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This PhD Compares Her Experiences at a Unionized University and a Non-Unionized University

November 18, 2019 by Meryem Ok

In this episode, Emily interviews Dr. Carly Overfelt. Carly received a master’s from Purdue University, which does not have a graduate student union, and a PhD from the University of Massachusetts at Amherst, which has a longstanding graduate student union. Carly compares and contrasts her experiences as a graduate student worker at her two alma maters; she received higher pay and benefits at UMass. She shares the history of the graduate student union at UMass and the nature of her work within the union’s bargaining unit. At the end of the interview, we address the core questions around graduate student unions: Does the university view graduate students primarily as students or primarily as workers? Are graduate students paid well enough for their assistantship work to allow them to pursue their other job of completing their dissertation?

Links Mentioned in the Episode

Teaser

00:00 Carly: A lot of union work and bargaining is holding onto as much of what you already had as you can because unions are not as powerful as they used to be. And so, usually, when you’re bargaining, you’re trying to mitigate something disastrous that the management is doing. They’re usually slashing something, and you are using your collective power to mitigate that as much as possible.

Introduction

00:27 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 four, episode 14, and today my guest is Dr. Carly Overfelt. Carly received a masters from Purdue University, which does not have a graduate student union, and a PhD from the University of Massachusetts at Amherst, which has a longstanding graduate student union. Carly compares and contrasts her experiences as a graduate student worker at her two alma maters. She shares the history of the graduate student union at UMass and the nature of her work within the union’s bargaining unit. At the end of the interview, we get to the heart of the question around graduate student unions: Does your university support you in your dual roles as student and worker, or does one eclipse the other? Without further ado, here’s my interview with Dr. Carly Overfelt.

Will You Please Introduce Yourself Further?

01:24 Emily: I am delighted to have on the podcast with me today Dr. Carly Overfelt, and she is here to talk to us about being at two different universities during graduate school, one that didn’t have a union and one that did and the differences between those two experiences. So, Carly, thank you so much for joining me today, and will you please tell us a little bit more about yourself?

01:44 Carly: Yeah, thanks so much for having me. I’m Carly, and I started my graduate school journey at Purdue University where I did a master’s degree in linguistics and then a master’s degree in English. That took me about three and a half years, and then I started a PhD at the University of Massachusetts at Amherst. I finished my PhD in the spring of 2017. My interests were in linguistics and literature. I got interested in supporting linguistic diversity through my teaching. So, the position I have right now is at a small liberal arts college in Minnesota, and I’m kind of an adviser/tutor/instructor for our international students and domestic multilingual students. Yeah, it’s a great job.

Finances while at a Non-Unionized University

02:33 Emily: Very interesting. Yeah. Glad to hear that you’re enjoying that. So, let’s go back to your days at Purdue as a master’s student. So, what was the financial lay of the land at this non-unionized university?

02:48 Carly: Right. So, you know, since I had never been to a unionized university yet, I didn’t really have a comparison point, but I remember, you know, just like so many graduate students- broke all time, you know, my rent was almost 50% of my pay. Which I think is going to sound familiar to a lot of folks. That was the start of my expertise in the side hustle. In addition to teaching a few times a week and having meetings with students in office hours, I was also tutoring three nights a week for about $20 an hour cash. And so, I ended up spending so much of my time during the week on my side hustle that it was really hard for me to perform as well in my courses as I wanted to and to do the research that is necessary to do well. Right. So that was pretty tough.

03:42 Emily: Yeah. So it sounds like, were you a TA for the entirety of your time there? That was how you received your stipend?

03:50 Carly: I was. I was teaching a communications class for international graduate students, and the whole time I was there, I was teaching for that program. And sometimes there was a summer version of that that I could teach.

04:06 Emily: Yeah, it’s a little bit surprising to me, just given that Purdue is in a low cost of living area. I mean, we’re already hearing like, okay, you move from Purdue to UMass Amherst. I’d imagine there’s a big cost of living difference there. But even in Purdue, your stipend was only about twice what your rent was or maybe not even that much it sounds like.

04:24 Carly: Right, right. That’s right. And we did have health insurance benefits. Some of that came out of our paycheck, and they were fine. They weren’t as good as what I had through my parents before I started graduate school. But it was like, it was okay.

04:38 Emily: How about dental and vision?

04:41 Carly: Dental and vision was a little bit extra. And they would take that out of your paycheck as well. Some other things I want to note–and these were differences I didn’t notice as much until later–but we did not get paid through the holiday months. So, it was kind of several weeks that we were not getting paid. And we also had hefty fees through our program in the fall semester. And sometimes we would start getting bills for those before we had gotten a full paycheck through our teaching associateships. So, that was pretty tough.

05:16 Emily: Okay. So, you’re saying that your stipend was not a 12-month stipend, but it stopped over winter break and then what about the summer?

05:23 Carly: Right. So, it stopped over winter break, and it didn’t continue for the summer unless you were lucky enough to have a summer class assigned to you, and then it would pick up again in, say, like June.

05:36 Emily: And also, of course, the very common problem of paying fees one time per year or one time per semester. And it’s a real hit to the budget. That’s a really hard thing to cash flow on a grad student stipend. Yeah. OK. So not such a pretty picture.

05:51 Carly: No. Pretty tough.

05:52 Emily: Anything else you want to add to that?

05:54 Carly: No, I think that’s about it. That pretty much covers it.

Finances while at a Unionized University

05:57 Emily: Okay. And then when you moved on to UMass Amherst, you started realizing things didn’t have to be the way they were.

06:05 Carly: Right.

06:06 Emily: So, what was it like there?

06:09 Carly: I was very excited when I heard that they were unionized because I, you know, grew up in kind of a union household. My dad and stepdad both were kind of hardcore union. So, I was like, “Oh yeah, let’s do this!” But I didn’t realize how much it was going to change my financial picture until just like kind of living it. So, a few major differences right away. We were paid a lot more. Maybe not twice as much, but it was at least a 30% increase over–maybe 40% over–what I was being paid before. And that’s just wages, not talking about benefits. So that was noticeable. The fees were smaller, but also it was written into our contract that you could have that spread throughout and taken out of your paycheck, and we were paid through the holidays.

06:58 Emily: I really love the benefit of actually paying something with each paycheck. Because like, I mean fees–it kind of depends. They may be a reality or not, but just if you know what they are and they’re going to come at regular intervals, they are a lot easier to deal with. So, love that. And you said you were paid through holidays, and what about summer?

07:17 Carly: In the summer, it was kind of similar where if you were lucky enough to have a summer class assignment, which in my department was extremely rare, then you could be paid through the summers. So, I still had to, you know, work my side hustle skills, but at least I only had to do that in the summer. Sometimes I would do my side hustles during the week to just sort of help myself with the cushion for the summer. But to put that in perspective, I would do maybe one four-hour, you know, side gig shift per week to sort of just keep my relationship with that employer, and then work during the summer more hours for that kind of side hustle. So I actually was able to spend time on research and writing and conferences. I think I went to one conference the whole time I was at Purdue in terms of presenting, and then that switched to actually having the time to work towards that. And I was going to maybe two conferences per year when I was in my PhD program because I had time to do it. It was great.

What about Travel Funding and TA-ships?

08:20 Emily: Actually, I’m glad you brought up conference travel because that’s kind of another benefit that may or may not be in place. So it sounds like, because you weren’t side hustling so much, you had more time to go to conferences. Was there additional funding available for that sort of thing, or were you paying for that out of your own pocket?

08:34 Carly: I was usually paying for that out of my own pocket. There was a little bit more funding in that department, but it wasn’t part of the union contract bargaining. I think it was just a department that had different maybe funding priorities, you know, just generally for their graduate students. I don’t think I’m remembering this incorrectly, I think that was something that was just department-specific.

08:58 Emily: Gotcha. And were you also a TA throughout your PhD? Like that was your position every term?

09:05 Carly: I was. I was a TA, first teaching for the writing program, and then teaching for the English department, and getting my stipend through that and benefits which were very good and actually better than the benefits I have in my full-time alt-ac job right now.

09:24 Emily: What do you mean by that? What makes them better?

09:27 Carly: So, the deductible and coinsurance strategies that we usually get through our employer benefits. You know, when you lose the power of sort of negotiating for that and it just sort of gets handed to you from on high, it doesn’t take long to start seeing the differences in what are you going to pay in copay, what types of services are covered, and that kind of thing.

Paid Leave and Other Union Benefits at UMass Amherst

09:51 Emily: Gotcha. Let’s see, you talked about leave over the holidays, but–was built in the contract and maybe in contrast to when you were at Purdue–any like other kinds of paid leave? Or maybe you didn’t access this but you know about it, like maybe parental leave or short term disability leave, anything like that?

10:12 Carly: Yeah, there were different leaves that were available. There was even vacation in our contract. Of course, no one ever took it because you’re teaching, right? So, it was pretty rare for anyone to actually, you know, do that. But if you were savvy enough about your union contract, you kind of notice those things. Or if you were sort of touching base with your union reps enough to sort of learn about some of the more specific–because a lot of times, and this makes sense, a lot of times residents were thinking about the pay. That’s really the main thing that they’re concerned about. But there are sort of these other things that you learn about that you have those benefits. If you’re sort of plugged into the union a little bit more and reading their emails and doing all that–it takes a lot of time though. Right?

10:56 Carly: And you know, grad students are always very busy. So, you know, no shame for people who didn’t know about some of those details. But if you were plugged into it, there were different things. Some things that, you know, were negotiated in the contract were, like, paid parking. So, if you just want to park on campus as a grad student employee, everyone knows that can be very expensive. But the union had actually negotiated certain rates for graduate student employees to lower those costs. So, another benefit was, one of the bargaining years that I was there, the bargaining team negotiated access to all-gender restrooms where you’re working. So, in these huge campuses, right? You know, it’s not the same experience for everyone in every department, every building. And that’s something that you should be able to use the restroom and feel comfortable and safe. And that’s something that was actually written into the contract. So, that was a huge one.

11:53 Emily: Yeah, that’s super interesting. Yeah, interesting that we get down to that level of sort of granular detail, right? Like you were saying, it’s not just the pay. There are all these benefits and other working conditions that can be brought to the table. And like you were saying, I think something that is useful to think about is that when you have a union in place, it sort of brings all the disparate parts of the different departments–for example, like graduate students in different schools and different departments at the university–it brings them to the same like playing field and gets them all the same benefits. And it’s not like there’s going to be this level of pay and benefits over here and this over here. Is that correct?

Departmental Differences in Pay Rates and Raises

12:35 Carly: There was still some difference in pay. So, for example, I worked for the writing program my first few years and we had the lowest hourly pay. It was still way better than what I was getting at Purdue. I think it was something like $22 an hour when I started at UMass, but there was a minimum wage on campus for graduate student work, and we were making that minimum wage. So, if you’re coming from a different department that’s more well-resourced or you know, maybe use this recruiting tool, then you may get paid more. My husband was in the linguistics department and he got paid more than me, and I just was always annoyed about that.

