ve written a proposal, I’ve pitched it to my publisher. Um, they have accepted it based on the strength of the proposal and on my previous, um, book with them. Um, and I have received part of an advance for it. I will receive the advance in installments, um, but I have not received any royalties for it yet because the manuscript has not been completed, uh, completely revised and approved and accepted for publication. So the book is not in production yet. We’re still a ways out from that.

Emily (10:48): Yeah, that’s fascinating. Um, I definitely wanna talk to you more about the financial aspects of this in a moment, but now I just wanna hear tiny bit more about how you serve your clients because I think it helps the listener to understand that you’ve not only had this personal experience, but you now have like the professional experience of helping, um, shepherd other people through this process.

Supporting Authors From Proposal to Publication

Laura (11:05): Yes. Yeah, so I mean, of course the personal experience is really helpful because I know the emotions that an author goes through. I have all those same anxieties, um, you know, about pitching my work to publishers and making a good impression and all of that. But I would say, um, the, the help I’m able to offer really comes from having been through this process with other people, um, in a wide variety of disciplines. Um, so I, uh, I basically help authors kind of distill what their book is supposed to be into a book proposal, help them write it in a way that is going to connect with publishers, that’s gonna speak to what publishers are looking for, which is not necessarily the same thing that academics are thinking about, um, when they’re thinking about their research. Um, and then, uh, you know, then I’ve, I’ve seen the process follow through where they actually get the contract and the, the offer and then get their book published. So, you know, I do online programs, so I’ve worked with hundreds of authors, um, who have been through this process. So getting to see sort of the different nuances and how it works at different publishers and, and all of that has been really helpful for getting that broad view of how it works.

The Financial Side of Publishing a Book

Emily (12:16): Awesome. So I wanna dive into a little bit more of the, the money aspects now, because that, of course your, your book is taking people step by step through the whole process. Um, but I want to just get some more details about like what people can expect if they <laugh> for financially if they decide to publish a book through this kind of press. I wanna start on how these books make money and how authors make money from them. So am I correct in assuming that money is made from these books by selling these books? Is that the direct way money is made by the publisher?

Laura (12:48): Yes.

Emily (12:48): Okay.

Laura (12:49): Yes.

Emily (12:50): Now, what do the authors get <laugh> after the publisher sells you books? You’ve mentioned advances, you’ve mentioned royalties. Can you define these a little bit further and talk about sort of the scope of what these contracts look like? ’cause some people get advances, some people don’t, maybe the royalties are different amounts for different authors. Like what’s the range here?

Laura (13:06): So yeah, so publishers, you know, even university presses, which are nonprofits, um, so, so they’re not necessarily trying to make a profit, um, but they are trying to stay open and they do rely on book sales to stay open. You know, I think there’s a misconception that they are just funded by their universities and some receive some funding from their universities, but that amount is of course shrinking, uh, with austerity and everything, um, you know, in university administration. So they really do rely on selling their books in order to stay open and keep performing their service to the scholarly community. Um, so, so that’s one reason why they are looking for books with a readership of hopefully hundreds of people, maybe thousands of people will wanna read each book that they put out. Um, so, and, and they are investing tens of thousands of dollars in producing each book. Um, and a lot of that goes toward the labor or the editorial labor, the production labor, um, but also materials, um, you know, everything that goes into making the book as a product. So, um, they are recouping that investment, um, in the form of the, the sales of the book. And in most cases they will share some of that, you know, recoup with the author in the form of royalties. Um, so the author would typically get of small percentage of whatever profit the book makes. So, so yeah, so they’re always sort of calculating, um, projecting profits and losses for each book. And based on that, they may think about, okay, what can we afford to share with the author and still break even on this book, or still even make a little bit of money that we could invest back into our press to help publish maybe some of the books that aren’t gonna sell as well. Um, and that’s where they’re figuring out, you know, how much money they’re gonna share with the author. And, and in advance is, um, the amount of money the, the publisher would give an author upfront before the book even starts selling copies. Um, and that is basically just an incentive to get the author to publish with that press. Um, so that is most likely to come into play when the press believes they have to compete for the book with other publishers. Um, and they’re also going to have to project pretty significant profits from the book, you know, so they’re not sinking even more into it without some prospect of getting it back out. Um, so, so advances, you know, scholarly publishers do sometimes offer advances again under those conditions where they think the book’s going to be profitable and they think they have to compete to land this author. Um, and the range of those advances varies a lot. It could be just in the low hundreds, more of like a token kind of thing. It could be a thousand dollars a and I’m speaking from experience of having worked with people who got advances for their dissertation books. Um, so it does happen. Um, but I would say the range has been from like a thousand, maybe 2,500, maybe $5,000. Um, that would be an advance that might be available. Not common, I would say, but available, um, depending on the project. Um, for, you know, people who are more established in their careers, they have a big name they could choose to publish with a trade press, but they have chosen a university press instead. Um, people who are writing a textbook or something that is likely to be widely adopted, not just read by a few hundred people but read by tens of thousands of college students, um, or, you know, scholars who are gonna use this book for some practical purpose. Um, that’s where you can get a higher advance maybe more in the five figures. Um, it’s not unheard of for a six figure advance to come from a university press, but that would be pretty rare. That would be them competing with a trade press that might be more used to dealing in those kinds of numbers. And they’re gonna expect that book to really pay off for them to help them keep the lights on for all the other books that they sell.

