Personal Finance for PhDs

Live a financially balanced life - no Real Job required

Money Mindset

Pursuing Your Passion in a Financially Healthy Manner

by

This episode is a podcast swap! Emily’s guest is Dr. Stephanie Schuttler of Fancy Scientist. Emily and Stephanie interview one another on the financial challenges of a career in wildlife biology and how to pursue your passion while preserving financial balance and health. They discuss the necessity and prevalence of volunteer and pay-to-play experiences in wildlife biology and how to have realistic expectations about the job availability and compensation at various levels of education. Stephanie is an expert in careers in wildlife biology, but this conversation is applicable to PhDs who are following their passions into many other competitive fields.

Links Mentioned in This Episode

Teaser

00:00 Stephanie: In this field, so much is about those experiences. So if you really want those pay-to-play experiences, because, I mean, some of them are super cool, you could focus more on getting into a school that’s more affordable and do some of those things rather than go to a really expensive school.

Introduction

00:21 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 9, Episode 3, and today Dr. Stephanie Schuttler of Fancy Scientist and I are publishing a dual interview! Stephanie is a wildlife biologist-turned-science communicator and expert in careers in wildlife biology. We have a great topic: How to pursue your passion in a financially healthy manner. Stephanie gives the financial and career lay of the land for wildlife biology, a popular and competitive field that requires volunteer and pay-to-play experiences prior to being admitted to graduate school. Even completing a graduate degree in wildlife biology doesn’t necessarily lead to the type of job young people dream about when they enter the field. Sound familiar? Stephanie and I discuss how to limit the financial risk of pursuing a career in a field that you are passionate about.

I have some exciting personal news, which is that I finally received my full vaccination course against COVID-19! I have to say, it was tough to watch my friends and acquaintances who have university and hospital affiliations receive their vaccinations over the last several months while I was waiting for them to become available to my age bracket in California. But my turn finally came. I am ecstatic that my parents are visiting us this week, whom we have not seen in person since November 2019.

01:51 Emily: Prior to COVID, as you likely know, I gave in-person seminars and workshops at universities. I honestly wasn’t sure how my business would fare without being able to travel and with universities facing the uncertainty that they did early on. As it turned out, in the 2020-2021 academic year, my speaking services in the virtual format were more in demand than ever, particularly this last spring. I feel really, really fortunate about that! My calendar is now open for engagements in the 2021-2022 academic year. I am of course offering virtual events, which I assume will continue to be popular. I’m not sure if professional development events and conferences are switching back to being in person this year to any degree, but if they are and I am asked to present, I will certainly consider it. I am over the moon about how I have adjusted my offerings for early-career PhDs this year, which you can check out at PFforPhDs.com/speaking/.

02:53 Emily: First, I got honest with myself about my most popular seminar, The Graduate Student and Postdoc’s Guide to Personal Finance. The Guide is my comprehensive overview of multiple personal finance topics. I was trying to cram it into 90 minutes, but it really is a two-hour seminar with Q&A. It’s great for the end of a workday, not so much for a lunch hour.

03:15 Emily: Second, I clarified the topics for my in-depth seminars, which are financial goals, investing, debt repayment, saving, and cash flow management. Each of these seminars comes in a one-hour lecture and Q&A version or a two-hour workshop version. The workshop version includes the teaching from the lecture version plus spreadsheet templates, worksheets, and/or small group discussion prompts. These seminars work well as stand-alone events or part of a series.

03:45 Emily: Third, I took my tax seminars off my slate of offerings. This is honestly a big risk for my business because my annual tax return seminar was second to The Guide in popularity and always drew my biggest audiences. The preparation of an annual tax return and calculating estimated tax on fellowships are my audience’s most universal financial pain points.

04:10 Emily: However, I am not leaving you in the lurch with respect to tax education and assistance. Stepping back from giving live seminars on this topic actually enables me to scale the delivery of the help. In place of these live seminars, I am licensing access to my pre-recorded workshops on the same topics. I have been offering these workshops for the past several years, and I know that they are even more effective than live events in guiding graduate students and postdocs to their goal of an accurate tax return and up-to-date income tax payments on their fellowships. Please keep these workshops in mind as we draw closer to tax season for 2021. If you would like to book a virtual or in-person event with me or recommend me to your graduate school, postdoc office, or graduate student association, the best place to go is PFforPhDs.com/speaking/. From there you can learn about all my seminar offerings, read reviews from previous event hosts and attendees, view my speaking fees, and schedule a call with me to discuss your event. I look forward to partnering with you this year to deliver high-quality, high-impact financial education to the early-career PhDs at your university, in your association, or at your conference.

Book Giveaway Contest

05:29 Emily: Now onto the book giveaway contest! In June 2021 I’m giving away one copy of The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach, which is the Personal Finance for PhDs Community Book Club selection for August 2021. Everyone who enters the contest during June will have a chance to win a copy of this book. The Automatic Millionaire was one of the first personal finance books I ever read, and it had an enormous impact on my financial mindset and behavior. The path to becoming a millionaire is not necessarily quick or easy, but it can be simple and automatic. I can absolutely credit the key strategy that this book teaches as the reason my net worth is as high as it is today. I hope this book effects a similar result for you. If you would like to enter the giveaway contest, please rate and review this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily at PFforPhDs dot com. I’ll choose a winner at the end of June from all the entries. You can find full instructions at PFforPhDs.com/podcast. Without further ado, here’s my interview with Dr. Stephanie Schuttler.

Will You Please Introduce Yourself Further?

06:49 Stephanie: Hi, I am Dr. Stephanie Schuttler, and I am a wildlife biologist, and now I’ve turned a science communication entrepreneur. A brief background of myself is that I kind of stumbled into this career. I didn’t know I wanted to be a wildlife biologist until my last year in college when I decided to study abroad and I randomly chose a wildlife management program in Kenya. So that changed my life. And I knew from there that I had to go to graduate school. So I got some experience doing three different types of internships over the course of three years. And then I went to graduate school to get my PhD at the University of Missouri, where I spent close to seven years there, followed by one short postdoc and one long postdoc, lasting, probably about, honestly, seven years. Yeah, so my short postdoc was at Missouri and my long postdoc was at the North Carolina Museum of Natural Sciences where I got to work on a lot of camera trap stuff that I talk about today. Yeah, and now the last part is I started my own business last year. I’ve been blogging for the past few years and I officially made it a business last year where I spread knowledge about science communication, I educate people, I started kids’ programs, and then of course I help people in their wildlife biology careers.

08:20 Emily: Fantastic. What is the name of your business?

08:23 Stephanie: A Fancy Scientist.

08:25 Emily: Great. I’m really excited to speak with you, Stephanie, today because are subject is kind of, you know, the finances of pursuing a career in wildlife biology, but it’s a little bit more general than that really, because we’re really talking about how to stay sort of financially balanced and healthy while you’re pursuing a passion that is not necessarily, or immediately, lucrative. And in fact might, you know, you might be paying for, in the form of your education, you might be paying for career experiences. So that’s kind of our general topic. So even if those of you who are coming to the podcast are not in wildlife biology, like still stick around because this is going to be generalizable information.

09:03 Stephanie: Yeah, absolutely. I would even add that our field can be more lucrative in terms of going to graduate school than other fields. Like I’ve heard about people who are getting their PhDs in English and their TAships get paid just so poorly. So a lot of the experience and advice here will definitely transfer over.

How People Develop a Passion for Wildlife Biology

09:25 Emily: Yeah. Let’s talk more about specifically how wildlife biology is positioned because it’s a science field, of course, which you might immediately think, oh, like you make money in science, of course. But on the other side of it, it’s a very competitive field and people follow it because of long-held passions. So let’s talk more about that. Like how do people develop their passion for wildlife biology and pursue that?

09:47 Stephanie: I think people develop it usually from a young age. That’s what happened for me. I always loved animals and I love nature. And like I said, I didn’t discover it until a career as later on. Like when you’re young, people always say, like, why don’t you become a vet if you really like animals? So I didn’t know it was a career option. Some people do, but when you track back to like, why people want to do it, it usually has to do with those experiences of being outside in nature when you’re young. And actually a lot of wildlife biologists, a lot of them start off like hunting and they just spend a lot of time outdoors. So I think that a big reason why people are so attracted to the field is that they think they will be spending a lot of time outside.

10:35 Stephanie: And this is definitely true for some careers. It depends on what level of education you have, and of course, what job you have. But in general, the more education you have, the less time you spend outside. It’s like an inverse relationship. And you know, we get really cool experiences. A lot of us get to travel. Of course, some of us get these really close interactions with animals that regular people can’t have, or even just accessing different types of places. Like some of the field sites I’ve been to would have been difficult to visit as a tourist and some of the experiences you have. So yeah, I think that’s what’s really attractive about it. And you’re right. It’s really interesting because there’s so much push for STEM education and especially getting People of Color and girls interested in STEM because our field is not very diversified.

11:33 Stephanie: And a reason to advocate for STEM careers is often actually like finances, that it’s a really financially beneficial career. But again, it totally depends on what you do, and wildlife biology is not very lucrative. And it’s just simply because there’s not a lot of money in wildlife and conservation work. A lot of our employment is nonprofits. The universities and, I mean, universities, you can definitely get paid well. And any of these jobs you can get paid well. But in general, if you think of like disease research, there’s going to be so much more money from the U.S. government and other sources to invest in like medical research than there is in saving wildlife. So, that’s really the big difference. But I think most people go into it because they love it so much. And that’s what I always said. I knew I wasn’t going to make a lot of money, but I loved it so much. So that’s why I went into it.

12:38 Emily: It’s so important to go into these kinds of career choices with your eyes wide open as to what the possibilities are, including the financial possibilities. So it sounds like people, maybe from the time they’re children, have a very like romantic idea of what this career is going to be, but the reality does not necessarily line up with that, especially as you advance further and further.

12:57 Stephanie: It’s interesting though, that you said that about like the romantic version, because I have a book, Getting a Job in Wildlife Biology: What It’s Like and What You Need to Know. And I had a review on there recently, it wasn’t a bad review, it was a four-star review, so it was good, but it was a parent that bought it for her daughter and she read it first, and with the intention of getting it to her daughter. And after she read it, she was kind of like, I’ll leave it up to my daughter to read. And her review was all about how realistic I was. And, and that’s exactly why I wrote it because people have this really romantic view of what wildlife biology is, like myself growing up, I saw Jane Goodall. And I mean, Jane Goodall, isn’t really considered a wildlife biologist. She’s more of a primatologist, but still that’s what you imagine it to look like, or Steve Irwin. And the reality is you’re not doing those types of things. So I pride myself on telling the truth, and I don’t want to dissuade anyone from entering this field. I just want them to know like what it’s like going into it.

Volunteer and Pay-to-Play: Are They Really Required?

14:01 Emily: So, one thing that I learned from our prior conversations is that in your field, it’s very common for people to have to do volunteer experiences or even pay-to-play experiences, to get into graduate school, to get a job, to advance. And this is not necessarily as common in other areas. So could you please tell us more about what, you know, what does pay-to-play mean? What are the kinds of volunteer experiences that people may be required to have? And are they really required?

14:30 Stephanie: Yeah, absolutely. This is a really hot topic right now. I personally think that you cannot get into graduate school without having some sort of experience. And in order to get that first paid experience, honestly, you really need experience for that. And you can, I would say you can get it in college if you volunteer with a lab and you get college credit for it. So that’s essentially not totally volunteering. And there are some work-study programs in colleges as well, but really to get your first experience, you need to volunteer. And that’s just the unfortunate reality of it. And this is a big problem because it discourages diversity from our field. So, I’m in no way, like advocating for these experiences. I just feel like that’s the reality of the situation. So there’s lots of experiences. And even our museum, when we had interns in our lab, we did have money for some of them.

15:27 Stephanie: And I constantly applied for grants to get money to pay interns, but they don’t come through. So either like I would have people email me and be like, I’m so interested in your research. Can I help you out? Or I would have a lot of research to do, and I would come across people and offer them experiences to help me with this. And there are exchanges in other ways. Like I write them letters of recommendations and I invite them to be on journal publications and stuff like that. But yeah, we can’t afford to pay for everyone. So it’s hard to deny people experiences who want them. But also, the pay-to-play thing is that some experiences are so desirable that they can afford to charge for them. And I do think there are some sort of scammy experiences out there where they profit off of it, but there are also legit scientists who are working in another country and they have to pay for the field site and the food costs and things like that.

16:35 Stephanie: So I’ve seen job advertisements where you get to maybe go to like South Africa for a summer and you have to pay to stay there. And they mention that it just covers the field costs and they’re not making money off of it, but still, I know a big reason why I got certain opportunities was because of my experience in Kenya. I had a study abroad program and an internship in Kenya. And Kenya was, it really was volunteering because I did get paid, but I got paid a Kenyan salary. And then I did have to pay for half of my airfare. So it ended up being a year where I didn’t make anything. And yeah, if I didn’t have those experiences, then I would have not had like my graduate school experience of studying forest elephants. So if somebody who comes from a financially disadvantaged background really wants to do something like work internationally, honestly, it’s really tough because those experiences are more desirable and people are willing to pay for them.

17:42 Emily: Yeah. You outlined a couple of reasons why these experiences exist. It really sounds like the field is in a bind. There’s not enough funding coming in for all the work that needs to be done, sort of from above, but from below, from the people coming up the ranks, there is an eagerness for people to do the work, even if it’s on a volunteer basis, even if they have to pay out of pocket for it. But it sounds like this just comes back to a funding squeeze, right? And the field being so popular and competitive. Those things combined have set up the conditions for this system to develop. And I agree with you. It sounds nightmarish, actually, for someone who doesn’t come from a financially advantaged background. And it’s a little bit like, you know, in the recent, I don’t know, last decade or two, there’s been so many more conversations about unpaid internships and the elimination of unpaid internships in most fields because they’re not great for anybody. Especially people who, you know, can’t afford to do them. But it sounds like that hasn’t quite touched the field of wildlife biology yet. Because these are essentially unpaid internships like on steroids, because you actually have to, in some cases, pay to access the site or what have you.

18:53 Stephanie: Yeah, absolutely. And that’s, like I said, that’s a huge conversation right now. And I think it’s especially difficult for nonprofit organizations because, you know, they obviously always need more funding. And they have been under attack, like posting unpaid internships. And I understand both sides. Like I understand that people need to get paid for their time, but I also don’t think it solves the diversity problem because if you’re just taking experiences away in general, then anything that is available is going to be so, so, so competitive. So it’s like a lose-lose situation.

Financial Risks in Pursuing a Wildlife Biology Career

19:32 Emily: Yeah. It definitely sounds like that. Okay. So we’ve kind of talked about the downsides to the field of kind of relying on these volunteer and pay-to-play experiences in the pipeline, at the beginning of the pipeline. To get into graduate school, you need to have some kind of experience. To get that first experience that maybe you get paid, well, you have to have an unpaid experience before that point. There are downsides to the field of like losing out on having great scientists, budding scientists who could be part of the field, maybe being turned away for financial reasons. What are the financial risks that are posed to an individual who tries to pursue a career in wildlife biology?

20:06 Stephanie: I think, I mean, just going into debt or living paycheck to paycheck constantly, that’s like super common in our field, but I know many people who have gone into debt for these like pay-to-play experiences or to do a volunteer experience, but they don’t have the means to cover themselves financially while they’re doing that experience. And it affects your entire life. The opportunities, I guess, like they kind of go away, but they manifest in different ways. So like once you get your PhD, well actually after your master’s too, like I talked about my friend, Rebecca, a lot of times you have these temporary opportunities, and it’s really difficult to get things lined up financially. And it’s a very demanding career. There are always things that you could be doing for your career, especially once you get to like the science route of doing more research-based things, then you are going to want to be working on your publications and things like that to get you that next job. So you don’t necessarily have the time to be able to like take on another job. So I mean, it’s really just that you have the potential to go into debt. People do go into debt, and then they don’t have the finances saved to be able to keep going, in the future, if opportunities don’t line up.

21:40 Emily: Yeah. This does remind me of the general like pursuit of the tenure-track in some fields where you need a PhD to get, and your goal is to get, a faculty position, but the employment opportunities, if you don’t end up, you know, landing that faculty position, are non-existent, very rare, not very lucrative. And so it’s like, yeah, if the stars completely align and you get that job that you’re going for, it all works out. But for most people who pursue that, it’s not going to work out. And so you have to realize that going in, it doesn’t mean you can’t like, you know, shoot for the stars and everything, but you need to have some kind of nets and backup plans and safety. Because the stats are that a tenure-track position is not going to work out for the vast majority of people who pursue one. And so it seems like there’s, you know, an analogy here with the field, the career in wildlife biology,

22:33 Stephanie: Do you see any additional downsides or risks?

Debt and Opportunity Cost: Loss of Compound Interest

22:38 Emily: I mean, mentioning, going into debt like you did is absolutely perfect. But to me there’s another layer on top of that, which is the loss of opportunity to get compound interest working for you. So if you go for many years in your twenties and into your thirties, maybe doing temporary work and underpaid work, and maybe you’re accumulating some debt, or even if you’re not, but you’re not doing anything like on the saving, investing front to get ahead with your finances, then that’s lost time. That decade or so is lost time. And it’s possible to make up for lost time, but you just have to save so much more later. But what if you end up, maybe in your thirties, in a job that pays, as you mentioned before, $50,000 a year, when you were hoping for something that paid more or was more stable or something like that? Like that’s where you are, and that’s what you have to live off of and save off of after that point and still try to make up for that lost time. So I think that people can be financially successful at all different kinds of salary levels, but like we were talking about earlier, you just have to be realistic about what the opportunities are, the salary opportunities are in the field that you’re pursuing, and also in your backup plans, if that primary plan doesn’t work out that well. So yeah, the loss of time to get compound interest working for you is the main one that I see there.

23:48 Stephanie: And I think that people in our field don’t think about that stuff at all and even, or I know they don’t think about that stuff at all. And even like talking about the loss of time with your first starting salary. You really don’t have at least a good first starting salary. I had a starting salary in graduate school, but like how most jobs work is you get your first job, and that’s your starting salary. And then that’s like the bar for you to negotiate a higher salary every job that you get. So for myself, when I graduated from my PhD, I was, what, thirties, close to 30. And you know, my husband who is an electrical engineer, he had been in his career for, for several years already. So not only are we getting paid little when we’re starting out, but we’re starting out later in age.

24:45 Stephanie: And another thing is people don’t do retirement investments either. So my dad grew up poor. His dad died when he was younger, and he had his brothers to take care of. So he was always like financially worried, and he always had us read financial books and stuff like that. So I’ve had a retirement account since legally you can have one, I think maybe 16 or 18. But yeah, like we’re not taught that. Like, you’re right. Like nobody’s talking about this stuff. And they, like, my friends would be like, well, I’ll get it through my job, when I get my first job, but some of my friends didn’t get their first jobs until they were close to their forties, and your retirement compounds. And that’s really where the money comes from. So if you are waiting a while to start that, then you’re missing out on a lot of that income compounding.

25:42 Emily: Yeah. And I think, again, to generalize, like this is something that I see with graduate students all the time, postdocs all the time is that there’s an optimism about what the future salaries are going to be post-PhD, post postdoc. And I certainly have the same optimism for them. But the other thing that happens as you age, generally speaking, is that your life gets more expensive in a variety of ways. You know, maybe you buy a house, maybe you have a child, maybe you have to take care of aging parents or other family members, like, so even if you do see a post-PhD, jump in salary in whatever field that you’re in, it might not go as far as you were hoping that it would. And so to me, my attitude is more like, you know, work with what you have now, that is, try as best you can to live a sort of financially balanced lifestyle and do some of that retirement investing or paying off debt or whatever it is that your goal is while you still have a lower salary, while you’re still in graduate school. And yes, like I do hope that that higher salary comes, the permanent job comes and it will all be much easier later, but just in case it’s not, let’s get started now so that you have that time, as we were talking about for, you know, your money to compound, or at least your debt to not compound as much.

26:54 Stephanie: Absolutely.

Commercial

26:57 Emily: Emily here for a brief interlude! Heads up, fellows: The next quarterly estimated tax payment deadline is Tuesday, June 15, 2021! This one always catches me by surprise because quarter two, strangely, is only two months long, while quarter four is four months long. Yet, a full quarter’s payment is due on June 15th. If you aren’t having income tax withheld from your stipend or salary and haven’t yet filled out the Estimated Tax Worksheet in Form 1040-ES, now is the time to do so. The worksheet will tell you how much you can expect your tax liability to be this year and whether you are required to pay estimated tax. If you need some help with the Estimated Tax Worksheet or want to ask me a question, please join my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers the common questions that postbacs, grad students, and postdocs have about estimated tax, such as what to do when you switch on or off of fellowship in the middle of a calendar year. Go to PF for PhDs dot com slash Q E tax to learn more about and join the workshop. Now back to our interview.

Advice for Pursuing a Financially Risky Career

28:13 Stephanie: Okay. So knowing that this is a financially risky career, what do you think, like, what’s your advice to people who want to pursue it in like, they’re absolutely sure they want to do this and maybe they don’t have a financial safety net or they don’t come from a really, really wealthy background? What can they do?

28:33 Emily: I think the first thing to acknowledge is that you, as an individual, are a whole person and that you have needs and desires that are perhaps independent of this career in wildlife biology that you want to pursue, or any kind of competitive and perhaps not lucrative kind of career. And what I mean by that is that I would love for you to pursue like your career kind of passion, but just as you’re doing that, keep in mind that you still have needs as a person. You have financial needs, you have relational needs, you have spiritual needs, health needs, all these things matter as well. And I think there’s a tendency for people, especially when they’re younger and in their twenties and so forth, to drive hard at their career goals at the expense of some of these other areas of life. And it will catch up to you, eventually. You will reach age 30 or age 40 and realize that you have some deficits or dearths in these other areas, because you were trying to sort of suppress your needs and desires in those areas for so long to pursue this career.

29:35 Emily: So I don’t think that’s healthy and don’t do it. So try your best. Right? And so we’re going to talk about the finances, but there’s all these other areas of life as well. So don’t forget that you’re a whole human and you’re more than just your future career or job in wildlife biology. So that’s kind of the first thing to keep in mind. So, as we’re talking about sort of financial health and financial wholeness, as you pursue these careers, I do think you need to create your own safety net and your own financial security and backup plans as you go. And so that may mean that it will take you a little bit longer to get to graduate schoo, for example, if that’s like your next goal. Maybe you might take an extra year instead of, you know, taking a one or two year gap, take a three or four year gap between finishing undergrad and that graduate degree, for example. And that’s to build up more of your own financial security in the meantime.

30:25 Emily: And so one of the things we talked about earlier, these pay-to-play or volunteer experiences, is it possible for example, for you to plan around that and say, I’m going to have a summer job? Maybe it’s not even a job, I’m going to have a summer experience, and it’s going to cost this much money, or I’m going to be paid this much, but my lifestyle needs are this much. And how can you save in advance for that? And what kind of job can you have when you’re not actively engaged with these experiences? How can you pursue a job and a career that will allow you to have the experiences, but still give you some financial stability in the meantime? And one of the things I end up talking a lot about, and that I’ve learned a lot about from people I’ve interviewed on my podcast is regarding money mindset and limiting beliefs.

Navigate Limiting Beliefs

31:06 Emily: And so a limiting belief that someone in the field of wildlife biology might hear, and they might even get this from your work, again, the realism, is I can only ever have a temporary job and I can’t have a job the other seven or eight months of the year, because that’s not in my field, whatever. But maybe there is a way for you to build a job or an income or a career in that part of the year and still have that balance where you want to do, you know, these special experiences in the summer or the spring, or what have you, but still be making money in the other part of the year. And honestly, I think one of the most accessible ways is what you and I are now pursuing, which is entrepreneurship. So maybe there’s a way to have, you know, set up your own stream of income.

31:45 Emily: Maybe you work on it more intensely in one part of the year and less intensely in the other part of the year. And you can create that balance for yourself to still allow you to pursue the experiences in the career that you want to have, but still be making money in the other part of a year or a little bit, you know, while you’re having those experiences still. So that’s one idea. The other one is about this debt, you know, either going to have experiences or on the flip side, maybe not paying down student loan debt that you’ve accumulated in the past. I mean, we’ve had a student loan debt crisis that’s been building and building ahead of steam for a long time, but especially in the last decade. And, you know, in the last decade, I think many people have come to realize, you know, your student loans, your education, especially at the bachelor’s level is not necessarily an investment.

32:30 Emily: It’s not automatically an investment. You can’t pursue any bachelor’s at any price and, you know, be sure that that’s going to pay off. Same thing for graduate degrees. You know, your home is not always an investment. There are things that used to feel safe that used to give you a path to the middle class that are not there, they’re not guaranteed any longer. And so I think you have to be really, like, in thinking about pay-to-play experiences as an extension of student loan debt. So like I’m taking out student loan debt to pursue my education. I’m taking out some kind of personal loan or consumer debt to pursue this experience that I want to have to get into graduate school. You can think about them sort of analogously. And so one rule of thumb that works for student loan debt that maybe you could extend to, if you’re going into debt for these experiences in wildlife biology, is don’t take out more debt than one year, your first-year starting salary.

33:20 Emily: That’s like the rule of thumb for an undergraduate degree. And so if you’re, you know, going into a little bit better or forgoing salary to pursue these volunteer pay-to-play experiences, can you keep the debt level down to one year of your current salary or lower? Is that possible? So like, so yes, pursue these experiences, but make sure you’re not giving yourself carte blanche, right? To spend and go into as much debt as you might want to. You’re sort of putting some checks and balances on yourself along the way to make sure that you’re not getting in too far over your head.

