Stretch that Stipend

Financial Habits Every PhD Student Should Live by

July 26, 2017 by Emily

Nick Giangreco is a second year PhD candidate in Systems Biology at Columbia University in New York City.

Graduate school is an enriching and rewarding time in one’s career, especially in the biomedical sciences. As I’m pursuing my PhD in Systems Biology at Columbia University, I get the chance to hone my skills and, using more glamorous terms, reach for becoming a biological data scientist. But as every graduate student knows, though we get paid during this stage in our careers, it pales in comparison to the paychecks of those working as employees in companies.

In this reality, it helps to be mindful of our financial situations and practice good habits. I’d like to share some tips that I follow as a research trainee. These tips have helped me over the past couple of years, so hopefully they will be helpful for you to extend your income while living on a meager stipend.

Watch your income and spending

I’ve made excel spreadsheets and google sheets that detail my monthly income and expenses, as well as trends in spending and savings over time. This has made me more aware of where my money is coming from, where is it going, and managing for expenses in the future. For example, to pay off a large sum of student loans, I budgeted an amount every month and saw a trend of paying “x” amount of money every month to pay it off by a certain date. I became debt free recently because of this consistent payment over a couple years.

Eat in rather than eat out

I tend to spend more buying food at restaurants or fast food chains than if I were to buy food to make meals for the week. An alternative to eating out and spending a lot having a night out with friends is having a dinner party or game night in your home or apartment. I hosted multiple of these with my group of friends-they are a lot of fun-and they typically cost a lot less than buying drinks at bars or having late night snacks at restaurants. Also, a big money saver is taking advantage of the (ubiquitous) free food offered at school events. **Tip: Always have Tupperware on you!

Join groups on social media or email

Schools often have listservs that allow you to sell items or to buy items for cheap. This may save you a lot compared to buying new at a brand-name store! Also, metropolitan cities or areas often have social media groups such as Facebook groups that post on free events in your area or offer a marketplace for selling and buying items for cheap. Instead of buying a new Ikea set at the store, someone might be selling a gently used set for 2 or 3 times less!

Set your priorities

Is it important to you to live in a studio apartment? A nice neighborhood? Close to work? Do you want to travel on the weekends or vacation often? Do you have to see a healthcare specialist? Need a medical or dental procedure? Want to try cross-fit? Foresee other large bills coming up in the future? All these things should factor into your budget. You may be able to live somewhere that’s cheaper and allows you to do more costly events or activities. Or you may value a nicer living situation, but this may mean substituting weekly for monthly or bimonthly trips to see friends and family. Some people can’t stand eating the same thing for lunch everyday and need to buy more variety at the store or eat at restaurants, while others may be fine with eating low cost meals with low variety and can save for larger purchases in the future. Know where you fall on the spending and saving spectrum and see where you can save and need to spend according to your preferred lifestyle and budget.

Save for a rainy day

Setbacks happen unexpectedly all the time. You may need to see a specialist for a health issue, maybe family requires you to do frequent travel, your phone or laptop may break, the car may need repairs, and much more. For the time when you’ll need to make that purchase or pay that bill, have enough cash reserves for that situation and allow yourself to grow it again for the next setback.

Keeping these tips in mind has helped me to realize what are my lifestyle priorities, luxuries, and disposables. Saving during the week on meals allows me to have upwards of 50 to 100 dollars cash for brunch and events on the weekends. Living in a metropolitan city, when I opt for public transportation over a taxi, I can save considerably when practiced over many weeks. If putting in another amazon order is within my planned budget, I don’t feel bad about spending the money. If I need to make large purchases for pilates sessions, travel or lodging for an out-of-town wedding, or just travel to see family, I may dip into my rainy day funds and then set a course to replenish how much I took out. Practicing these and other conscientious financial habits have helped me over the years; hopefully now they will offer you perspective for adjusting and living your preferred lifestyle based on earning a graduate student stipend.

Why and How I Eliminated Eating Out for Convenience in Grad School (and You Can, Too)

July 19, 2017 by Emily

Shortly after my husband and I got married and combined our finances, we faced a reckoning in our budget. As we created our first combined spending plans and started our system of targeted savings accounts, we realized that our month-to-month spending was out of sync with our values and short-term goals. Chiefly, we wanted to put aside more money for travel spending, which meant that we had to find other areas in our budget to cut back. On the chopping block: eating out for convenience.