Emily (17:45): So, fascinating. Thank you for telling us those like orders of magnitude for the, the different types of books. That’s really, really helpful. Um, so let’s say, um, whether or not an advance was given, um, I think you said something like when the book sales exceed the costs that have been invested, then royalties are shared with the author. Is, is that correct that royalties don’t come from book number one, but only once costs have been recouped?

Laura (18:11): No.

Emily (18:11): Okay.

Laura (18:12): Um, not exactly. Um, so yeah, it’ll be written into the author’s contract, uh, and, and I’ve seen various types of offers. Uh, some university presses will say, okay, no royalties on the first 500 copies, say, um, ’cause they know they’re not gonna break even until they’ve sold 500 copies. Um, I would say that’s a less common than a royalty from copy one. Um, but you know, the press, it might not break even until later on, but they’ve factored in the fact that they are going to compensate the author something for sales of the book. Um, so, so yeah, it’s really hard to know what that break even point is, but, but publishers are like, you know, they have a lot of data points and they are really projecting out into the future optimistically hoping they’re gonna get to that break even point. Um, but the author will likely seal some money before that point. Probably won’t be a lot of money, but some money.

Emily (19:15): Okay. Let’s, I wanna get some orders of magnitude again. Sure. So let’s say for the example you gave earlier of like someone who’s trying to publish work arising from the dissertation that they wrote, um, that kind of book. How much money would they think they might make in the first year, let’s say? Are we talking two figures, three figures, four figures, five? Like where, what is the order of magnitude there in royalties?

Laura (19:41): Uh, uh, so it’s, um, it’s really hard to generalize, I’ll say. Um, but, so, uh, maybe some other numbers will kind of help this. So let’s say your book, um, retails for, I’m gonna say $20 just for simplicity’s sake, but most academic monographs are gonna be priced a bit higher than that. Um, but let’s say it’s $20, the way that the publisher calculates the royalty, you are likely going to see a dollar or less from each sale of that book. Um, let’s say there’s a, um, sometimes publishers have, um, a library version, a library edition that is, is actually priced at a hundred dollars. Um, ’cause they know only libraries are gonna buy it. They’re not trying to sell that to like your average academic reader, but they are gonna sell it to a library that’s gonna, you know, let dozens of people read it. Um, so they’re gonna sell that for a hundred dollars and the author might see $5. Again, it depends on the, the royalty structure that’s set up in the contract, but so you might see $5 from the sale of that book. So, you know, most academic monographs that begin as dissertations, they’re, you know, they’re gonna sell to a few hundred people realistically. Um, so, you know, let’s say a hundred libraries buy your book, that would be great. That’s a lot of libraries. Um, buying just, you know, a new monograph. Um, so let’s say like very optimistically, you’re getting $5 a copy that’s 500 bucks, right? Um, you know, let’s say 200 individuals buy your book, that was, you’re getting a a dollar a copy on there’s another 200 bucks, so that’s what, $700, right? And you’d be having a good year if you got $700 in your first year, um, you know, you’d be doing, you know, well for an academic monograph. So, uh, yeah, it’s not, not a lot of money.