Consider the Cost of Your Education

33:56 Stephanie: Yeah, absolutely. And actually one of my big, I have a lot of advice for people, something I think that people should do is not worry about the school so much. Like a lot of students are super obsessed with like, what’s the best graduate program or what’s the best college to go to. And I honestly think that students should really, especially at the college level, focus on getting in the school that’s going to cost them the least, because like you mentioned your degree doesn’t necessarily pay off. If you’re going to invest, you know, $120,000 for a college degree and you can get the same result with one that’s going to cost you $10,000. I mean, I actually regretted for a long time, my experience because I didn’t know what I was doing. I didn’t know what I wanted to be.

34:49 Stephanie: An, I even applied poorly to schools. I applied to like only Ivy league schools because that’s what I knew. And the only schools I got into were my local state school and other schools that cost like $30,000 a year or a semester. And I was like, okay, I’m just going to start from my state school because I don’t know what I’m doing. And then it also felt weird to dorm at my state school, which is like 20 minutes down the road from me. So I stayed with my parents and I regret not having the college experience, but I also love that I don’t have debt and that it was, I mean, I paid, I think a thousand dollars a semester for school. So in the long run it definitely was worth it.

35:34 Stephanie: And in this field so much is about those experiences. So if you really want those pay-to-play experiences, because I mean, some of them are super cool. You could focus more on getting into a school that’s more affordable and do some of those things rather than go to a really expensive school. And this is true for graduate school, too. And graduate school in science, you do get paid, you get a stipend, but you get paid different amounts according to the different schools and even according to the different programs. So I was actually not in the wildlife biology program for my PhD, or in the department. I was in the biological sciences department, and they had a fellowship. So I was paid a lot more and I didn’t have to TA. And that played a huge role in me deciding to do that as opposed to another program where I would have to TA and get paid less.

36:31 Emily: I think that’s a great point. Both at the graduate and the undergraduate level. It’s more about what is the actual work that you could be doing? Who can you be working with? Rather than maybe the name of the school. And of course the finances come into play as well. Because again, I think my basic point here is like shore up security for yourself as you go as best you can to keep you on this route, as long as you want to be on it in pursuit of a career in wildlife biology. So that if you get to the end, let’s say of your PhD and you realize, okay, I can get the permanent job. I’ve achieved all my goals. Everything is wonderful. Well, you have some good, you know, financial, a nest egg behind you perhaps, or at least not as much debt as you could have been in.

37:15 Emily: That would be great. But if you get to that point and you say, Nope, I’m going to exit this career now. I’m not going to have the type of job that I thought I would have. I’m going to have some other type of job. At least you won’t have the financial regret behind you of, oh my gosh, I pursued this school, that school, they didn’t pay me well enough. I spent too much on this experience. Yeah. I think what you said is perfect is like focus more on the experiences. If you want to go for, you know, a less expensive college education, but save your dollars for some pay-to-play experiences that are really high impact, then that makes a lot of strategic sense to me.

FIRE: Financial Independence, Retire Early

37:45 Stephanie: Yeah. And another route, I think we talked about this in our chat, you talked about an acronym FIRE.

37:51 Emily: Yeah. So FIRE stands for Financial Independence Retire Early, or Early Retirement.

37:57 Stephanie: Yeah. So you could either do that or do a sort of hybrid model. And I interviewed somebody who did something kind of similar to that, inadvertently. He didn’t, I mean, he didn’t retire early, but he had 20 years in a corporation that was a really good job. And he participated, he volunteered in the Citizen Science programs on the weekends and in his spare time. And his corporation actually paid for him to go back to school. So he did get a degree in environmental sciences. But when he was finished and on the job market, he got the second job he applied for. And I could not believe that I was like, oh my gosh. Wow. And it was because of those volunteer experiences, he had so much experience that he was like leading groups and organizing events and stuff like that. So that all translated really well.

38:48 Stephanie: So you could start off in a more lucrative career and volunteer with conservation organizations, with Citizen Science, and make enough money then where you can take a less lucrative career. Or if you’re a real go-getter in today’s world, like, I mean, there’s really not a financial limit to like what you can do online and with entrepreneurship and stuff like that. Like, it is tough to do, but it’s, I mean, there’s so many like millionaires who are six-figure earners from selling courses online, and in practical stuff, too. Like I remember I was listening to this one podcast, this woman, she had a podcast all about goats and she made six figures just from selling a course on how to raise backyard goats. And she had like, she had like different courses, too. So it’s like, you know, you just don’t think like, oh wow, like you can make a lot of money off of information and goats, but you can. So there’s a lot of opportunities out there.

Combining FIRE with Passion Careers

39:52 Emily: Yeah. What I think is really interesting about the FIRE movement and combined with like these sort of passion careers, whether it’s wildlife biology or whether it’s maybe some other things you want to get a PhD in. So if, you know, the most intense people in the FIRE movement, the goal is to retire in about 10 years, not retire necessarily, but become financially independent in about 10 years. That would be like a fast goal. So you get out of college when you’re 22, you know, by 32, if you’re really intense about it and chose the right career, maybe you were an engineer or something like that. You could be retired by that point or, you know, financially independent, optional to retire at that point. Now that is a route to free up the entire rest of your life from age 32, to whatever, to do anything that you want.

40:37 Emily: As long as your lifestyle expenses don’t creep up to the point they exceed your investments’ ability to support you. And so that is where you could spend the next 50, 70, a hundred years of your career working in wildlife biology in any kind of capacity that you can achieve knowing that your finances are already taken care of. And that’s a very unconventional route, right? But I think it’s something that maybe more people should consider if their passion is in a field where it’s so difficult and so competitive to get a full-time position. And, you know, I think it also goes back to the realism discussion we’re having earlier. You know, maybe there’s something about wildlife biology or whatever field that you’re in that you would like that romantic version, but you are not so enamored with the reality of having a career in that field version, and maybe becoming financially independent allows you to experience the romantic versions of the career, you know, of rather the field to a great extent without having to commit to having to earn in the career and doing maybe the work that’s not quite as exciting to you.

41:43 Emily: And so that’s, I don’t know, it’s a very like interesting idea. I actually did meet someone one time at a financial bloggers’ conference who had reached financial independence in his early thirties through, whatever, he’s like a finance guy or something. And he was telling me, oh yeah, I’m considering going back and getting my PhD in some completely unrelated area because I can do whatever I want now, essentially. It doesn’t matter if I get a stipend or not. I can support myself. He can pursue anything he likes. And so I’ve never really like discussed this idea with anyone in terms of PhDs before, but I think it’s, I don’t know. It’s not the most outlandish thing.

Wildlife Bio: Career or Lifestyle?

42:19 Stephanie: Yeah, absolutely. And I actually, I mention this in the last chapter of my book is, like you said, maybe you don’t want it as a career, too. And maybe that’ll actually be more satisfying to you. So I had this talk with this very prominent biologist and he was talking about his friends, how like they’re traveling all over the world and showing him all these cool pictures and all these cool places that they’ve been to. And one of the countries that he said was a country that he does a lot of work in. And I was like, you work there, you’re like always traveling there. And he’s like, yeah, but I am in like conference rooms, I’m in meetings. I’m not going to see like this beautiful waterfall or go to the beaches. So again, it might be that romantic version of like, once you get higher up with your education, you’re going to be doing like more administrative work.

43:10 Stephanie: And you’re going to be writing scientific papers and writing grants and stuff like that. And, to be honest, that’s sitting behind a desk writing. So I just want people to like really understand what it’s like and what they’re getting into. And, yeah, like, if you’re really driven because you want to travel or have cool experiences with animals, there are Citizen Science vacations, Earth Watch does this, that you can pay for that give you those opportunities. Like you can pay to work with a sea turtle biologist and help him tag turtles or help them tagged hurdles. And so you can still have these experiences. But you’re not the one leading them, which actually might be nice because then you don’t have to worry about like all the logistics of setting everything up, and yeah. And managing people and things like that.

44:03 Emily: Yeah. I love that idea. And it’s just kind of thinking outside the box, right? Like how can I get to have this lifestyle that I want? Does it have to be my career, or can it be something I do on the side as you’re building a career in another area? Or I’ve retired from my career. And so now I can do it afterwards. I think that’s a really exciting idea that you can be in wildlife biology in more ways than just a full-time professional scientist.

44:32 Stephanie: You’re so right, too, about your, your life choices changing when you get older. I talk to a lot of young people who are like, I don’t need to live in a big house. Or maybe not necessarily live in a big house, but you do want more things as you grow up. Like you want more stability and things like that. You don’t want to be moving around all the time. And like, even myself, I didn’t want to have children, but yeah, like I want to be stable and I want to stay put and not going from here to there all the time.

45:02 Emily: Yeah. What I often repeat on my podcast is money gives you options. And so really what you’re doing when you, for instance, take out a bunch of student loan debt and then go into even more debt for these, like, pay-to-play experiences and eventually go into graduate school. And you’re there for a long time. And then, you know, all the things that you might have to do to get this final career that you are going for, if all that while you’re just accumulating debt and you’re not putting money into retirement, you’re basically hamstringing yourself into this career has to work out, or I am sunk, you know? And instead if you try to pursue it, but in a more balanced manner in terms of finances and other areas of life, you can get to that point, maybe when you’re done with your PhD and say, okay, I have options. I can still pursue this career that I’ve been going for. I can get another type of job because you have built up some financial stability along the way. So it gives you options. You don’t feel like you’re stuck in just the one type of job that you’ve been going for that whole time, which might not even be available to you.

46:06 Stephanie: Absolutely.

Best Financial Advice for Another Early-Career PhD

46:08 Emily: Okay. Well, as we’re wrapping up the interview, Stephanie, one thing that I ask all of my guests is what is your best financial advice for another early-career PhD?

46:18 Stephanie: I think probably the best is, and this is where I always tell people to start out in this career, is to look at the jobs out there now that they ultimately want. And I have a tool on my website for this it’s called the Job Tracker. And you basically just like write down, or you copy and paste, like what jobs you like, how much they pay, what your education is. And then, in my course, I actually, I also have a budget planner too. And like, see if you can afford that career and see if it works out to be the type of lifestyle that you want. So really like copy the salary and the location, and look up houses in that area and how much they cost, and see if this fits into your lifestyle. But again, like really get an idea of like, where you want to end up. So there’s no surprises and you can pivot more easily along the way if you decide, okay, I love this, but I really want to make more money. Which is okay, because, like I said, some of these jobs, they pay very little and it can be difficult to live with those jobs. I knew somebody who had what other students thought was like an absolute dream job, but she was just so sick of not making money.

47:38 Emily: Absolutely. I love that advice. It goes along with the general theme of like being realistic. Okay. So where can listeners find you, Stephanie?

47:49 Stephanie: They can go to fancyscientist.com or just Google, fancy scientist I’ll come up and they can contact me any way. I check all my messages. I’m happy to answer their questions. And I love hearing from people.

48:02 Emily: And what is the title of your book?

48:05 Stephanie: Getting a Job in Wildlife Biology: What It’s Like and What You Need to Know.

48:10 Emily: Great.

48:11 Stephanie: Very blunt. Well, thanks so much for doing this. I had a good time talking to you and I learned a lot.

48:17 Emily: Thank you. It’s exciting to me to learn about a new field and kind of wrap my mind around like particular financial challenges within that field.

Outro

48:26 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me! 2. Share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

How a Boom-and-Bust Money Mindset from Grad School Serves This Start-Up Founder Well

by

In this episode, Emily interviews Dr. Lindy Ledohowski, a PhD in English, former tenure-track professor, and founder of the ed tech start-up EssayJack. Lindy describes the money mindset she developed as a college and graduate student while experiencing boom and bust cycles of income and budgeting for must-haves and investments in herself. Lindy narrates how her money mindset has been in concordance or not with how she’s generated income throughout her career, and how it is serving her well now as a start-up founder. She emphasizes that a safety net enables career risk and how she prefers to bet on herself rather than other financial instruments.

Links Mentioned in this Episode

money mindset PhD

Teaser

00:00 Lindy: Even that TA income that was more regular, certainly wasn’t enough to comfortably cover month to month costs. I’ve since read that you’re not supposed to spend something more than one third of your income on fixed housing costs and that was never my case. It was often I was spending anywhere from 60 to 90% of what monthly envelope was on just fixed costs.

Introduction

00:33 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode 15 and today my guest is Dr. Lindy Ledohowski, a PhD in English, former tenure track professor, and founder of the ed tech startup EssayJack. Lindy describes the money mindset she developed as a college and graduate student while experiencing boom and bust cycles of income and budgeting for must haves and investments in herself. Lindy narrates how her money mindset has been in concordance or not with how she’s generated income throughout her career, and how it is serving her well now, as a startup founder. She emphasizes that a safety net enables career risk and how she prefers to bet on herself rather than other financial instruments.

01:31 Emily: I’m recording this near the end of March shortly after finishing my 10th webinar for a university client in this month alone. That sets a record for my business in terms of speaking engagement density. I want to send a super sincere and heartfelt thank you to all of the people who have recommended me to their universities and other organizations, particularly in the past year. I shared with you last month that I really wasn’t sure how my business would fare when the pandemic started given that the revenue was so reliant on in-person speaking engagements, but between webinars, individual, and bulk purchases of my tax workshops and the Personal Finance for PhDs Community, my business has actually flourished in the past year, and especially this spring. I know that is in large part due to the recommendations of the graduate students and PhDs who listened to this podcast. I know that because the people who book me tell me so. I really, really appreciate you supporting me in this manner. I’m so happy to be able to provide this podcast to you for free, and it is possible thanks to the products and services I sell to universities and individuals.

Book Giveaway

02:42 Emily: Now it’s time for the book giveaway contest. In April, 2021, I’m giving away, one copy of “Walden on Wheels” by Ken Ilgunas, which is the Personal Finance for PhDs Community book club selection for June, 2021. Everyone who enters the contest during April, we’ll have a chance to win a copy of this book. If you would like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review, and email it to me [email protected]. I’ll choose a winner at the end of April, from all the entries you can find full [email protected]/podcast.

03:22 Emily: The podcast received review this week titled “Customized and Encouraging Info”: “I’ve been interested in personal finance for awhile, but a lot of advice from other sources doesn’t really apply to my unique situation as a graduate student. This podcast, and the online resources on filing taxes as a grad student on a fellowship have been so enlightening and useful/relatable in a way that other sources aren’t. They’ve also helped me to challenge my sometimes limiting mindset about money as a graduate student, and have helped me begin to save and invest more than I thought I’d be able to on my stipend. Definitely recommend for anyone grad school or thinking about entering grad school. This is really important info that we don’t get from our school/programs.”

04:04 Emily: Thank you so much for this review! This reviewer really gets what I’m doing with the podcast and business. Without further ado, here’s my interview with Dr. Lindy Ledohowski.

Will You Please Introduce Yourself Further?

04:22 Emily: I have joining me on the podcast today. Dr. Lindy Ledohowski. She is the founder of EssayJack. She’s also a PhD. She’s a former faculty member — we’re going to find out all about that. When Lindy and I were preparing for this episode, we realized that she has a super interesting parallel story to her career story, which is the story of how her money mindset has served her very well in some of these stages, not so well in other stages. And it’s a little bit of an interesting flip on what we usually hear. A lot of times we talk about how money mindsets we develop in academia are harmful to our finances. Lindy has found the opposite of that. She’s found some concordance with her money mindset nurtured in graduate school with her success with finances later in life. We’re going to hear all about that. Lindy, thank you so much for joining me today. I’m really pleased to have you on. Will you please introduce yourself a little bit further to the audience?

05:15 Lindy: Yeah, absolutely. Thanks so much for that introduction. I am Dr. Lindy Ledohowski. I have an English PhD. Before I was an English professor at the university of Waterloo, I had been a high school English teacher. Then I left full-time teaching and founded, as you say, EssayJack, which is an ed tech software solution in the academic writing space.

Money Mindset in Young Adulthood

05:38 Emily: That’s fantastic. It’s obvious how your business grew out exactly of your career, so fascinating. We’ll get a little bit of that story today, but really I want to focus on this money mindset aspect. What was the money mindset that you were developing in your childhood early experiences with money in your young adulthood?

05:56 Lindy: It’s actually interesting looking back in hindsight, because you don’t know that you’re developing a money mindset when you’re in the middle of it. For me I think it’s best characterized as kind of a boom and bust. All throughout high school and then my undergrad, I certainly taught during the school year. I was a busser on weekends and then I was a waitress and then I would make the majority of my money that had to last throughout the school year in the summer months. When I was a high school student that was all day long babysitting, nine to five, whereas during the school year, it might be a couple of hours after school. And then similarly through undergrad, I relied very heavily on making a lot of tips and making all that money over a full-time summer working gig, and then during the academic year, I would scale back so I could focus on my full-time classes.

06:51 Lindy: That really gave me an approach to finances that was like, make as much as you can in as short a time as possible, and then budget that surplus over a long sort of drought period. That really started to get shaped for me in my teen years and then into my undergrad. I had my first job was as a paper route when I was 11, and then it was, as I say, babysitting, and then into the hospitality industry and customer service.

07:25 Emily: Now I can see how that kind of pattern, which I think is not uncommon for young adults and people who are still in their schooling years, but I can see how that pattern could divorce in your mind work from money in the sense that you’re doing a lot of work all the time, which is the work of being in school — the classes and so forth — but sometimes you’re not doing that kind of work and you’re doing the kind of work that makes money and that’s that period of intensity of earning the money and then spreading it out through the rest of the time. As an entrepreneur, I can see how that separation of what is work for money and what is work that just has to be done to further your general development, how that can help you later on, but you developed that early on while you were still in the cycle of the academic year.

08:11 Lindy: Yeah, absolutely. You put it really well that it made that separation between work and money. And then also I think it gave me a sense of budgeting through scarcity. And also I’m not really counting on financing for things because I very early was training myself to not think about, “Oh, I have a stable monthly salary, which I will then allocate for various purchases.” I always had to make a bunch of money and then buy the thing, whatever that thing is that I wanted.

Money Management and Budgeting Strategies through Scarcity

08:56 Emily: It’s so interesting that you use that term, budgeting through scarcity. And I think when we were prepping for this, you also use the term hoarding — hoarding money during the good times and eking it out during the leaner times to get through that. What kinds of strategies were you using during those early years? How did you budget for when your income was much lower or like zero versus when that income was much higher?

09:19 Lindy: One of the interesting things, and I don’t know if this is just my own personality traits, but as you focus on developing a money mindset unconsciously, in my case, what that meant is that I very quickly began to prioritize the “must haves” and the “nice to haves” for me. I was never, for instance, really into like clothes or fashion. That wasn’t my thing. I also had an older sister whose best friend was really into fashion, so from the two of them, I could inherit hand me downs and that was more than enough for me. I don’t know if I’m particularly stylish, so I didn’t need to color my hair or all that. Those kinds of things became “nice to have” for me and even in a time when my bank account was very flush, I still never ran out and bought a bunch of clothes or did my hair or things like that.

10:15 Lindy: Whereas, books were always my passion and I could justify also spending some of that money on books because I would think of them as a longer-term investment in my intellectual future. Even if I was buying books as a high school or undergrad student, I always knew that I was going to sort of go on and do more. I loved books and that was sort of investing in myself. Similarly for me a must have, would be say traveling. Interestingly, I had a conversation with my then boyfriend as an undergrad because his attitude towards money was to invest it in financial investments. Whereas if I had a little bit extra, I’d budget a backpacking trip and I always thought, well, I’m investing in myself and how my brain is going to be broadened by different perspectives. I think that came into play in terms of creating a hierarchy of, if I have limited funds in that hoarding and scarcity time, what will I spend it on and what won’t I spend it on?

11:22 Emily: I’m so glad you gave us that insight, because first of all, I’m glad to hear that your “must haves” were not literally just like food and shelter. Of course you took care of that, but had added onto that what you considered to be investments. And it’s so interesting that you were thinking about them that way, even that early on, because as I said earlier, obviously your career has evolved in such a way that probably all those experiences, the books, especially, did contribute to ultimately like your founding of your company and everything. I don’t think that many people at that age think about investing in themselves in those ways, but you did.

12:00 Lindy: I think maybe that’s a personality quirk of my own, or maybe my good fortune. And speaking of good fortune, as you mentioned, I did have a place to live. During my undergrad, I lived at home. The deal with my parents was that I could live at home rent free and so I need to flag that because that’s just a tidbit of good fortune on my part that not everybody shares. Again, back when I was doing undergrad, so that was in the nineties, I was able to make enough money waitressing and saving my tips over the summer that I could afford tuition. And again, that’s a very different financial reality than what people are facing today. That kind of make it all and then put it into your tuition, buy books, and then also the fact that I did have that family help, means that I had a bit of a buffer and it’s fair to recognize that little bit of a buffer that I certainly had.

13:00 Emily: Absolutely. It sounds also then that you didn’t take out debt, at least you haven’t mentioned it so far during those undergrad years.

13:07 Lindy: No, no. And that was actually what the conversation was with that then boyfriend, because he and his parents took out student loans and then he and his parents had a plan for investing that money and making money on the student loans and all that. It was very sophisticated in a way that I didn’t have with my family at all. We didn’t really talk about finances in any sort of concrete way, aside from the “we love you and if you need help, we’ll help you” kind of way, which again, I’m lucky that I had people in my corner, but it wasn’t like a sophisticated financial education in those early days.

13:47 Lindy: In my young twenties, then that boyfriend, and he was the first boy I lived with, we then had to talk about those finances in terms of how we split things up financially in a shared housing. I was really sort of dumbfounded to know that he had this whole other financial reality based on the availability of student loan debt at the time, whereas I just had the neither a borrower nor a lender be. And so if I didn’t have the money, I didn’t spend it, was kind of my approach at the time.

14:23 Emily: Yeah. I like your simpler approach. For the record, for anyone who’s listening, please don’t take out student loans just to invest the money. I do not endorse this approach. It is something I’ve been asked about from time to time and it’s very risky, very, very risky. I’ll just put it that way.

14:39 Emily: That was some of the strategies you were using. What about budgeting at that time? Did you have any particular way that you were doing it, or you just found this sort of natural rhythm of your spending?

14:48 Lindy: A couple of ways. One, I definitely found a kind of natural rhythm to the spending, which is you don’t spend very much and then whatever you have leftover is the surplus for travel or for something else. After my undergrad degree where I was living at home, then I did have a proper job that had a salary and the deal with my parents was I could have one more year at home rent free, so I could sort of get on my feet. I used that to again, sort of boom and bust, to hoard that income so that I could then go and do another degree, and that was my education degree. I was more conscious of budgeting at that time, because I had a really specific target. I want to do a bachelor of education degree. I know that I’m going to have to, at that point, move away, pay for housing, pay for tuition, sort of figure out all of that. I did have a spreadsheet and tracked things, and then once I had a couple of months of the spreadsheet, I could then sort of see, okay, well, typically this is how much I spend on a given month. If I go over that, that’s a problem. And then if I can be competitive with myself and get under that, then that’s great.

16:06 Emily: I see. So you actually had a little like gamification element kind of going on.

16:10 Lindy: Yeah, absolutely. Like self gamification. It was like, can I go lower?

Income Changes and Money Mindset During Graduate School

16:16 Emily: Yeah. And so we’re kind of talking about you mentioned a second bachelor’s degree, but then of course, at some point you went into graduate school and got your PhD as well. Can you talk about how this money mindset served you or didn’t serve you during that time?

16:31 Lindy: As I just mentioned, after the undergrad, then I worked and saved money, did the education degree. Then I worked as a teacher and saved money so that I can go to graduate school. I did a master’s, which was unfunded and then the PhD, which was fully funded. I went straight through for that and I did borrow some money from my dad, at the time to do that unfunded masters, but I had a chunk saved from my education degree. That money mindedness meant that as I went through, one of the things for sure, when I was contemplating a PhD after the masters, and I really loved my master’s degree, which is what made me want to continue on and do doctoral work. But one of the absolute deal breakers was it had to be fully funded and it had to be significantly, fully funded. Not all fully funded PhDs are fully funded equally.

17:29 Lindy: I knew that any university would happily take me as a PhD if I was going to be willing to pay them, but it would be a real vote of confidence if they said, yes, we will take you, and here’s the financial commitment we’re making towards you and your success. I think the fact that was a real must have for me in the application process for the PhD came out of that money mindset that had been developing along the way.

17:58 Lindy: And then in the PhD, similarly, there’s these funding cycles. You apply for grants and scholarships and all of that at one time of the year and then it ups your funding for the subsequent years of the PhD. had five years of guaranteed funding from the university, and I immediately then upped that by various kind of scholarships and grants. And again, then was able to sort of dole out the month by month stuff when I would get a big stipend or a big award in September or January, and then make it last for the subsequent term and semester and top up. I did also do some teaching and TA work and again, that was paid more regularly, so I at least had the combination of some TA work that was paid regularly and then grants and scholarships and fellowships that came in these lump sums.

18:48 Emily: Yeah, so a combination of regular income, irregular income, larger sums, and I really liked that you pointed out the grant cycle and the fellowship applications and all of that, because that’s another example of how you work, like on an application, it’s not immediately for money, but some percentage of them presumably will work out and you can have this cash influx based on that later. For you, I think it was just probably grooving in even further, again, this boom and bust cycle and all the things that you’ve mentioned so far and work not being directly for pay, but sort of indirectly for pay later on.