13:15 Emily: So, the union helped establish the minimum wage across the university, which your department said, “Yup, that’s what we pay.” Did the union also negotiate the pay rates at other departments? Or is that just the department saying, “Okay, we see the minimum, but we’re going to be paying more than that?”

13:33 Carly: I think that that’s what other departments would do. I can’t speak specifically to that, but I think that that’s how the disparities–and you know, when I say disparity, it was pretty minimal. It wasn’t a huge difference among the departments–but there was a difference. So that was sometimes annoying to me. But yeah, when they would negotiate raises, it was like a general raise. And so, how that might work out in particular departments might vary.

Additional Experiences with the Union

13:59 Emily: I see. So, aside from just being a student at the university, did you have experience with the union as not just a student?

14:10 Carly: I did. You know, I was already sort of interested in unions and so I was a steward at first, which means that you maybe come with someone to a meeting with their supervisor that they think might be a little bit tricky, and you come and you’re sort of a support person for them. And then I was in the leadership for the graduate student bargaining unit part of our union, because we were part of a–and some people who don’t know, there’s usually a much bigger organization like the United Auto Workers was ours. And then the graduate students at UMass were one shop as they say, one workplace, in that. So, I was in the leadership of that. And then I kind of just kept getting more involved and I volunteered on the joint council, which is where all of the shops, the workplaces, kind of have representation. And then eventually I was on the executive board as the secretary and that’s where you have like the president of the union and this would be over the entire union for us. It was UAW 2322. And so we had, I think there at the end about like 3000 members. So, there was a lot of opportunity to be involved and to meet different people. And so that was an interesting perspective.

15:21 Emily: Yeah. What an interesting opportunity for, maybe not work experience, but volunteer experience that is very professional as part of your graduate experience. Like, yeah.

15:33 Carly: Yeah. I have used a lot of that experience in, you know, my work even now working on committees with people who have extremely different backgrounds than myself. Just collaborating towards a common goal. Most of everything that I did was volunteer-based, but something that people don’t know sometimes is that, if your graduate students are unionized, sometimes there are paid positions within that shop, so to speak. That is a fellowship or assistantship that comes with the pay and benefits, you know, that we’re talking about. So, sometimes people would step into one of those roles out of their teaching fellowship and do one of those leadership roles for a year and then step back into the funding stream of their department, which was really great to have that kind of opportunity.

16:20 Emily: Yeah, that’s kind of some more jobs to go around. I guess.

16:23 Carly: That’s right.

Commercial

16:27 Emily: Emily here for a brief interlude. As a listener of this podcast, every week you hear strategies that another PhD has used to improve their financial picture. But listening and learning does not automatically translate into action in your own financial life. If you are ready to change how you think about and handle your money but need some help getting started, I can be of service. There are two main ways you can work with me to create and implement a financial plan tailored for you. First, I offer one-on-one financial coaching, either as a single session or a series as you make changes over the long-term. You can find out more at pfforphds.com/coaching. Second, I offer a group program called The Wealthy PhD that is part-coaching, part-course, and part-community. You can find out more and join the waitlist for the next time I open the program at pfforphds.com/wealthyPhD. I believe it’s possible to succeed with your finances at every stage of PhD training and throughout your career. Let’s figure out together how to make that happen for you. Now, back to the interview.

History of the UMass Amherst Union

17:41 Emily: So, you kind of talked about what your experience was again as a student at UMass. When was the union at UMass Amherst established?

17:50 Carly: This was established in the 1990s, so by the time I was there, it was a really longstanding, well-established union, sometimes even seen as a model for organizing in other places. Around the time I was there, the University of Connecticut organized as well. And so, yeah, there wasn’t a lot of memory of what that was like at first, although I think it was kind of tense, and I believe that the students did go on strike to help create that union. When I was there, when we would bargain every maybe two or three years–I think that’s right–it could get a little bit tense with the relationship in terms of like the bargaining team and the administration. But other than that, usually it was pretty calm. A lot of people didn’t know that we were unionized, which was kind of interesting and a little discouraging. If you’re involved in the union, you’re like, “Hey, you know, this is like this really great thing that’s happening here.” But yeah, so it was interesting.

18:52 Emily: So, while you were in graduate school, it sounds like since there were contracts being renegotiated every two or three years, did you see any changes year over year to those contracts?

19:06 Carly: For sure. So, we always would bargain–I’m now using the word “we” to just being “we the union,” I wasn’t on the bargaining team–but we always negotiated for higher wages. So, it was usually between a 2-3% raise. I’d want people to know that when you’re talking about one and 2%, you’re usually just keeping up with the cost of living. So, we get excited when it’s 2-3%, right? And you’re just getting a little bit higher than that.

19:33 Emily: Is that 2-3% over the two-to-three-year period or is that every year within that period?

19:40 Carly: Yeah, so because it was usually stepped up. So, maybe it would be 1% for the first year and then 2% for the second year, or something like that. And so, you would see gains over cost of living, I guess, is the important point. You know, one thing that people don’t think about sometimes is that if you’re not getting a raise that at least equals cost of living, your employer is paying you less money for the same work. And that’s one of the benefits of the union experience. You start to think in those terms a little bit, which everyone benefits when they’re kind of thinking about that for themselves. I guess the major point I want to make is that it was over the cost of living.

How About Changes in Fees?

20:21 Emily: Yeah. How about the fees? Because I mean, you said already that the fees were at least set up so that you could pay them with each paycheck. But something I’ve seen at other universities is, not only is the pay stagnant, but the fees are increased. The out-of-pocket fees are increasing. Did you see any changes to that fee structure while you were there?

20:43 Carly: I think our fee structure stayed about the same. I don’t remember any major changes with the fees. So, that’s not one thing, but maybe a different example of a gain would be the health insurance difference. So actually, and this is sort of a larger context and other union leaders that you interview can probably corroborate this, but a lot of union work and bargaining is holding onto as much of what you already had as you can because unions are not as powerful as they used to be. And so, usually when you’re bargaining, you’re trying to mitigate something disastrous that the management is doing. They’re usually slashing something and you are using your collective power to mitigate that as much as possible. That’s going to sound really cynical to some folks, but when we’re talking about the benefits side of things, it just is true.

21:33 Carly: So, for example, the insurance turned into kind of a co-insurance the first year I started. So, I don’t remember what it was exactly the year before I started, but I remember that they upped it to like a $5,000 deductible, which was a huge difference from before. And the union over time and a lot of effort was able to cut that to $2,500. That’s half. Right? Still wasn’t as good as it was before, but with the rising costs of health insurance and just unions just being what they are in the U.S. right now, that was what they were kind of able to do. You wouldn’t feel that difference if you don’t have like a major accident or a chronic illness, but for people who are experiencing that, it was a major difference for them.

Any Downsides or Tradeoffs with the Union?

22:20 Emily: Yeah. I appreciate you making the point about it’s not necessarily about seeing gains, like while again just a beneficiary of the contract, but rather you don’t know behind the scenes what is being pushed back against, you know, what changes might have been had there not been some bargaining power there on behalf of the student workers. Were there any downsides or tradeoffs you would say for the union being in place at UMass Amherst?

22:50 Carly: Right. So really the major thing is that you’re going to pay union dues, and depending on what state you live in, that might look different. So when I was at UMass, it was 2% which is something like two hours worth of labor, I think is the way that they figure that. And so there was the option to be an agency fee payer and now we’re kind of getting into the legislation around union membership and that kind of thing. And if you didn’t want to pay the 2%, and you could be an agency fee payer and pay 1.7% because of the laws in effect in Massachusetts at that time. Somewhere like Indiana, you could get away with paying zero, but you’re still covered because you’re in the bargaining unit. You still get all those benefits, anything that they bargain you get. If something terrible happens in your workplace, like you’re sexually harassed, the union is behind you 100% and they do all of the things that they would do for anyone else.

23:48 Carly: But then you’re either not paying the dues, somewhere like Indiana, or you’re paying a smaller amount. And so at UMass Amherst it was 1.7 or 2%. You’d be surprised how many people chose the 1.7. And I understand that because people are thinking, I want as much of my paycheck as possible. But you know, from my perspective it’s like, “Pay the 2% and be a voting member.” That’s kind of changing. There are some changes with legislation around that. I’m actually not sure how long Massachusetts will be able to do that. I think they’re about to go to a system where they can’t require that 1.7% anymore. But so, right. Paying dues. Something that people think about is a potential trade-off would be maybe the attitudes on campus around the union. Do we have an adversarial kind of relationship with the university? And that kind of thing.

24:40 Carly: And not really, I mean, if you’re on the bargaining committee, it could get kind of tense with the administration during that time, as I said before. But being part of the union or being a union member from my experience, didn’t make like my advisor feel differently about me. It didn’t make me seem like a troublemaker, you know. It was just, it was kind of normal because the union had been there so long. If I had been there during like the initial fight, I guess you could say it might be different.

Other Union Groups on Campus

25:09 Emily: Yeah, I can definitely see how that could be the case. But with a union in place for decades, it’s just kind of part of the landscape now. Were there any other union groups on campus? Like adjuncts or faculty or postdocs or staff members, anything like that?

25:23 Carly: Yes. So the postdocs were in the same union with us. They were a different shop, but within the same union. And they were you know, maybe like less active because they were usually on campus for maybe one or two years. The faculty were also unionized, but they were in a different union. The staff were unionized and they were in a different union. And then also I think Massachusetts at that time had legislation where any contract work that they did on campus, like construction, etc., they had to hire union workers or at least there were some incentives to doing that. So, If we marched around with signs about something like the co-insurance issue, we had support from all different directions. And sometimes we would have events and actions, you know, together. But I remember specifically one time marching across campus with a sign and the guys over here on the forklift doing whatever they’re doing construction-wise, like kind of honking and supporting us. So, it was kind of a cool way of being part of a community on your campus as well.

26:24 Emily: I’m really glad to get this picture of an established union for the graduate students and postdocs–or postdocs separately, different shop–but then also just pretty much most people on campus, right? Being part of one union or another. So it’s a very normalized part of the culture. So this is a very, I guess maybe could say like quiescent situation. Like, it’s just this is how things are at that university. So we may hear in other interviews I do in the next few months from some different situations where unionization is a newer concept or maybe only the graduate students are unionized, not other people.

26:56 Carly: Right.

Anything Else About Your Union Experience?

26:56 Emily: I don’t know. So it’s really interesting. I’m really glad to have your perspective there. So, anything else you want to add on this before we wrap up?

27:03 Carly: You know, I would say, just looking back on my time at Purdue, I remember that they made a change with our health insurance benefits once where suddenly like birth control was not going to be covered at all whatsoever. It didn’t matter what your doctor said, if you needed it to live, it doesn’t matter. Right. And I remember being really angry about that and not feeling like I could do anything. If that had happened at UMass Amherst, hell no. That would not have gone without a fight and it probably would have eventually gotten into the contract that that has to be covered. And it was covered. That kind of thing was covered through our insurance. So, you know, just looking back, you think a lot differently, and I feel really grateful that I was part of that and I was actually able to do research and writing, which is what you’re there to do. So, it was great.