Emily (22:02): Okay. I’m so glad we know like the order of magnitude, that’s exactly what I wanted. Uh, do you mind me asking, what about a book like yours that’s more, those this practical kind of guide? I know the, uh, what you wrote is part of a series from, uh, Princeton University Press, right? So like, can I have an example either of your book or, or similar books like that?

Laura (22:21): Yeah, yeah. So, um, and I do wanna say all of those numbers were just hypothetical and made up. So it’s not to say like the typical book sells makes $700 in royalties that I’m just, you know, putting it out there. Um, so yeah, so for a book like mine, which is sort of, um, positioned as, um, not, it’s not an academic monograph, you know, it’s not research based in that way. It’s going to be used by many more people than somebody who might just wanna read, um, a very specific, you know, narrow piece of research because it, you know, scientists could read it, humanity scholars, social science, people at all stages of their careers. You know, people who are, um, just finishing a dissertation and wanna publish their first book, people who wanna publish a second or third book, people who are mentoring those people, people who work at publishers, you know, so just have a much broader audience. So, um, the sales expectations for that are much higher, um, and have that it has played out that way, you know, compared to my dissertation book. Um, so I’m gonna try, I’m gonna try and think of, um, the numbers of sales. I think the first year it sold about 6,000 copies, I wanna say I don’t have the royalty statement right in front of me. Um, and the second year it, uh, I don’t think it sold quite that many, but it stayed up there. It was like four to 5,000 I wanna say. Um, and I’ve just gone into the third year, so I don’t have the, the numbers for that yet. So, so that’s a much higher number. And so that has led to, you know, higher royalties. It’s still not by any means the majority of my income. It’s still sort of supplemental income, but it is in the thousands of dollars as opposed to the hundreds.

Emily (24:16): Yes. Very, very good. Thank you so much for doing all this. Yeah. Like, um, order of magnitude and just like level setting and I, I really appreciate that

Commercial

24:25 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 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.

Costs Associated with Publishing

Emily (25:16): I wanna talk more now about, um, not how the authors are making money, but the costs associated with publishing. You mentioned earlier that a publisher could be investing tens of thousands of dollars for each book that they’re putting out there. So can you tell us like, what, where are those costs coming from? Obviously I understand printing the book and so forth and there’s labor. What, what are the different maybe phases, uh, different types of people who have their hands on the book, what their different jobs are? And then I, I read in your book sometimes the publisher is gonna pay for these costs, but then also sometimes the author might pay some of the costs of, of this process. So can you kind of break that down as well?

Laura (25:52): Yeah, so, so the costs that the publisher is going to incur, you know, the, it’s the editorial labor, the editor that you’re emailing back and forth with the person who is, um, sending your manuscript to peer reviewers, wrangling those peer reviewers, then getting the reports. Then, um, you know, inside the publisher they’re making, um, presentations and pitches for your book that you might not even be aware of as the author, but the editor is doing all of that labor to get the publisher on board to say they wanna publish your book, all of that. Um, and that, that doesn’t even include like giving you feedback on the manuscript itself. Some acquisitions editors are able to do a little bit of that, um, but most don’t really have the time to give that kind of attention to the manuscript. Their, their role is more of a project manager, um, and, and an advocate for the project within the press. Um, so that happens within the press. Um, then, you know, there’s, uh, the, the production, so designing a cover, um, type setting the manuscript, so it looks like a book that can be printed on pages. There’s some design that goes into that as well. Um, most scholarly publishers do engage their own copy editors and proofreaders, um, where they would, you know, make sure the final version is like stylistically correct and grammatically and all of that. Um, uh, and then there’s the marketing and the publicity and, and all of that that goes to like making sure people know about the book and wanna buy the book. Um, and that’s not even getting into the, like the physical production of the book, which in my understanding is beyond the tens of thousands of dollars, the tens of thousands of dollars is just to get to that first proof electronically that they can then use to print the book and ship the copies and all of that. Um, so, so yeah, there’s a lot that’s going on there that is heavy on labor and so that just, um, incurs costs. Um, and of course none of that is what the author is also investing. So if you want deep feedback on your manuscript, that often doesn’t come from the publisher. It would come from a freelance developmental editor, um, somebody like myself, uh, or you know, my freelance colleagues. Um, and that money would come out of the author’s pocket usually. Um, and that could cost thousands of dollars, um, depending on sort of the level of feedback you’re looking for and how experienced of an editor you want and all of that. Um, there are also some costs associated with, um, the, you know, if you want images in your book, um, do you need to purchase the permission to reprint those images from whoever owns the rights? Um, if you want tables and diagrams, those have to be professionally drawn. Um, you might have a mockup, but then somebody’s going to have to draw that and make it look good enough to be in the book. So you might pay somebody to do that. Your publisher might hire someone to do that or have someone internal do that. They might pass that cost along to you. Um, since that’s sort of a choice you’ve made to include that in your book. Um, if you are citing, um, copyright protected material, you often need permission depending on how you’re using it. Um, that’s another thing the author is often expected to cover. Um, and then open access costs. Some publishers, you know, have, uh, infrastructure in place and they cover the cost of the open access. And when I say they cover the cost, they’re getting a grant or a subsidy or something to be able to do that. Um, um, but some will ask the author to pay a subvention, um, to, in order to make it possible to give the book away for free, essentially, thus, you know, reducing the revenue that might be expected from the book. Um, so, so i, I don’t know if that even covers everything that you asked about, but those are some of the costs that go into making a book and some of which are born by the author, some by the publisher.