19:26 Emily: Is there anything else you want to say about those grad school years? How did you come out of them financially? It sounds like you maybe were making a decent amount of money with all these sources combined.

19:37 Lindy: Yeah. Interestingly, I made more money as a grad student than I did as a high school teacher, to be quite honest. And part of that again has to do with taxation, so certain grants and fellowships and scholarships, aren’t taxable in the same way that a teaching income is fully taxed as regular income

19:57 Emily: Actually, we’ll note, because we haven’t said so far, but you’re in Canada. Actually, no, you mentioned the university name, so we know you’re in Canada. But yes, different situation in the States.

20:04 Lindy: Yeah, I was going to say, anything I say about taxes will be specific to the Canadian context. My schooling was in Canada and then my work life has also been principally in Canada. There were certain kind of tax benefits to the way that the graduate funding was set up. Everybody sort of jokes about being a starving student and I still was, but I was less starving as a PhD student than I had been as a full-time school teacher. And again, that’s just because you know, it was early days and I hadn’t sort of stuck with teaching long enough to go up the ranks or anything like that.

20:44 Lindy: The only thing that I will certainly say about my PhD experience from a financial perspective is that even that TA income that was more regular, certainly wasn’t enough to comfortably cover month to month costs. I’ve since read that you’re not supposed to spend more than one third of your income on fixed housing costs. That was never my case. It was often I was spending anywhere from 60 to 90% of what a monthly envelope was on just fixed costs. I got very good at going to every single free wine and cheese on campus and getting food. Any holiday party anybody would in invite me to. I ate a lot of canned goods and pasta, and so if I was invited to somebody’s house, it would be the produce that I’d be eating because that you couldn’t sort of buy in bulk at the beginning of the semester and have it last, whereas you can buy cans of tuna and that’ll last. That gives you a bit of a color on that PhD experience.

21:57 Emily: It also does for you and your budgeting method, I guess. Knowing that you have money in the bank, but eating this way, being this frugal and so forth, knowing that you have to make it last until the next influx comes in. I do think that gives us a good picture.

Post PhD Salary: How Having Steady Cashflow Changed the Money Mindset

22:12 Emily: Now, after your PhD, you had regular employment. You had a salary, maybe not for the first time, but maybe in a different way than you had before in your life. Tell us about that period when you were a professor.

22:26 Lindy: After my PhD, I did a post-doctoral fellowship and again, that was much the same as, as the PhD in terms of lump sums of money. Then I became a tenure track professor. That had full benefits, full salary, all of those sorts of wonderful things. But interestingly, at that point I was then married. My husband is an academic and we had jobs in different cities. And so again, the budgeting became sort of weird because we were now using our two regular salaries to spend on the monthly costs of running two homes. We had two apartments in two different cities and traveling back and forth. Then any surplus I had was on driving or flying to be in the same city as my spouse. However, what I did find in that because that was our experience, I was well-suited to continuing a bit of that boom and bust and spend the money that was surplus on travel to see my spouse.

23:26 Lindy: What was interesting for me is at the time banks were only too willing to give us financing. because we were in two different cities, I had an old 15 year old car, we were going to sell that and buy a new car so that I could safely drive on the highway. And the dealership is like “we can give you this kind of financing because you’re both professors” and I was really uncomfortable with that. We were like, “well, we have our savings, let’s just buy the car.” In hindsight, I don’t know that that was the smartest decision given that cars are depreciating assets.

24:02 Lindy: But again, at the time I was very uncomfortable with this idea of taking on something that was a month to month to month debt, because I hadn’t built up my trust in the system that money would be there month to month to month in the way that I think if you start working at a regular job early and have that continuity over time, you start to have faith that, yeah, even though you might run out of money by the 30th of the month, it rolls over and new money comes in. I, temperamentally, didn’t feel that that was the case, even though, obviously as a professor, that is the case.

24:41 Lindy: So as I say, we made the choice to buy the car outright and again, hoard all of our money and live cheaply in the hopes that we could then save up for a down payment. That’s kind of how that money mindedness — the boom and bust, the hoarding — carried over into the academic job when we were both professors and seemingly could have had a much more regular financial life. We still kind of didn’t.

25:06 Emily: I’m so glad you pointed that out because really we’re talking about whatever it was 10, 15, maybe close to 20 years of this boom and bust cycle developed by the type of income you have with maybe some periodic, yes, you had some regular income, but it was never as much compared to that irregular income. I can totally understand why you didn’t immediately have trust that the salary is going to keep coming in and so forth.

Commercial

25:31 Emily: Emily here, for a brief interlude. The federal annual tax filing deadline was extended to May 17th, 2021, but the federal estimated tax due date remains April 15th, 2021. This is the perfect time of year to evaluate the income tax due on your fellowship or training grant stipend. Filling out the estimated tax worksheet and form 1040ES will tell you how much you can expect your tax liability to be this year and whether you are required to pay estimated tax. Whether you’re required to pay throughout the year or not, I suggest that you start saving for your ultimate tax bill from each paycheck in a dedicated savings account. If you need some help with the estimated tax worksheet, or want to ask me a question, please join my workshop, quarterly estimated tax for fellowship recipients. It explains every line of the worksheet and answers common questions that postbaccs, grad students, and postdocs have about estimate tax, such as what to do when you switch on or off a fellowship in the middle of a calendar year. Go to pfforphds.com/QETax to learn more about and join the workshop. Now, back to our interview.

Transitioning to Entrepreneurship

26L49 Emily: So you’re going along, you have your salary job and everything, but at some point you become inspired to start your company. I’d like for you to talk about the financial aspects of that transition — did you prepare financially before jumping into self-employment or were you already prepared based on the way that you were living? Or these kinds of insights?

27:10 Lindy: Before starting the company that I now head up, which is EssatJack, and that’s an ed tech software solution, I did a couple of years of consulting. So between being a professor and starting a tech startup, I was like, “okay, this living in two cities as two professors is untenable. All of the money that we’re making, we’re spending to rent two apartments or to travel back and forth to see each other, and I just don’t see this being a sustainable future for us. Something’s got to give, and the something that’s got to give is I’ll give up this job and figure out what comes next.

27:45 Lindy: I was very lucky. Again, I secured a grant — this is apparently just how I roll. I get the chunk of money and then decide what to do with it. So I secured a grant which gave me the confidence to take a year’s no pay leave from my job as a professor, as a kind of get the first toe in the water of quitting without actually quitting first. I had this grant, I was working on a conference in a symposium and ultimately it then became a book. But what I also did during that time was I started consulting. I started taking consulting projects just to see what can I do and then that gave me a certain confidence in being able to charge for my services.

28:27 Lindy: You made a really good point earlier on in the podcast about how my mindset divorced labor from financial remuneration, which I think is absolutely spot on. The time as a consultant remarried those two things together for me, because it made it very clear that my time was worth money, so I had to a, charge appropriately for it and not do free work on the gamble that it would pay off later in the way that say applying for grants and things like that is that kind of a gamble. Secondly, I also ran into like a scalability problem. There are only so many hours in the day that as a single sole proprietor consultant, you can work. At some point you max out and you can’t charge for 27 hours a day worth of work. That was ultimately how I got to the end of my time as a consultant is that I just sort of was like, there’s more work than hours in the day for me to do it, so I need to now start thinking about what’s the next step? Do I grow out the consultancy or do I think of something else? That’s kind of how that money mindset of the boom and bust carried over into consulting and I really did have to change my approach to labor and finance and more closely see every minute I worked as having to be worth money.

29:56 Emily: Yeah, I see. You had in that narrative that you didn’t officially leave your job, but you took unpaid leave for a year, testing the waters, after securing a grant as well. I’m wondering, obviously I think anyone can see that your life at that time with your husband was untenable, that’s not a long-term solution, but I think a lot of other people still in the face of something like that of there’s this really big thing about my job that’s unsatisfactory, they still stay in it maybe longer than you did. I would like for you to just speak briefly about this transition and how you decided to do that unpaid leave versus just leaving it right away. Did that make it easier taking the half step out? And also, is there anything that you wish you had done differently in that transition from the full-time position to the consulting?

30:48 Lindy: I think the first part of the answer is profoundly gendered. Many female professionals in the Academy and other professional fields find their careers just taking off at the time where they biologically, if they want to have children, they have to. That’s the window, you kind of have to do it. And that was the case for me. I was in my early thirties as a professor and my husband and I, we hadn’t yet decided whether or not we had wanted kids. It had always been like a “maybe one day kind of conversation. But being professors in two different cities and the ages that we were made it very important for us to get some clarity around, well, do we even want to have a family because if we do, that’s something that we’re really going to have to get on sooner rather than later. What came out of that conversation was the recognition that while we still didn’t know if we wanted kids or not, we knew that we didn’t want that decision to be made by circumstance. We didn’t want to fall into not having kids because we lived in two different cities and couldn’t figure out how to do it in that context, in a way that would make us both happy and satisfied as parents or as a family. That I think helped because it was like, well, this is a huge life decision and it could happen to us by circumstance and you can never know what that feeling is going to be like down the road, if you regret it. And I certainly didn’t want to be in that situation.

32:28 Lindy: Taking the leave kind of helped, as I say, sort of give me the confidence that I could actually make money outside of the Academy, which was my big fear. I was like, “Well, this is what I know. This is what I’m good at. This is what I can do. And I like it and all the rest of it.” Being able to sort of throw my hat over the fence, so to speak, as a metaphor for then you got to go in and get your hat, meant that I then began to feel confident that I could pitch for consulting gigs. I could get them. I could do the work. It could be rewarding. I could get paid. And then that also gave us the opportunity to live in the same city, to think about whether or not we wanted a family. In the end we decided we didn’t want kids. We have a cat. She’s amazing. But I’m very happy with that because it was a choice that we made as opposed to one day we woke up and realized that that that window had closed. So that, I think, as I say, the first part of that answer is a profoundly gendered answer.

Money Management Shifts during Self-Employment

33:28 Emily: What I found really interesting in there is that, okay, so you’ve, you stated that this period of consultancy, tied your time and earning back together. Your husband during that time, I think still was salaried. Is that right? So you still had that part of your finances was salaried. How did that change your money management or did it? Were you starting to trust the salary system or were you still like hoarding and then making these investments?

33:58 Lindy: I was definitely still hoarding. As soon as I left my job as a professor and started as a consultant, I definitely got back into the hoarding mindset, partially because as a consultant, it is also very boom and bust. You have periods of intense work and then periods where you don’t necessarily have the work or you’re calling around and trying to get work, so you need to kind of have enough that you’re carrying yourself through the lean times. Particularly at the beginning, you have no confidence that the lean time will end. You do one job and then it’s lean time and you think, Oh my God, I’m never going to make money again. And then you get another job. And then over time, you start to feel a bit more confident that even in a moment when there happens to be a break, that that’s temporary, but it takes a while to sort of get through that. And every time there’s a bit of a break or a lull in projects, at least for me, I was like, “Oh my God, I’ll never work again and I’m a failure and this is terrible and I’m never going to make any money.” I certainly hoarded quite a fair bit.

35:06 Lindy: And then again, because we didn’t know in the early days, did we want to have kids? I wasn’t paying into any benefits package at that point as a consultant, I was just myself. I knew there’d be no maternity leave, so whatever the next step was going to be, I needed to make sure that we had saved and had a buffer. And again, just as I flagged, my early years, I was very lucky to have family support. I had a home where I could live and, and there were financial resources there to support me, as an adult I was very lucky to have a spouse who had a full-time job. Again, I’ve had the ability to take probably some greater risks because of that backstop.

35:56 Lindy: Other people who are in similar situations to me may also think about one person covering the costs and one person taking the risks, because I think that’s a reasonable way for two people in a financial partnership, a marriage, to plan things out. My dad always said, if you can live on 50% of what you make, so one person’s salary and bank the other, you get much farther ahead than if you spend a hundred percent, month to month to month. Again, the finances of dad, the boomer generation are obviously different from us, but I did have that message in the back of my mind for sure.

36:40 Emily: Yeah. That is a really interesting way to put it and quite true that a safety net is maybe not strictly necessary, but can make it easier and more psychologically palatable to take a risk like that.

36:55 Emily: Okay, now you’re in this period of you did this consulting work for a while, but you mentioned earlier that you wanted to scale, ultimately, and so that’s where the business, the software solution comes in. Also, to today, is your husband still in that academic position?

37:09 Lindy: Yeah. He’s still a full-time tenured law professor and he loves it, and will probably continue doing it until one day he’ll be an emeritus professor, I think.

Interplay Between Lindy’s Money Mindset and Entrepreneurship

37:22 Emily: Okay. Another question we have here is after doing the consulting and starting the business, did you start to realize that there were some mismatches between your financial mindset and how the system worked? We talked about the system of being a salaried employee earlier in terms of your employer, but what about the system of, as you mentioned earlier of financing for instance, or you’ve also brought up taxes?

37:46 Lindy: Yeah, so really interestingly, as I say, as a consultant, I was doing that hoarding. Initially because it was like, well, maybe if we want to have a kid, we want to have a buffer. And then there were also things like, well, maybe we want to buy a house, so we need a down payment. And then as I started to think, okay, well, let’s get away from a service-based business and start thinking about a product-based business, we know we’re going to need to have some savings to put into that. All of those considerations required having some kind of chunk of money to allocate towards them.

38:19 Lindy: Then it was as we started to refine those things — okay, now we’re going to buy a house. We thought we were in such a great position because neither of us have student loan debts, we have some savings. Then when we started house hunting, we realized actually what we could afford was kind of not what we thought we wanted, so that was a bit of an eye opener to realize that while we, I think very blithely and naively thought, “Oh, well, we’re sort of trundling towards a middle-class life,” we weren’t, and that was surprising. The houses we saw in the neighborhood we were looking at, which we thought were standard middle-class-y, “this is us”, we’re utterly priced out of that. That again was one of those moments where I was like, well, I need to work a lot harder and save a lot more money so that we can sort of buy a nice house or whatever the case may be.

39:17 Emily: To clarify there, was it that you weren’t making enough money to afford that kind of house or was it that the lending system didn’t recognize your income as contributing towards a mortgage of the size needed?

39:30 Lindy: It was essentially that the mortgage that we needed to secure would be based on my husband’s income, not mine, because I didn’t have…and again, you need say as a consultant, self-employed, you need years of income that you can then show and they still only take a percentage of that, that they count towards your overall income to debt ratio. That meant we were in a much smaller position. The only way to up that was we had to make and save more money, so that even though the overall borrowing amount, the debt amount would remain the same, we’d have a bigger down payment, and so the actual house purchase increased. So we paused that house hunt and I scurried around and tried to make a bunch more money so that we could have more. That’s what got us thinking and that carried over into, we were like, “Hey, I need to move from a service based business to a product based business.”

40:35 Lindy: It got me thinking about income to debt ratios in a way that was entirely new and my money mindset, which is very boom and bust is helpful. Particularly now in sort of tech and startup, you may have to spend a fair bit of money at the beginning to build the thing before the thing that you’re building is actually going to start generating revenue. There’s a chunk of time where you’re spending money, but not making any because you haven’t built the thing yet. But it also got me into dealing with traditional lending institutions. In a tech company, there is no collateral. If I want to start a restaurant, I go to a bank and I have the business plan and I’m like, “okay, I want to borrow some money and either rent this restaurant or buy this restaurant or whatever,” and there’s stuff that the bank can take back if that business fails.

41:31 Lindy: Whereas if I say, okay, here’s my business plan, here’s the product I want to build, it’s this technological product and it’s going to be built in the cloud. There is no hard good. There’s nothing a bank can take, it’s all intellectual property. While there’s a lot of value in that intellectual property, it’s not value that somebody else really can monetize in your absence. I was kind of naive about that. I thought, “Oh, well, you know, we’re building this thing. There’s this need, both educators and students need help with academic writing and there are essay mills out there where people are plagiarizing and cheating, and we are actually providing a real viable, technical solution that’s pedagogically sound, that’s built by a couple of professors, all of that. But it means that you can’t necessarily go to banks and get that funded, unless you’re willing to say, “Oh, and you can take my house if this fails.” It’s really sort of getting comfortable with a fair degree of financial risk.

42:38 Emily: I’m thinking this is where venture capital comes in. Is that something you have pursued or are pursuing?

42:44 Lindy: Yeah. We’re right now in the middle of a financing raid. We held off on venture capital for a very, very long time. We had revenues and savings and bootstraps and friends and family and loans and any grants. As I say, I’m the queen of getting grants. Any kind of, um, funding we could get without external investors in the early days, that’s what we pursued. VCs can be fantastic, but there’s also a risk in the sense that if you get them in too early, they are driving a particular business model for your business, and for us, in the early days, I wasn’t sure exactly what our business model is. Academic writing — is that something that’s going to go viral? Do we want it to go viral? Or is it going to be like a meat and potatoes business where you sign up, you get a subscription, it serves your needs while you’re a student writer, and then you move on to the rest of your life, being able to think and write critically because of the skills that you’ve learned. Or do we need to lock you in like Facebook and keep you forever?

43:52 Lindy: I was very wary of inviting other people into the company early on, lest they derail what is…My passion is to create an ethical business that is viable and that provides a real solution and isn’t a gimmick, and isn’t just out there to steal user’s data and sell it to the highest bidder. But of course, many VCs, that’s what they’re looking for. In the early days, I felt our bargaining power would be quite low, because it’d be like, “here’s my idea” and they’d be like, “well, your idea is unproven.” Whereas now, as we’re going out to investors, like, “okay, we’re selling all over the world. We have schools, colleges, and universities. We have individual subscribers. We’ve won a bunch of awards.” We’re in a much more solid position to then say, “Do you VC want to be part of this journey?” As opposed to “do you want to derail and take over the journey yourself?”

44:58 Emily: So fascinating. I’m so glad you gave us that insight. I’m sure there are probably many people in the audience who are thinking in their futures that maybe, VC or startups could be part of that. I’m really excited that you shared that.

Investing in Yourself as a Way of Financial Growth

45:10 Emily: Is there anything else that you want to add about your money mindset that you’ve been developing all these years and your financial life as a founder that we haven’t covered already?

45:19 Lindy: The only thing that I would add is that I think I have been able to take sort of a fair degree of, and I mean, it’s calculated risk, but my calculated risks are always to invest in myself. At earlier times where it was like, I’ll put the time and energy into this grant or this application, now as a startup founder, it’s “I will put the time into developing this content or this product, or pitch decks or financial business models that I’m going to present to lending institutions.” All of that work, which now again, is sort of decoupled from payment in a very specific way. I’m back in the realm where I do a bunch of stuff, and I’m betting that it will pay off in the end. And so being able to do that has always been I’m betting on myself. I’m assuming that if I put any chunk of money I have in a financial institution savings vehicle, that I’ll make small percentages. Whereas if I invest in myself, what I’m gambling on is that I’ll be able to make multiples on that investment. That has developed over time, as I’ve started to think, well, I have the personality type, I’d rather be the one trying really hard, than just handing my money over to the bank and letting an account manager invest in various funds, and I have no insight or understanding on how those work. I’m not a trained financial analyst. I still don’t understand money markets with that degree of specificity. And if I wanted to invest in that, I’d need to then rely on somebody else. Whereas if I invest in myself, I rely on myself. If I take a day off, then that’s my fault if I screw up. Whereas if I work really hard and produce results, I’m the one who benefits from that. That’s the final that I would say, is that I certainly have had to develop the confidence in myself to then bet on myself.

47:35 Emily: Yeah, this is so fascinating. And it is a very different approach from my financial approach, so I’m so glad to have your perspective on the podcast as well, because again, I think this is going to resonate with a certain slice of the audience who wants to be or is the type of entrepreneur that you are. This is really going to resonate with them. And you know, what some other people might be listening and say, I don’t want the life that Lindy has. It’s not for me. I want that salary.

48:00 Lindy: Exactly. That’s the thing that’s so clear is that if you’re going to leave the Academy or leave a stable job, I think you do need to know. If a must have is financial stability and security, then certainly don’t become an entrepreneur. If say you have the backstop of either you’ve got family money or in my case, a spouse with a job or something like that, and you have the sort of weirdo seemingly risk-taker, roll the dice kind of personality, then I think entrepreneurship is really exciting because the relationship between whether you do a good job or not is absolutely connected. Not in a day to day “did I get paid today for my work,” but in the big macro picture. The market, the world at large will tell you whether you did a good job or not.

48:54 Emily: Yes, absolutely. Well, Lindy this has been such a fascinating conversation. One, can you tell people where they can find you, where they can find EssayJack and so forth?

49:04 Lindy: Yeah, so EssayJack is essayjack.com, and then on Twitter and Instagram, it’s @essayjack. For me, I’m @DoctorLindy on both Twitter and Instagram. On Instagram, you’ll just see pictures of my cat, but you’re more than welcome to find me there. And then both on LinkedIn as well.

Best Financial Advice for an Early Career PhD

49:26 Emily: Yeah. Great. And the question that I ask all my guests at the conclusion of our interviews is what is your best financial advice for another early PhD? It can be an emphasis of something that we’ve already touched on in the interview, or it can be something completely different.

49:39 Lindy: The best bit of advice is honestly to keep your debt load as low as possible, like consumer debt load. Ideally at zero, but as low as you possibly can because ultimately if you’re starting from a level position and then earning onwards, whether it’s with a stable job or entrepreneurship, you’re already in the positives going upwards. If you’re already in debt, it is just so hard to start digging your way out. So as much as you can minimize that, that would be my key advice. Learn how to get hand-me-down clothes from your older sister.

50:20 Emily: Yes. I totally totally agree, especially, gosh, for people who are in graduate school and have that lower income. If you have the option to not obligate that future income, please avoid it whenever possible. I totally agree. Well, Lindy, thank you so much for giving us this interview. It was a real pleasure to talk with you and I’m sure the audience found this absolutely fascinating as I did.

50:39 Lindy: It was really great to chat through all of this with you. You unearth things that I’m not aware that I think until I say it.

Listener Q&A: Investing on a Living Wage

Question

50:51 Emily: Now onto the listener question and answer segment today’s question was asked in advance of a live webinar I gave recently for a university client, so it is anonymous. Here is the question: “How much should I invest if I make a living wage?”

Answer

51:08 Emily: Back in season eight, episode seven, I answered a simpler version of this question, which was” what percent of income should be used for investment? In that answer, I gave my overall ideas about what percentage of your gross income should be used to invest for retirement. Now this question specifies that the person makes a living wage. So does my general answer from the previous question change at all, knowing that this person makes a living wage?

51:37 Emily: Living wage is sort of a general term, but I like to refer to the living wage database from MIT, livingwage.mit.edu. That living wage is calculated by looking at how much money a single person or a family spends on average in a variety of different necessary budgeting categories.

51:58 Emily: Let’s say you’re a single person and you’re earning the living wage for a single person in some given area of the country. What that means is that if you are an average spender across all of these different categories, you would not spend any of your wage on discretionary expenses or saving. All of it would go towards those necessary expenses.

52:21 Emily: The first way I can answer this question is if you’re only making a living wage, it’s okay if you’re not investing, I mean, of course I want you to be investing or saving or working on debt repayment or whatever your goal is, but given how much you’re being paid and how much the cost of living is in your area, that may not be feasible for you. I want you to give yourself some grace, if you are not able to invest right now, or you’re not able to invest as much as I talked about in that previous answer.

52:50 Emily: Now, let’s go a step deeper with this. I just mentioned that the living wage is based on averages. You do not have to spend an average amount of money in these various categories. The big, big one that goes into this is on housing expense, so again, if you’re a single person, the living wage calculator that I referenced assumes that you will live on your own. Just by making the one choice to live with a flatmate, instead of by yourself, you’ve already radically reduced your spending compared to what the living wage thinks you should be spending in probably your biggest expense area, overall. That one choice alone, even if you’re average in every other category might free up enough money for you to be able to spend on some discretionary expenses and start investing.

53:39 Emily: You don’t have to do this just with housing. In every one of these necessary expense categories that go into the living wage, you can strive to spend below that level. And if you did that across all these areas, you would free up quite a bit of cash flow to go towards other financial purposes. So that’s my answer. If you are making a living wage, you “should” be investing anywhere from 0% up to the amounts I talked about in that previous answer of 10% of your gross income, 15 or 20% of your gross income, depending on your age when you start investing.

54:13 Emily: But I want to leave you with one final thought, which is have a plan to make more than the living wage. Whether that is by finish up your graduate program and moving on to a postdoc or another type of job. Whether that’s increasing your income in some other way in the meantime, before you can make that career leap, earning more is the other way to circumvent this problem on investing when you only make a living wage.

54:38 Emily: Thank you so much to anonymous for submitting this question. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

54:55 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.

A Low-Cost Lifestyle Can Be Both Necessary and Enjoyable During Grad School

by

In this episode, Emily interviews Dr. Trevor Hedberg, who completed his PhD in philosophy at the University of Tennessee at Knoxville in 2017. His academic year stipend was $15,000 throughout graduate school, yet he finished with about $35,000 in savings. Emily and Trevor discuss the money mindset and financial strategies that enabled Trevor to save even on this low stipend, including his willingness to apply for any possible extra funding and conduct frugal experiments.

Links Mentioned in This Episode

low cost grad student lifestyle

Teaser

00:00 Trevor: Don’t fall into that self-fulfilling prophecy. Don’t just assume that your destiny, as a humanities PhD, is to live paycheck to paycheck. It doesn’t have to be that way for everybody.