While our restaurant spending was never astronomical, we had each fallen into a pattern of buying convenience food on a regular basis. Among other reasons, I tended to buy a quick dinner on campus when my lab experiments ran into the early evening, my husband bought a fast food dinner every week on his way from campus to an evening activity, and we also occasionally went out to dinner just because we didn’t feel like cooking.

We determined that these convenience meals were not a great use of our money, especially in light of our travel goals. So we made a spending rule: We only ate out with other people on social occasions; we eliminated eating out alone or with each other. We held to that rule almost perfectly for our last few years of grad school, though I admit we started deviating a bit while dissertating!

In this post, I’ll share our strategies for sticking with our no-convenience-eating-out rule. I know this topic is of high interest to grad students (with busy schedules!) who are looking to reduce their spending. Most recently, we discussed it at length in Grad Student Finances’s monthly live money chat. (If you want to join our next money chat, sign up for the mailing list here to receive more information.) Even if you don’t want to eliminate eating out for convenience entirely, implementing these strategies will help you to enjoy eating out more when you choose to because it’s not done out of desperation.

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

Identify Your Patterns

The very first step to eliminate eating out for convenience is to take note of when and why it happens. In all three scenarios I listed for my own life, dinner was the issue. My husband and I never ate out for breakfast and rarely did for lunch, as we were consistent brown-baggers. Since dinner was the problem time for us, that was where we focused our energy for creating solutions.

I realized that I tended to get hangry and need to eat right away; if there’s not ready food available, I would buy something because I couldn’t wait an hour or two to get home/shop/cook. So part of my solution was to keep homemade food available (more on that next).

The pattern you identify in your convenience eating could relate to any meal or snack of the day or more than one of them. Maybe you’re not a morning person so you habitually stop for a coffee and bagel on your way to work. Maybe you like to take a nice break for lunch, and part of that is leaving your office to go to an eatery on campus. Maybe you need a pick-me-up snack in the mid-afternoon to keep from nodding off while reading. Maybe you tell yourself you deserve a night off from cooking after a long day in the lab. Work first to identify the situations in which you habitually buy convenience food or are tempted to, whether those are based around a meal, a time of day, a feeling, a stressor, a regularly scheduled meeting, etc.

Keep Food on Campus

If you are buying convenience food on campus or on your way to on from campus, like my husband and I were, the easiest solution is to keep food on campus in your office, department lounge, or whatever personal space is available to you.

Further reading: Make Your Stipend Go Further: Bring Your Lunch to School

We were consistently bringing our lunches with us every day and keeping them in our shared refrigerators. After identifying dinners as our weak point, we started bringing in dinners as well. On the days of the week that we knew in advance that we would need to eat on campus (like before a regular evening activity), we just brought in our lunch and dinner together. But I also started bringing an extra dinner in with me on Monday to stay in the fridge for the week to be eaten on whatever night I happened to stay late (and if that was early in the week, I’d bring in another the next day). In this way, I planned for the eventuality of needing to eat on campus, even though I didn’t know exactly when it would happen.

You don’t necessarily need to bring in a full extra meal to make this work. If you just need to tide yourself over for an hour or two, a snack will do just fine. If you choose shelf-stable foods or long-lasting refrigerator foods, you don’t even need to change them out every week.

Batch Cook

No kidding, batch cooking changed my life. When I first started eating out of my own kitchen and learning to cook, I prepared one-serving meals, which was very time-consuming and didn’t allow me to use frugal strategies like buying in bulk. I also ate a lot of pre-prepared foods and meals out because that kind of cooking was so exhausting. Our slow cooker changed all that for me.

While batch cooking is not limited to slow cookers, it is a good entry point. I started making 8+ servings at once of hearty chilis and soups in our slow cooker, which were easy to toss into a Tupperware and bring to campus for lunch or dinner. From there I moved on to other styles of cooking, but always making at least 4 servings at once. Batch cooking is perfect for a busy grad student as it is so time-efficient.

Batch cooking was key to eliminating our convenience eating out because 1) it created those meals that we wanted to keep on campus and 2) we always had food ready for reheating at home. Gone were the days of convincing ourselves to eat out because we had no groceries at home or cooking would take too much effort.

Further reading: Eliminate Eating Out for Convenience with Batch Cooking

Eat Before You Cook

Batch cooking also leads easily into this tip: eat, then cook. When I arrive home from work hungry, the last thing I want to do is spend a bunch of time cooking! People are always saying “don’t grocery shop while hungry” because it leads to poor decisions, and I apply the same logic to trying to cook while hungry. I get impatient and am liable to go off-plan.