Emily (30:07): Well, for example, in one of the later chapters of your book, you mentioned creating the index and you recommended yes, getting a professional to do that. That was something I was like, I never would’ve thought that was something that really would require like to do it. Well, it would require a professional. And so, and again, that’s a kind of cost I think you mentioned would probably be on the author most likely. Yes. So I was just kind wondering in general. Yeah, I mean you answered that very well. Thank you so much because it’s a little bit mind blowing just as a reader to understand all the different, um, people and elements that go into the production of a book.

Laura (30:39): Yeah, yeah. So the index thing, indexing thing is a great point. So yes, while presses often do cover a copy editor and a proof, not a proofreader, they’ll cover a copy editor. They will ask the author to proofread the proofs, the typeset proofs, and then the author might decide they wanna hire a professional proofreader or they might just do it themselves to make sure there’s no errors. Um, but the index is almost never covered by the publisher. It is something you can negotiate sometimes, again, if you have like an attractive project and they’re the publisher’s trying to get you to sign with them, um, sometimes they will cover it or um, charge it against your royalties. Um, but often you do, the author does need to provide the index, which again, you can DIY it and you get what you pay for kind of, um, or you can pay a professional indexer, which could cost a thousand dollars or more. Um, yeah, so it’s an investment the author makes in hoping it just makes her a better book product that people will use and cite and all those things we want for our books.

Emily (31:41): And I believe I also read in your book that sometimes this is what an advance is used for. Like the author might try to negotiate for an advance knowing that those are, there are cost coming down the line that they can use in advance to cover. It’s very different from the way I think of an advance, like in a, you know, larger household name publisher kind of situation. Um, and maybe that’s like just naive of me just not understanding much about the publication process. So I am getting the impression that we’re not making a living off of these books <laugh> maybe until you’ve published one every year for your entire career, maybe that layered by then you would have enough. Um, so given that, um, if authors are not really making that much money, you know, maybe hundreds or few thousands of dollars, um, per year directly from their books, how are they able to use those books to leverage into their careers, to earning more money, advancing their career in other ways? How does the books serve them in a, a less direct monetary way?

Laura (32:37): Yeah, I love this question because this is really what it’s about for scholarly books. It’s the book itself is an investment of labor, of time, of possibly money, um, that you’re hoping will pay off in some other arena, not necessarily directly through, you know, your royalties or in advance. And I do wanna say there’s a little sidebar, like commercial publishing is not that much more lucrative. Yes, we know about the celebrities who get the six figure advances or more, um, but most people who are writers who are just, you know, writing trade books also have another job. Like they’re not making their complete income off of writing their books. Much like academics who, you know, often if they’re writing academic books have an academic position, um, where they’re making some a salary, you know, that is their main source of income. And so the investment of writing an ac academic book is often for that job. It’s, you might need to write a book in order to um, you know, pass your three year review or go up for tenure. Um, a book might be an expectation in your field, so you’re not writing the book ’cause you’re gonna make money on the book, you’re writing the book because you hope you can keep your job, um, as a part of having published that book. Um, and you know, I’ve worked with authors who already have tenure but are wanna go up for full professor, which is a significant, um, raise, uh, in income, you know, in their salary and they can use the book toward that. So they see the investment of the book as paying off indirectly in that other way. Um, there’s also, um, you know, other sort of financial opportunities that could come from having written a book. So if you are invited to give talks based on your research, um, you know, giving talks at universities doesn’t always pay that much. It sort of depends on how in demand you are and, and how much funding those universities have to pay speakers. But if you have research that is applicable in industry or policy, um, or places that have kind of other kinds of funding, you can command more money than you ever would make from the book itself, um, in speaker’s fees, um, or consulting fees or things like that. So, um, you can sort of think of the book as a strategic investment in your reputation and your platform that then would allow you to command higher fees in other venues.