Introduction

00:15 Emily: Welcome to The Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is season eight, episode 14, and today my guest is Dr. Trevor Hedberg, who completed his PhD in Philosophy at the University of Tennessee in Knoxville in 2017. His academic year stipend was $15,000 throughout graduate school. Yet, he finished with about $35,000 in savings. We discussed the money mindset and financial strategies that enabled Trevor to save, even on this low stipend, including his willingness to apply for any possible extra funding and conduct frugal experiments. Have you heard about the IRS pushing back the federal tax filing and payment deadline? By the time you listen to this, it would have happened a couple of weeks back. The new deadline for filing your federal tax return and paying any remaining tax due is now May 17th, 2021. I hope that by now, your state will have made up its mind about whether to extend its deadline as well.

01:21 Emily: So, check on that. Please note, however, that the federal deadline for making the quarter one 2021 estimated tax payment on your fellowship, if you’re required to, remains April 15th. And of course, you need to check with your state as well. In response to this extension, I added live Q&A call times to How to Complete Your Grad Student Tax Return (And Understand It, Too!). If you join the workshop now, you’ll be invited to any and all of the remaining Q&A calls, which will take place on April 10th, May 2nd, and May 15th. You can learn more about and join the workshop at pfforphds.com/taxworkshop. I hope to see you inside.

Book Giveaway Contest

02:08 Emily: Now, it’s time for the book giveaway contest. In April 2021, I’m giving away one copy of Walden on Wheels by Ken Ilgunes, which is the Personal Finance for PhDs Community book club selection for June 2021. Everyone who enters the contest during April will have a chance to win a copy of this book. Walden on Wheels is a memoir about student loan debt, if you can believe it, and the steps the author took to get out and stay out of it. Although I haven’t read it yet, the book has been on my radar since its publication because of the extremes the author went to to avoid taking out student loan debt while he was a graduate student at Duke, which is my Alma mater. I’m really looking forward to this one. If you would like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review, and email it to me at [email protected]. I’ll choose a winner at the end of April from all the entries. You can read full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Dr. Trevor Hedberg.

Will You Please Introduce Yourself Further?

03:23 Emily: I have joining me on the podcast today, Dr. Trevor Hedberg. I’m really delighted to have him on. He is now out of his PhD, but he’s going to be telling us about how he managed his finances during graduate school, which as a slight departure from many of the other interviews we’ve had, Trevor was in a humanities field, philosophy, and he had a lower stipend. So if you are in the audience and have been tired of listening to interviews with people who have had much higher siphons than you did during graduate school, this is the one for you. So yeah, Trevor, thank you so much for joining me for this episode.

03:55 Trevor: Sure, Emily. Thanks for having me.

03:57 Emily: And would you please tell the audience a little bit more about yourself?

04:00 Trevor: Sure. So, my present position, I’m a postdoc at the Ohio State University situated in Columbus. I’ve got a joint appointment with the Center for Ethics and Human Values in the College of Pharmacy. My two main responsibilities are coordinating Center for Ethics and Human Values events. Right now we’re doing webinars because of the whole COVID thing. And I’m teaching bioethics courses to students in the College of Pharmacy. I also do some of my own research in areas of applied ethics.

Length of Time and Stipend in Grad School

04:26 Emily: Yeah, that sounds fantastic. Great kind of postdoc work to have, I think. Okay, so let’s go back to the grad school years. Tell us what years were you in grad school for?

04:36 Trevor: I was in grad school for a while. I started at the University of Tennessee in fall 2010, and I picked up a master’s degree on my way to the PhD and I got the PhD in spring of 2017.

04:48 Emily: Okay. Actually, that doesn’t sound that long to me.

04:52 Trevor: It is about average for humanities PhDs. So it’s like, I don’t feel bad, but when I think back I’m like, man, that was a seven-year chunk of my life, you know, that’s a while.

05:03 Emily: Yeah, it is. My husband also took seven years to finish his PhD and he’s in a bio kind of field. So, it can take a while. Okay. So, what was your stipend during that time? Or if it ranged, maybe just give us the range.

05:15 Trevor: The base stipend for the time that I was in the program, so if you had a standard teaching assistantship package, didn’t do any summer teaching, just fall assignments, spring assignment, was $15,000.

05:26 Emily: And were you at that the whole time, or did you ever get above that?

05:29 Trevor: My first year I had an introductory like one-year fellowship, which reduced my teaching responsibilities to half, well you’re normally at half-time, it reduced it to quarter-time. And I also got like a lot of extra money, which is kind of weird, right? You get paid a bunch of extra money for doing less work, but that’s, you know, why it’s a fellowship. It’s supposed to give you time to work on research. So for that semester, I made around 20,000, $21,000 something like that.

05:58 Emily: Yeah. This is a note for any prospective rising graduate students in the audience that you can get an offer letter and your first year it can look nice and rosy. Oftentimes fellowships are given to help people, you know, transition into grad school or whatever, but you need to be asking about years two plus, because I hope that you were aware that that was a, you know, a short-term thing, but some people may not be aware just looking at that first year.

06:21 Trevor: Yeah. So actually, my situation’s the opposite. I got admitted without having that fellowship and I applied for it under the supervision of a faculty member after they’d already admitted me to the program and then I got it. So it was a bonus on top of my initial offer. So I did not get, you know, deceived or something.

Finances at the Beginning and End of Grad School

06:40 Emily: Good. Yeah, I’m glad to hear that. Okay. So base stipend $15K, a little bit extra in one year, but that was basically what was going on. And so, over that seven-year period, overall, how did your finances end up going? Like where were you financially when you started? Where were you financially when you finished?

06:57 Trevor: I went to Knoxville with a little bit, somewhere between five and $6,000, just kind of a nest egg that had been given to me by parents and other relatives and so on during undergrad and I just had not spent that much of it. And I was able to, without taking out any additional loans or anything, I had some loans from undergrad. I didn’t add to them at all during grad school, but I was able to leave graduate school and go and move to Tampa, Florida with between 35 and $40,000 in my bank account. I was also able to purchase a new car while I was, I didn’t really want to, but my Mitsubishi Lancer was totaled out in a freak hailstorm. And it happens, I guess, in April of 2011. And so I wound up leasing a car for a while and then buying it at the end of that, I ended up getting a Hyundai Elantra. But that was, I got some money from the insurance company for like the payout from the Lancer. But it was, you know, that was still a sizable expense that I had to cover in the long-term.

08:03 Emily: Yeah. I mean, the numbers that you just threw out, I mean, having 35 or $40,000 in savings, that’s two years of what you were earning during that seven-year period, plus buying the car on top of that. That’s quite surprising to me and obviously probably a motivating reason why you came on the podcast because somehow you were able to do that. And we want to hear about how on that lower stipend, right? So kind of like let’s dig into that. Why did you end grad school with so much savings? Was it an intentional thing that you set out to do? Or was it just a happenstance thing based on, you know, your personality or something?

Ending Grad School with Savings

08:39 Trevor: One of the few pieces of financial advice that I got going into graduate school in philosophy is whatever you do, don’t take out any loans en route to your degree because the employment prospects in the humanities, and philosophy included, are just so uncertain. There’s, you know, every job has hundreds of qualified applicants and you may apply for a hundred jobs, but the odds are still very uncertain as to whether you’ll actually wind up with employment at the end of it. So the idea is don’t take out a ton of money for, you know, for a career that might not pan out. And a lot of what happened just kind of resulted from being very steadfast in doing what I could to minimize my expenses and to try to save where I could and also apply for as much extra money as I could get.

09:28 Trevor: I mentioned the first year of fellowship, I also got a couple of summer dissertation fellowships, which were just basically extra money because people thought your dissertation project was cool. Did some summer teaching, which paid very well Tennessee relative to the amount of extra work. And when I traveled to conferences or did events like that, I always put in my, you know, travel reimbursement requests and things like that. And just over a seven-year period of time, these kinds of small, you know, savings or these extra little bundles of cash that you happen upon, it just adds up over time.

10:03 Emily: So at kind of the root of this is you being really realistic about job prospects. And I assume also the possibility of having a lapse of income, right? Like, while you’re job searching. And so having that kind of, let’s say one to two years of, you know, living expenses in the bank when you finished is a hedge to help you pursue the career that you want. Is that a fair characterization?

10:28 Trevor: Yeah. The other thing I was cognizant of is that once I was out of grad school, I’d have to start repaying student loans. And so I wanted to be in a position where, you know, if I’m in fact unemployed, I can float while making loan payments successfully for a while, you know, long enough to if it requires going a non-academic career route, so be it, whatever. But you don’t want to be stuck in that situation where you’re living paycheck to paycheck, then you’re not getting any more paychecks. Now, student loans are coming due and you’re in a really tough spot.

10:59 Emily: Yeah. So really it’s about like financial flexibility in a sense, and being able to meet your obligations, even if you haven’t landed the ideal job yet.

11:10 Trevor: Yeah, I think that’s fair to say.

Summer Funding Strategies

11:10 Emily: Okay. So you mentioned a few different ways that you increased your income during graduate school, such as by pursuing summer funding and summer jobs. I’m wondering, did you have funding in some way or another every summer? Or were there some summers where you were unfunded?

11:26 Trevor: So the first two summers I was there I did summer teaching, and summer classes paid very well. They were about $4,000 which I was offered to adjunct some classes at community colleges. Like I would be getting paid less than half of that. So I turned down those instances, because that’s too much. I think that’s too much time and energy for not enough pay. But four grand for, you know, five, six weeks to teach a summer course was a pretty good deal. One summer I had a research assistantship that I think paid between $2,500 and $3,000 where I was basically helping a professor edit a book that he was putting together. And then there were two summers where I had a dissertation fellowship, which was around the same amount of money as teaching a summer class, but you’re supposed to just be working on your dissertation during that time. So there were two summers in there where I didn’t have any extra income, but that’s still pretty good. Five, you know, five of those seven summers, I managed to add something to what I was getting.

12:31 Emily: I was just thinking, based on your kind of sort of defensive posture towards financial planning and saving that, were you thinking like every year I need to be prepared financially for an unfunded summer? If money comes in, if I get work, that’s a bonus. But were you confident that you, and, you know, there were two summers where that was the case. So were you using your cash to fund, you know, your living expenses through those periods?

12:54 Trevor: I didn’t have any trouble. The amount of money that it seemed to cost to live in Knoxville, Tennessee, where I was living and with what I was doing, was roughly $12,000 a year. [Note: It was actually closer to $14.4K.] So I didn’t really seem to have, there was no danger of if I didn’t have money in the summer that like it was going to be, you know, I was going to take a loss in the year.

Frugal Living Tips for Grad Students

13:18 Emily: Gotcha. $12,000 per year, not bad. Do you have any you know, sort of frugal living tips for the listeners? And I’d really love to hit, for sure the big three expenses for grad students, which are housing, transportation, and food.

13:34 Trevor: Yeah. So the housing in Knoxville is really good. I was able to live in a pretty comfortable, not quite 600 square-foot, I think it was around 600 square-foot, one bedroom, one bathroom apartment for right at $500 a month. That included some, but not all utilities. Transportation-wise, you know, I got that new car. I didn’t have any car payments for almost the first year of grad school. And then I had around payments for around $300 a month once I did have a car again. So that right there is 800 bucks. I said it was around $1,200. I think groceries came out to a little bit, like $200 to $250 a month, give or take. And there were utility expenses, right? So I got a cell phone. You got to pay for gas.

14:24 Trevor: I had a very unusual like cable internet situation because I eventually just got so tired of Comcast because they just rate-hiked ludicrously. And after they did that enough times, I just said, no, I’m done. And just, and I had a period where I didn’t have any internet or television at my apartment, which was an interesting six months. When you’re basically doing all your, now, now during the remote learning period we’re in right now, that would not be doable, but this was a different time. You know, a simpler time where you could have all your internet access on campus and it was okay. So just on average, this whole situation came out to around $1,200. I will say, I wasn’t living like an extremely miserly existence. I was still, you know, it’s not like my apartment was destitute or that I had no material possessions. I still enjoyed the same amount of video games the average person in his twenties nowadays probably enjoyed. I would say that there were certain things that I didn’t do as much as some grad students might. I certainly wasn’t like going to bars frequently. I was eating out on special occasions, but not very often otherwise. So, there were some sacrifices, but I do want to stress I don’t think that it was unbearable.

15:41 Emily: Yeah. You know, in what you’re saying, I’m reflecting on my own time in graduate school as well and thinking about how we did eventually, my husband and I, did eventually get into a rhythm of just kind of simple living, you know, relatively low costs. We were okay with the fixed expenses we had. Yeah, the going out expenses weren’t too much. By about halfway through grad school. We had found friends, we love to hang out with who also wanted to socialize in a low-cost manner that didn’t require us, you know, going out all the time. We would just hang out at each other’s homes and stuff. And so we just kind of settled into what I felt was a very satisfactory, but also pretty low cost, sort of lifestyle. It sounds like what you were doing was similar. Were there any other, you might say discretionary expenses that you did engage in? You haven’t mentioned travel so far.

16:29 Trevor: Oh, so yeah, I did go back. My hometown is in Topeka, Kansas, so I did go back about twice a year to visit. Usually, my parents were willing to cover the flight back. As far as travel to conferences and things like that. It was very rare for me to pay for hotel rooms and other things because I would always apply for travel reimbursement. So I did go to a fair amount of conferences. I don’t know what the average would be over grad school, but I had, you know, 13, 14 conferences on the CV by the time I was on the job market, like at the end. But I didn’t generally have trouble getting reimbursed, provided you go through the actual administrative channels and you show that you actually did present at that conference, you know, show the receipts and all that stuff.

17:12 Trevor: So, that wasn’t really a huge obstacle for me. I suppose if someone, if you were an international student for example, and you’ve got to go abroad to go back home to visit, that would be a more significant expense. There were also some, you know, not all TA assistantships include like health insurance, which was something that I had through my assistantship. So, that’s an extra expense I didn’t mention that I didn’t have to pay. And when you’re making so little money, your taxes are very low. They’re not nothing, but usually like the income tax that was withheld would usually be much greater than what I actually owed. So if anything, I’d be getting a check from the IRS at some point.

17:52 Emily: And there’s no state tax in Tennessee, right?

17:55 Trevor: That’s true as well. Yeah. No state income tax.

Money Mindset Developed in Grad School

17:58 Emily: Yeah. So, you know, we just talked about sort of having a satisfactory but low cost existence. What was the money mindset that you developed, by the end of graduate school, regarding where happiness comes from?

18:11 Trevor: Well, I saw some graduate students, like some of my peers, who lived even more miserly than I did. And I sort of realized there were certain limits. Like there were apartments I could have gone to in Knoxville that had much lower rent than even the $500 I was paying, for example. But there were certain thresholds below which I wasn’t willing to go to save money. So there was an extent to which I did, you know, it wasn’t just save money at all costs. There was a certain amount of prioritizing my own personal satisfactions. But I also think that there were certain things that just, I was able to live without too much trouble. I mean, cable television was a great example. I grew up with cable television and when I didn’t have it, I just didn’t care. It didn’t really make that much of a difference.

19:01 Trevor: If anything, I was just glad that I wasn’t seeing commercials all the time. Now, the internet was different. That six months without internet access was kind of rough. That was an experiment that was probably worth doing. But, never again, right? Like always going to have internet whatever it goes for. But there were lots of things like that that I just kind of tested and experimented with to see what I could do without and what I needed. If you test enough things, pretty quickly, you hone in on what’s important to you and what’s worth spending money on and what’s not. And I think that process is really important when your money is very tight.

Frugal Experimentation

19:37 Emily: I love that point. Absolutely. I use the same word, experimentation, when I talk about, well, I use the term frugal experimentation. So, sometimes if people are, you know, in my audience, looking for ways to decrease their expenses, I’ll say, you know, conduct a 30 or 60-day frugal experiment where you try out a new tip you found. You’re not sure at the outset if it’s going to be right for you. One, you know, you have to sort of evaluate, like you were just saying, like, what impact does it have on your quality of life? If it’s negative, or maybe it could be positive. And how does that compare to the actual savings that you realize? And you can’t really know until you actually try something out. So I’m really pleased that, you know, you also came to this idea of experimentation and it sounds like you did it in multiple areas. Do you want to give us some other examples, aside from the cable and internet one, of some other experiments you did?

20:27 Trevor: So, some of it had to do with technology upgrades in general. So, I was one of the last people, for example, to buy like a smartphone. Because I actually really liked the model of phones where you had the little slide-out keyboard. So they were really good with texting, but not so great for like the web browsing and other stuff that we do on them now. That was one where I was perfectly content to not technologically upgrade for as long as possible. So, you know, once that phone was paid off, I just had that phone for a really long time. And that bill was lower as a result. I wasn’t able to keep my PC around for all of grad school. When I was working on my dissertation, the motherboard finally died, but I mean, I’d had that PC I was using for seven or eight years. And it had been through heavy, heavy usage. So that was another thing that like, I didn’t need to replace. I think that nowadays, especially, we’re so prone to just want to upgrade, upgrade, upgrade when a lot of times the upgrades are marginal and just cost us more money and don’t actually make our lives much better. Those are the obvious other examples I can think of.

21:31 Emily: I have one that I remember from grad school really calling out as a frugal experiment on the blog that I was keeping at the time, which was no longer using our clothes dryer or rather using only for like towels, like that kind of thing. And we were just hanging, drying you know, shirts and all the rest of the stuff that would dry pretty easily in that manner. And I wasn’t that diligent to like, actually look at the difference that made on our electricity bill, and I’m sure it made some kind of small difference. But yeah, that was just something that we like tried out, weren’t super wedded to whether we would keep it around or not, and ended up doing it for a couple of years. Because it was really no more difficult, and again, you know, we weren’t running the dryer, so that probably helps some.

22:08 Emily: So I remember that as being one of our frugal experiments I’m also really big on, this is just like my personality type, I’m big on like rules. Like I love boundaries, like things being black and white and not gray. So for instance, one rule, you mentioned this earlier, but one rule we made eventually in graduate school was that we would only eat out for social occasions and we would not eat out for convenience. Because we noticed that was a pattern going on for us, that we would be, Oh, I’m staying late on campus. I’m just going to grab dinner from whatever fast food joint. And so just that wasn’t really bringing a lot of satisfaction, just convenience, into our lives. So we decided to cut that out and I made a rule for myself. Okay. No more eating out for convenience, only with other people. I wonder, I don’t know if your personality is the same way, but did you end up having sort of a set of rules, financial-related rules, for yourself by the end of graduate school?

How Low (ºF) Can You Go?

22:56 Trevor: Real quick, before I answer that question, there is one other one that comes to mind because you just mentioned like the clothes-drying thing. One of the other things I experimented with was what temperature I could stand to live at. So just adjusting the AC or the heat. And Knoxville has really good weather for that because there’s about a six-month period of the year where you really don’t even need the AC or the heat on at all. The temperature outside is mild enough that it just kind of self regulates. But that was one thing. So, if you need 70 degree summers, so to speak, inside, that’s going to cost you a lot of money in Knoxville, Tennessee. If you’re willing to satisfice for, you know, 76 or 78, that could be $50 on your utility bill at the end of the month. That’s not an exaggeration. Found that out in the first, like couple of months in the summer that I was there. So.

23:50 Emily: That’s a great example. Thank you.

23:53 Trevor: Now, your question about other rules. I’m not necessarily, I like the idea behind setting, like these kinds of rules and rigid boundaries, but I often find that you always wind up being put in a weird situation where you’re tempted to make an exception.

24:08 Emily: Travel is my exception to the no eating out for convenience rule. Yeah. It’s going to happen when you travel sometimes.

Forming Good Financial Habits

24:14 Trevor: Yeah. So I like to think of it maybe in terms of, instead of rules, like habits. Like things that you kind of just try to motivate yourself to do regularly, but not in a sort of rigid ironclad sort of way. So there were quite a few habits that I developed. A few of them I’ve already mentioned, like I always applied for money that I thought I had a chance to get. I always tried to, one of the big habits I developed was not auto paying very many bills and always taking the time to like manually manage what I was doing. Just so that I was more cognizant of the money that was being spent so that, you know, a $70 bill doesn’t just go by and you know, just the system pays it and then, you know, it’s handled.

25:04 Trevor: Nowadays, I do auto pay a fair amount of stuff because I just have more bills and more expenses. But also it’s because I don’t need to be aware of every tiny little expense here and there. But as a grad student, I felt like I did need to be aware of that stuff. I needed to be aware of exactly where all the items on my credit card statement were coming from. So, that was one big habit. Some of the other ones I think would overlap with things you’ve mentioned, like generally not going out to eat unless it was a department event or a Friday night social gathering with a bunch of the other grad students. Reserving that kind of stuff for special occasions. I also have just never been a big drinker. So for me, not regularly going to the bar was not much of a sacrifice, not something that I really had to think too much about to follow.

Commercial

25:59 Emily: Emily here, for a brief interlude. The federal annual tax filing deadline was extended to May 17th, 2021, but the federal estimated tax due date remains April 15th, 2021. This is the perfect time of year to evaluate the income tax due on your fellowship or training grant stipend. Filling out the estimated tax worksheet and form 1040ES will tell you how much you can expect your tax liability to be this year and whether you are required to pay estimated tax. Whether you’re required to pay throughout the year or not, I suggest that you start saving for your ultimate tax bill from each paycheck in a dedicated savings account. If you need some help with the estimated tax worksheet, or want to ask me a question, please join my workshop, quarterly estimated tax for fellowship recipients. It explains every line of the worksheet and answers common questions that postbaccs, grad students, and postdocs have about estimate tax, such as what to do when you switch on or off a fellowship in the middle of a calendar year. Go to P F F O R P H D s.com/Q E Tax to learn more about and join the workshop. Now, back to our interview.

Financial Values Post-PhD

27:17 Emily: I want to go back and like emphasize again this experimentation that you were doing. And I don’t want anybody to take what I’m about to say the wrong way. Graduate school is a very financially challenging period of life, especially for, like you, living on such a low stipend. So I don’t want to lionize that too much. But one of the benefits, if you want to look at it that way, is that you are, many people are sort of forced to do what you did, which is experiment and really figure out, you know, what is going to add to your happiness and your satisfaction with your life at the end of the day and what is not. Because you really have to be kind of brutal about managing your money and cutting out those things that are not adding that much to your life. And I went through that process as well during graduate school. And I think it’s been really beneficial overall. I mean, now post-graduate school, we have a much nicer income and that’s lovely, but I still go back to the lessons and the identification of my own values that I came to during that period of time. And have you carried some things forward into your post-PhD life like that?

28:25 Trevor: Yeah, definitely. Still don’t have cable television, for example. But thinking about it more generally. I would say that the same habits of like checking where my expenses are coming from on like my statements and things like that that, that’s pretty much just stayed the same. Some things are different. I’m a little more willing to like upgrade, you know, things now that I was in graduate school. For example, like once we started this remote learning thing, I bought a printer for my home office, which is something I would have never even considered in grad school. Like always use the department printer, right? Like it’s free and you’re on campus so often. But, so there are things like that or buying new computer software, or stuff like that, I wouldn’t have considered buying, you know, in grad school. You just use whatever freeware alternative, you know, you can get. So some things are a little different.

29:20 Trevor: I am willing to spend a little bit more. And the place I’m living at now is a little bit bigger, like a little bit larger. A little bit more comfortable, higher rent. I have an add-on garage, which I wouldn’t have paid for in grad school, but now, like I like the extra security. And guess what? If it hails, my car won’t get totaled. So that’s nice. But I would say overall, you know, aside from those kinds of incremental changes over time as my income’s gone up and I’m no longer required to micromanage my finances so much, a lot of the habits are still kind of the same. It’s not that big a difference.

Avoiding Lifestyle Inflation

30:00 Emily: Yeah. So, a common term used in the financial space is lifestyle inflation, right? So like when your income goes up and your lifestyle just, somehow the money goes away and you’re suddenly living a higher lifestyle every time you get a raise. I think of a positive process of lifestyle increase that can happen when you go from grad school to a postdoc, postdoc to a real job. That is to say, that like you were just mentioning, adding in intentionally item by item some things into your lifestyle that you think really add to it that you can now afford on the higher salary, but not just blindly increasing everything across the board, right? So that’s what I kind of meant about like keeping the insights that you gained into your own values from that lower-earning period of life in graduate school.

30:47 Trevor: Yeah, definitely. The mere acquisition of more material possessions does not automatically make your life better or make it more fulfilling. It just gives you more stuff. And if you’re like me and you’ve had to move a couple of times since your PhD, having more stuff is not always a good thing for other reasons. I would say, you know, as you said, you want to be more deliberative about the things you buy and about what you add into your life. You want to make sure that it’s actually going to provide some kind of meaningful benefit.

Beware of Financial Pitfalls

31:17 Emily: Yeah, absolutely. Do you have any bits of advice for current graduate students, some things that you’ve maybe observed like, you know, pitfalls that other graduate students have fallen into that maybe you either used to fall into or, you know, learned how to avoid?

31:33 Trevor: Yeah. There are a couple. So, I think there would be basically three that would come to mind. One is, especially in philosophy and English and some of the other humanity fields I’m familiar with, a lot of graduate students seem to assume that they are going to have to live paycheck to paycheck. That they will never be in a financially stable situation at all while they are a grad student. And of course, if that’s your mentality going in, it kind of creates a self-fulfilling prophecy. You’re very unlikely to get out of that position if you think it’s inevitable and don’t take any steps to avoid it.