So my (largely unconscious) strategy became to eat a pre-prepared meal upon arriving home, then do any necessary cooking for the following day(s). I did try to batch cook on the weekends, but usually I also needed to do it once or twice during the week, so I made sure that I had a dinner already available on those nights so that cooking could be put off until the later evening.

Use Your Freezer

Tying in closely with batch cooking and always having a meal available to you is freezer cooking. This is not a strategy I personally employed, but it works amazingly well for many people. Basically, you prep/cook one or more meals that are to be immediately frozen and then reheated/cooked at a later time. If you have a meal available in your freezer, you will never have an excuse to stop for convenience food on your way home.

This strategy also works very well for people who want to batch cook but don’t want to eat the same thing every single day. You can cook a four-serving meal, for example, eating one and freezing three. Rotating through that a few times will give you a selection of different freezer meals so you can spontaneously choose which to eat for any given meal.

Meal Planning

I’m a big believer in creating habits to avoid decision fatigue. I do not want to have to think about what I’m going to eat 3-4 times per day, 7 days per week. Eating the same meals over and over again makes my life so much easier. Grocery shopping, cooking, and eating all become consistent and decisions are minimized. If I have my meals planned out and food available to me, such as through batch cooking, I don’t have the opportunity to decide to eat out for convenience.

Luckily, my personality allows for eating the same dinner multiple nights in a row without becoming dissatisfied. If you crave more variety, meal planning can help you preserve that while still eliminating on-the-spot decisions. When you meal plan, you decide in advance what you’ll eat throughout the week. Often, weekends are used for shopping and prepping/cooking all of the meals, so all you have to do during the work week is carry out the plan with minimal effort.

To combine decision elimination with batch and freezer cooking, you can create a pattern of eating one type of meal every Monday, a different one on Tuesday, another on Wednesday, etc. An even more advanced level of meal planning coordinates the ingredients in the meals you eat throughout the week. The different meals will all draw from a common set of ingredients, which allows you to buy in bulk. (Combine that coordination with the sales cycle at your local grocery store and you are a super-frugal meal planning genius!)

It’s a tough adjustment going from eating family meals growing up or dining hall meals in college to cooking for one or two as a young adult. There is absolutely a learning curve, and sometimes convenience eating is part of that. But as you gain skills in the kitchen and clarity on how you want to use your money, you can make the decision to eliminate eating out for convenience. Start with identifying when convenience eating crops up in your life, then apply these strategies to combat it.

What strategies do you use to avoid eating out for convenience?

How to Manage Irregular Expenses with Limited Cash Flow

July 12, 2017 by Emily

A version of this article was originally published on GradHacker.

Irregular or non-monthly expenses can be difficult to weather for anyone, but even more so when you have a low income or little to no discretionary income. Irregular expenses are a nearly universal pain point among graduate students. Any (relatively) large expenses that crop up once or a few times per year can pose a problem, and common examples include school fees, taxes, car registration, car repairs, travel, conference expenses, entertainment, electronics, clothes, home furnishings, insurance, gifts, and medical expenses.

For grad students without much available non-emergency cash, there are limited options for paying for these types of expenses that don’t involve debt: increasing ‘income’ or decreasing spending. A grad student with a side income may be able to ramp up work when an irregular expense crops up. Another grad student may be able to clean out a closet and generate some quick cash on Craigslist or eBay. Frugality in variable spending areas, such as shopping, groceries (eat down your pantry!) and restaurants/bars, entertainment, gas/parking, and personal care, may be sufficient to pay for the expense. An undesirable idea that grad students may consider is to rely on credit cards to float or spread out the expense. This is a dangerous strategy because it is easy to let a balance accumulate, credit card debt is very expensive, and the cycle is hard to break for people with low incomes.

Instead of being forced to make difficult last-minute decisions or put themselves in financial jeopardy, grad students can get ahead of irregular expenses by generating short-term savings that are earmarked for the specific expenses.

Building up cash to have available for these types of expenses certainly takes planning, self-control, and sacrifice in the short term, but it is well worth the long-term benefits of reduced stress, increased confidence in spending decisions, and the ability to say yes to unexpected opportunities.