27:48 Emily: Yeah. It sounds like your experience at Purdue, versus at UMass, that you were much more supported as like a well-rounded student, I guess you could say. Which is kind of a funny thing to say when we’re talking about unions because we’re really focused on employees, right? Like the important part is that you were an employee of the university and therefore were part of this bargaining unit and so forth. But what I’m thinking of is that you really were supported more as a whole student rather than at Purdue, it sounds like you were treated like you’re a TA. In terms of the relationship between the university and you, that’s what they cared about. You’re serving as a TA, that’s what you’re being paid for, et cetera. Maybe you had other types of relationships with other people there, but in terms of the administration, they saw you as a worker who was just there to perform some task.

Grad Students: When are you Working versus Studying?

28:41 Carly: I see your intuition, totally, but it’s almost the opposite. And let me kind of explain that. So, at Purdue, if there was pushback about something like pay, et cetera, the rationale that the university would give is this is your stipend, this isn’t wages. You’re a student and this is a stipend that you get. Because if they thought about us as workers, then they would have to reckon with what are we getting paid hourly, right? What does that calculate to? And that was some of the rationale against some agitation to unionize while I was there. Actually there was some movement towards that, which is a whole other story. But yeah, that was usually their argument if someone had to complain about something. At UMass, they saw us as workers more than at Purdue, and we benefited from that.

29:31 Carly: But sometimes there was still a little bit of that. If there was something that someone’s complaining about, if they could benefit by seeing you as a student for these purposes and as a worker for these purposes and they could work the system to sort of benefit in certain ways. And usually when we insisted on being seen as workers, that’s when we would usually do the best. So, it’s kind of interesting that you say that because it kind of gets us into the heart of that question is like, when are you working and when are you studying? And I would argue that you really have two jobs. One is the thing that you’re getting your pay and benefits for, and the other thing is your research and writing and thinking. And that’s also your job.

30:09 Carly: And so, if you’re at a place where you’re unionized, you can do both of those jobs. If you’re at a place that isn’t, you may find that you’re only doing one of your jobs because the rest of your time is your side hustle to try to kind of make up for the pace. So, that’s kind of a long-winded way of saying that you’re really hitting at the heart of the question, which is when are you a student? When are you a worker, and why does that matter? What are the implications for that?

30:31 Emily: I’m so glad that we got to that additional level of insight on this. I guess that I was thinking more so, and you brought this up too, is like that the university maybe in a nonunion situation sees that their graduate students are both employees and students, and they’re going to do whatever’s best for them in terms of, do I want to treat you more as a student? Do you want to treat you more as an employee? Well, we’re just going to do whatever is in our best interest. The dual relationship in that case can work against the student worker. Whereas, it sounds like what you’re saying, at least in the case when you have unionized in terms of your work, that is more protected, and then you as an individual can have that protected part of your compensation, your benefits and so forth, be able to enable you to do the other part of your job as you said, which is actually what you’re in grad school to do, like kind of scholarship and your own professional development. Does that sound right?

31:31 Carly: Yep, absolutely.

Financial Advice for Early-Career PhDs

31:32 Emily: Okay. I’m so glad we got there, and so last question as we wrap up, Carly, which is just what I like to ask everyone. What is your best financial advice for another early-career PhD?

31:43 Carly: I would say, and this is right from what we were just talking about, which is what you’re doing is work, and it’s labor. And don’t forget that, and think about what it’s worth. And when you’re doing things, think about how is that coming back to you in terms of hourly work. So, thinking about how much time you’re spending on different components of your teaching and your research and your writing, and how is that coming back to you and what’s it worth to you? Sometimes people say don’t do anything for free. Maybe sometimes, but like know what you gave away, right? Know what was the value of that. And it has really helped me think about like my career steps afterwards and thinking about what I’m worth and what I want. So yeah, what you’re doing is work. It is.

32:32 Emily: Well, thank you so much for this interview, Carly. I really enjoyed speaking with you about this really sort of topical and timely issue in getting your perspective from those two different institutions you’ve been part of. So thank you.

32:46 Carly: Yeah. Thank you so much for having me. It’s been a pleasure.

Outtro

32:49 Emily: Well, 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, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. 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.

This Higher Ed Career Coach Worked Her Way Out of Financial Ruin Caused by the Great Recession

November 4, 2019 by Meryem Ok

In this episode, Emily interviews Beth Moser, a certified career coach specializing in higher education clients pursuing career change. Beth was All But Dissertation and pregnant with her first child when the Great Recession hit Phoenix and she was laid off from her museum job, so she and her husband lived on his graduate student stipend and the money she earned from odd jobs. Their home also lost enough value so as to go underwater, which tied them to Phoenix long-term while the value recovered. These events brought them to “financial ruin,” and they spent the next several years digging themselves out of that hole. Beth and her husband pursued several strategies to improve their finances over the coming years, including a career change for Beth, slashing household expenses, better financial management, and working with a financial advisor. Beth concludes with excellent money mindset advice for younger PhD trainees. You can find Beth at Academics at Work.

Links Mentioned in the Episode

Teaser

00:00 Beth: I don’t have a dime to save. What are you talking about? There’s no point. And now I’m like, now having seen the power of stashing away $5 here, $10 there over time. I’m like, huh, what actually could I have saved? What might have been?

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 four, episode 12, and today my guest is Beth Moser, a certified career coach and the founder of Academics at Work. Beth was ABD (all but dissertation), married to another grad student, and pregnant with their first child when the great recession hit Phoenix. She was laid off from her museum job at the same time their house went underwater, which brought them to what she calls “financial ruin.” Beth and her husband lived on his graduate student stipend and the money she earned from odd jobs while she reevaluated and eventually changed her career objectives. To climb out of that hole, they slashed their household expenses, implemented basic and advanced budgeting techniques, and worked with a financial advisor. Listen through the end of the episode to hear Beth’s excellent advice for PhD trainees regarding money mindset. Without further ado, here’s my interview with Beth Moser.

Will You Please Introduce Yourself Further?

01:26 Emily: I have joining me on the podcast today Beth Moser who has, well, quite a story for us, quite a financial story from her own personal life relating to her family and pursuing a PhD and having children and the great recession. So I’m really excited to dive into this story. Beth, would you please introduce yourself to us a little bit further? Tell us about your family and your career to date.

01:51 Beth: Sure. Thank you so much for having me, Emily. So my name is Beth Moser. I’m a certified career coach and I specialize in coaching higher ed clients who need career change. As part of that, I am a training manager who does professional development workshops for graduate colleges, for graduate students, postdocs and faculty on why they need to be incorporating this into their own lives and into their curricula. So I work in higher ed as well. I am married, I have a spouse who is an academic, and I have two children. But when this financial journey that we’re going to be talking about today started, I didn’t have children. So that was some time ago. And I live here in Tempe, Arizona.

What Led to Your “Financial Ruin”?

02:48 Emily: Yeah. Excellent. So let’s go back because what we’re going to be talking through here is kind of a perfect storm of events that brought you to–what you described to me when we talked for this episode–you described this to me as “financial ruin.” A sequence of events that brought you and your husband and your family to financial ruin in the midst of, you know, pursuing degrees and so forth. So, let’s find out what that was. What was the sequence of events here?

03:20 Beth: Sure. Yes, so some of this is unique to us and our circumstances and the timing. And some of it I think a lot of your listeners and readers can relate to. So, I went to get my PhD to go into what’s called an alternative academic or “alt-ac” career. I went to get my PhD so I could get a job in museums. And so, when I came out of working through my coursework and was in the midst of my dissertation, I landed a full-time job in the museum’s field, which was my ultimate goal. As you might surmise, it’s not a very well-paying field. Museums are of course, nonprofits. And so, when I started my first full-time job in 2006, I was making about $36,000 a year with no benefits. So, when I went to work full-time, my husband and I switched off.

04:25 Beth: He had wanted to get his PhD as well. So, since I had landed a full-time job and my career, he quit his full-time job to go start his PhD program. So, he got a stipend of making about $12,000 a year. So, total, I mean, for the two of us, for a single couple in their thirties, we were making about $48,000 a year in the Phoenix metropolitan area. So, not great, but not horrible either, especially when you’re considering we didn’t have children at that time when we moved here. For his PhD program, we bought a home because we thought, you know, well we can and that will keep our costs lower than rent. And so, we were fortunate in that respect, at least at the start. So, for the first three years of my full time career, I was not making more than about $36,000 a year.

05:26 Beth: But within three years with position increases and promotions, I eventually was making $50,000 a year plus benefits. I finally was making benefits, but that’s the first time. In my mid-thirties was the first time I started getting any employer retirement plan of any sort, including any employer match of any kind. So, I got started on saving for retirement relatively late into my career. Okay. So, in the midst of that I finally got pregnant. We had wanted to have children. I was three months pregnant when the recession had started hitting and I got laid off from the museum that I was working on. At that time, we spent four months surviving only on my husband’s graduate school stipend and me taking odd jobs here and there. You know, babysitting, working an office job for people for, you know, 12 bucks an hour, but nothing steady.

Aftereffects of the Great Recession in Pheonix, AZ

06:31 Beth: And then, when I was seven months pregnant, I finally landed a full-time benefits-eligible permanent job at a higher ed institution. But I only had two months of paychecks there before I gave birth and then had eight weeks of unpaid leave. So, during that summer in 2011, you know, we had already had three months of me not having an income. Of us surviving on my husband’s pretty paltry stipend, and then having the enormous cost of diapers and you know, cribs and strollers and car seats and all of that with no income on my part. So, in the midst of all of that, our lives were changing financially. They were changing personally. They were changing in ways big and small. In ways that were amazing and incredible, but also incredibly challenging as you can imagine. So, what finally led to what I call financial ruin is the aftereffects of the recession hit particularly hard here in the Phoenix area, and the home that we were living in lost over 50% of its value.

07:48 Beth: So we could not consider moving to downsize our living expenses because we were what’s called “underwater.” That meant that our home was worth far more than what we owed on it. And we did not qualify for state or federal programs to offset that or alleviate that to get out from under that because we were, and this is a great irony, too far underwater to qualify for that program to help us. So we found ourselves, you know, in the first year of our first child’s life, really relying on credit cards, unfortunately, relying on piecing together unemployment in odd jobs for several months, falling behind on monthly bills, and then finally starting to catch up once I was back at work full-time after parental leave. But it was really, really difficult to climb out of that over the next several years. So, that’s what I wanted to talk with you about today.

08:56 Emily: Yeah. Beth, thank you so much for that introduction. Oh man, it’s taken me back. I didn’t personally experience hardship during the great recession, but it’s taken me back to all the media coverage and everything because I was very involved in the personal finance, you know, sphere at that time. Just a terrible situation that so many people were in. You were not alone in being so far underwater, especially in your particular area. And wow, I’m really glad to have the opportunity to talk with you to get the second half that story. Right? Because we know that so many families were hit so hard by the recession. And of course with you personally, it ended up coinciding with, as you said, a wonderful time of life but also a particularly challenging time of life, especially financially challenging that is having your first child. So, I’m really glad to hear how you ended up climbing out of that because I think that’s the part of the story that we don’t hear so much. And especially how, you know, you did that as a person who was in higher ed, is working in higher ed and also your husband still pursuing his PhD at the time that we’re, you know, picking this up. Is that right?