32:08 Trevor: Another one is, I was shocked to learn there were lots of grad students in my program, I don’t think our program is anomalous, i’s just a common thing, that just didn’t apply for stuff. That were eligible to get travel reimbursement, or to apply for certain kinds of fellowships, whatever, and just wouldn’t apply for it. And they’d say something like, sometimes it was just forgetfulness maybe, or not knowing the like Byzantine administrative requirements, or something like that. There were also some of them, you know, that thought they weren’t good enough to get a fellowship or something like that. But the thing is like, there’s so much arbitrariness in how these things are evaluated. You have no idea whether you’re good enough or not. Let the committee tell you you’re not good enough, you know. Always apply for whatever it is.

32:53 Trevor: And the last one we’ve already kind of alluded to a couple of times in some of the habits we talked about. But I think there’s a really serious tendency to discount small but frequent expenses. So, you know, one $10 on-campus lunch, not a big deal. But if you’re doing that four days a week for a 15-week semester, suddenly like that’s over a thousand dollars a year that you’re spending, you know, buying lunch on campus, as opposed to what you could be doing, which is just taking a few minutes in the morning, packing a sandwich and whatever else and handling things that way. So, I would say, you know, we’re not great at that kind of arithmetic, like human beings just aren’t wired that way to sort of aggregate those small expenses over really long periods of time. But you’ve got to fight that habit and recognize that that stuff does make a difference.

33:45 Emily: I love all those examples so much. I mean, they really all are about as you were just saying, like mindset and habits. And I think that, you know, they’re especially impactful for someone at the kind of stipend level that you were at, right? Like, I mean, you were able to do quite a bit of savings, but it was still a low stipend overall during that period. And so, it absolutely makes such a difference as you were just saying to go into that situation with believing that there’s something financially possible for you above living paycheck to paycheck. I mean, of course, we all know grad school is very difficult financially, for some people more so than others. But like you said, if you never even think that it’s a possibility to get out of that, you definitely never will. I guess I’ve heard the phrase, like whether you believe you can or believe you can’t, you’re right.

34:35 Emily: This can be applied generally. I don’t think that’s quite true at the graduate student level because many graduate students may believe that they can, but they still can’t just because of circumstances. But the opposite is definitely the case. If you don’t believe that you can get out of the paycheck to paycheck cycle, you absolutely won’t no matter what your circumstances are. So I’m so glad that you brought up those points and I hope that, you know, current and entering graduate students will take note of all three of them.

Navigating Savings and Loan Repayment Post-PhD

34:59 Emily: So, now that you’re on the other side of the PhD and you’re in your postdoc, how does the way that you handled your finances during your PhD affect your life? You know, did you end up having to use the savings during a job search? Or how did it work out?

35:14 Trevor: After it, yeah. So when I was in my last year of graduate school, I wound up getting a postdoc at the University of South Florida, which is where I went and spent two years in Tampa. And now I’m at another postdoc at Ohio State. So I didn’t wind up having to dip into savings to navigate any employment gap, which was very fortunate. I was very happy to have that money on hand though, because I was able to really pay off my loans very quickly as a result. And I was also able to pay off my car. So I think that all my loans and the car were both paid off by the end of like December of 2018 or no, was it 2019? I don’t remember, before I finished up at Florida. The December before I finished up at Florida. And that was obviously very satisfying. Now, like the money that I’m saving is mainly going into like an investment portfolio which is something I wasn’t thinking about at all during graduate school. But, you know, as time goes on, your financial goals and what you’re trying to do have to change with your circumstances,

36:14 Emily: I’m wondering why you chose to pay off the debt during that first postdoc, both the car and your student loans, when you could have worked on those earlier, instead of having such a large cash cushion? What was the calculus there?

36:29 Trevor: One was medical emergency. Wanting to have money on hand in case something like that happened. That never happened to me personally, but there were peers I had to whom that happened. And I wanted to be prepared for that possible contingency. I had no reason to think I was high risk. But some of them didn’t, either. And so, that was part of it. I actually did pay off one of the loans while I was in grad school. I could have theoretically paid off all of them. I don’t know how much of a dent it would have taken in that like 35 grand or whatever I had when I was leaving, but it would have been substantial. The other thing I learned is that I didn’t know how much the moving expenses would be, but because of the delay in getting my first paycheck in Tampa and because of other moving-related expenses, you need around five grand as a minimum to do the kind of move that I did and not be in kind of a tough situation.

37:30 Trevor: You also got to put down security deposits, pay, you know, at least one, I had to pay two months rent without any paychecks in Florida, because I was delayed getting into the system. You know, stuff like that. So, the short answer is, I don’t know if it was necessarily the right call. Like some of those loans though, the interest wasn’t running until I graduated. So for those at least, I’m sure it was fine. But I’m honestly not sure looking back if that was like the financially optimific way to do it, but that was the rationale.

Any Financial Regrets?

38:00 Emily: Yeah. I’m not trying to criticize your decision. Just wondering, like, as someone who held onto the cash for so long, why were you able to let go of it at that point? But having loans actually start accruing interest is a great reason to kick into the repayment mode instead of just save the cash mode. Do you have any financial regrets from graduate school?

38:23 Trevor: I think that any financial regrets I would have would be tied to the choice to get a humanities PhD in the first place, right? Because there’s an opportunity cost with going to grad school, right? Like, I’ve got plenty of friends in non-academic positions who during the time that I was in graduate school, they got a certain degree of career capital, such that when I was getting my PhD, they were like getting promoted or something like that. But insofar as I, you know, don’t regret getting a PhD or having one, I don’t regret the financial circumstances I’m in.

Best Financial Advice for Another Early-Career PhD

38:58 Emily: Yeah. Thank you for pointing that out. We sometimes overlook the most important financial decision, which is whether to go to graduate school or not. So yeah. Thank you for that. Well, Trevor, I’ve enjoyed this conversation so much, and I think that, you know, it’s been really valuable for the listener as well. As we’re wrapping up, the question that I ask all my guests is what is your best financial advice for another early-career PhD? And that can be something that we’ve touched on already in the interview, or it could be something completely else.

39:25 Trevor: I’ll just reiterate one short little low-hanging fruit point, which is don’t take out loans to get a degree in the humanities. But that one I’ve already mentioned. The less obvious one I think might generalize across all PhDs is you have to take initiative with your finances because you’re not going to get any feedback from anyone that you’re interacting with about them. So, think about like if I was in a seminar and I wrote a crappy term paper. I would be told that I wrote a crappy term paper and I would be made aware of that and be given suggestions for improvement. But if I made a bad financial decision, no one would know. There’d be no feedback, no graduate advisor is going to be like looming over you to make that kind of decision, which means that you have to self-police pretty much entirely.

40:13 Trevor: No one’s going to give you, you know, any kind of pushback even if you’re making like poor choices or suboptimal choices, repeatedly. And so the only way to kind of keep to avoid that is you have to take the initiative yourself and you have to make some effort, you know. Whether that means making a spreadsheet of all your expenses and tallying them, or just repeatedly like logging into your accounts and checking where your expenses are going or what deposits are being made. Whatever it is, whatever you have to do, like do it because no one else is going to push you in that direction.

40:55 Emily: Such an interesting point. As you were making that, well, one, I thought of the phrase, no one cares about your money as much as you do, which is kind of a truism, but yeah. And the other one is, you know, generally for Americans, like we’re pretty much on our own like financially in a lot of respects with the, you know, pensions being almost non-existent. Social security, yes, it exists. How reliable is it? We don’t know. It’s not that well-funded anyway. It’s not like you get that much money. So in general, Americans are pretty well on their own financially, but the situation is intensified during graduate school because your employer is not giving you the retirement benefits. They’re not giving you certain kinds of insurance. Like unemployment insurance, for example, if you’re a student, I’m pretty confident is not being paid in for you. So other examples like that of just like sort of social safety net kind of stuff. Also, you’re not paying into social security or Medicare. Social safety net stuff is like, we’re kind of exempted from it as students, which is a little bit odd. Especially when you’re getting into your late twenties and thirties, maybe even forties, and you’re still, you know, in PhD training. It’s such an interesting point. So yeah, while Americans in general have to kind of captain their own ship in this, it’s like even more so during graduate school because yeah, your employer is not doing anything for you.

42:13 Trevor: Yeah. That’s an interesting set of observations. Your situation as a graduate student is just very weird and very financially perilous for so many reasons.

42:22 Emily: Yeah. Gosh, well, Trevor, I’m so glad to have gotten your insight on this interview, and I’m really glad that you, you know, had the experience you did in graduate school and all the things that we’ve talked about today and it was positive overall and you got that nice, healthy, you know, nest egg by the end. And yeah, I wish you all the best and thank you so much for volunteering for this.

42:41 Trevor: Sure, thanks Emily. It was good talking with you. And I hope my story can help some other people in the humanities who are struggling. I mean, there were some advantages that went my way. You know, I don’t care how good you are with your money. You’re not making a 15 grand stipend work in New York or LA. So, Knoxville was really good for that. But as I said, you know, don’t fall into that self-fulfilling prophecy. Don’t just assume that your destiny, as a humanities PhD is to live paycheck to paycheck. It doesn’t have to be that way for everybody.

43:11 Emily: I think that’s a perfect note to end on. Thank you so much.

43:15 Trevor: Thanks, Emily.

Listener Q&A: 1098-T

43:15 Emily: Now, on to the listener question and answer segment. Today’s question was asked in advance of a live webinar I gave recently for a university client. So, it is anonymous. Here is the question. Quote: is the form 1098-T accurate? I am confused by it. End quote. I loved the simplicity of this question. I think my conclusion on this is that the form 1098-T is accurate, but it probably doesn’t mean what you think it means. It’s not really trustworthy. The sums in chiefly box five and box one of the form 1098-T draw from the transactions in your student account. So one of the reasons that you shouldn’t take form 1098-T at face value is that not all of your awarded income and not all of your qualified education expenses might have been processed by your university’s student account.

44:23 Emily: You could have awarded income that completely bypassed your student account and just landed in your bank account thanks to some kind of external funding agency. You also could have incurred some expenses that your university did not process. So in that sense, the form 1098-T includes some awarded income and some qualified education expenses, but not necessarily all of them. You still have to critically evaluate your own actual cashflow situation to see the totality of the picture. The other way that the 1098-T maybe doesn’t mean what you think it means is that box one of the 1098-T reflects payments received for qualified tuition and related expenses. That might sound like the same term as qualified education expenses, which is used elsewhere by the IRS, but they’re not quite the same. The sum reported on your 1098-T in box one might be all of the qualified education expenses you can use to make your awarded income tax-free, or it might not. More likely not.

45:34 Emily: There are several education expenses that are considered qualified education expenses for the purpose of making scholarship and fellowship income tax-free that would not be included that are explicitly not to be included in box one of the 1098-T. So, if you incurred those kinds of transactions, even if they show up in your student account, they’re not going to be in the sum reflected in box one of the 1098-T. Therefore, once again, you can’t take box one of the 1098-T at face value. You have to go into your student account and really look at all the transactions that occurred there and figure out whether or not they’re qualified education expenses for the benefit that you are taking. Bottom line, the 1098-T has some issues. And the IRS knows about these issues.

46:27 Emily: And the IRS knows that you may be using qualified education expenses to make some of your scholarship and fellowship income, or what I call awarded income, tax-free that’s not reflected on the 1098-T, and that’s okay. The IRS is aware that this can happen. So the form 1098-T is not given a whole lot of weight when we’re talking about the particular benefit of making scholarship and fellowship income tax-free. It’s given much more weight for the Lifetime Learning Credit, the Tuition Fees Deduction, and the American Opportunity Tax Credit. But those are less often used by funded graduate students. If you want to learn more about the expenses that could be qualified education expenses that you can use to reduce your taxable income and reduce your tax liability that do not show up on form 1098-T in box one, you can join my tax workshop, How to Complete Your Grad Student Tax Return (And Understand It, Too!). You can find more information about that at pfforphds.com/taxworkshop. Thank you to Anonymous for this beautifully phrased question. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

47:50 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for The Personal Finance for PhDs podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast, and instructions for entering the book giveaway contest and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

Knowing Your Worth in an Environment that Devalues Your Work

by

In this episode, Emily interviews Sam McDonald, a fifth-year PhD student in informatics at the University of California at Irvine. Sam received the NSF GRFP, completed a lucrative internship at a tech company, has won multiple smaller grants and fellowships, and taught classes for additional income. Upon observing this, some of her peers questioned why she was still applying for awards. Even more light was shone on this issue when her department compiled a list of all the grad students’ income as part of the Cost of Living Adjustment protests in the University of California system; Sam was the highest-paid grad student. In response, Sam became discouraged and even stopped submitting funding applications until her advisor counseled her about knowing her worth. Sam has now come out the other side of this financial shaming experience and has great advice for anyone else questioning their worth and what they should be paid in academia.

Links Mentioned in this Episode

grad student know your worth

Teaser

00:00 Sam: Sometimes our expertise and our ability to do stuff is so undervalued. And it’s hard to measure how much you’re personally valued because you have all these different discrepancies in how different grad students are getting paid. And you really, I think just have to sit yourself down and look at comparatively, well, if I were to go into industry right now, how much would I be making? So I’d recommend the students to really go out there and see how much is my value in other places versus in grad school, where I think we have this skewed sense because of this limited budgeting construct of how much you’re actually worth.

Introduction

00:33 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode three and my guest today is Sam McDonald, a fifth year PhD student in informatics at the University of California at Irvine. Sam received the NSF GRFP, completed a lucrative internship at a tech company, has won multiple smaller grants and fellowships, and taught classes for additional income. Upon observing this, some of her peers questioned why she was still applying for awards. Even more light was shone on this issue when her department compiled a list of all the grad students income, as part of the cost of living adjustment protests in the University of California system. Sam was the highest paid grad student. In response, Sam became discouraged and even stopped submitting funding applications until her advisor counseled her about knowing her worth. Sam has now come out the other side of this financial shaming experience and has great advice for anyone else questioning their worth and what they should be paid in academia.

01:42 Emily: It wasn’t until Sam brought up this topic to me, that I realized that I had my own story of financial shaming and academia. Additionally, several of my relatively well-paid grad student, friends, acquaintances, and podcast guests have told me their stipends or that they had won a fellowship, but asked me not to repeat that information. I believe this was in fear of the financial shaming they might experience from their peers. I am a big advocate of transparency around stipends and benefits, which is why I started the websites, PhDstipends.com and PostdocSalaries.com. But transparency is hindered by shame. Asking for what you’re worth is hindered by shame. Shaming someone else for their financial success doesn’t put any money in your pocket, it just discourages them and ultimately harms our whole community. I’m so pleased that Sam volunteered to give this interview. I hope her message encourages you to swing for the fences financially and to speak respectfully when discussing sensitive topics like finances. Those are great lessons for me too.

Book Giveaway

02:35 Emily: Let’s turn our focus to the book giveaway contest in January, 2021. I’m giving away one copy of the House Hacking Strategy by Craig Curelop, which is the Personal Finance for PhDs Community book club selection for March, 2021. Everyone who enters the contest during January will have a chance to win a copy of this book. I’m delighted to bring attention to house hacking, which is when you buy a home live in it and rent out part of it, thereby radically reducing or even eliminating your housing expense. It’s a new name for an old tactic that grad students and PhDs have been using for a very long time, but this book puts a highly strategic spin on it. If you’d like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review and email it to me [email protected]. I’ll choose a winner at the end of January, from all the entries you can find full instructions pfforphds.com/podcast. Without further ado, here’s my interview with Sam MacDonald.

Will You Please Introduce Yourself Further?

03:54 Emily: I have joining me on the podcast, Sam MacDonald, who is a graduate student at the University of California at Irvine and she’s here to talk with us today about kind of a touchy subject. It’s financial shaming, and she’s experienced this and I’m really just excited that she’s decided to come forward because I know that her experience is not unique. After she approached me about this topic, I started thinking and I realized I’ve experienced this. I’ve realized I know other peers who have experienced this, so she’s definitely not alone. And we’re going to treat the subject very carefully today. So Sam, thank you so much for your willingness to talk about this. I know it’s not an easy subject matter at all. Would you please tell the audience a little bit more about yourself?

04:37 Sam: Yeah, absolutely. Thank you so much for having me Emily. Like Emily said, my name is Sam McDonald. I am a fifth year PhD candidate at the University of California, Irvine studying informatics. I actually study the United States Congress and their use of constituent communication. So I’ve been back and forth in DC and in California to figure out how members of Congress use technology to communicate with their constituents and how to make it better. I have an undergrad degree from the University of Maryland Baltimore County, where I did a lot of research before going straight from undergrad to my PhD and I got a master’s along the way that I got from UC Irvine.

Funding During Graduate School

05:11 Emily: Thank you so much that overview. Super interesting subject matter, not what we’re getting into today, but thank you so much for the context. So what’s been the funding situation for you during grad school?

05:21 Sam: My funding has been different for different years. My first year I got the GAANN fellowship, which is from the US Department of Education that my department supplied to me, which was really helpful not to TA at first. Then I TAed for two years, and while I was doing that, I applied for the NSF GRFP and luckily I got it to fund my last three years of my PhD. I’ve also spent two quarters teaching as additional funding and have gotten grants from congressional research funding and travel grants. And then also I’ve worked for Facebook for an internship, so I have internship money as well.

05:54 Emily: Can you give us like an idea of much money you were being paid — and I know it might be different year to year — versus, if you’re aware of it, the baseline stipend in your department?

06:05 Sam: Yeah, absolutely. The TA baseline stipend is around $2,200 for teaching us a little bit more. And my GRFP is about $2,800 per month, just to give you a baseline ballpark for how much that is.

06:21 Emily: Okay. And it sounded like in your second year you were being funded only from TA-ships. Is that right?

06:27 Sam: Yes.

06:27 Emily: Okay. So on that year, you lived on that baseline stipend and is it every other year you’ve been above that for one reason or another?

06:34 Sam: Yeah, it’s really fluctuated for different months, depending on if I’m getting travel grants, going to DC during the summer is quite expensive, so getting additional grants for that to be moving around, but still keep my apartment in California. I think my money has fluctuated every single month, being different because of all these different activities that I’m doing in addition to this baseline salary.

06:57 Emily: That is such an interesting budgetary conundrum. One that I would love to explore, but not our subject for today. And this is maybe not super on this subject, but I’m just curious how much the internship at Facebook paid.

07:09 Sam: Let me remember. I think it was around. I could be wrong, I think it was around seven per month,

07:16 Emily: $7,000 per month?

07:18 Sam: Yeah. I think it might be a little bit higher than that. I’d have to go back and double check, but it’s definitely around that ballpark.

How Sam’s Peers Reacted to These Extra Sources of Income

07:24 Emily: Yeah. Sounds great. Well, I am of course, wanting to congratulate you on winning the NSF, gaining these other travel grants, but I understand that’s not necessarily how some of your peers reacted to you having this wonderful CV full of accolades.

07:40 Sam: Yeah, absolutely. The NSF GRFP — I want to particularly point out, I’ve had three advisors, not through my own fault, one retired, one moved, and then one picked me up like a lost puppy and she’s been great, but none of them have had funding for me, so I’ve always had to go out and get my own funding as well, which is why I was so motivated to get a lot of these grants. But I always haven’t had the best reactions to it. After I got the NSF, which is amazing and it’s given me so much more flexibility, I still had to pursue other grants for travel to DC, and then I just kept applying to more grants because it looks good on your CV. A lot of students were really supportive, but one or two would always sort of give me side comments of like, “Oh, you’re applying for this grant, I thought you already had the GRFP. Why do you need this? Why did you win this grant even though you already have these things?” So I’ve had to deal with a little bit of tension and figuring out my own worth in that process.

08:30 Emily: Yeah. How did you feel when you got those snide comments?

08:35 Sam: I felt a little bit guilty. I will say with a caveat that like I am a more privileged person. I’m white. I came from an upper middle class family. I am working in technology, so I get tech internships. I have a really supportive advisor. I live on subsidized housing and I also live cheaply because I love hiking and I bike more than I drive places. Just for context here at the University of California, Irvine it’s so expensive to live in Orange County that even the professors have their own subsidized housing on campus and there’s an entire professor community. I’ve done a lot to really sort of push myself towards getting these grants, and it kind of made me feel bad that I was getting them because I am in such a privileged position. So for a while I was feeling bad about applying to grants and had to talk to my advisor and other peers about it to figure out if I’m in the wrong here of applying for more money, even though I already have a more stable income.

09:28 Emily: So it seems like even though a lot of your peers were supportive of this and they were helping you edit your applications and so forth, a few, a minority, were making these comments. What do you think their kind of motivation was behind that?

09:43 Sam: I think a lot of students — we’ve had protests in California about this — are struggling financially in some ways, or maybe they don’t get the grants that they want, and then they’re feeling like I’m getting a lot of grants and my research is very attractive for the current context with everything going on in Congress and wanting to improve that. I naturally do have an attractive topic and I think some people feel like maybe their topics aren’t reaching that same attractiveness when it comes to advertising your own research. Also it’s hard being a grad student and I’ve worked really, really hard to have really good grants. When I did the GRFP, I went to the writing center on campus at least 12 times and had dozens of friends review it and professors review it, so I really, really take my time with grants where I know some people also can do them last minute because they’re so overwhelmed with everything else. I think it depends on the person, but it’s just the struggle a lot to get grants in the first place, I think.

10:38 Emily: Yeah, definitely. I understand that at some point, this sort of crystallized and it was not only people by happenstance noticing that you won this grant or that grant, even though you already had the GRFP, but at some point it came down in black and white. Can you tell us about that?

10:54 Sam: Earlier this year, our department got together and decided to make a spreadsheet of everyone’s income from the department, because this was part of our consolidarity with the COLA protests. And for those who don’t know, COLA stands for cost of living adjustment. Here in California there’s been a lot of protest from grad students around, the cost of living adjustment, especially at UC Santa Cruz, where a lot of grad students are spending 50 to 70% of their income on just their housing alone, because it’s so expensive to live and they are demanding to have an adjustment to their rent because they are so rent burdened. So UC Irvine and my department in particular, especially one or two students who are really involved in the unions on campus, wanted to make a spreadsheet to show how much did we all make because we needed the data in order to demonstrate how most of us are rent burdened. Even though we have subsidized housing, even though we are a tech department, we found out that 99% of us are still rent burdened just going through this. But did find out in that instance that I do make more money than everyone else in the department. And that was in black and white and that’s on a spreadsheet that’s available to all students in my department to see.

12:03 Emily: I think this is a great process to go through actually and I am very in favor of more transparency around what people make, especially in grad school, not necessarily with your name tied to it, but just what people are making and the range. I’m kind of curious about why you ended up, I guess it was because it was asked of everyone, but what the motivation was for including people who were on fellowship, especially external fellowships like yours, along with people making the baseline stipend from the department. The argument is going to be about increasing the baseline stipend, right? So is it, we want the bottom sector here, that’s just making the baseline to be brought up closer to where you are, closer to where other people who receive outside fellowships are? I’m kind of wondering what the angle is on that.

12:47 Sam: That’s a great question. When this was sent out to students, it was completely optional. You had the option of doing it anonymously. I think most of us just decided to do it publicly and to be able to share how much, and we did put specific notes for each person of like where your funding was coming from — is this the baseline, or is this with an addition to external income? Is this pre-tax, this is post tax?. So we had all those details as well and it is a good question because I think with our department particular, there is an assumption, especially in the summertime that you’re going to go out and get other sorts of funding. And they know that there are a lot of students in our department who have Google and Facebook and Amazon and other sorts of internships because we are a more attractive group for those big tech companies that overcompensate sometimes for this wealth gap and this discrepancy for teaching.

13:34 Sam: I think that was also sort of demonstrating, even if there was a baseline, how much students were maybe feeling like they have to go for these internships in order to supplement their income. And just seeing these different discrepancies of if you were lucky and privileged enough to even get an internship. There’s actually someone in our department who studies this and how to get a tech internship, and she’s really helpful, but also shows the different discrepancies that can happen for who gets it and who doesn’t. So all those details, I think, were just really interesting to sort of demonstrate how broad the ranges and incomes in our department, just for students.

14:06 Emily: Yeah. It’s a super interesting project. I’ve actually recently heard of another, not related to the California specific protest, but another department where students took this on and used it as a negotiation tactic, as in a sense collective bargaining, although they were not in a union. So it can be a really powerful exercise. And what happened with either your peers or with your own feelings about this after the spreadsheet is out there?

14:28 Sam: The spreadsheet was out there during the pandemic, so I haven’t seen much of my peers in person, so there’s less discussion that I can have with them. Definitely for me personally, it did really two main things for me. First, it really sort of solidified this idea that I do make more money than everyone else in the department, and sort of feeling a little bit shameful and a little bit uncomfortable with that, but also at the same time, recognizing that I have a privilege to have these sort of grants and I’ve worked for it, but I’ve also been very lucky with some of these grants. And because of that, I do feel like I have a responsibility to share that and make that transparent and advocate for the people in my department who don’t. So on the one hand, it does make me uncomfortable to come out and say like, “Oh, I make a lot of grant money and I do a lot of other things to supplement that money in different ways, but also I am privileged enough to share this with you to show these discrepancies and make sure that we’re all coming up to a baseline.” And even before I had my tech internships, despite getting all these grants, I was still technically considered rent burdened. It’s kind of funny to show that you make more, but we’re all still in this sort of struggling standpoint, so it doesn’t really help to have as many tensions, in-fighting, I guess, as much as it is to collectively work together.

Continuing to Apply for Additional Grants

15:38 Emily: How did you feel regarding going after more funding?