My husband and I reached a point of frustration with the irregular expenses in our lives about halfway through our PhDs. We had to decline some wedding invitations that we really wanted to accept due to the cost of traveling. This distress spurred us to try to save ahead for the travel we anticipated in the upcoming year. We soon applied this strategy to other areas of our budget.

If it were easy to build up significant savings with a low amount of available cash flow, everyone would have it in place already. For those people, like my husband and I, who don’t naturally live well below their means and watch their checking account balance grow, certain strategies and psychological tricks may make this process more palatable.

The key strategy we used was to set up a system of targeted saving accounts or sinking funds. With this strategy, you essentially convert irregular expenses to regular expenses by spreading out their impact on your cash flow over several months or a year. Targeted savings accounts are either literally distinct savings accounts or simply notations within a single savings or checking account. (If your bank doesn’t allow you to open multiple savings accounts for free, look into an internet-only bank like Ally or Capital One 360. Nickname each account with the category of spending it represents.) The money in each account is designated only for its individual purpose. To fund the account, you anticipate the expenses in each category over a period of time (e.g., a year) and set up a monthly savings rate to pay for the expenses. When an expense occurs in the category, you draw money from the account to pay for they expense.

Returning to the travel example that inspired my own finances, to implement this strategy my husband and I projected all the traveling we expected to do over the course of the upcoming year. Generally, that included a few trips to see one set of parents or the other, travel to a few weddings, and sometimes travel for a special event like a reunion. We assigned an amount of money that we would need to each event and used the total amount of money we expected to spend to calculate a monthly savings rate. The exact number of out-of-town weddings we attended were difficult to pin down a year in advance, but we took a guess based on the previous year’s spending. As the year progressed and the events came into focus, we adjusted our cost estimates to be more accurate and changed our savings rate.

You could project an entire year’s irregular expenses all at once and start saving immediately for everything, but there is an easier and more gradual way to get started with targeted savings accounts. Each time you encounter a difficult irregular expense, figure out the next time it will occur and in what amount. Calculate your required savings rate by dividing the amount of money needed by the number of pay periods you have to prepare for it. Then, set up a recurring automatic transfer from your checking account to the appropriate targeted savings account (create a new one if needed). You will be prepared for that expense the next time it arises.

You can create as few or as many of these accounts/designations as your lifestyle suggests. By the time my husband and I finished grad school, we had proliferated our targeted savings accounts to cover travel, car, medical, community supported agriculture, electronics, entertainment, appearance, and tax expenses.

Converting irregular expenses to regular doesn’t make money magically appear out of thin air, but we did find its structure helpful for motivating us to find ways to cut our spending in certain areas or earn extra money. The main benefit we experienced was reduced stress and a feeling of more control over our money as we moved from being reactive toward our irregular expenses to proactive.

Would you like a one-page worksheet that helps you brainstorm your irregular expenses? It includes the three questions to ask yourself to map out your upcoming year and a list of the most common irregular expense categories. Sign up below to receive your worksheet!

Further Reading: Weather Irregular Expenses on Your Grad Student Stipend with Targeted Savings Accounts (a Personal Finance for PhDs Guide)

How Much of Your Stipend Should You Spend on Rent?

May 9, 2017 by Emily

A version of this article first appeared on GradHacker.

There are a few different versions of the “rule of thumb” regarding how much of your income to spend on housing. No more than 25-30% of your take-home pay seems to be the consensus, with a few outliers. But as a graduate student receiving a stipend, does this guideline apply to you? How should you figure out how much to spend on housing? Clearly, whether your university is in a high cost-of-living or a low cost-of-living area will have an enormous impact on how much you need to spend.

For some graduate students, this rule of thumb is unfortunately useless and discouraging. In certain high cost-of-living areas, rent can be 50% or more of a stipend. But even in pricey markets, it’s worthwhile to take a hard look at yourself and your surroundings to make the best choice you can among your limited options.

But, other graduate students are in an area that offers them a degree of choice in how much of their stipend to spend on rent. They have the opportunity to evaluate the range of reasonable choices and decide what is best for them, given their values and other financial goals.
Whether you are moving to a new city to start grad school or are several years into your program already, you should evaluate your housing costs to make sure you are spending the right amount of money and getting the right amount of value for you. To do so, you have to evaluate both yourself and your environment and, ultimately, balance your budget.