09:57 Beth: Yes.

Strategies for Financial Recovery

09:58 Emily: Yeah. So, thank you so much for sharing that with us. So, okay. The strategies that you were using to climb out of the financial ruin and it’s taken, what, we’re going on eight years, it sounds like? Since this point you identify as like the low point?

10:12 Beth: Right.

Recovery Strategy #1/4: Increasing Income

10:13 Emily: So, it’s been quite a while. You’ve probably tried a lot of different things. So, we’re going to break down your strategies into three main categories and then kind of a catch-all. And so, the first one there is regarding increasing income. So, how did you do that? Aside from, as you just said, you landed a job. You actually weren’t out of work for too long, relatively, that’s not so bad. So, aside from that, again, a full-time job with full-time pay, what else were you two doing to increase your income?

10:41 Beth: So, when I was laid off from museums, I decided that that was the end of that career, unfortunately. I mean, that had been the goal of me going to graduate school. That had been the focus of my dissertation work. It was my passion. But when reality hits you, and especially when your life changes and your marriage becomes more of a priority or your partnership and having a family or children and other things outside of yourself that you have to consider financially, it just became really real that it was time for me to grow up, perhaps. I don’t really like to use that phrase, but to really get real with myself about what my financial needs were and what ours were in providing for, you know, a tiny child who was going to grow over the course of our lifetime. So, strategy number one was to accept and work through that difficult decision to close down one career and change directions.

Recovery Strategy #2/4: Decreasing Household Expenses

11:47 Beth: So, that helped me prioritize. I need something that pays at least a livable wage for myself and has great benefits including retirement plans and matching and of course, great health insurance in order to just, you know, close that chapter and move forward. So I targeted my job search exclusively to sectors and employers where my skills would transfer, but that was my priority. Finding employers that would pay a much better wage and that would provide those benefits. So, that was strategy number one in increasing my income: being really targeted with what sectors I was applying for and networking in and going after. The second strategy was to decrease our household expenses. Now, as I alluded to, we weren’t able to decrease our housing expenses. So, while our neighbors were scooping up the exact quality of homes at literally 50% of what we were paying for our mortgage monthly, we could not address that one. We tried to qualify for a program, a HARP program was what it was called and we didn’t. So, that was a fixed expense.

Did You Consider Taking the Foreclosure Hit?

13:11 Emily: I want to jump in there with a question because I do remember at the time a lot of people were walking away from their homes that were too far underwater, taking the foreclosure hit to their credit and just saying it’s too far gone. So you guys didn’t go that route. Did you think about it?

13:25 Beth: I did think about it and I consulted with others who had done it and people who had not done it. I decided not to do it because I held my credit score tightly at value. So I knew that we were going to come out of this someday (our financial circumstances). And I didn’t want to also have to tackle just a really horrible credit score because that can take years to repair as well.

13:52 Emily: Yeah, it sounded like it didn’t get to the point where you had to walk away. There may have been a point that it could have gone that direction, but because it sounded like you did an amazing job searching for and networking for the new job, it didn’t get to that point where it was a necessity.

14:07 Beth: Correct. Yes. And so, we sat down and we looked at what can we downsize on as far as our monthly expenses. So, we went down to sharing one vehicle. That way we didn’t have to carry insurance on the other car. We wouldn’t have gas expenses on the other car. We live within walking distance to grocery stores and coffee shops and so forth. So, we started walking to the grocery store decreasing mileage and usage of our vehicle and gas expenses. So, we would coordinate going to and from work together so that we had that only one vehicle expense. We used my husband’s vehicle because he did not have to pay for parking at his work, but I did at mine. So, he would drop me off, drive off to his job, park for free. He would come back and get me at the end of the day.

15:09 Beth: And then we really cut down on all like entertainment expenses. We got really lean and mean about it. So we dropped streaming services of all types. We didn’t even have the Netflix DVD service, which existed back in that day still. We didn’t do any movie rentals. We wouldn’t go out to movies. We cut down on eating out. And I mean, like by cut down, I mean, we did not do it. So, we got really disciplined about what expenses are necessary and which ones would be nice to have again in the future, but that we can’t afford right now. We made huge use of our libraries. We would rent DVDs and movies and streaming there all the time. But it just meant that we did not have the luxury of having, you know, just flip on the TV and whatever’s on tonight is what we’re going to be able to watch.

Decreasing Expenses while Starting a Family

16:05 Emily: How did this effort in decreasing expenses play with you having a baby for the first time? Because I think there’s an idea in our culture that babies need a lot of stuff and you have to provide a level of care for children. I don’t know. So, how were you handling applying the decreasing expenses mindset to your first baby?

16:30 Beth: So, one of the things that we did was I sat down with women friends of mine who had recently had babies and said, okay, you know, you go to the baby websites and you go to the stores and they give you this like, you know, flip book of all the things you need. Okay. What are the absolute essentials that I must have? And so for instance, people were saying, okay, yes, they’re going to tell you you need a pack and play. But really here’s my bassinet. My baby doesn’t even fit in it anymore. Use it for the first three months. And then when she needs to grow into a crib, we can go, you know, get you a crib at Target or whatever. You don’t need, you know, this, that or the other. You don’t need toys yet. She’s too little.

17:19 Beth: So it really helped me focus in on like: these are the absolute bare bones essentials that you need to have a baby. And just having, you know, that critical mindset about what we consume. Right? And I mean, if you think about it from the “this is a first-world problem” perspective. Like thinking about, okay, well families who live in tiny apartments in giant cities around the world or in smaller, more humble circumstances, they don’t need these things for their babies and their babies grow up healthy and beautiful too. So, just really being critical about the buying, what we could borrow from friends. Using secondhand stores for buying baby onesies and that sort of thing. And then luckily I was able to nurse so I didn’t have the expense of formula. I say, luckily I was able to, because there’s also this cultural presumption that, “just nurse and you’ll be fine.” But that is not always an expense that can be eliminated. I know many women who have been either physically unable to nurse or their baby can’t nurse and formula is no joke. It is really expensive. So, I do recognize that that was something we lucked out on.

18:38 Emily: Yeah. Thanks for those comments. I want to jump in here with some comments of my own as I have two children that are fairly young. So, it’s a recent thing for me. The first is, this is kind of weird, but my husband and I watched the documentary, which was available on Netflix, maybe it still is called “Babies.” It’s like a no-narration documentary just following these four babies in different countries through their first years of life. And so, it’s a really fun, funny kind of documentary. But what we took away from that is babies thrive in all kinds of different situations. Like, they’re good, they’re gonna develop, no matter if you have this, you know, doodad or this gadget or you do this thing this way or that way. You know, babies are very adaptable and, you know, robust and so it’s going to be fine.

Any Other Strategies to Decrease Expenses?

19:23 Emily: You know, no matter what you choose, it’s going to be okay. So, we enjoyed that and I’d recommend that to someone who is looking forward to becoming a parent. I really liked what you did in talking with multiple, other new mothers or recent mothers or recent parents to get their perspectives on what you actually need. I say multiple because babies are also very individual. And so, what was essential to one parent might not have been essential to another parent, might not be essential to you. And so it’s great to get an idea of from several different people. “Okay, that one person said that one thing was essential, but I didn’t hear that from, you know, so and so and so and so. So maybe I’ll hold off on that.” And I just think the idea of, as you said, like babies don’t need all the stuff from their first two years of life upon their birth. Right? You can acquire these things slowly as you determine that they actually make sense for you. So, it doesn’t have to be a buying binge like right at the beginning. So, Please continue on. Were there any other ways that you decreased your expenses during that period?

20:23 Beth: I mean that was the main thing, the main categories. We couldn’t, you know, decrease utilities or we couldn’t drop Wi-Fi. So those were the main things, like any entertainment sort of things. And then the other thing, you touched upon this earlier, are these like cultural messages that we receive as new parents. And one of the big ones especially that I see is like date night and how important it is to remain committed to your partner. Yes, that is of course important. But for the first six months of your baby’s life, you are so tired that even if someone had come and offered us date night, we would have been like, where’s the closest place where we can go take a nap? You know, so that was not something that we had any interest in spending money on anyway. But we really didn’t use a sitter. We didn’t go out for that sort of thing, honestly, for the first year at all. I mean for like birthday dinner out or something like that, we had a friend watch the baby. We would trade off and say like, “Hey, the baby’s very calm during mornings, so let’s go out and have a leisurely brunch together and bring the baby.” Right? Like you don’t have to buy into this messaging about how much children have to cost.

21:46 Emily: Yeah. Great, great point.

Commercial

21:51 Emily: Emily here for a brief interlude. As a listener of this podcast, every week you hear strategies that another PhD has used to improve their financial picture. But listening and learning does not automatically translate into action in your own financial life. If you are ready to change how you think about and handle your money but need some help getting started, I can be of service. There are two main ways you can work with me to create and implement a financial plan tailored for you. First, I offer one-on-one financial coaching, either as a single session or a series as you make changes over the longterm. You can find out more at pfforphds.com/coaching. Second, I offer a group program called The Wealthy PhD that is part-coaching, part-course, and part-community. You can find out more and join the waitlist for the next time I open the program at pfforphds/wealthyphd. I believe it’s possible to succeed with your finances at every stage of PhD training and throughout your career. Let’s figure out together how to make that happen for you. Now, back to the interview.

Recovery Strategy #3/4: Sticking to a Budget

23:06 Emily: Okay, so the third kind of category that we want to talk about is financial strategies or financial management. So what, aside from increasing income and decreasing expenses, could you do with your finances to help you through this period?

23:19 Beth: Okay. So, one of the things that we did was, and this is not going to be eye-opening to you, but it really was to us, was to finally follow the adulting advice of creating and sticking to a budget. I know how insane that sounds for people in their thirties to finally like “adult up” and sit down with an Excel spreadsheet and say okay, how much is Wi-Fi, how much is our utilities, how much is our car insurance, how much is our mortgage? But we started looking at that and sticking to it. So, that was first and foremost was getting real about these are our expenses.

24:07 Beth: Burying your head in the sand and pretending like, “Oh, you mean I have to pay my cell phone bill every month?” That’s not a viable strategy. So, actually facing the reality and the facts was another strategy that really helped us. You know, I think as academics in particular, you get a lot of messaging and a lot of training in your self-worth and therefore perhaps your, you know, financial value being wrapped up in your job title and what you tell people you do. But you cannot ignore the financial realities of what you have to provide for yourself and your family. And I don’t think there’s enough about that in graduate school for any of us. And I think for those of us who aren’t in graduate school in MBA programs or accounting or finance, like it’s just, you know, sort of back of the mind consideration. And so we finally decided to get real about that.