15:45 Sam: That was a little bit hard for me. I had to talk to my advisor once about this and really figure out what’s the best path, because I did have to tell her once that I felt uncomfortable applying for more because I’ve gotten some of these comments. I was like, “I have enough, I’d be okay.” And she really sat me down and made sure I remembered what my worth is and that grants are really important for CVs if you’re wanting to go into academia, and that you should not stop applying for things just because you have some money.

16:13 Sam: I have a great example of this where actually one of my funders, the democracy fund in DC helped me fund an entire summer in DC and they asked me, “Okay, how much do you need to do your research? And I was like, “okay, well I need this much for housing and this much for food and this much for a plane ride and some Metro and like, that’s it.” And they came back to me and said, “This is great, but you forgot to mention your actual value in terms of the work that you’re doing for this grant, so we’re going to double what you’re asking for.” That just blew my mind because it was the first time that someone came to me and told me you’re worth way more than you’re asking for and you need to make sure that you’re asking for these things at a higher level. I think even now I am getting these grant fundings, it doesn’t necessarily mean that that is my baseline worth just because I get something. And that took me a while from my advisor really encouraged me to keep applying for grants coming to me and telling me that I’m worth more than what I’m asking for.

Commercial

17:06 Emily: Emily here for a brief interlude taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the, or have a question for me. Please join one of my tax workshops, which you can find links to from pfforphds.com/tax. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

Understanding the Value of Your Work

18:12 Emily: I’m really glad that you can share that with our listeners, because some other people in the audience might be feeling the same way — sort of limiting themselves and saying, “well, I shouldn’t go after more. I shouldn’t do this. I shouldn’t do that.” You had these great mentors in a sense in your life to help you push back against that, but maybe someone in the audience doesn’t have that and they’re hearing this line of thought for the first time, which is really wonderful, so I’m really glad you’re sharing that with us now. Is there anything else that you want to say about like understanding your worth? I mean, that is not just in the context of fellowship and grant applications, but just for graduate students more broadly, this is a very tricky topic to value yourself.

18:53 Sam: Yeah, absolutely. I think sometimes our expertise and our ability to do stuff is so undervalued and it’s hard to measure how much you’re personally valued, right? Because you have all these different discrepancies and how different grad students are getting paid. How much you’re worth versus another grad student. You really, I think just have to sit yourself down and look at comparatively, if I were to go into industry right now, how much would I be making? How much is my value in terms of giving to different nonprofits or companies, which was what I was doing. I was technically partially consulting, but mostly had a grant to do my own research. Having those opportunities and making myself step out there and ask other people, “how much am I worth to you?” I think that makes a big difference, so I’d recommend to students to really go out there and see like how much is my value in other places versus in grad school, where I think we have this skewed sense because of this limited budgeting construct, of how much you’re actually worth.

19:46 Emily: I think that’s a really excellent point and I want to underline it that who is paying you, that context, matters a lot in how much you can command for your value. Your value can be the same in the academic context, in the private sector, or in the nonprofit sector. But what you can get paid is vastly different from those different contexts and if you stay stuck in just the academic context, you’re not really going to realize all those different price points, in a sense, for your work.

20:16 Sam: Yeah, absolutely. I’ve come across different discrepancies, even internally, because in addition to having the GRFP and doing my research, I was extremely lucky and my department gave me a chance to teach twice, the first time being right at the onset of the pandemic. And me never teaching before and then teaching 140 students online wasn’t the funnest, but it really showed me how much they were also paying. And actually apparently we get paid more as grad student lectures than adjunct faculty do, which is kind of crazy think about because we have a better union. Recognizing the transparency that “wait I’m a grad student, but I make more than an adjunct faculty.” That’s just telling me that the value system inside the university is skewed and I really shouldn’t use that as a metric for my worth and that I really need to go outside the university bubble to understand that metric at least for grad school.

Financial Transparency in Academia

21:10 Emily: I understand we’ve been in COVID times, you haven’t seen much of your peers so I don’t know if you’ve actually, now that you have this new mindset around going after things and valuing yourself, maybe you haven’t had a chance really to speak with your peers and receive a comment and be able to respond or push back against it. Certainly tell us, have you had that opportunity at all?

21:33 Sam: No, I really haven’t just because everything’s remote and most of the stuff is just friendly, get togethers and things like that. There was a little bit of work with COLA still going on, but that’s a little bit hard with everything being remote and kind of put off to the wayside, I think, in a lot of people’s minds.

21:48 Emily: Definitely. I guess maybe in preparation for you once again seeing your peers in some months, maybe — we’re recording this in January, 2021 — is there anything that you think that you’ll say to your peers at that time, or maybe something you wished you could go back and tell them, earlier on in this process when these comments started?

22:09 Sam: Yeah, absolutely. I mean, the biggest takeaway that I’ve really found, especially contributing to this data when it comes to COLA is that we’re really all in this together. And it’s really important to be open to this process, to share it with other grad students and to not really react negatively when other people are potentially making more than you are applying for more grants than you are, because everyone’s so different. Especially even in my department — my first advisor was an anthropologist, my second was a computer scientist, and my third had a business degree a PhD. Even in that, the professors in our department have different scales of finances just because they come from different backgrounds, so it’s all a little bit hodgepodge anyways.

22:46 Sam: But most importantly, I think it’s important to be transparent. I had an occasion where we had new grad students come into the department, like accepted grad students, and they had a panel of current grad students answering questions about what it’s like living in Irvine. What is the rent like? What is it like being a student and what type of classes do you take? And one of the accepted students asked “what is your stipend like, and how much is it to live on campus?” And none of the other students on the panel were directly answering the question. They’re like, “Oh, it’s enough. It’s reasonable.” And I was like, why aren’t you giving people a number and I just straight up said, make this much money. This is how much I pay for rent. And this is for this type of housing. And they’re like, “Oh, thank you. That’s really helpful.” And I think there’s a stigma still even just to share for accepted students, this is how much you’re actually going to make, because there’s some uncomfortableness with this transparency that I think really needs to be broken because it really does help us collectively to have those discussion.

23:46 Emily: Yeah, thank you for that. And of course, I also contribute to and promote this process through my website, PhDstipends.com and PostdocSalaries.com. That’s an anonymous way that you can share what you’re making, what the funding sources and so forth, because that is also super, as you were just saying, important in this context. Are you making a baseline stipend? Do you have supplemental money coming in from XYZ, other sources? Are you taking out student loans to supplement the income because the rent is so high? Whatever the situation is I’m definitely in favor of being more transparent about it. But I certainly understand the discomfort because this is not, of course, something that exists only inside academia, only in our context, but in our entire society. Employers, even if they can’t actually disallow it, certainly discourage employees from sharing their salaries with one another. It’s really an entire society wide situation, so it’s really commendable for you and also for your peers that you are doing more to throw back the curtain and say this is what it is and we want more and using it as like a bargaining tool. It’s really awesome.

24:49 Sam: Yeah, absolutely. And especially, I think now that we’re having more conversations about minority students and getting a leg up for a lot of people who are underprivileged, it helps to know where the line is and what they should be meeting equally. I work a lot with Congress and there are so many debates about congressional staffers, because staffers are woefully underpaid, but there’s no transparency as much. There is some in documentation about knowing people’s worth in that context. So I’ve just been around these discussions and I feel like the more that we can pull back the curtain, the more we can level up people, especially people who are underprivileged in the beginning and even that playing field.

Advice for Other Early Career PhDs

25:22 Emily: Yeah. Thank you so much and thank you for your willingness to come on the podcast and talk about this because it’s a bit of an uncomfortable process. As we wrap up the interview, the question that I like to ask all of my guests is what is your best financial advice for another early career PhD? And that could be something that we’ve touched on in this interview, or it could be something completely different.

35:43 Sam: Yeah, absolutely. Going along with the theme here, apply to everything, even if you think you have enough, because you’re often worth way more than you think that you are, things cost more than you think they’re going to be in the beginning. That’s always something that happens too. So I think that’s really, really important and always being smart with your money. I’m personally a big fan of the FIRE method. I barely eat out. My activates that I love are cheap, so I’m just naturally in that mindset of being more financially savvy than I think a lot of people want to be, but that’s okay, and that’s my position. Not everyone needs that. But I think the more that people understand to apply and to really say “I could have more and I can really utilize this to my own advantage.” Take advantage of it. There’s so many grants out there that barely anyone applies to and those micro grants really can add up. Just applying for anything that you possibly can, I think is really important. And I know sometimes you get tired, especially towards the end of your PhD, like I am now, but it definitely makes a huge effect in the long run, especially you want to talk about compound interest and investments and things like that. Absolutely doing those as much as possible in the beginning.

26:49 Emily: Yeah. Thank you so much for that advice. And I totally agree with that. I want to emphasize two components of that. One is, like you were just mentioning, kind of the only way you can get a raise as a graduate student is to win outside funding. And whether that is outside funding that replaces your stipend at a higher level or supplements a stipend that you’re receiving, maybe like you mentioned earlier, taking on extra teaching work could be another way to do that. But the fellowship and grant applications are really the way to do it without actually adding more work to your life, so it’s kind of the equivalent of getting raised rather than just taking on more hours of work. A lot of paths to higher income are barred for graduate students, but this is one that is available.

27:30 Emily: The second thing that I wanted to emphasize is, you mentioned earlier that your advisors don’t have funding for you, so this was completely your responsibility. I think that’s part of this mindset of you know that you have to provide for yourself, but I just want to emphasize for people who do have funding to fall back on as a research assistant or teaching assistant, whatever it is for their advisors or their departments, the word guarantee might be in there, but what does it actually mean? And the word guarantee you might not be in there and what does that mean? I had a friend for example who had the NSF GRFP and that finished and she still needed another year or something. And because of a situation going on with her advisor not providing funding as he had in the past, she was left unfunded for a year. That was not something she ever anticipated. That was not supposed to happen in the way the funding typically went in this department, but it did happen. She had to negotiate and say, “you know what, I brought in the GRFP, you can give me another year. I brought in three years of funding.” But that wasn’t necessarily guaranteed to work.

28:37 Emily: In a sense, in academia you’re a little bit like an entrepreneur. You have to hustle for your own money. Yes, you’re supposed to be paid by someone, but how secure is that really? It feels to me a little bit more secure to be applying for lots of different things, have a lot of irons in the fire. And if those don’t work out, at least you can say to your department or to your advisor, “I have applied for four grants in the last year. Hey, they didn’t work out, can you give me some bridge funding?” There’s a way to argue about that too. I think there’s a lot of merits and a lot of different directions for applying for as much as you possibly can. I’m really glad you came back around to that position after having these conversations with your advisor and so forth.

29:19 Sam: Yeah, absolutely. And I love what you said about thinking about it as a raise. Especially as you’re getting more and more in your PhD, you are more valuable, but your finances stay exactly the same. I love the idea of thinking about applying as a way to show that your worth increases over time. Thanks for sharing that too. Yeah.

29:35 Emily: Well, thank you so much for joining me today for this interview, Sam, this was really enlightening.

29:39 Sam: Yeah, absolutely. Thank you so much!

Listener Q&A: Investing

Question

29:42 Emily: Now onto another one of our new segments, the listener question and answer. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall, so it is anonymous. Please note that nothing I say in the segment or anywhere else on the podcast is investing advice.

Answer

30:00 Emily: Here’s the question: How do I invest? I don’t have time to monitor the stock market constantly, but I would like to have at least a small amount of money invested.

30:10 Emily: What a wonderful question and I am so on board with the sentiment here. I also do not have time to monitor the stock market constantly. Who does? Honestly, I feel like people who do have the time and inclination to constantly monitor the stock market should just make that their full-time job, like go become a fund manager and get paid millions of dollars to do so instead of just doing it for your own paltry assets.

30:33 Emily: The good news is that spending that kind of time on investing is absolutely not necessary. In fact, in 99+% the cases it’s actually counter-productive to do. Let me introduce a term to you: passive investing, also known as index investing. Passive investing is the most effective least expensive and most time efficient manner of investing.

31:00 Emily: The real quick gist of passive investing is that you buy one or a small number of index funds and you hold those funds in your portfolio long-term in a percent-wise allocation that you have determined in advance. Index funds themselves are collections of, we’ll stick with the stock market, collections of stocks that reflect a broad market sector. So in these funds, the fund manager is not trying to pick the winners and dump the losers. They’re just trying to buy either everything or a representative selection of everything available in that market sector. My go-to example is always the S&P 500 index. When you listen to the stock market news of the day, you’re going to hear how the S&P 500 and the NASDAQ and the Dow Jones did. So those are three indices that represent how the market overall is doing. The S&P 500 has a really clear definition. It’s simply the 500 largest companies that are traded on the US stock exchanges. So if you were to purchase an S&P 500 index fund, you would be a part owner, a very small part owner,of all 500 of those companies. So that represents the market sector of large cap companies, the largest companies. So basically the learning and the research that you need to do is to understand what passive investing is, what index funds are and which index funds you want to purchase and in what allocation. This might take you a few hours of upfront investment of your time, but it’s not something that you need to put time into on a continual basis. Once you’ve decided on your strategy, you basically just let it ride. Another really easy set it and forget it way of accomplishing this is to use what’s called a target date retirement fund, which is in itself a collection of index funds in a percent-wise allocation like I described earlier.

32:53 Emily: So where to go next for resources. I actually have a set of webinars inside the Personal Finance for PhDs Community explaining what passive investing is, what index funds and exchange traded funds are, how to choose them, which brokerage firm to use for your investments, whether you use an Roth or a traditional IRA, all these kinds of questions. So if you would like to view that webinars series, simply join the Personal Finance for PhDs community at pfforphds.community. And that webinars series will be immediately visible to you. I also have inside the community, a challenge that I ran a few months back on opening your first IRA. So you might be interested in following the steps of that challenge, which point to certain webinars to watch in a certain sequence and other steps to take. That might be relevant for you. Or you could do something like read a book such as the Simple Path to Wealth by JL Collins.

33:46 Emily: Now, another element to this question is that you mentioned you want to have a small amount of money invested. You might be tempted to use. What’s called a micro investing platform. Those are brokerages that specialize in helping people with zero capital upfront get started with investing. Some names you may have heard are Acorns, Robinhood, M1, these kinds of platforms. I want you to be really careful when you’re choosing the platform to go with. Ideally, you would only pay the fee associated with the ETF itself that you end up buying. You wouldn’t be paying fees on top of that. For example, some of these platforms charge like $1 per month to be invested with them. I want you to avoid a platform that charges, that kind of fee. Because when you are investing only a small amount of money, a fee of $1 per month actually takes a big, big bite out of that money. So if you go with a micro investing platform, make sure it’s one that doesn’t charge any fees on top of the underlying ETF fees.

34:46 Emily: You also should check whether the platform offers IRAs, individual retirement arrangements. It might not seem important when you’re just starting out with investing, but retirement investing should probably be your top investing goal when you’re starting out, because it is such a large need, even though it’s a long time away. For example, Robinhood fit some of the criteria I mentioned earlier — they don’t charge you fees on trades, you can buy ETFs through that platform, but they don’t offer IRAs, at least as of the time of this recording. It’s very worthwhile to check out what are called the online discount brokerage firms, like Vanguard, Fidelity, and Charles Schwab. Those are kind of my go tos for being able to avoid higher fees that might be charged by other companies. However, the issue is that sometimes they have minimum amounts that you need to invest to get started, like maybe a thousand dollars, which of course is not at all a that you would have that much money. So in my mind, those are the places to get to, eventually maybe when you’re starting out or maybe later on. But if you need to start out in a micro investing platform or a robo-advisor at the beginning, that’s perfectly fine.

35:51 Emily: I think once you really understand the concept of passive investing and how simple it is, how easy in a sense it is to build up wealth over the decades, you’re going to want to have more than a small amount of money invested. You’re going to be really motivated to increase that savings rate and a discount brokerage firm is a great place to be when you’re saving a hundred dollars a month or more, or have a thousand dollars in your account already. Personally, when I first opened my IRA and started investing, I went with Fidelity because at that time they allowed me to open an account with no money up front, as long as I set up a recurring savings rate of at least $50 per month. So I did that for a little bit over a year until I had $3,000 in my IRA. And then I transferred my account over to Vanguard. They had a $3,000 minimum at that time, and I’ve been with Vanguard ever since. So I hope that is a start to answer your question and that you have a place to go for our further resources, either with me or other people who talk about this. And I really want to encourage you at the start of this investing journey, so I do hope you’ll take that next step. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours listeners.

Outtro

37:10 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.

How to Set Yourself Up for a Successful Career and Financial Life Post-PhD

by

In this episode, Emily interviews Dr. Jennifer Polk, a career coach specializing in PhDs whose brand is From PhD to Life. Emily and Jen explore the damage that graduate school and academia often does to PhDs’ financial lives, in terms of both dollars and money mindset. They answer the question, “What can a graduate student or PhD do to mitigate academia’s financial damage?” from both a financial and career perspective, starting in grad school and extending several years post-PhD. Jen concludes the interview with an incredible insight that can only be gained with years of distance from the PhD.

Links Mentioned in this Episode

post-PhD career and finances

Teaser

00:01 Jen: Woo boy, I think the two-word answer is compound interest. The more that you can put away, even very, very, very small amounts earlier on, make such a huge disproportionate difference over the long term.

Introduction

00:23 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode 14, and today my guest is Dr. Jennifer Polk, a career coach specializing in PhDs, whose brand is From PhD to Life. Jen and I explore the damage that graduate school and academia often do to PhDs’ financial lives, in terms of both dollars and money mindset. We answer the question, “what can a graduate student or PhD do to mitigate academia’s financial damage?” from both a financial and career perspective, starting in graduate school and extending several years post-PhD. Jen concludes the interview with an incredible insight that can only be gained with years of distance from the PhD. If this episode, and that final insight in particular, get your wheels spinning about what you should be doing right now in your finances, there are several ways you can work with me in the upcoming months to level up your financial life.

01:29 Emily: The Personal Finance for PhDs Community is always open to new members. That’s where you can find my courses on financial goal setting, budgeting, investing, et cetera, plus monthly challenges to participate in a book club and lots of opportunities to ask me questions and engage in discussion with other like-minded graduate students and PhDs. You can find out more at pfforphds.community.

I’m facilitating my brand new half-day workshop, Chart Your Course to Financial Success, twice in the next couple of months. Spend four hours with me and a small group of peers, and you’ll come away with clarity on what your current financial goal should be and how to achieve it, plus super actionable ideas for increasing your income and decreasing your expenses. On December 12, 2020, I’m facilitating the workshop exclusively for funded graduate students. And on January 10th, 2021, it’s exclusively for PhDs. You can find out more at pfforphds.com/chart.

02:34 Emily: Finally, Mark your calendars for the next round of The Wealthy PhD. My two-month group-coaching program that provides guidance and, most importantly, accountability to help you achieve a significant financial goal and set you up for future financial success. Enrollment will open in early January, 2021. You can find out more at pfforphds.com/wealthyPhD.

I’m so pleased to be able to offer you all these different avenues of support going into the new year. I hope you will identify one that fits you the best and sign up.

If you’re not quite sure about diving into working with me, please join my mailing list at pfforphds.com/subscribe. Every Friday, I’ll send you an email detailing, a personal finance concept, an actionable strategy, or an inspirational story. You will receive an incredible amount of value, absolutely for free, through the list.

Without further ado, here’s my interview with Dr. Jen Polk.

Will You Please Introduce Yourself Further?

03:28 Emily: I’m delighted to have joining me on the podcast today, Dr. Jen Polk. You probably know her brand From PhD to Life. She is a career coach specializing in PhDs. So, she has a lot to say to us around this topic. And we’re actually going to be talking about money mindset today and specifically how it affects, you know, your finances, but also your career journey as you’re moving through and beyond the PhD. So, Jen, thank you so much for joining me on the podcast day. It’s wonderful to have you.

03:56 Jen: Yeah. Thank you, Emily. It’s my pleasure. I’m nervous. I’m excited.

04:01 Emily: It’ll be fun. So, please tell the audience just a little bit more about yourself.

04:05 Jen: Sure. So Jen, as Emily says, I work with PhDs figuring out what to do next in their careers and my business is From PhD to Life. That’s fromphdtolife.com. And I’m self-employed and I live in Toronto.

What Academic Culture Teaches Us About Money

04:22 Emily: What does academic culture–in your experience, and also what you’ve observed from your clients–what does academic culture teach us or tell us about money?

04:32 Jen: Yes. Yes. Big question. So, my own personal background is from the humanities, a history PhD. And I think that academia emphasizes, at least my corner of academia, to use that phrase, thinks of money as a bad thing, as kind of a necessary evil. And extremes to which we might take that view do exist out in the wild. There are people out there who will, they can’t possibly live this way every day of their lives, but they will literally say things to me that anybody who has more money is morally inferior or that it is unethical to have, you know, more money than one needs, et cetera. And I think that, yes, one can find that view in academia.

05:29 Emily: Is that defined as more money than they have? Is that the dividing line?

05:34 Jen: Probably, probably, probably. But yeah, I think that thinking about money, talking about money makes you somehow less of a scholar, less of an intellectual. Of course, as we know, the truth is that you can’t actually do scholarly work over the long-term if you are constantly worried about money. It’s difficult. But yeah, there’s definitely a sense that if you’re the person–and I think this is also tied in with aesthetics–if you show up in your humanities department wearing flashy suits and red lipstick and earrings you will be deemed less serious as a scholar, as an intellectual. I think that is related to money mindset as well. It’s really gross. It’s really gross. And yet, of course, you need money.

06:33 Emily: Yeah. I mean, you just said that, of course over the long term, you, you have to have money or else you’re going to have a constant, you know, really it’s a fog in your brain. When you’re constantly stressed about money, when you experience scarcity, and this has been studied, you know, through research, that you literally don’t cognitively function as well as you could, if you did not have that stress in your life. So it’s really actually perplexing to me that we do this. We–academia–does this to graduate students, especially, but also postdocs and also, you know, adjuncts and other faculty members to a degree. Why are we doing this to our youngest, most vulnerable developing scholars? I mean, I know you can’t answer that question, but it’s really perplexing to me that, you know, the system chooses to put this kind of stress on people, and then moralizes it, as you were just saying, says, “Oh, this has been official to you that you don’t have the distractions of money and flashiness and opulence and so forth in your life.” When really what it is is, “No you’re stressing us out, so we can’t even think properly.” And that’s, it’s horrifying, really.

07:37 Jen: Academia is perplexing. I think that’s a good short way of putting it. There’s a lot of work to be done to kind of recognize the truth of one’s situation and think about what you actually do value that is different from what academia implies that you should value.

Money Mindsets in Academia

07:57 Emily: Yeah, I will say from my, you know, my corner of academia and engineering, I did not get the message that money is evil or money is to be shunned. Certainly, we were still under, you know, some money stress depending on how well-funded you are. But definitely from the advisor or the faculty level, we weren’t getting that kind of message. And yet, there were still money mindsets that academia tells even to students in disciplines like that, like all your best time and energy has to be spent on research. Like, you know, you’re not allowed to do XYZ other things in your personal life or earning money on the side. Even if it is not explicitly disallowed, it is certainly frowned upon, because again, you should be spending all your best energy on your research. Things like that. And I think another really sort of damaging thing that happens that probably speaks a little bit more to your experience as a career coach, is that people become anchored at the graduate student salary that they are earning during those years. And so how do they judge what they’re worth in the marketplace after they exit academia when their skills can and should be valued much differently? But how do they, you know, transform their own understanding of the value that they bring? Maybe we can talk more about that.

09:14 Jen: And I also see from scientists that, of course it varies and everyone’s experience is unique, but a lot of worry about getting a quote unquote industry job is morally inferior. And I think part of that is that those jobs pay better than academia. And I think people not only would you make more money, but potentially, I mean, depending, you would have a better life and a better career. Because there’s just lots more variety out there. And there’s a lot more better places that one could be for a lot of people. But I do think that money is part of it as a signal of virtue. Does that make sense, Emily?

09:56 Emily: Yes, I definitely hear what you’re saying. I actually would add onto that. It’s possible that you can have more of an impact on the world in industry than you could in academia, potentially, depending on your field. So, there’s that too. Is your scholarship actually getting out there?

10:11 Jen: Yeah. More money, more impact.

Financially Damaging Money Mindsets

10:14 Emily: We’ve talked about how these money mindsets are not true, damaging in some ways. How is this financially damaging?

10:25 Jen: Whoo boy, the two-word answer is compound interest. The more that you can put away, even very, very, very small amounts, earlier on makes such a huge disproportionate difference over the long-term. There is such a potentially, I mean, again, it really varies, but there is a real opportunity cost to spending time in academia, as a graduate student who is not earning, you know, a whole lot of money. And then, you know, if you do post-docs and then in a lot of disciplines, even a tenure-track professorship, is not going to pay you really enough to live in a lot of cases. And that, you know, life isn’t about comparing oneself to others, but it does put you behind, to use that framing, other people with similar types of education in terms of your financial resources. And of course, if you have debt.

11:20 Emily: I couldn’t agree more. I mean, you know, sometimes I think about there’s been, I don’t know, I think I’ve seen studies from time to time on, “Oh, a PhD is worthwhile like salary-wise because yes, you take this income hit early on, but then later you could make, you know, much more than you would with just a bachelor’s or whatever.” But I really wonder, and I have not done the math on this. I really wonder, well, you’re disagreeing with even that assertion because I’m sure it is very individual, entirely. But even taking that as a given, if you then factor in the opportunity costs for compound interest of paying off your debt, starting to invest for the long-term for retirement, it becomes very dubious.