Evaluate Yourself

Since housing is the biggest component of most Americans’ budgets, you should use a mini-financial planning process to help you determine where housing falls on your priorities list. Start by determining your top life values (family, freedom, creativity, health, achievement, etc.). Then, set goals for your finances that help you fulfill those values. Once that high-level picture starts to come into focus, you can figure out where housing falls on your priorities list. What aspects of housing—space, location, safety, privacy, amenities—help you fulfill your values or are otherwise very important to you? What attributes are non-negotiable and what are you willing to let go of in favor of a lower price? This process can bring a lot of clarity because it helps you directly compare differences in the price of housing with your other financial goals.

One of the first and biggest decisions you will make is whether or not to have a roommate/housemate. Some graduate students are so tired of living with other people that they won’t consider it no matter how much cheaper it would be, while others may be excited about how a roommate would benefit their lives as well as bottom lines. If you’re on the fence, price out both options and ask yourself if having $X more per month to put toward other areas of your finances is worth the (reasonable) potential downsides such as noise/distractions, differing standards for common areas, reduced privacy, or personality clash. Living with another grad student in your same year or area of study who understands the demands of your program could be a great option.

Evaluate Your Environment

Your best resource for finding appropriate housing options is other graduate students. I have found that grad students are quite willing to divulge what they pay in rent, and widely polling can give you a great idea of the market. If you haven’t yet moved to your city, start by emailing students you met during your visit weekend, students in your (prospective) lab/group, or students in departmental leadership positions. But you don’t have to keep thinking “inside the box,” either, if it seems that grad students flock to the few most popular options. Where in your city do other young professionals or people with an income similar to yours live?

In addition to asking around, check your university’s website to see 1) if housing is offered to graduate students (and at what price and priority) and 2) if your university makes off-campus housing recommendations or maintains a housing database of its own. Searching on Craigslist is usually a good way to find housing and/or roommates, and you can also check listings on Trulia, PadMapper, apartments.com, etc. Which database is best to use to search for housing will vary somewhat by city.

Be sure to consider various types of housing. In Durham’s housing market, my observation is that the least expensive option is renting (or buying) a single-family home with several other people and the most expensive option is renting a luxury apartment near campus. In some cities, on-campus housing may be the least expensive option, and by talking with your peers you may discover the best practices for getting your foot in the door.

Balance Your Budget

Ultimately, when reconciling your own priorities with the realities of the housing market, your expenses need to be less than your income. If you are simply locked into high housing costs no matter how low a priority it is for you, the rest of your budget is going to be affected. But one additional factor to consider is how housing cost might play against other needs like transportation and utilities costs. Perhaps a higher base housing cost can become more palatable if it means you can live car-free or have low utility bills. For example, are you able to keep your total needs spending to 50% of your net income (recommended in All Your Worth: The Ultimate Lifetime Money Plan*), or at least minimize the whole category?

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

If you live in a city where you have good housing options across a reasonable range of prices, this is the situation where the rule of thumb might come in handy. Calculate what 25-30% of your household take-home pay is and look at what that will get you. If you are tempted to spend more than 30% of your income on housing and don’t have to, ask yourself if it’s really that important and if you are going to be able to meet your other financial goals. Certainly, you can spend less than 25% if you are so inclined!

Revisit the Question

If you are renting, you aren’t locked into the housing decision you made at the start of grad school. In fact, you’re likely to make a better decision about housing after you have gotten to know your city and have seen where other grad students live. Your priorities and income may also change with time. It is valuable to periodically re-run this analysis on yourself and your environment to determine if moving is warranted.

I have personally benefitted from re-evaluating the cost of my housing during graduate school. My husband lived in the same apartment for his first five years of grad school and really loved it. But the city changed during those five years, and the area he was renting in no longer seemed like the only option. When the apartment complex tried to raise our rent 6% year-over-year (the rent increases in the previous 5 years had summed to about 10%), we took it as an opportunity to shop around. We ended up moving to a townhouse with the same square footage closer to our university (reducing our commuting costs) for an 11% decrease in rent. The only downgrade was that our new community didn’t have a clubhouse gym, but that wasn’t much of a sacrifice, as we had access to our university’s gym. I count that move as one of the best financial decisions we made to reduce our spending during grad school.

For your stipend, is housing in your city expensive, reasonable, or inexpensive? Where does housing fall on your priorities list? Have you been able to find a good deal in your city?

Basic and Stretch Financial Goals for Graduate School

May 1, 2017 by Emily

A version of this article originally appeared on GradHacker.