25:12 Emily: Yup. Classic advice, but always perennially good. And I kind of feel like, I guess I feel like some people can get away without budgeting if they make a lot of money or if they have very, very, very, very, very simple lives and simple desires. But 97% of the population I feel like would benefit from keeping a regular budget. So, it sounded like it took you a little bit longer to get there, but when the need was high enough, you did and you found it to be a useful tool.

Maintaining Your Budget for Continued Savings

25:44 Beth: Yes. And so, one of the ways we use that tool was even as we started to catch up on the backlog of expenses that we had been tacking onto credit cards out of necessity. So, we started to tackle debt. But then as my income rose over several years–because I stayed in this full-time role, I found a new career, I was doing good work, so I was getting promotions and increases over time–we maintained our budget. So, we could use that extra income not to like restore all the streaming services, and sign back up for the premium whatever, and start doing date night once a month, but to focus on getting rid of that debt and then start to tack away even tiny amounts for savings.

26:35 Emily: Yeah, you really had a large hole that you had to dig yourselves out of first before you could even consider increasing things on the lifestyle side. And again this is not, I mean, none of this was like your fault, right? Like this is all just what happened like nationally and in your housing market in particular that caused this. And I’m sure that, you know, it took so many years of sacrifice to do this and it must be frustrating that like you were kind of just generally a victim of what was going on, like more generally. So anyway, it must have been frustrating and difficult, but I really admire that you stuck at it and you stuck with it for so many years to ultimately get ahead.

The Benefits of a Financial Manager

27:14 Beth: Yeah. And so, one thing we did was we decided to add on one strategic expense and it was a huge expense to us at the time, but we met with a financial manager two times. So, I can’t quote this for sure, but I believe each session–I know each session was an hour–but I believe it was $150 an hour. And that was a huge add on for us at the time. But the knowledge and the toolkit that we came away with like has paid off in spades for years to come. So one of the things she did was she took our budget and she tried to convince us–and the first session, it was a little hard for us to hear this–that we did have spare room in our budget to start saving. And we were like, no, we really don’t.

28:10 Beth: But she actually did the math and she did some forecasting with us and she showed us that if you make your savings automatic and you start putting that away before you can even see it in your checking account so it’s not there for you to spend or consider spending, then you can honestly start to build up savings. And so she taught us about, we used a tool called Capital One 360. It’s an online bank and within that particular bank it’s free to set up an account and you can set up as many accounts as you need. So we set one up, for instance, for future child activities, like day camps during the summer or sports lessons or whatever. We set up one for travel with, I mean, we weren’t traveling at the time, but we were like, “Hey, maybe we’re going to want to take a big beach vacation, a weekend trip to San Diego one of these days.”

29:10 Beth: So we set up these little goal buckets in Capital One. And I’m telling you, like five bucks out of that paycheck and 10 bucks out of this paycheck, and what seems like a coffee here or a lunch there. Really small amounts. We were so skeptical that this strategy was going to work, but she had seen it work before and she had the expertise to back it up. So we said, we’ll give it a shot. And I have been continuously blown away by this, and I still use it to this day. So, within our first year of trying this, even with our really modest higher ed incomes–and my husband had finished his graduate school programming at that time but was on the job market, which as we know is problematic. So he was adjuncting only so we were not living large.

30:04 Beth: We were not high on the hog. We had climbed out of this debt and so forth, but we were not like, you know, going on extravagant vacations or anything like that–but in the first year we were able to save about $5,000. And then the second year, $10,000 on top of that. So, it completely blew me away that like five bucks here, 10 bucks there. Oh, I have a few extra dollars left over from grocery shopping. Okay. Tuck that away. We’re actually going to go put that in the ATM and transfer it over to the Capital One 360 funds and then we’re not going to touch those funds. They’re there for those goals. Just leave it and forget it. And they’re not making huge interest. Right? Like we are not talking about anything more than the interest rate you’d get at your bank or credit union. So, it’s not like this is some investment strategy. It’s literally just set it and forget it but don’t touch it. So that was a huge eye-opener for us.

Financial Advising Tip #1: Targeted Savings Accounts

31:08 Emily: I really love that you brought up this strategy because it’s one of my favorite ones. Especially for, you know, grad students and postdocs, people with lower cashflows, but I talk about this very, very frequently. I call it targeted savings accounts. Other people call it sinking funds. I’m not sure what term your advisor used, but it’s exactly what you described. Putting away a small savings rate with every single pay period. And then pulling the money back out when you have those, you know, a reason for it. If you want to take a trip or maybe you have car repairs or whatever the buckets are that you’ve set up. I also have seen this work in my own life and other people’s lives. And it is amazing that there’s actually a difference between saving in theory and saving in reality.

31:51 Emily: Like you might tell yourself, “I never have money, you know, I never have $5, $10 leftover at the end of the month. How could I possibly be saving anything?” Or like, “Oh yeah, I’m saving but my savings are just sitting in my checking account and oops, I actually kind of spend them from time to time without thinking about it.” It’s amazing what a difference it makes to actually sequester the money away from your general cashflow. And I really love that you particularly use Capital One 360. My husband and I currently bank with Ally, which has the same kind of structure, but I used to bank with Capital One 360 and it was totally great and you know, no big reason for the change, but I also set up targeted savings funds there. So, if anyone’s looking to implement this strategy, using an online bank like Capital One 360 or Ally is a really good choice because some of the larger brick and mortar banks might charge you fees for having accounts open or maybe they’ll charge you a fee if your balance drops below a certain amount.

32:45 Emily: And when we’re talking about these accounts, the balance might be $5. That’s all that might be in there at one point or another when you’re starting out or if you’ve just depleted it. So, it’s really important to have an account that has no minimums, and Ally and Capital One 360 both offer those kinds of accounts. So, really good tip to check those out. In particular, if you like this strategy, and I’ll link in the show notes some more writing I’ve done about this strategy. But thank you so much for describing it Beth.

Financial Advising Tip #2: Use Cash for Day-to-Day Expenses

33:09 Beth: Yeah, I mean it’s been huge for us. So, the other strategy that our financial advisor had us use was to use cash for all of our day-to-day expenses. And I’m not talking about the complicated, here’s the envelope for groceries and here’s the envelope for eating out and like figure all of that. No, just take a lump sum of cash out of each paycheck. And it sounds like a lot, like maybe it’s $400, maybe it’s $800. That, you would have to consult with somebody on, but use it for all your groceries, your cleaning supplies, your coffee shop runs, your lunches out, the beer happy hour after work, whatever it is. And the reason for that is, for whatever psychological reason, whatever behavioral economists call this, you really do think twice about that purchase when you’re using cash, much more than you would with your debit card. So, it has been incredibly powerful and honestly, I get a charge now at the end of every two-week pay cycle where I’m like, “Haha, I still have 40 bucks left over, and I’m actually going to shove that into my Capital One 360, because I actually do want to do like a trip to Denver next year and go have some amazing food and beer. And that’s going to be way more fun for me than using this 40 bucks to go out to lunch a couple of times this week.”

34:39 Emily: What I really love is with your leftover money that you saved it. You weren’t like, “Oh, leftover money. Yeah, great. I’m going to blow it. Like it’s already been accounted for.” You’re like, “No, I’m actually weighing like should I use it for this purpose in the here and now or should I use it for this purpose? Maybe it’s a longer term thing that I’m saving for.” And sounds like much of the time you said, “Nope, I have this other goal, I know exactly where this money is going to go, it’s going to give me more pleasure, more satisfaction to put it over here. Even though it’s, you know, saving in the meantime but it’s saving to spend in the short term.” So, I really love that you actually followed through on that because that’s the part that a lot of people don’t do is the last final step of actually saving the money that they have available to save.

Recovery Strategy #4/4: Research Your Resources

35:18 Beth: Yup. And the final strategy, which I’ll just touch on briefly, is it’s a lot of hard work and it’s a lot of discipline, and that can get tiring over time, but it pays off. So for instance, in 2013 when we had our second child, okay, childcare expenses are about to skyrocket. Like you wouldn’t believe. Well, okay, so let’s take the time and do a lot of research and homework and find a childcare share situation. So for that, we were able to find a place that during the academic year we had part-time childcare and we could take summers off but still hold our place for the next academic year. So that way during summers when my husband was adjuncting only online courses, he would watch the children at no childcare expense to us. So, it’s really hard to find that sort of circumstance, but you might have something equivalent in your life that it’s going be hard to find, but it’s going to be worth the effort to find.

Were There Any Other Strategies You Used?

36:23 Emily: Yeah, it just shows the creativity and the resource in terms of the time you were willing to put into researching certain things is not easy, as you said. But when you can apply those things, you can come up with financially pretty frugal solutions that still work for you. Okay. Were there any other strategies you want to get to that you were using during the period of those years?

Curate Social Media Exposure, Find Your Support System

36:47 Beth: I think a lot of it was trying as much as possible to curate what we looked at and saw. So like staying off of some social media sites where everybody’s flaunting their amazing vacations and you’re like, “Oh, I’m missing out on that.” Or you know, I started reading a blog for instance, about a woman who decided to see how much she could save by bringing her lunch to work every single day for an entire year. So just seeking out where you could that support system, whether it’s virtual or in real life, being really mindful about not going to those after-work happy hours where you know, “Okay, sure. One beer. Well, now I’m hungry, I’m also going to get an appetizer.” So really just being mindful about surrounding yourself with the support system you need to stay on track.

37:45 Emily: Yeah, and I think within an academic setting, I would imagine you can find those other people. Those frugal friends, the classmates who are living on the same kind of income that you are. I’m sure you can find other people who are living above their means in some way or another. So it’s not necessarily everyone in that setting, but you can definitely find that support system. And I did, I know during graduate school because I happened to be very open about talking about money. Other people who were open to talking about money realized that about me and we became friends around that common interest, I would say. So they exist. You might have to sniff them out, but the support systems do exist. Okay. Beth, I think we’ve gotten through the strategies you used to recover from the financial ruin on as you’ve been doing over those several years and since then. So, is there any advice that you would give your past self? You know, anything that you wish you had considered or wish you could have done differently during that time? Given that again, a lot of these forces were completely out of your control.

Final Financial Advice to Oneself

38:49 Beth: Yes. Yeah. So yes, I have two really key takeaways that I wish my younger self would have known. The first one is I wish I had had the ability to more critically consider my future financial needs when it came to choosing a career. So my initial career I was dead set on working in museums and even knowing the realities of the job market and the pay and, you know, how long it takes to get a livable wage in that industry with benefits. I still chose to do it. And it’s not that I regret that at all. It was an amazing experience. But if I could have somehow talked myself into considering like, “Hey, you probably do want to get married someday, you probably do want children. It may be that you’re going to have changes in your life that shift around your personal priorities and some of those are going to cost a lot of money.” I wish that I could have taken that into consideration when making my career choice more deliberately and not tossed finances to the wind as if like, “Well, you know, we’ll figure out how to make it work with whatever this industry pays.”