11:58 Jen: Well, that’s just it. That’s just it. Exactly what you say. Like, even if the salary itself is higher, you’re starting so much later than other people. Like Emily, you and I are both in North America, U.S./Canada context. PhDs take a while. You know, on average, somebody is 30, more than 30, almost 30, right, when they finish, with limited prior work experience. And yeah, it’s not just about annual salary. I’ve seen those studies where everybody’s like, “Look how much more money PhDs make” than people with other degrees. And yes, that is an average. And, you know, it varies a lot. A lot. Not only between disciplines, it does vary a lot between disciplines, but within disciplines, it varies a lot, over gender and race and immigration status, et cetera, subfield. And whether you’re in an academic career track or not, right?

12:54 Jen: There’s a lot of variety there. But yeah, it’s not just about your salary number. It’s not just about that. Yeah. It’s about all of the other things you said. You know, if you’re 10 years later entering the housing market, you might not enter the housing market, et cetera. Anyways, I don’t mean to bemoan and lament, but I do think that it is a message that if anybody listening is considering a PhD or in a PhD program earlier on and doubting whether they should continue, please take this seriously and know that I respect any and all decisions to not apply, not enroll and potentially, you know, if it’s right for you, to not continue in a PhD, because it really might not be the right thing for you for lots of reasons, including financial ones.

Working on the Post-PhD Money Mindset

13:40 Emily: Yes. I would actually love to expand on that. So, we were just saying, okay, to people who have not yet applied for graduate school or are early on in your graduate school journey, take seriously any doubts you may be having and explore other career possibilities for you. For my part, I’m a little less don’t do the PhD, but I’m more on like, why don’t you get some work experience and see what’s out there for you and be able to judge the PhD more, not from, okay, I just got out of undergrad and this is what I want to do, but judge it in a little bit of a more informed context? So let’s say someone is on that path and they’re firm about finishing the PhD, but they’re still early on or, you know, midway through. What can that person be doing to be, you know, both working on their mindset, setting themselves up for financial and career success, following the PhD, what can they do at that stage?

14:31 Jen: I think that, you know, and this comes from my own work, you know, day-to-day career coaching PhDs. I think it is never too early, never too early to think about your career because there is, and I don’t, I think this surprises people, there is so much work that you can do that you really ought to do, but you know, that you can do before you ever apply for a job. And part of that is about money and how much you really need and how much, you know, you 10 years from now is going to want. But I would really, the quicker that you can get into a job and the quicker that you can get into a job and a career that is one that you like, and you can really excel in and you know, it doesn’t sort of match up that you would excel in a career and you make money, but a little bit, right, the quicker you can make that happen for yourself after you graduate, the better.

15:28 Jen: So, do all of the work that you can when you’re still a student. And I just mean the self-assessment, the reflection, like what you were talking about, Emily. Identifying the right, you mentioned identifying the careers that you are interested in going into, right? Like do all of the work ahead of time to identify those, and then start building your network, and, and draw on your network to learn more about those career paths, to get really specific about the types of work that you could do. To have a kind of a draft resume in place for various different kinds of roles that you might apply for. Again, long before you ever get to the point of application. So that six months, four months before graduation, before you’re kind of ready to work, you can hit the ground running.

16:13 Emily: You mentioned like doing self-assessments and so forth. I did a lot of that stuff and it was provided by the career center at my university. I wouldn’t say I showed up at every event, but I was definitely like a regular frequent flyer at, you know, what they had going on. And I was able to do like, yeah, some of the various self-assessments and that was wonderful.

Career Exploration: Know Thyself

16:30 Emily: So, there’s resources that may be available to graduate students through their career centers. There’s your website of course, From PhD to life. Do you know, would you recommend any other resources outside of the university context, for people to help in this like career exploration phase?

16:46 Jen: Yeah. I think at this point, anything can be useful. And so, you know, I think it can sound really simple, simplistic but even just sitting down and making a list of the things that you actually truly value and that are really important to you, that there’s real power in that. Taking a few minutes and just doing a brain dump, like, okay, what do I actually value in having, and write it down. Make a visual of it and make a graphic that you stick on your computer desktop. I mean, whatever it is so that you can keep reminding yourself when academic culture is swirling around you, which can be, I’m exaggerating, but it can be a bit of a totalizing culture and impose values and priorities on you that, you know, can kind of make things messy, just to remind yourself of what you truly value.

17:42 Jen: When I say anything can be useful at this point, I mean, sure do the Myers-Briggs. Scientifically dubious, doesn’t matter, because point is to give you new language, like literal words, and new perspectives, different perspectives on the types of skills and strengths that you have. So, any kind of like skill assessment, strengths test, value survey, anything like that, you can find online. Any of those that can be really kind of interesting to get you thinking about yourself in a different way. And then make your own lists. Some people like spreadsheets. And take advantage of any and all assessments that, yeah, you get from your career center on campus if that’s available to you. This process, I’m talking about it like it’s a mess, and that’s because it is a mess. So, it’s fine. And the other thing I would say is that this is not a process of identifying your one true right job.

Do Not Get Stuck on the “Dream Job”

18:42 Jen: Your dream job. No, no. Wipe that from your mind. That’s not a thing. A lot of jobs out there are broadly similar. And you, whatever your PhD discipline, whatever your background, you can do a lot of them. So they’re broadly similar and you can do a lot of them. And so what becomes important is not that particular job title, but more where in the world do you want to live? What kind of lifestyle do you want to have? What the vibe of the office that you want to be in? What kinds of like actual work do you want to do every day? Who do you want to hang out with? What kind of impact do you want to make? So all of those kinds of questions that, like job title is not even that relevant. At a certain point, you’re going to try and identify some so that you can find jobs to apply to. And so that your network can help you out by making suggestions. But yeah, it’s a mess. Embrace the mess and know yourself.

19:37 Emily: At that stage. Because you can be really open to a lot of different things, like you were saying. We’re not at all trying to like narrow things down, right? It’s about sort of broadening. So, I’m also thinking about, for an early-stage graduate student, mid-stage graduate student, how to mitigate this financial damage that we were talking about. And so very briefly, I just want to say, as you said earlier, compound interest. So if you are at a stage in your finances, when you’re able to save, get an emergency fund together, but after that start tackling your debt, start investing if that’s where you are. And I of course talk about that many, many other interviews and so forth. So people can find a lot more resources. But as you said earlier, the early you get started, small amounts of money, perfectly fine. It’s still going to make a difference.

The Value of Outside Work Experiences

20:18 Emily: So don’t dismiss just because you’re a graduate student, “Oh, I can only save 50 bucks a month or I can only save a hundred bucks a month.” That’s amazing. That would be a lot of money if you actually got that invested. So don’t dismiss that while you’re, you know, doing all this other career stuff. I also want to bring up outside work experience. You know, you mentioned earlier, like, you know, think about your network and so forth, and you can do that without working. You can expand your network. But you know, for some PhD students, it is possible to do internships or to have some kind of side hustle, that’s going to ultimately help you in your later job. Can you speak to that a little bit?

20:53 Jen: Yeah. And I take your point, Emily, that you said for some they can have, because yes, acknowledgement that, you know, it does depend on visa status and the contract, et cetera, et cetera. But, so in response to a Tweet I sent earlier this morning, somebody, I think she’s a humanities PhD student, said that in her program, when she was doing her PhD, she was reflecting on one of her colleagues had this like prestigious grant. So she didn’t have to have a job on campus to pay the rent. Because she had the prestigious grant. And the person who wrote the tweet was saying, you know, I didn’t have that, but instead I worked outside of academia and that, you know, the implication here being that, that gave me the same amount of money. And the vibe she got, not only the vibe, the actual literal the message she got from her professors in the department was that the fellowship was of greater value.

21:46 Jen: Even though from our perspective now, as people out in the world, you know, working jobs, we know that actually in some ways having actual work experience is more valuable. And that is really, really, really important and can’t be undervalued. This is not, you know, to ask students to do more and more and more work. But just to say that when you are making decisions about what to do in your kind of free time, quote unquote, you know, where you have a choice about whether to do this and this and this, just to pause and say, “Well, the, the thing that I think that I should do is adjunct one more course.” Well, hold up, just think to yourself, what is the value of adjuncting a course versus stepping up your side hustle or getting a job outside campus, even just in retail? I mean, it’s not obvious from where I sit that adjuncting a course is the right move. Whereas that can be like just a totally obvious thing according to academics, but no no no. I mean, it really depends. So, I would, you know, use your critical thinking skills and question the things that seem obvious to you.

Commercial

23:00 Emily: Emily here, for a brief interlude. You are invited to my brand new half-day workshop, Chart Your Course to Financial Success. The central question this workshop will help you answer is what should my singular financial goal be right now and how should I best pursue it? I’ll teach you my eight-step financial framework that explains when you should save versus pay off debt versus invest. And we’ll explore many, many strategies to increase your income and or decrease your expenses. I will facilitate the workshop exclusively for funded graduate students on Saturday, December 12th, 2020, and exclusively for PhDs on Sunday, January 10th, 2021. You can learn more and sign up at pfforphds.com/chart. That’s P F F O R P H D s.com/ C H A R T. The deadline to register for the December 12th workshop is Wednesday, December 9th. So, don’t delay. There are discounts currently available for both workshops and registration is limited. Now, back to the interview.

Pay Attention to Your Base Salary

24:10 Emily: Let’s now talk about someone who’s finishing up about to finish up the PhD, and maybe about to finish up a postdoc, if that’s the choice that you made following the PhD. And you want to get a real job and it’s not going to be in academia. So, what can a person who’s reached that stage do, again, to mitigate the damage that the mindsets and the financial damage that academia has caused?

24:31 Jen: It’s really tricky this because you know, some people ask, how do I know when to take this job now, or to take the risk of turning it down in hopes that I would get a higher offer six months from now? So, you know, I think it’s not obvious what the answer is and it will highly depend on the individual person. But one thing for sure to think about is, when you’re ready to accept and negotiate a job offer, right? Accept and negotiate, right?

25:02 Jen: Both of those together. That your base salary is a really important consideration. It’s not the only thing up for negotiation. It’s not the only thing to discuss. But that a one time payout, like a bonus, like a signing bonus of five grand, for example, that seems great in the moment and sure you could invest that, but over the long-term, it’s probably better for you to have like $500 extra on your base salary, something like that. I mean, I can’t do the math immediately, but I think tending to base salary is really important.

Do Not Underestimate the Value of Your Network

25:37 Emily: To pick up where we left off with the career exploration, exploration of yourself. Now this person is ready to narrow things down and apply for some jobs. So, what do they do at that stage?

25:53 Jen: Yeah. So, I think don’t underestimate the value of your network. And before people are like, “Hold up, Jen, I don’t have a network.” No, you have a network, you have a network and you know people, and the people that know you also know other people. And, it can depend, but your academic network, don’t discount them. Even if you’re applying for non-academic jobs. Again, it can depend. But, I mean, I have a client now who is a research associate, a post-doc, and he was nervous about talking to his PI about the fact that he’s, you know, he’s on the job market. And he had the conversation and the PI was very supportive. And then the PI sent a few emails. My client got some interviews literally the next week and, you know, might have a job offer like within like a month. And so don’t discount the value that your network can come through for you.

26:54 Jen: And I know in my work with PhDs, with my own clients, but also all of the research that I’ve done over the years that you talking with people, and that’s all I mean when I say you should network, is you should interact actively with people in your field, with other professionals, quote, unquote. Just actively interact with people, that pays off enormously. And if you don’t do that, it’s going to be so, so, so, so, so much harder. At this stage, unless you have really particular technical skills, and I would wager that a huge number of PhDs don’t–and that’s not a criticism, that’s not a criticism–but if you don’t have these like really narrow, really specific, really rare technical skills, and you’re not at the right place at the right time, then you really have to use your network.

People Can Connect Us to New Opportunities

27:48 Jen: And that’s all of us. Not only so that potentially you could get referred to a job, you could be an inside hire as it were. Right? That’s great. But it’s not only that. It’s so that you can learn what’s out there. It’s so that you have people on your team to send you job ads. I applied for a job in September, and I wouldn’t have seen it except that somebody that I know and have known over the years. I’m not frequently in contact with her, but she kind of knows about me in general. She sent me the job ad as soon as she saw it posted. And I was like, “Oh my goodness.” And what happened is I had a number of other people send me the job ad subsequently.

28:26 Emily: Your branding is so clear that many people could identify what is a perfect job for you.

28:31 Jen: Exactly, exactly. Right. Exactly.

28:34 Emily: I actually have another story to add to that pile, which is how my husband got his job in industry. And so this is more about the value of networking with people from your own program who have moved on in the years prior to you. Because it’s not just the faculty who have networks. It’s anybody who’s exited academia. Even an undergraduate that you worked with who is now in the workforce can be a contact in your network. So my husband, some person who had graduated from his program a couple years earlier, sent a job listing for his, you know, at the time current company to my husband’s PI and said, I know that your lab lines up very well with what we do here. Could you show this to your students who are graduating? And that happened, and my husband got that position. So that was like just, yep. Clearly networking. Because of course it was on the strength of his PIs reputation. This individual didn’t know my husband in particular. But yeah, that’s exactly how it happened and it was quick and easy.

29:31 Jen: Yeah. And that’s what you want. Right? I mean, life doesn’t always work out that way, but quick and easy means that there was years of work that went into that ahead of time, but it doesn’t have to difficult. It’s all, I mean, it’s just about making friends, having good conversations and doing work that you find interesting and that you find engaging. And if you do that over the years and you are in conversation with people about that, hopefully kind of stars align at a certain point and it seems easy.

Always Try to Negotiate Your Starting Offer

30:03 Emily: Yes, exactly great point. So, okay. Our candidate has, you know, done the job searching, done the self-reflection, applying for jobs. You mentioned a moment ago, negotiating base salary as incredibly important. And so this to me also is one, probably your biggest opportunity, to mitigate financial damage that’s occurred during your PhD, is to get that first starting offer as high as you reasonably can within the scope of the field and your skills and so forth. But to negotiate that offer, because I think some PhDs might be kind of bowled over by, “Oh my goodness. You’re offering me how much money?” And again, they’re anchored to their graduate student salary. And so, might just feel so grateful, yeah, and I get that, that they don’t negotiate. But really it’s expected. It’s absolutely expected in industry and it’s probably going to be pretty well-received.

30:54 Emily: Even if the answer is, no, this is a union job and you can’t negotiate, that might be the answer, but you’re not going to be faulted for trying. Right? So, definitely at least attempt that negotiation, because as you said, having a slightly higher base salary, that’s going to affect for sure, whatever salaries you have, as long as you stay at that company. And may even beyond that, if you know, employers shouldn’t, but are allowed to, at least in the U.S. In many cases ask about prior salaries, it depends on what state you’re in. So it’s possible that it could even affect once you leave that, you know, that particular employer, could still follow you. So getting that starting salary as high as you can is a great idea. Even if it seems really scary and daunting to you in terms of the number.

31:38 Jen: Yeah. And I would recognize, you know, everything in life is a risk. Sure. Of course. But once an employer has made an offer to you, they are imagining you solving their problem and hanging out with them every day. And that gives you some power here. As I say, there’s a risk, but I would, you know, own the power that you have in that situation to make a strong case for yourself. You have to make the case. But you want to be successful in that position long-term to help the team grow, et cetera, et cetera. And so, you’re going to show up for them and they should show up for you in terms of base salary.

Good Employers Make their Employees Feel Valued

32:22 Emily: Yeah. And I think it actually goes back to what we talked about earlier that academia, for whatever reason, decides to put this financial stress on its trainees. Your employer probably does not want you to be under that kind of financial stress. They want to pay you enough to reflect the value, to make you feel like you’re valued. That you’re not going jump ship and go to someone else. That you’re going to be able to live in the city that they’re in, you know, comfortably without having to move an hour away for your commute. All of that stuff affects your performance at work. And so it can all come into play when you think about what is the salary that I want to have to perform well in this position? That’s really your opportunity to express that.

32:57 Jen: To a certain extent, there’s some recalibration that might need to happen for folks coming out of academia, where things can be such a struggle, and you can have this impression that any employer is kind of out to get you, out to screw you over. Depending on the experience that you have in academia and the experience of your colleagues and friends around you. But yeah, as Emily said, I mean, any employer that you would really want to work for, they recognize the crucial importance of their labor, of the people doing the work. I mean, this is so, so, so important, and employers, good employers, employers that you want to work for. And there’s lots of them out there. They’re not going to pay you outrageous sums of money potentially, but they want you to be able to have the lifestyle and do the work and be happy and get what you need to be on their team, solving their problems. So, I would assume, assume that they want to pay you equitably right. Fairly and adequately. And, you know, maybe a little more than that. I would assume that, and go forth.

34:04 Jen: Yeah, I am glad you put in the caveat of a good employer, because certainly there are ones that–maybe not employers broadly, but maybe a manager, someone who views this more as a competitive thing, like I’m going to pay you less because I have that better from my bottom line. But it really should be viewed more so as, “We want you to do a great job, and we’re going to compensate you well to do that great job.” And certainly if you get into a salary negotiation process with an employer and you’re getting a vibe that they don’t really seem like they want to support you, then that’s your red flag. And that’s the time to go back to the exploring you’ve done and go back and look at other, you know, positions that you might have, and so forth.

Avoiding Lifestyle Inflation and Unhealthy Mindsets

34:40 Emily: Okay. So, let’s then talk about, you’ve got the job, maybe you’re a few months, a few years into that point. What should you still be doing to again be mitigating the mindset and the literal financial damage that your time in academia has wrought?

34:55 Jen: Yeah, it’s interesting. I mean, I think there’s lots of things that one could say here, but something that comes to mind for me is a phrase that I’m sure, you know, people that grew up in this part of the world have heard, penny-wise and pound-foolish, right? And to a certain extent, you know, when you’re in academia, there are a lot of things that you don’t pay outright for, of course you do pay for them through tuition, et cetera. But it doesn’t occur to you. So there might be things that you yourself would want to invest in, to use that term. And I use that term kind of in a broader sense that will help you over the long term. Ideally, your employer pays for professional development and pays for coaching and whatever, pays therapy, right? Ideally you have benefits around that. But it could be, you know, if you don’t, or if you’re unemployed at the moment, that it can be really valuable to invest in those kinds of services for a relatively short amount of time, because the investment as a metaphor is the right one, because there will be a longer-term payoff.

36:01 Jen: And if you can get your career started kind of on a good footing, great. Right? It’s just so helpful. It’s so helpful. And I would sit down with a money advisor, financial advisor, or whatever the term is, you know, somebody who can kind of tell you things, even if it’s your mom, right? Because if you can get into the lifestyle kind of early on of making good decisions around money, but also, you know, making decisions about you suddenly have more money, hopefully maybe you can set money aside for vacation. You know, that’s a good thing too, et cetera.

36:43 Emily: I totally agree. And actually, this is a phase that I’ve come to now that I’m, you know, a few years post-PhD and into my career, my business with Personal Finance for PhDs, is this idea of investing in myself was something I was very reluctant to do, right? Because I was being penny wise, pound foolish right when I finished my PhD because I wasn’t making that much money yet. So how can I, you know, decide to invest? But actually, you were one of the first people who I worked with, you know, near the start of my business. And it was a was a small investment, but I joined one of your programs. And it, I mean, I still talk about it and laud it, this was Self-Employed PhD, and how we originally met and what an impact that made on me.

37:23 Emily: And I’ve since then been much more willing to invest in training and professional development for myself. So I would definitely, I mean, obviously my field as an entrepreneur is, is different from what other people were doing, but just be thinking about what are the professionals, if it’s again, not provided, as you said, through your workplace, which sometimes it is, what professionals might I work with that can help further my career further, my financial development? Of course you are one of those professionals. If the question is more on the career front with PhD to Life. I am one of those professionals if the question is more on the, how do I handle my finances? How do I handle my budget? You know, what should I be saving for? What should my life look like? If those are the kinds of questions, then of course, feel free to work with me, but there are also many other types of professionals, depending on the exact needs that you have.

Invest in Your Future

38:06 Emily: And as you said, it is an investment. It takes money to work with a professional in the way that we’re talking about. But ideally, the dividends are going to start coming very, very soon after you begin that relationship. Another sort of financial tip, I’ll definitely say, once you’re into that, you know, your career and you’re making a much better salary than you were as a post-doc or as a graduate student. This is now the time to not super increase your lifestyle. Yes. Hopefully, you will be spending more so that you don’t feel stressed. But to some extent you should keep your lifestyle level on a little bit lower than maybe where you see your new colleagues at because you do need to make up for lost time a little bit, and doing things like starting to invest inside your company’s 401(k), even maxing out that 401(k). So to be going into those tax advantaged, designed for retirement types of accounts to a great degree, I mean, just put money away from your salary. You never see it coming in your paycheck. It’s all payroll deductions. That’s the best way to do things. So it might seem like a large number. Right now, a 401(k) in the U.S. would be $19,500 per year to max that out as an employee.

39:17 Emily: Why not? Why not? If your salary has jumped up by much more than that in this transition, why not go for that? Why not have that be your new anchor in your mind? So think about maxing out that 401(k), or at least contributing a good amount to it. Think about making serious, serious progress on your student loans if you have decided that you’re not going to go for an income-driven repayment plan and forgiveness plan. So all kinds of other questions, but this is the time when you get into that job where you can really, like you were saying earlier, you know, hitting the ground running like you’ve done these years of preparation for your career so that by the time it’s finally time to apply for a job, you’re ready and raring to go. It’s kind of the same thing financially. You’ve been keeping your lifestyle low for such a long time. Now you have the salary, don’t do too much lifestyle inflation and just get saving, get investing, get on that debt.

Think of Your Future Self

40:02 Emily: When we were preparing for this interview, you told me you had a message for people earlier on in their PhD journeys than you are currently. So what is that message?

40:12 Jen: Oh boy, your future self is going to care so much more about money than you do now. You know, if you’re in a PhD program, like I started my PhD at 24, like I was like, “Whoa, $15,000 a year.” This was a while ago now. Great. I can’t believe, you know, we hear this all the time. I can’t believe I’m going to get paid to do a PhD. That’s amazing. Okay. Awesome. Congratulations. But just know that your future self is going to care so much more. I mean, I happily, relatively happily, lived with a roommate for years and years and years, and I now live by myself and I pay a lot more money for that privilege, but I just, I just don’t, I don’t want to go back. Right? And so, of course I need a lot more money than I used to. And that, yeah, your future self is going to thank you i you care about it a little bit more than you might be inclined to when you’re, say, 24.

41:15 Emily: Yeah. And by doing the things that we’ve been talking about, like negotiating, like starting to invest early, even if none of your peers are doing it. Like having a side hustle maybe to bring in a little bit of extra money. I’ll say from my perspective too, like now that I, you know, my husband and I got married during graduate school, so we really, you know, we didn’t need any more money after our marriage than we did before. We were both in graduate school. But after we finished our PhDs, we had a couple babies and you know what, once you get on that train, things get very expensive very quickly. And so that’s not at all to say that you can’t have children earlier. That’s just my personal journey, but I certainly feel like we need to command a much higher salary at this stage in our lives and our family formation than we did years ago when we were, you know, DINKS [dual income, no kids]. So there’s that too, if you want that in your future. Yeah. It’s something to start thinking about now.

42:08 Jen: One of my recent clients, she lives in an expensive part of the U.S. Right? Granted but the lifestyle that she has now, a few years out of her PhD with a couple of kids and, you know, a mortgage and all of the above, she really can’t accept a job that pays her less than $150,000 a year. And right. It’s just the reality. And that might seem outrageous to folks listening now who are living on, $30k or less, maybe much less. Like, just keep that in mind. It’s not, you know, I’m not saying that my client, she’s not greedy. It’s just the reality of the situation. Life can get expensive really quickly.

42:45 Emily: Yeah. And I’ll link actually in the show notes, a wonderful interview I did with Dr. Scott Kennedy a year or two ago where he talks about his own realizations as he formed his family during graduate school, that he was going to have to change his career plans, to go into a different field that was going to pay more because he could not afford, now that he had a family, to stay on the track that he had been on. Even though that was sort of intellectually, maybe his preference from earlier on. So these kinds of things have, you know, your life has real impacts on how much money you need to make. And that’s something to start, you know, being realistic about as early on as possible.

How Can People Work With You, Jen?

43:24 Emily: All right, Jen, how can people work with you, should they, you know, if they’ve been intrigued by this interview?

43:32 Jen: For sure. Yeah. Thanks for asking. So, start on my website fromphdtolife.com. I work with individuals. I do small group things, coaching, open discussions. Those are a lot of fun. Shout out to small group things. I think those are awesome. I do drop-ins for Self-Employed PhDs. So, if that applies to you at all, check those out. And then I also work with institutions. So I’m happy to come to your campus, virtually please, I do a presentation or a workshop. I love workshops. So there’s different options.

Best Financial Advice for Another Early-Career PhD

44:07 Emily: Wonderful. And final question that I ask of all my guests. What is your best financial advice for another early-career PhD?

44:15 Jen: So this is a totally “do as I did, and also, as I say,” usually those two things do not go together. But one thing that I have been doing for 20 years, gosh, wow, something like that, is I track every penny. There are no pennies in Canada anymore. I track everything that I spend. So I know how much my life costs. Like I literally know how much my life costs in different categories. And years ago, I used to do this on a, it wasn’t even Excel. I use the WordPerfect version of excel, just a spreadsheet. But now there are lots of programs out there. But I think, you know, tracking what you spend is really, really important. It’s different from budgeting. You can do both together. But the example I like to give is like, I think this is really common for grad students.