It may seem counter-intuitive, but graduate school affords you an excellent opportunity to grow financially, whether that means growing in your money management skills or growing your net worth. There is no need to wait until after you land a “real job” to put in the effort to improve your financial picture.

Basic Financial Goals

All graduate students, whether they are being supported by stipends, loans, family, savings, or some combination, have the ability to set and reach basic financial goals during graduate school. In fact, graduate students have already overcome one of the biggest hurdles that prevents people from succeeding with personal finance: they are future-focused. Graduate students are making an incredible sacrifice in the short term to invest in their future careers. Often, success in personal finances comes down to the same type of decision-making and commitment: to put the good of ‘future you’ at least on par with what is good for ‘present you.’

Here are a few examples of basic financial goals and why you should work on them during graduate school:

Track 100% of your spending: If you have never paid attention to how you use your money, you will be surprised by what tracking reveals. Tracking alone can actually change how you spend because of your higher level of awareness. You can track your spending manually (pen and paper, Excel, Pocket Expense, Every Dollar) or automatically (Mvelopes, You Need a Budget, Mint, GoodBudget).
Budget: Be the boss of your money. Tell it where it’s going to go and what it’s going to do. Exercising this kind of control over the small amount of money under your purview now will help you control larger amounts later. Furthermore, you can use your budget to help you meet other financial goals.
Discern the difference between needs and wants: No one is living high on the hog while in graduate school, and many students flirt with the poverty line. When your income is low, you are forced to figure out your priorities quickly. The upside to this process is that you can carry that knowledge forward into your post-grad school life and use it to avoid wasteful spending and lifestyle inflation.
Monitor your credit: Everyone should practice the basic financial hygiene of monitoring her credit reports at least once per year. The purpose is to ensure that all your accounts are being properly reported to the credit bureaus and to catch identity theft early on. You might also take an occasional peek at your credit score (for free), but that’s not as vital.
Build an emergency fund: Emergency funds are important even for people who are in debt. An emergency fund stands between something bad happening in your life and something bad happening in your life plus serious financial consequences (e.g., credit card debt). A starter emergency fund size might be just $1,000, and you can build up the size of the fund to meet your unique needs.
Learn about personal finance: We all should take the time to learn a bit more about such an important topic, and there are plenty of easy-to-digest resources in the form of books (e.g., Get a Financial Life: Personal Finance in Your Twenties and Thirties*), websites (e.g., Get Rich Slowly), podcasts (e.g., Stacking Benjamins), etc. Learning more can both motivate you to set other goals and show you how to reach them.

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

Two of the basic financial goals I set during graduate school were tracking and budgeting. When I was single, I budgeted and manually tracked my spending using Excel. After I got married, I switched to using my husband’s preferred automatic tracking and budgeting platform, Mint, which really aided our communication and coordination around our finances. These practices helped us to align our spending with our values and gain peace of mind, which maximized the satisfaction we gained from the use of our money during grad school.

Stretch Financial Goals

Some graduate students may desire to go beyond these basic financial goals to set ‘stretch’ goals for themselves during graduate school. If achieved, stretch goals positively impact your net worth. (It is also likely that some of the basic goals will improve your net worth, but that is not their primary intent.) Whether one will set stretch financial goals during graduate school is a personal decision, but a student who understands the power of compound interest is likely to strive to preserve or increase her net worth as much as is reasonable during graduate school (i.e., don’t sacrifice your degree progress!).

A stretch financial goal for a graduate student taking out loans for his education may simply be to minimize the amount of debt he is taking out. This could be achieved by reducing his living expenses, finding an on-campus job that provides tuition benefits, or working part-time.
A stretch financial goal for a student living on a stipend plus loans or familial support may be to forgo taking out debt by living within what her stipend provides or making up the difference between her stipend and living expenses with additional paid work.
A stretch goal for a grad student receiving a livable stipend may be to more aggressively save/invest or pay down debt.

This type of goal lends itself very well to the SMART description of goal setting: Specific, Measurable, Attainable, Relevant, and Time-bound. Money itself is easily measured, and it is straightforward to set specific and time-bound goals, e.g., save $3,000 into an emergency fund by August 2016. The aspects of SMART goal setting that will take more consideration are making the goals relevant and attainable.

The goals you set must be relevant to what you really want out of life. It will bring you no satisfaction to set and achieve a financial goal that you don’t care about and that doesn’t impact your well being in the short- or long-term. Give yourself some time to consider what you want money to do for you during and after graduate school, and then translate those ideals into SMART financial goals.