40:07 Emily: Yeah. It sounds like you were forced to do that, right? When you were laid off from your museum job and you totally did this reevaluation and had gotten to your new career path. That was when it had happened, but maybe you could’ve done that a little bit earlier. And if you go to the show notes, I’ll link from this episode a whole other discussion I had in season three, I believe it was episode six with Scott Kennedy. And we talked again about that same subject of how the reality of “he wanted to have a family, have children” and how did that affect his career decisions in terms of which career paths will pay enough to support a family versus others. Because there are plenty of things you can do because you have a great passion for it that might support a single person but probably not a family. So in that episode, he also grappled with the tough thing of closing a door to a career path that was very attractive to him and turning to something that was also attractive but going to pay quite a bit better. So thank you for that point. What was the other one you wanted to make?

Learn to Critically Examine Your Self-Talk

41:10 Beth: So the second is I would tell my younger self to really hear what you tell yourself and that are truths and beliefs that you have about your money. Because they may not turn out to be true at all. That is the case in my instance. So now, you know, knowing how much I’ve been able to save by this sort of, I forget the term that you use, but this automatic savings out of my paycheck into these Capital One 360 accounts. I wish I had tried that a long time ago. Because I’m sure–in fact I know–I was telling myself in my twenties and before all of this happened, like “I don’t have a dime to save. What are you talking about? There’s no point.” And now I’m like, now having seen the power of stashing away $5 here, $10 there over time, I’m like, “huh, what actually could I have saved? What might have been?” So I really wish I had been able to critically examine that self-talk.

42:17 Emily: Yeah. Thank you so much for making that point. And I think it’s a really common one among graduate students or PhD trainees in general. You know, “I’m meant to be living close to the bone during these years. I’m not meant to be paying off debt. I’m not meant to be saving. I’m not meant to be investing.” That’s a story that academia tells us. Is it actually true? For some people it is. They definitely don’t make enough money to do anything else. Other people, it is possible. So it’s more of a matter of what are your priorities. So thank you so much for bringing that up. And as we wrap up here Beth, could you tell us a little bit more about your business and how people can find you?

Beth’s Website: Academics at Work

42:52 Beth: Yeah, thanks, Emily. So I’m a career coach. You can find me at academicsatwork.com. I have a blog there where I share all kinds of tips about changing careers or making the one that you’re working at now thriving in that to advance and what you need to think through in terms of networking, your resume, your cover letter and career-changing. And aligning your career with your needs, which change over time. So that’s where you can find me. You can also reach me at [email protected]. And I really, really appreciate your blog, Emily. I have started nerding out about paying more attention to my finances as a result of this, you know, climbing out of this hole that I had. And so that’s how I found your blog. And I just think it’s such an incredible tool that everyone should know about and be using. So I’m so glad you’re doing this podcast. You’ve got the blog. And I really appreciate you having me today.

43:52 Emily: Aw, thank you so much for saying that Beth. And I’m really glad that we got to hear your origin story, kind of view yourself as your first client in terms of a career coach and how that worked out for you. It’s clear that you made that transition very well and rather quickly, finding another job within only three months. So I’m excited to see more about what you do for other people now that that’s your business. So again, thank you so much for joining me and it was really a pleasure to talk with you.

44:17 Beth: Thank you so much!

Outtro

44:19 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, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. 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.

This Behavioral Finance Expert Gives Incredible Career and Financial Advice to PhDs

October 28, 2019 by Lourdes Bobbio

In this episode, Emily interviews Dr. Daniel Crosby, an author and expert in behavioral finance. Upon completing his PhD in clinical psychology, Daniel realized for the first time that an academic salary would not afford him the lifestyle he wanted. He instead pivoted to translating the academic research in behavioral finance for working financial advisors, and he currently serves as the Chief Behavioral Officer for Brinker Capital. Daniel shares how he’s applied the principles of behavioral finance in his own life and specific career and financial advice for early-career PhDs, particularly those exiting PhD training.

Links Mentioned in This Episode

Personal Finance for PhDs: Sign up for personal finance coaching
Personal Finance for PhDs: Wealthy PhD group program sign-up
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Subscribe to the mailing list
Find Dr. Daniel Crosby on LinkedIn and Twitter
Books by Dr. Daniel Crosby [These are affiliate links. Thank you for supporting PF for PhDs!]:
- The Laws of Wealth
- The Behavioral Investor

Teaser

00:00 Daniel: And rather than saying, “Oh, I’m a PhD in psychology, so let me do PhD in psychology things”, I thought, well, I know to have great conversations with people. I know how to run a training. I know how to read human emotion and human behavior and all of these things, when you conceive of them as building blocks, you can repurpose those building blocks in different ways and create a host of opportunities for yourself.

Introduction

00:34 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 four, episode eleven and today my guest is Dr. Daniel Crosby, an author and expert in behavioral finance. Upon completing his PhD in clinical psychology, Daniel realized, for the first time, that an academic salary would not afford him the lifestyle he wanted, so he pivoted to translating the academic research in payroll finance for working financial advisors. Daniel shares how he’s applied the principles of behavioral finance in his own life and gives specific career and financial advice and encouragement for early career PhDs, particularly those about to finish their PhD training. Without further ado, here’s my interview with Dr. Daniel Crosby.

Will You Please Introduce Yourself Further?

01:23 Emily: I have the pleasure today of hosting Dr. Daniel Crosby on the podcast. He is a certified expert in behavioral finance. I’m really, really pleased that he agreed to come on. And Daniel, will you please introduce yourself a little bit further and tell the listeners about the fantastic career you’ve had?

01:41 Daniel: Great to be here. Thank you for having me. I am the chief behavioral officer at Brinker Capital, which is a multibillion dollar asset manager based outside of Philly. There’s not many chief behavioral officers in the world, I guess, so by way of explanation, what I do is I create training, tools, and technology that help people make better decisions with their money. I am a clinical psychologist by education, but really haven’t spent any of my professional career in a clinical setting. I quickly learned in grad school that I loved thinking deeply about why people do the things they do, but I didn’t love working in a medical setting. I’ve looked for business applications of the thing that I studied, and I know you know what it’s like to pivot, so my career has been wild and crazy, but it’s been a great one.

Going from Psychology PhD to Chief Behavioral Officer

02:39 Emily: Can you take us back? Tell us more about your education and at what point you decided that you weren’t actually going to go that traditional, clinical route with your degrees?

02:50 Daniel: My undergrad was in psychology. Loved it. I’m the son of a financial advisor, so I went into school thinking I would study finance and be a financial advisor. Took some general ed courses in psychology and just absolutely fell in love, knew that that’s what I wanted to do, started my PhD three days after I finished my bachelor’s. I was really just on a good path to get going with this. But about three years into my doctoral program, I had just kind of had enough. I don’t think I’m wired to listen to 40 hours a week of heavy stuff. It’s hard to be that empathetic. It’s hard to not let that bleed into your own life and your own wellness, and I was just really taking my client’s problems home with me, candidly. And I said, you know, this is just a lot. The final nail in the coffin for me though, I was still sort of on the fence as I was wrapping up my PhD, I had an inkling that I would like to apply this in a business setting, but wasn’t quite sure how, so I interviewed for a dual appointment position at a local university, which would have been half teaching, half counseling and the pay was so bad. I got offered the job and the pay was just so ridiculously bad that when I sat down and did the math with my wife, I was just, there’s no way this can work. I think it’s instructive that I, as the son of a financial advisor, someone who is interested in finance, finished an entire PhD, kind of never doing the math on how the thing I was studying would put food on my table. That’s sort of an embarrassing, but true story, is to get to the end of this road that I was passionate about and then go, “Oh, well geez, what am I going to do with this?” So then I was sort of left scrambling with how can I actually make a living at this thing I’ve just spent eight years studying.

05:05 Emily: I think that’s going to be a very relatable story to a lot of people in the audience of hearing that advice, follow your passion and doing it, and doing it at a high level, and getting to the end of it and saying, “well, now what do I do?” In your case, it was because the dual position that you applied for was not attractive, financially. That could be the reason, certainly for people in the audience, why they don’t continue on the expected career path. But for many people who want to go into academia, it’s just that the jobs aren’t there. That’s the main problem is that there’s just no jobs to be had or very, very few, and so they end up having to look elsewhere. So super, super relatable story there. Would you mind me asking, was your graduate degree, did you go into debt for that or was that paid for, was it a combination?

05:52 Daniel: It was paid for. PhD programs in psychology are very selective, they’re very small, so there were only like five people in my cohort. If you get in, it’s paid for through assistantships. Then, through nothing but luck, I had parents who were in a position to support me in other ways. My parents kept the food on the table and a roof over my head, and the tuition itself was paid for, so I came out with no debt.

06:26 Emily: I see. So when you were sitting down to do that salary calculation, it wasn’t debt that was necessarily causing your initial needed number to rise, but rather just simply the cost of living and supporting your family and so forth.

06:39 Daniel: Yeah. It wasn’t debt. It was just like, “wow, I’m going to work forever.” It was crazy because it paid less than a kindergarten teacher. You go teach at a high level, at a college, go to all this school and you should have just taught first grade. The pay was much better, if you can believe it, and I think you probably can. That was just a shock to me. I had never really put pen to paper about how the jobs that were available to me would coincide with the kind of life I wanted to live. Then the other thing is, as you said, so many of the jobs — I was lucky to get a job offer in my hometown — but you know, many, many times you’re forced to move to someplace you don’t want to live or somewhere very out of the way to start your career. And that’s its own set of trade-offs, certainly.

07:34 Emily: When you decided, “okay, that’s not a viable route over there, I have to pivot and do something else,” ten or so years later, you’ve come to this point where you’re the chief behavioral officer somewhere.

What is Behavior Finance?

Emily: I want to hear more about what behavioral finance is and did that exist as a field when you came out or have you been part of developing that? What’s been the transition both for your career and also for that field over that time?

08:00 Daniel: Great question. I got out and I said, “look, I need to pivot to something that is a little better for my sanity and is also a little better paying.” I began to explore jobs in organizational behavior, organizational psychology, behavioral economics, behavioral finance, and really, no one would take a chance on me because this is 2008 and the economy’s not exactly fantastic. I’m out there, 29 years old looking, looking for a job and I’m applying for jobs in fields where I candidly have no experience, because I have this PhD in clinical psychology and they go, “well, this is, you know, industrial psychology or organizational psychology.” And so I got a lot of doors slammed in my face. And really it was just luck. I applied at an organizational behavior firm where the boss, the founder of this firm had a clinical background and had sort of made his way in the world. My story resonated with him and he saw enough potential there to take a chance. Again, I think anyone who has any modicum of career success can point to times in their career where they just got lucky. That was certainly one for me, where he saw himself in me, took a chance on me and knew what it was like to be in my position, because I just wasn’t getting a look at most places because I didn’t have the right sort of psychology background.