45:11 Jen: Like you might spend like a lot of money, like on clothing kind of once or twice a year, not on a monthly basis. So some of the kind of standard ways of thinking about budgeting is sort of like a monthly thing. You go to your big annual conference one month and suddenly you’ve spent $2,000 more than, right? So anyways, but track, and then you can see the trends over time. And by seeing the amount of money that you’re spending in different categories, literally being able to like, see it on a spreadsheet, you can make decisions, better decisions about, you know, how much, how do you really want to spend $200 on takeout every month? Maybe. Yes. Maybe no. Right. But it makes it very clear.

45:55 Emily: I totally totally agree. Foundational personal finance advice. Step number one, track your spending. Track your expenses. Well Jen, this has been such a wonderful conversation. Thank you so much for coming on the podcast and sharing your expertise.

46:07 Jen: Thank you.

Outtro

46:09 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

How to Curb Your Impulse to Keep Up with the Joneses

by

In this episode, Emily interviews Dr. Joy Lere, a licensed clinical psychologist and behavioral finance consultant on the danger of “keeping up with the Joneses.” Joy explains how emotionally unsatisfying and financially damaging trying to keep up with the Joneses is and that contentment can only come from within yourself. PhDs anticipating future income jumps would do well to put off lifestyle inflation for a least a few years after their salaries increase, which will give them more career and lifestyle choices in the future.

This is post contains affiliate links. Thank you for supporting PF for PhDs!

Links Mentioned in This Episode

keep up with the Joneses

Teaser

00:00 Joy: If you can understand that this idea of peer comparison, it is going to be ever-present, and it’s not so much that the environment or the people around you need to change. What needs to flip is the script in your mind, in terms of the mentality you have when looking to the people in your life.

Introduction

00:28 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode 12, and today my guest is Dr. Joy Lere, a licensed clinical psychologist and behavioral finance consultant. Our topic is the danger of keeping up with the Joneses. Joy explains how emotionally unsatisfying, and financially damaging, trying to keep up with the Joneses is, and that contentment can only come from within yourself. PhDs anticipating future income jumps would do well to put off lifestyle inflation for at least a few years after their salaries increase, which will give them more career and lifestyle choices in the future. This interview really hit home for me, as I reflected on my post-PhD life and finances and where my family is headed next. As you might have garnered from listening to previous episodes of this podcast, I had a pretty good handle on my finances by the end of grad school.

01:30 Emily: And I was truly satisfied with my lifestyle. I had defeated my Joneses. Or so I thought. Then, my husband and I moved to Seattle. We rented a relatively inexpensive apartment in a wealthy neighborhood. There’s a lot of tech money in Seattle, as I’m sure you know. Suddenly, I wasn’t comparing my lifestyle to that of other graduate students in a medium cost-of-living city, but to other full-fledged adults in a high cost-of-living city. I distinctly remember my first and hardest-hitting Jones moment in Seattle. Shortly after we had our first child, I joined a mother support group in my neighborhood. Our first meeting was in the home of our group leader, and each participant would rotate hosting subsequent meetings. I remember walking into our group leader’s house, which was gigantic, gorgeous, and immaculate. It was somewhat shocking to me. Plus, during the meeting, our group leader casually mentioned she was in the process of custom building another house in our neighborhood to move to the next year.

02:33 Emily: My heart sank, knowing that I would eventually host these mothers and babies in my small, dingy, undecorated apartment. That cheap apartment had been a strategic financial choice upon our move. We were following the advice to live like a grad student so that we could keep our retirement savings rate high while I got my business off the ground and we adjusted to parenthood. Even though we had good reasons for living in that apartment, those reasons paled for me, when I saw where and how my group leader lived. And I started questioning all our choices. That was my first big post-PhD Jones moment. I got past that feeling, kind of, eventually, for that situation, but now my husband and I are in the early stages of searching for our very first home to purchase. And I can sense myself starting to become aware again of the Joneses. Since buying a house in Southern California is such a big, expensive decision, I know I have to be really conscious about those feelings and influences. That’s why the subject of this interview was so timely for me. I hope it will be for you as well. Without further ado, here’s my interview with Dr. Joy Lere.

Will You Please Introduce Yourself Further?

03:50 Emily: I am just delighted to have joining me on the podcast today Dr. Joy Lere. She is a licensed clinical psychologist and behavioral finance consultant, such an interesting combination. So, I’m really happy to have her on the podcast today. We’re actually going to be talking about keeping up with the Joneses. Or rather, how not to keep up with the Joneses. So, Joy, will you please introduce yourself a little bit further?

04:11 Joy: Absolutely. It is a joy and a privilege to be here with you today. My name is Joy Lere. I am a licensed clinical psychologist and behavioral finance consultant. So, essentially I am someone who as a clinician works where Freud meets finance. So, I live and work outside of Napa, California, and I’ve a telemedicine practice where I see patients for psychotherapy. And I also work in specializing in consultation within the finance industry. So within that role, I’m providing support, training, education, coaching, and psychotherapy also to financial planners and financial advisors, because there are a lot of really exciting things happening within the industry where there’s more and more attention being given to the fact that people’s relationship with their money is not just a matter of math or economic theory. Money itself is emotional currency. So, having an understanding of human psychology and how that drives financial decisions is really starting to be integrated more and more into the world of finance.

05:33 Emily: Yes. Thank you so much for that description. Yes, of course, I have observed this trend as well. And I’m really excited to have you on. Actually, I did an interview some time ago with Dr. Daniel Crosby. So, we’ll link that from the show notes as well, since that was on a similar topic.

05:47 Joy: He is a good friend and just, he’s fabulous.

Tell Us a Little More About Your Education

05:52 Emily: Oh yeah, it was a wonderful conversation. Would you also tell us a little bit more about your education, because you’ve spent some time in academia as well?

05:58 Joy: Yes. So, I obtained my master’s degree while living abroad in the UK for a couple of years. And I decided after that experience and after starting my clinical work in England, that I wasn’t quite yet ready to be done with school. So, my husband is in the military. We made our way back across the pond. And then I went to graduate school at George Washington University and obtained my doctorate in clinical psychology while I was there.

Can You Define “Keeping Up with the Joneses”?

06:33 Emily: Yeah. Wonderful. Okay. So, our topic for today, keeping up with the Joneses. Probably a phrase that maybe everyone’s heard in the audience, but can you give a little bit more of a fine point on the definition?

06:45 Joy: Absolutely. So, this is a phrase that’s popularized in society, and it really speaks to the way that people look around their social spheres and circles, and look oftentimes at their peers and kind of benchmark their lives and their decisions to that. So, they are seeing something, often an outside image or kind of a curated facade. I think certainly social media makes this even more complicated for people today. And then they think to themselves, “Well, if they have that or they are making that lifestyle choice, that must mean I can, or I should.” So then, they make decisions based on what they are seeing around them.

Does “Keeping Up” Make Anyone Happier?

07:43 Emily: Does attempting to keep up with Joneses actually make anyone happier? You know, we’ll address the financial component of that in a moment, but does it do anything for us emotionally or socially to try to keep up with the Joneses?

07:58 Joy: I think really, being in the comparison trap just keep someone emotionally stuck. Because what is not happening when you’re telling yourself, “I need to be, I need to be doing that. I need to be getting farther ahead,” is you aren’t focusing and being centered from a place of being grateful for what you have and really having a sense of contentment. And when you think about someone’s financial life, when there’s this constant search and drive and need for more and more and more, that can lead to dangerous, destructive places. Being on a hedonic treadmill like that can be exhausting. And the truth is that when a lot of times people think, “Well, I will eventually catch up,” but oftentimes the goalpost just keeps on moving.

09:01 Emily: I was just going to say that the phrase is keeping up with the Joneses, right? It’s not hanging out with the Joneses and being at the same level as the Joneses. It’s just like it implied in the phrase itself is a continual striving, as you were just saying, which sounds totally exhausting. I really like that you make the point that we can also move these goalposts on ourselves. Like yeah. Maybe you caught up with, you know, Jones number one over here. Well, that just means you’re going to switch your attention to Jones number two and try keeping up in some other area.

09:32 Joy: I tell people, throughout your life, there will always be Joneses there. You went to graduate school with them. You looked around there and you were like, “Well, they’re doing this. That means, naturally, that’s what I should be doing.” They are always going to be in your workplace. They’re going to be on whatever street you live. So, you moved to the bigger house, the newer neighborhood. Well then there’s going to be someone else who ultimately has a little bit more. So, if you can understand that this idea of peer comparison, it is going to be ever-present, and it’s not so much that the environment or the people around you need to change. What needs to flip is the script in your mind, in terms of the mentality you have when looking to the people in your life.

The Hedonic Treadmill

10:29 Emily: Yes, such a wonderful point. You mentioned the term hedonic treadmill a couple of minutes ago, and I’m betting not everyone in my audience knows what that is. So, can you explain that a little bit further?

10:42 Joy: This idea that often times we’re running a race, we’re going after more, something better. There’s a desire for enough. And people think they are moving closer to the mark, but really you are just exhausting yourself on a treadmill, and there’s never a finish line. So, when you are caught in this cycle, you’re just going to keep running. And it ultimately is never enough. I think, I encourage people to reflect on this idea of what is enough. Who decides what it is, how much it is, how do you know you have it? You know, even how someone answers that question is, is enough a number? Is it a sense of security? Does the outside world get to decide what enough is? Or is that something that you determine for yourself? No, this is, this is good. I can stop. I can breathe. And I don’t have to continue to feel the need to be amassing more.

11:55 Emily: Mhm. I’m currently reading the book Your Money or Your Life for the very first time. This is inside the Personal Finance for PhD’s Community. We have a book club, so I’m reading it for the book club.

12:06 Joy: That’s fabulous.

12:06 Emily: Yeah, I’m surprised it took me so long to read actually, because of course it has been out for a couple of decades. But anyway, the concept of enough figures very prominently, the argument that the authors are making in that book about having, as you were just saying, determining for yourself, and it’s really about self-reflection and it’s not at all about looking around you at what anybody else is doing. You know, what it is to be content, be full in a sense, like in terms of thinking about your appetite. You’re full, but you don’t want to stuff yourself. You don’t want to go beyond this, you know, level of fullness or contentness or enoughness because it’s damaging not only to your finances, but also to you as a person to, you know, as you were just saying, continually strive to go and beyond, beyond, beyond. One aspect of the hedonic treadmill idea that I understand at any rate is that, maybe it’s a little bit similar to like addiction or like getting into that, but what you need to feel a pleasure hit from spending becomes higher and higher and higher because you become adapted every new spending level.

13:10 Emily: You know, you get to a new spending level, you’re like, “Well, this is fantastic. I have all these new experiences and stuff. It’s wonderful.” And then suddenly it’s just normal and it’s just you again. It’s just you, yourself. And then you have to go to a higher spending level to get that hit again. And that’s the sort of a mountain climbing, like that’s kind of the treadmill aspect of it, is that correct?

13:28 Joy: Yes. Yes.

Keeping Up with the Joneses Affects Your Finances

13:31 Emily: So, we were just talking about how this is not ever going to be emotionally satisfying. What happens to your finances if you are striving to keep up with the Joneses?

13:40 Joy: I think it, peer comparison when it comes to finances is so complex. And oftentimes it is very problematic because peers give you permission to sometimes spend in ways that you ultimately can’t afford. And sometimes there’s pressure or there’s fear of missing out. Now, when we look at this idea and this concept of keeping up with the Joneses, when we look at the financial state of affairs of the average American family, who is indebted, over-leveraged, all of these things, if you are then trying to keep up with someone who is overextending, you are then overextending yourself even more. So, it just perpetuates this problem indefinitely. My great-grandmother who lived through the depression, had this phrase that I love. And I never met her, but it was something that was instilled in my mom. And it was this: “Just because they have it, does not mean they can afford it.”

Just Because They Have It, Does Not Mean They Can Afford It

14:53 Joy: And that is something that so many people confuse. They look at, “Well, this is the house they’re living in. This is the car they are driving. These are the vacations they are taking. And so that must mean like that’s okay.” What they don’t see is what goes on behind closed doors. They don’t see the physical, the psychological cost of the stress that comes with carrying debt. They don’t see the impact of the work stress of the employment situation that person feels like they are trapped in because of the lifestyle that they are living. A lot of that stuff happens behind closed doors. But I tell people, so part of my job as a therapist is–I love my job–so often, I wake up and I’m like, “I truly believe I have the best job in the world because I get to sit behind closed doors with incredibly bright, driven people who are having conversations they aren’t having with anyone else in their lives.” So, I’ve sat behind closed doors with the Joneses. And let me tell you, their lives are not as rich or pretty or neat as most people think when you just see a public-facing persona.

16:28 Emily: Yes. That’s a wonderful phrase from your great-grandmother. And actually, it reminded me of something that my pastor from my church in North Carolina was preaching a sermon one time and was talking about this concept of keeping up with the Joneses. And I remember him saying, you know, if you’re going to follow sort of the the Christian way of handling money, you know, there’s certain things in the Bible, the layout of how you’re supposed to do this. He says, you’re going to be living multiple steps behind who you perceive to be as your peers. You’re going to be living a step behind because you’re not going to be leveraged with debt, at least outside of your mortgage or whatever. You are going to be living in step behind because you’re going to be giving. You’re going to be living a step behind because you’re going to be saving for your future as well.

You’re Going to Be Living Three Steps Behind

17:12 Emily: So, he was like, “You’re going to be living three steps behind, you know, who you perceive to be your peers in terms of like your career or whatever it is.” And that has really stuck with me too, that like, yes, it just, as you were saying, you don’t know how other people are handling, you know, as an outsider, you don’t know what’s going on inside their homes and how they’re really managing to live the lifestyle that you can perceive. And, you know, you brought up social media earlier. We have so many more, I think, potential Joneses in our life right now, because we have access, in a way limited access, to a lot more people from maybe a lot of our different stages of life and even people you don’t know. So, I’m sure that this just exacerbates this entire problem.

17:50 Joy: Yes. And I love what you brought up. You brought up something so important about lifestyle choices. If you do the things that most people do, you are going to get the things that most people get. You’re going to get average. And right now, financially average in our country is not a pretty picture. So, it really requires people to step back and ask, “Okay, what do I really want? And what do I want long-term?” In order to get ahead, you have, especially early on, our little choices compound over time. So, I will often explain to clients and people, if you can make, and this is especially applicable to, to students, to professionals. A lot of times, if you are entering a kind of employment, or you’re graduating, you’re like, “Okay, I’m going to start living the doctor life.” No, hold on.

18:56 Joy: If you can give it a couple of years of living like you are a broke grad student and what you can do with the savings during that time, when a lot of your peers are starting to make very different choices, what that can lead to for you in the long-term is huge. But that requires being able to say, “No.” It requires being able to tolerate, okay. Maybe you’re going to miss out on some things. But, if you can be willing to do things differently than other people, you give yourself a chance at having something bigger and better that most people will never achieve.

Commercial

19:44 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at pfforphds.community. The Community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the Community, you’ll have access to a library of financial education products which I add to every month. There is also a discussion forum, monthly live calls with me, a book club, and progress journaling for financial goals. Basically, the community exists to help you reach your financial goals, whatever they are. Go to pfforphds.community to find out more. I can’t wait to help propel you to financial success. Now, back to the interview.

Present Lifestyle Choices Impact Your Future Comfort

20:49 Emily: I’m really glad that you took the conversation in this direction, because it’s exactly where I wanted to go as well. Talking about, you know, when you have these large income jumps, you know, okay for PhDs, you finished graduate school, maybe you’re moving up to a post-doc. Hopefully, a decent jump in income there. Okay, you’re moving out of the postdoc or directly out of the PhD, you’re getting into a proper job. Hopefully, a big jump there. And maybe, you know, throughout your career, potentially there could be other big jumps as you switch, you know, employers or whatnot. So, a lot of my audience is still in graduate school or is still in training. And so, they’re still anticipating and looking forward to those large income jumps in the future. And of course, the advice you just brought up, you know, there’s versions of it. You know, live like a grad student, live like a college student, live like a resident. It’s basically just, keep that lifestyle, or as close to that lifestyle as you can, from your prior earning stage for at least a little while into that next one. And then as you said, you know, this can do fabulous things to your finances. So, can you elaborate on that a little bit more?

21:45 Joy: Absolutely. And I want to explain. I think something that people often don’t fully understand or account for is in school, or maybe early in your career, you have a picture of, “This is what I’m going to want. I’m on this linear trajectory, professionally.” But things change. Life circumstances change. Sometimes your dreams, your desires, opportunities can lead to different places. And, if you have made financial choices so that you have the freedom and flexibility to change your mind, if you want to at a later time, and not be locked in because of the debt you have and the lifestyle that you have settled into, that gives you a ton of freedom. So, I just really emphasize to students that the things you are doing with your money now in these first years of your career are huge. So, if you can just hold on and be a little bit more conservative in some areas, that can have huge implications for your financial life later on.

Saving During Graduate School

23:11 Emily: Yeah. I actually want to give an example from my own life here. It a little feels like I’m tooting my own horn, but I think it does illustrate what you were just talking about. So, when my husband and I were in graduate school, we did our PhDs at the same time. So, we were both on stipends, same time. We saved, you know, I’m into personal finance, right? So like I was figuring this stuff out early. I was figuring out saving, investing and paying off debt and doing all these things. And so I started that during graduate school. Whereas a lot of people, either one have no opportunity to start saving or investing during graduate school, just completely off the table based on either their going into debt for their degrees, or they’re just simply not paid even a living wage. That was not our case.

23:50 Emily: We were very fortunate. So, we were doing that saving. We, one, could, but two, we took the initiative to do it. We were figuring that out at that time. By the time we finished graduate school, we had amassed quite a decent nest egg. And, you know, one, one attitude could have been during that time, “Well, you know, I may as well just spend what I have have, I don’t really need to save right now because I’m going to have this big income jump in the future. And, you know, it’s going to take care of itself at that time. I won’t worry about investing until, you know, later on.” But because we took that other route of starting as early as we could with, you know, saving and investing and so forth, we had a decent nest egg built up by the time we finished graduate school. That enabled one, my husband to take a job at a startup, which he had never anticipated doing and was completely, you know, really nervous about that.

24:30 Emily: We’re sort of conservative with our careers. And so we were like, “Wow, you know, this good job could go at any point.” But it was just such a perfect fit for him. We were like, “How can he pass this up?” You know, we’ll take the risk. We have the nest egg, we can do that. We can take that risk of him taking that kind of job. Secondarily, I was able to start my business, which meant, you know, just completely going off a different track from, you know, the normal job thing, which is a fantastic opportunity and similarly, very good fit for me. So, I feel like our life, you know, career satisfaction levels were much higher than they would have been had we not been in a financial position at that time to be able to make that choice. And the reason we were in that position was because years earlier we had started this process not really knowing that was how it’s going to work out. You know, we didn’t realize, you know, these opportunities came our way and we could take advantage of them because of the preparation we’d done before that point.

25:19 Joy: Absolutely.

How to Cultivate Contentment in the Now

25:21 Emily: So, I’m thinking about a graduate student, probably. Maybe a post-doc, who is currently maybe even practicing not keeping up with the Joneses. Because they probably have a lot of Joneses in their lives that they couldn’t possibly keep up with. Right? Like it’s just not even a feasible thing for them to do right now. So, what would you say to that person about how to still cultivate contentment in their life when they know they can’t even possibly play the game with the Joneses right now, and also how to maintain that once maybe they are able to get in the game once their income is higher?

25:57 Joy: I think, you know, this idea of game and even if we bring it back to the race. if you can understand everyone is playing a different game, and if you can focus on running your own race and just stay in your lane, that is going to set you up for success. Now, I don’t think that if you are not trying to keep up and you’re making a concerted effort around that, that doesn’t mean your life needs to be devoid of fun and human connection. I think, I encourage people to be creative. You can be the one driving the conversation, making suggestions. And the truth is, sometimes if you are maybe doing things or suggesting things to your social circle that are not going to be exorbitantly costly, there are probably going to be some people who are really relieved. Because here’s the thing. Everyone’s running this race.

27:04 Joy: And some people are more aware of it than others. Some people, based on their upbringing and what they bring to the table in terms of their own money scripts, and what gets activated for them around money, they may have different thoughts and feelings about it. But that’s one way to think about it. And you know, this transition when you do have more income, I think it’s important that it doesn’t become, you know, if you think about someone who’s been on a diet and then it’s like, everything is suddenly available, I’m just going to binge. If you can keep a mentality of moderation, that is going to serve you going forward.

Take Ownership of Social Spending

27:50 Emily: I love those two suggestions. And especially the first one around like, it’s sort of like, money decisions, let’s say about social spending with your peer group. They don’t have to happen to you, right? Like you can actually sort of take the wheel and say, at least some of the time, I’m going to be suggesting things to do that are within my budget. Like you said, probably some other people will be relieved. And so, you know, you can do a combination of planning things and maybe saying yes or no here or there to things that other people suggest. So that you’re not, you know, always, always saying no to everything, but yeah, you can keep it more within your range and steer things. I know, certainly for me in graduate school I found a group of friends that I was comfortable socializing with and we all sort of had the same manner of socializing that we enjoyed, and it was very inexpensive. And it was really good for all of us in that sense.

28:40 Emily: And so, you sort of find your people, is maybe one way. So like, there aren’t so many Joneses, so close to you in your life. I had a couple other ideas about how to like combat this, you know, impulse to keep up with the Joneses. One was to redefine what you’re jonesing for. So like instead of jonesing for the consumption aspects of using your money, Jones for like, “I’m going to max out that 401k,” like “I’m going to, you know, be striving”–if you want to strive for something–be striving for something that’s ultimately going to benefit your finances instead of, you know, working in the opposite direction for you.

29:17 Joy: Change your status symbols.

Happiness is Not Contingent on What You Are Chasing

29:20 Emily: Yes. Oh, that’s a great way of putting it. I love that. It’s very, you know, it’s millionaire next door. Right. So, try to be like that person. Are there any other like sort of behavioral finance tips that you would suggest for, you know, helping people achieve their financial goals without letting these Jones impulses kind of get in their way?

29:40 Joy: Well, I think just really paying attention to what you are benchmarking to, this idea of this is the baseline. I think that’s really important. As you think about and reflect on, I think developing financial self-awareness and doing some reflection and understanding about what gets activated for you with your money, and really starting to dig into some of the more core beliefs you carry about money and how that drives what you do with it. I think those are really important foundational places for people to start.

30:26 Emily: Yeah, I think going along with those exercises as well, and you just mentioned this, is sort of remembering where you’ve come from. Like remembering the influences, of course, that your parents have, and then maybe your peers, you know, through different stages of your life. And remembering like, especially once you’ve passed, like the graduate school stage, like, “Okay, back then I did live on this amount of money. I did have this size of home. I did do these things. Was I happy then? Was I content then? Why are things different now? Could they be more similar to how things were in the past?” I’m asking myself some of these questions now that I’m, you know, a few years out of graduate school.

31:02 Joy: If you are telling yourself, “I will be happy when,” and you are then looking to something in the future, I would really encourage you to go back into your history and think about this idea of happy. What is some other evidence you have that there have been other times when you’ve had that feeling that experience that you haven’t had that thing? So, happiness is not contingent on that which you are chasing.

The Power of “No”

31:34 Emily: Yeah. That’s such a, I think foundational point about happiness, that I’m only just sort of starting to learn myself now in my thirties. And I wish I had known it because I am the type of person who kind of always has goals and is always striving for something. And my husband definitely kind of complains and kind of ribs me for like always wanting the next thing. And why can’t you be satisfied now? And, I am starting to realize like that. Whoo. That’s just how I am. I need to really like, look at that because I’m never going to get there. Right? If that’s what I’m basing that on. Is there anything else you wanted to add, Joy, before we wrap up the interview here?

32:09 Joy: I think this idea of there’s a lot of power in saying no and having financial boundaries, that’s something I do a lot of talking with people about. I think a lot of things get in the way of people saying, “No.” There’s a fear of missing out. There’s a discomfort with what you are anticipating someone else’s reaction is going to be. And the truth is, I believe people would be healthier, wealthier, and less exhausted overall if they built that muscle of saying “No” more often. And again, that’s not saying no to everything. But if you are finding yourself in a situation in your gut where you’re like, “I’m going to say yes, but I really don’t want to do this.” Ask yourself why. And then what is getting in the way of your taking care of yourself? If it’s your energy, if it’s your finances, and what would need to happen in order for you to have the courage to say, “No?” And what is the cost to your yes? Be that financial, physical, psychological.

How To Connect with Joy Lere

33:27 Emily: Yeah. Thank you so much. How can people find out more about the work that you do? Or I don’t know, if they want to be a client of yours. Like how do people connect with you?

33:37 Joy: My website is my name. J O Y L E R E. Joylere.com. I am active on LinkedIn, Joy Lere Psyd, and also spin my creative wheels on Instagram a little bit, @ joylerepsyd, and also love to hang out on Twitter and connect with people there. Also, my handle is joylerepsyd.

Best Advice for an Early-Career PhD

34:02 Emily: Yeah. Thank you so much. That’s where we connected as well. So, final question here, Joy. What is your best financial advice for an early-career PhD? It could be something we’ve touched on in this interview, or it could be something else entirely.

34:14 Joy: My best advice is to do things different than most people around you. If you do that now, you will have things that no one else later on in their career will likely be able to accomplish and achieve.

34:36 Emily: Yeah. Thank you so much for that. Thank you so much for this interview and for joining me today.

34:39 Joy: Absolutely. It was a pleasure. Thanks for sharing your platform with me.

Outtro

34:44 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.