To avoid burnout, the financial goals you set must also be attainable. You will just become frustrated if you set a goal that requires you to have an amount of cash flow available that is impossible or unlikely in your current situation, so you should select challenging but achievable goal numbers for your life.

Stretch financial goals boil down to ones that improve your balance sheet (assets minus liabilities). On the ‘increasing assets’ side, you can set a short-, mid-, or long-term savings goal and choose appropriate investment options for your time horizon and risk tolerance. On the ‘decreasing liabilities’ side, you can set a goal to pay off your debt ahead of schedule, perhaps using the debt snowball or avalanche method. To achieve these goals or to reduce your living expenses overall, you may set a variety of other SMART goals, like reducing your spending within a given category through budgeting, tracking, and frugality.

One of the ‘stretch’ financial goals I set during graduate school was to save for retirement consistently. I started out saving 10% of my gross income into my Roth IRA, but over time wanted to do even more. Eventually, my stretch goal became to max out my Roth IRA every 12 months. I did not achieve this goal during graduate school, but I did end with a 17.5% savings rate, which definitely aligned better with my values than not saving at all or sticking with 10%.

Grad students shouldn’t treat this period as an exception from their overall financial lives. Even if you are taking on debt or have a lower income than you had before or expect to have after grad school, you have the ability to set and achieve basic financial goals that will help you develop positive financial habits and even stretch financial goals that will help you grow your wealth.

What is a basic or stretch financial goal you are currently working on or would like to set for yourself during grad school?

Break the Taboo: Talk with Your Peers about Money

April 3, 2017 by Emily

A version of this post originally appeared on GradHacker.

Traditionally, there have been certain topics that were off-limits for dinner table conversation. The prohibitions against discussing sex, politics, and religion have largely fallen away, but in many pockets of our society the money taboo persists. Over the past several years, I have fought against the money taboo among my grad school peers, and in return have experienced financial and relational benefits.

I encourage you to begin or continue discussing money with your peers for the following reasons:

1) Take advantage of your own malleability.

One major upside to discussing finances as a young person is that you don’t yet have deeply ingrained habits around money—or at least not as deep as they will be in a few decades! As you are trying to figure out your own relationship with money, you can learn from the best practices of those willing to share theirs with you. Grad students are by and large not locked in to large financial commitments (such as expensive cars and homes) and have the flexibility to change as they gain new information.

2) The information you get from your peers is the most relevant.

The internet has bountiful resources on how to manage your money well—so bountiful as to be overwhelming at times (Google “frugal tips” and find hundreds on just the first results page). When you talk with people who live in the same city, have the same employer, and have a similar lifestyle as you do, the information they impart is as relevant for your situation as it can get. This could be anything from a benefit you didn’t know you had to a tip on a discount retailer to a new-to-you money management strategy. When you discuss money with your peers, you can find mentors all around you and be a mentor yourself.

3) Expose “the Joneses.”

I hope that none of us are comparing our lifestyles to those of our college classmates who got jobs instead of going to grad school—that’s a game you just can’t win. But it may be the case that your jealousy has been kindled by some of your own peers’ apparent spending habits. When you are open to talking about money with your peers, you can find out the real story behind those shared photos, which is likely to dampen your envy.

4) Grow closer by discussing your values.

The biggest reason I like talking about money with people is that money is really a stand-in for our own individual life values. How you choose to use your money reflects your priorities. When my friends and I are open about our money with one another, we are learning what really matters most to the other person, and that spurs us to grow closer (even when we disagree).

Get the conversation started.

Money can be a difficult subject to broach for the first time with a friend. Two baby steps to take toward breaking the taboo are to share something from your own financial life and to ask for advice. Focus your icebreaker on yourself so your friend doesn’t feel as if she is under the microscope. For example, when communicating a spending decision, share your reasoning as well as the final yea or nay. Instead of just rhetorically complaining about pain points in your finances, ask your friend if she has found a good solution in her own life.

When you bring up money for the first time, be especially attuned to your friend’s facial expressions and body language. If he subtly communicates that he is offended, uncomfortable, or bored, change the topic and steer clear for a while!

We have so many superficial conversations with one another. Why not take a chance on a topic through which you may learn something really practical, improve your balance sheet, and deepen a friendship?

Do you discuss money with your peers, and if so what outcomes have you experienced? What keeps you from discussing money more openly?