09:47 Daniel: In terms of the field of behavioral finance, behavioral finance is just sort of the study of finance that incorporates the messiness of human beings. A lot of standard financial and econometric models are based on simplifications of human behavior that make humans look more rational than they really are. Behavioral finance is just finance with human irrationality factored in and talking about the way that we make quirky decisions with our money. This was a field that was around. Not too many years later they gave out a couple of Nobel prizes for it. The good thing for me, sort of the niche that I found, was there were people out there charging $200,000 an appearance. These Nobel prize winning folks were out there charging a $100,000 to $200,000 every time they gave a speech and multimillion dollar contracts for consulting, but there was no one that was more affordable and there was no one that was more applied. There just weren’t many people doing more reasonable applied behavioral finance work and taking these great ideas that these folks had come up with and taking them out of the ivory tower and putting them on the desks of everyday people or everyday financial advisers. That’s sort of where my niche — my niche became being the more affordable, more practical options.

11:23 Emily: But it sounds like what you were doing was really taking academic research and translating into what can be then used on the ground by, as you said, advisors and perhaps other people, is that right?

11:35 Daniel: Yeah, that’s right. I mean that’s been sort of the trajectory of my whole career is as an intermediary between people who are much smarter than me and people who haven’t been exposed to these ideas. I sort of view myself as a translator to take these ideas, this research, and make it speak to the lives of everyday people.

11:57 Emily: This actually reminds me, from what you were saying, of my physics training, which is what I did my undergraduate degree in, where you basically assume that everything is a sphere, so the calculations are actually manageable because if you actually look at what things are, real shapes and so forth, it’s just the math is completely beyond what’s possible. Of course, not everything is a sphere, but you have to assume they are to make the math work. It reminds me of that.

12:23 Emily: I am curious if anything in your personal history — going through the PhD process and then, and then coming out as an early career PhD, and this job search and so forth — has any of that informed the work that you’re doing now within behavioral finance? Any of that personal stuff informing that?

12:41 Daniel: I don’t think so, really. I don’t think that really informs a ton of what I do from day to day. It probably informs my parenting more than my work. I have three young children and my wife and I talked, that as we raise them, I’m just trying to give them a more expansive look at the world of work and maybe a more detailed look at finding the sweet spot between following your passion and doing work that gives you the kind of life that you want. Because one thing that my studies have shown me is that we all measure what normal is on a relative basis. This is true of everything from mental health to wealth. Normal for you is financially is just kind of what you grew up with, so I think you need to be candid with your children about how they grew up and what normal is and what normal isn’t. So yeah, it probably impacts the way that I parent more than more than anything else.

13:51 Emily: Gotcha. What about the reverse ways, from taking what you’ve been learning about personal finance and behavioral finance since you pivoted into that field? Have you taken any of what you learned and applied it in your personal life or were you already kinda there with what you grew up with your particular parents?

14:09 Daniel: Yeah. What’s interesting is I have applied a lot of what I’ve learned from behavioral finance into my own life. But one of the primary ways that I’ve done this is by knowing what I don’t know. I remember, and I think every PhD has this experience, I remember I started my program when I was 23 years old. I start this PhD in psychology, 23 years old, thinking I know everything, get out a couple of years later and I’m like, did I learn anything? I feel like I know less than I did before. I think I have more questions than answers now. Especially when what you’re studying is something as hard to get your arms around as human behavior, you never quite get good at it. One of the primary things that I’ve learned from my years of study of finance is that nobody really knows anything and that knowledge is a weak predictor of behavior. I work with a financial advisor myself. And not to toot my own horn here, but I think when it comes to knowledge of markets and things, I probably know more than my advisor, but that’s not why I pay him. I pay him to keep me out of my own way. I pay him to be a barrier between me and the sort of bad behaviors I study because I know that simple knowledge of the sort of biased, irrational poor behavior that I study is a weak predictor of doing the opposite. I know I’m no better than the next person, no matter how many books I write on the subject. I take pains to diversify, to keep my fees low and to work with someone who will keep me out of my own way.

16:01 Emily: Yeah. I think this is something that’s maybe not well understood by the public. That you may be paying an advisor for expertise — you are not necessarily, but someone else may be — but an even more important role is, as you just said, to kind of talk you off the ledge from carrying out bad behaviors that you’re inclined to do as any human naturally would. You’re specifically talking right now within the realm of investing, is that right? Or does your advisor help you with other decisions as well?

16:31 Daniel: He does help me with things around, you know, the purchase of a home. He’s sort of a sounding board for things like college savings for my kids, the purchase of a home. But I’m primarily focused on investing and investing professionally is my primary focus.

Commercial

16:53 Emily: Emily here for a brief interlude. As a listener of this podcast, every week you hear strategies that another PhD has used to improve their financial picture. But listening and learning does not automatically translate into action in your own financial life. If you are ready to change how you think about and handle your money, but need some help getting started, I can be of service. There are two main ways you can work with me to create and implement a financial plan tailored for you. First, I offer one-on-one financial coaching, either as a single session or a series, as you make changes over the long term. You can find out more at PFforPhDs.com/coaching. Second, I offer a group program called The Wealthy PhD that is part coaching, part course, and part community. You can find out more and join the wait list for the next time I open the program at PFforPhDs.com/wealthyPhD. I believe it’s possible to succeed with your finances at every stage of PhD training and throughout your career. Let’s figure out together how to make that happen for you. Now, back to the interview.

Human Emotions and Financial Decisions

18:08 Emily: Is there anything else that you have learned, and then applied in your own life, aside from putting a bit of distance between yourself and being able to make a fast decision?

18:18 Daniel: Well, one of the hallmarks of behavioral finances talks about overcoming emotion. A lot of what we talk about is how do we keep people from making these emotionally laden decisions, but one of the other things you learn when you’re studying human behavior is that it’s always easier to roll with a behavioral tendency than to push against it. There’s cool research that shows that people who look at a picture of their children for five seconds before making a financial decision save more, are more likely to stay the course, et cetera. Similarly, we find that people who invest in ways that are aligned with their own personal preferences around the world that they want, in terms of social issues, environmental issues, tend to be better behaved. So I’ve tried to build some emotion into my process. I’ve tried to keep the things and the people that I love at the front of my mind and central in the planning and investing process, and I’ve tried to invest in a way that’s consistent with my values, because I think that it makes it a little stickier than say owning the S&P 500. It just personalizes it a bit. I think that those are both powerful ways to make investing a little more fun, to make the investing and planning process a little more personal and to bring about some good behavior in the end as well.

19:51 Emily: I really love those suggestions. I think I’ve also, maybe in the similar vein of looking at a picture of your children, I’ve heard that if you look at a picture of yourself aged up, you make different decisions. Is that right?

20:04 Daniel: That is right. Yeah. One of the things you learn a lot about in behavioral finance is salience and salience is just the ease with which you can sort of imagine or tap into a situation. As I sit here, I’ll be 40 next week, so as I sit here at nearly 40 years of age, it’s hard for me to imagine 80 year old Daniel, right? The idea of a guy who walks with a cane and has gray hair and stuff, it feels a little remote. People have found that if you age your face, you’re basically making it a more visceral experience to imagine yourself as this 80 year old version of yourself, it brings about better behavior. Again, that’s an imperfect example of how you imbue the process with a little emotion to help you make the right decision.

20:56 Emily: I actually had a client asked me recently what I thought about the particular RoboAdvisor Ellevest and she followed that up with, well, I’m really passionate about women and empowering women and all these things that were sort of in line with Ellevest’s mission. And I said to her, well, it sounds like you’re really excited about that, so I think they’re fine and go for it. Because, as you were saying earlier, if it it lines with her values, that particular manner of investing, she’ll probably be more likely to throw more money at it, engage with it more, and have a better outcome. Is that right?

21:27 Daniel: Yeah, that is. Without speaking to the particulars of Ellevest, I don’t know all the ins and outs of it enough to say one way or the other, I have a lot of respect for Sallie Krawcheck who heads up a Ellevest. But in general, you’re more likely to contribute to, and stay the course in your women’s leadership fund than you are your S&P 500 fund because it’s personalized, it’s tailored to you and your values and, not making any promises here, but there is also research to suggest that the kind of companies folks like Ellevest seek out, companies that have better female representation on boards and things, there’s historical research to suggest that those companies have outperformed the broad market, at least historically. I think there’s every reason to try and personalize your investing to your own preferences, feel like you’re doing a little good in the world, and if that helps to animate you to stay the course or to set aside a little money, both of which are very psychologically difficult, more power.

Behavioral Finance Strategies for the PhD

22:35 Emily: Absolutely. Yeah. Another question here. We’ve started to get some insights into this behavioral finance stuff, maybe for the general population, but I’m wondering if you see that there are any personal finance pitfalls that you think PhDs might be particularly susceptible to falling into, and then what strategies might there be to not do that?

22:59 Daniel: I’ve observed — I’ll speak to psychologists, doctors of psychology in particular, but I think that this probably applies to PhDs broadly — a lot of times we get a PhD because we want deep domain-specific knowledge, right? We get into this because we love it. We want to be the best in the world at it, but almost every position needs a bit of business savvy, and I think that we have more power than we realize. I think this power takes a couple of forms. I think first of all, you need the power to negotiate a salary. That first job you get is more predictive of your ultimate wealth than just about anything else, because it benchmarks every subsequent salary conversation. Being comfortable negotiating that first salary — I remember that first job, you feel lucky just to be there. You beat out 20 other talented people to get the offer, but don’t be afraid to know your worth and to negotiate that salary. I would say PhDs need a little business training, because we have this deep domain-specific knowledge, but we don’t know, sometimes I feel like, how to do more practical things. I think get a little bit of business knowledge.

Daniel: Then a third thing and I would say the thing that has probably served me best in my career, financially, is to just think creatively about your role. If I had stayed on the prescribed path of being a dual-appointed college counselor, I would make a fraction of what I make now. Because I thought expansively about the things that I learned in school, and rather than saying, “Oh, I’m a PhD in psychology, so let me do PhD in psychology things” I thought, well, I know to have great conversations with people. I know how to run a training. I know how to read human emotion and human behavior and all of these things, when you conceive of them as building blocks, you can repurpose those building blocks in different ways and create a host of opportunities for yourself. Rather than thinking about one prescribed path, think about your education as a series of building blocks, a series of competencies that you can repurpose in any number of ways to do a host of different things. Finally, I would say don’t be scared to get out of academia. Because when I was in academia, you’re a face in the crowd, you’re one PhD among many. But when you get out in the real world, when you get out in the business world, you’re special and people respect your expertise in a way that they might not necessarily in a university setting. Lots to be said for a university setting of course, but I think don’t be scared to get out there to try something new and to know your worth.

Dealing With an Income Increase Post-PhD

26:20 Emily: Such wonderful advice and you put that so well. Thank you. I’m wondering if you have any advice for a person in this situation, which is something that you went through, which is a person who is about to come on a large income increase? They’ve been in training, grad school, postdoc, whatever it might be, and now they’re going out there and doubling or tripling, or more, their salary, potentially in industry, or similar. What behavioral finance concept should that person know about and be applying in that situation?