Emily (35:14): Yeah, I spoke with, uh, an author recently, actually, she was self-published, um, who described her book as like a business card, like going out into the world in front of her and opportunities come back to her because people are reading and using the book, right? So it’s not necessarily about that money that’s made directly. That’s nice, that helps. But as you said, there’s much more opportunity could be depending on, on the subject of the book on the backend through these other mechanisms. Um, but yeah, thank you for giving us that like wider picture of like why people would go through this process, which clearly is very time consuming and, and very full of labor and, and not, um, immediately seeing much ROI financially from it. Um, yeah, that’s great. Yeah.

Laura (35:55): Yeah. And I’ll say, uh, you know, many scholars, intellectuals, you know, they just have an intrinsic desire to share their knowledge and what they have found and what they’ve spent these years studying and discovering and concluding. Um, so I would say the majority of people I work with are, the money’s a bonus, you know, but what they’re really trying to do is just like, get the work out there. Um, and the book is the way they do that.

Emily (36:20): I’m wondering, do you ever work with people who are not academics? Like I sometimes hear people describe themselves as like independent scholars or something like that. Like are, would they still be a type of author who would publish with Yes. Scholarly process?

Laura (36:33): Yes, absolutely. I do work with many, um, independent scholars, people who have know, retired from academic careers or, um, just decided not to pursue one for whatever reason. Um, I would say, and those are the people who are sort of the most, I intrinsically motivated to share the work, um, because yeah, like what’s the gain for them? They’re not really getting paid to write the book, getting paid much. Um, and, and any payoff from it would come like later down the road. So, um, I, you know, I have many clients who are in that position. I will say it’s, it’s, you may have a bit less to invest in the book, you know, if you don’t have funding from a university, uh, you know, a research grant or something like that. Um, so, uh, yet you, everyone has to sort of make their own calculation of what it’s worth to them to invest in the book upfront.

Dr. Laura Portwood-Stacer’s Contact Information

Emily (37:29): I see. Well, Laura, this interview has been so insightful. I really appreciate you coming on the podcast and letting us know, um, all that you’ve learned and all that you’ve experienced through this publishing process. Would you please let people know how they can get in touch with you if they’d like to follow up?

Laura (37:44): Yeah, so I have a weekly newsletter, um, that’s probably the, the easiest place to find me. It’s the manuscript works newsletter. If you go to newsletter.manuscriptworks.com, um, you can get that, that shares lots of knowledge about scholarly book publishing and also some, you know, brief announcements of programs that I offer and um, ways that I support authors. Um, yeah, so that’s probably the best place to find me, but, uh, my more general home on the internet is just manuscriptworks.com.

Best Financial Advice for Another Early-Career PhD

Emily (38:14): Excellent. And I’d like to conclude with the question that I ask all of my guests, which is, what is your best financial advice for an early career PhD grad student, someone recently out of grad school or a postdoc? And that could be something that we’ve touched on in the course of this interview, or it could be something completely new

Laura (38:30): To understand the publishing ecosystem and where the money flows in and where it flows out and how much is gonna flow to you and be realistic about how that all works. Um, so I would not expect, I would not treat a book as, uh, a direct financial investment. You know, it may be a financial drain in many ways, but you think about the sort of broader context and, and what it might do for you.

Emily (38:54): Very good. I really think we’ve either done that in this interview or given people a really good head start on that process in the course of the interview. So Laura, again, thank you so much for your time. Thank you for agreeing to come on and um, I look forward to talking to you again soon.

Laura (39:06): Yeah, thank you so much for having me.

Outtro

Emily (39:13): 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.