26:50 Daniel: This is a great question. The concept to know here is what’s called the hedonic treadmill, which says that, as our earning increases, our consumption or spending tends to increase in ways that are commensurate with the increase in earning. And then you never feel richer. You never feel better off because your lifestyle has risen as fast as your income. My number one piece of advice here would be to not let your lifestyle rise faster than your income and to make sure that as your income increases, so does the amount you’re setting aside, because lifestyle creep is a really, really big problem. What’s fascinating is, and I’ve been certainly bitten by some of this and haven’t followed my own advice here in certain instances, but the things that seem so extraordinary to you — I think about my house; when we bought this house it was the most beautiful house I had ever seen and soon it’s just where you throw your dirty socks — it just quickly becomes the backdrop against which you live your life. So really watch out for lifestyle creep. Make sure that if your income increases 50%, that your spending only increases 25%. Have a little fun, but make sure that they don’t increase in lockstep because that’s not where happiness is.

28:26 Emily: Yeah. I guess, I think I would add onto that — you put it very well about how the hedonic treadmill operates — I think that for some PhDs, when they get out of training and they finally have that larger salary, there’s some pent up demand. There’s some pent up wanting to spend behavior because they have been on this constrained income for so long. My advice to that person, in addition to what you said, would be to splurge on something that’s a one time expense, like a grand vacation or something, and not upgrade your housing this high degree, not upgrade your transportation to a high degree, not upgrade those fixed or recurring expenses in your life, but rather have this one wonderful, pleasurable experience and then get back to a lifestyle that is, as you were saying, far below what you could actually “afford” with your new salary, just so you aren’t stuck on that treadmill over the long term.

29:15 Daniel: I love that advice and I think it’s also consistent with understanding how you can spend money in ways that make you happy. When you look at the research on how to spend in ways that makes you happy, giving money away makes us happy, spending on experiences makes us happy and spending on getting rid of stuff we hate doing makes us happy. Having someone mow your lawn for example, makes happy. Buying time, buying experiences, and giving for goodwill — these are the things that make us happy. Don’t go buy a fancy car. Don’t go buy a big house that’s going to lock you into this recurring expense trap and it’s not even going to make you feel any better. It’s a trap.

Last Words of Advice and Where to Find Dr. Daniel Crosby Online

30:01 Emily: It’s great insight. Thank you. Do you have any final pieces of advice? We’ve already heard so much, but anything more for that early career PhD in terms of personal finance or behavioral finance advice?

30:11 Daniel: Again, just really to know your worth. I felt like when I broke out of my swim lane and got out of the cattle call that was sort of herding me towards this very prescribed life and once I sort of broke out and got into the world, I found that people had a lot more enthusiasm and respect for my ideas than they might have in a more constrained academic setting. So know your worth, don’t be afraid to ask for what you’re worth and go get ’em.

30:46 Emily: Wonderful. And if listeners want to follow up more with you, want to learn more from you, read your books, listen to you, where should they go?

30:54 Daniel: Yeah, I’d encourage folks to check out my books. The Laws of Wealth* is probably the place to start, The Behavioral Investor* is next. I’m super active on LinkedIn and Twitter, @danielcrosby.

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

31:07 Emily: Thank you so much, Daniel, for this interview.

31:10 Daniel: My pleasure.

Outtro

31:11 Emily: Listeners, thank you for joining me for this episode. PFforPphDs.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, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars covered 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 Poddington Bear from the Free Music Achive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

This Postdoc’s Financial Turnaround Story and Attitude Toward Money Are Incredibly Inspiring

October 21, 2019 by Lourdes Bobbio

In this episode, Emily interviews Dr. Indira Turney, a postdoc at Columbia Medical Center. Indira tells the story of how her finances changed over the course of her PhD at Penn State. Indira started graduate school with approximately $60,000 of debt in a variety of forms and no idea where her income had been going. She resolved to turn things around, and by the time she graduated she was debt-free with cash savings and investments in a Roth IRA. Indira details the strategies she used to increase her income and minimize her expenses. Her methods are both creative and highly accessible for other graduate students.

Links Mentioned in This Episode

Personal Finance for PhDs: Schedule a Seminar
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Help Out
Find Dr. Indira Turney on Twitter and Instagram

Teaser

00:00 Indira: And I think that’s when I realized, wait, my bills are going to be the same for the next five years and we’re having all this money coming in, I could pay off my loans. I don’t have to wait until the end. I think that’s what kind of started opening up my eyes.

00:16 Emily: Welcome to the Personal Finance for PhDs podcast, higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season four, episode ten and today my guest is Dr. Indira Turney, a postdoc at Columbia Medical Center. Indira tells the incredibly impressive story of how her finances changed over the course of her PhD at Penn State. Indira started graduate school with approximately $60,000 of debt in a variety of forms and no idea where her income from the previous year had gone. On top of that, she realized that she was taking an income cut to approximately $20,000 per year for her stipend. She resolved to turn things around and by the time she graduated, she was debt free with cash savings and investments in a Roth IRA. Indira details the multiple strategies she used to increase her income and minimize her expenses. Her methods are both creative and highly accessible for other graduate students and we could all do well to adopt her attitude toward income and finances. Without further ado, here’s my interview with Dr. Indira Turney.

01:25 Emily: I’m delighted to have joining me today on the podcast, Dr. Indira Turney, and she has a really remarkable financial story to tell from her time in graduate school and since. Indira, will you please tell us a little bit more about yourself?

01:38 Indira: Sure. I’m happy to be here and thanks again for inviting me on the podcast. I’m currently a postdoc at Columbia Medical Center in New York City and I graduated from the University of the Virgin Islands with my bachelor’s. I went on to do a pre-doctoral program at the University of Pittsburgh for about a year and then I went on to earn my PhD in cognitive neuroscience at Penn State University in Pennsylvania. Now, I just started a postdoc at Columbia Medical Center, where my research essentially focuses on using molecular and functional neuro-imaging to identify socio-cultural sources and neuro-correlates of Alzheimer’s disease across diverse racially and ethnic population.

02:25 Emily: That is awesome. Thank you for telling us about that.

Indira’s Debt-Free Journey

Emily: So financially, where were you at the start of graduate school?

02:34 Indira: When I started grad school, I had about $60,000 in debt at the time. I never really calculated it specifically, but I had a car loan, I had about $20,000 student loans, and I had some health insurance stuff that I hadn’t paid off fully and some credit card bills. So in total about $60,000.

02:56 Emily: Yeah, that’s a pretty heavy debt load for grad student, and especially because with all student loans, of course you’d be able to defer that and not pay attention to it. But with other types of debt you still have to address it as a graduate student. What was your income during graduate school?

03:12 Indira: My first year I had the regular base pay of about, I think it’s about $1950 on a monthly basis, so about $19,000 a year. That’s what we got to cover stipend and then they paid tuition as well, as a teaching assistant. That’s what I had the first year and then after that with applying to other things, I essentially increased that based on how much funding I got that year.

03:37 Emily: So can you give me like a range for your subsequent years in graduate school of what you were earning?

03:43 Indira: As far as grad school funding, for years two, three and four, I got an NSF grant, so I went from $19,000 to $35,000, so that was a huge increase. My last year I got off of NSF because it was only three years and I went back to the regular base pay of $1950, but because I was an NSF for three years, I also kind of negotiated having a little extra, so I had about $23,000 or $22,000 a year. In addition to that, I also had other grants and funding, which probably, at max, was about $25,000 a year from graduate funds, as far as stipend goes, in my last year. So anywhere between $19,000 to $36,000

04:32 Emily: And it was just five years during your PhD, is that right?

04:35 Indira: Six years, actually, six years. Right. So the last two years.

04:39 Emily: And you said a word that I love to hear, which is negotiate. Can you tell me really briefly about negotiating?

04:46 Indira: Sure. So technically the program is five years and if you’re more than that, they tend to bump you down as a way to push you out. I essentially was like, “No, I’m not going to get paid $18,000 a year. I saved you guys a whole lot of money for three years by getting NSF funding.” And even while I had NSF funding, I technically taught a class, which I wasn’t necessarily supposed to. So I was just like, “I did a lot for the university, especially for this department. You’re not going to bump me down. If anything, you guys should increase my stipend.” Not in those words of course. I think there’s always room for asking for more money because there’s always money there, because technically they gave you, in your letter in the beginning, this is your five-year funding. There is money there. If you told me there was money there for five years, I deferred for three years, then there’s money there, so don’t tell me I used up your money for six years. I think there’s always ways to negotiate and tell them why this is what you’re worth and you are always worth more than what they give you. And if you ask there’s usually a lot of room for extra money.

05:51 Emily: I know you just said you didn’t use those words, but I really love the words that you just said and I’m so pleased to hear them. I think a lot of people need to hear them, about your value, and especially if you win outside funding. Yeah, of course they should extend your tenure and increase your pay. But I was just very interested in hearing that you actually did that negotiating after the NSF concluded. And so there’s still room when the money is yet to come in, even after the money has already passed through the system. In your opinion and in your example, the money was still there, you said the right words, you unlocked the money. In those last two years, were you doing like an RA or did you have to TA or where did the money from?

06:31 Indira: I did a mixture of both, so I TA-ed, where I taught a class because after your master’s you can actually teach versus just correcting papers, I guess. Then I also did an RA fellowship with my lab advisor where essentially I just did the work in the lab and got paid for it, instead of teaching a class where I’m taking away time from my research. I also got another award that bought off some time where I didn’t have to TA that year, even though I was getting funded by the university, I still didn’t have to TA that semester. So I really only taught two years out of the six years and on-and-off half a semester here and there.

07:09 Emily: Gotcha. Okay, so start of graduate school, things are actually not looking too great for you to start of graduate school. Approximately $60,000 worth of debt, not a very generous stipend, although probably okay, given where you were living. But then second year and following, buku bucks, at least for the time you were on the NSF. What’s the snapshot of your financial picture upon your defense, when you finished graduate school?

07:35 Indira: Upon defending, I was completely out of debt. I had $0 in debt. I tried to pay off everything, so my goal was pay it off in five years and I paid it off in four and a half, so my last year I had absolutely no debt at all. My car was paid off. I had paid all my student loans, except for maybe like $1,000, that I think is lurking somewhere from undergrad because the $20,000 I had was for my first year of grad school because I had moved away from the Caribbean to the United States, and so I felt like I needed the extra money, but I had about $2,000 in undergrad, which those are deferred because I’m still taking in school. But your grad school loans, they accrue interest while you’re in grad school, so I was determined to pay off that before I graduated. So on graduation day, defense day, I was completely out of debt, which was amazing.

08:22 Emily: So just so I’m clear about where the student loans came from, that was from the year that you were in school prior to starting your PhD? Is that right?

08:31 Indira: No, so the year prior to starting my PhD, I was fully funded. I think we got like $2,500 a month for a year or eight months pre-doctoral program. Then, right before I started grad school, I applied for financial aid, for a student loan until the start of grad school. I had a $20,000, I don’t know what it’s called, but essentially it was a loan from the federal government and it accrued interest every month. once you started grad school.

08:59 Emily: Okay. So you had taken out a $20,000 student loan, but you also had the loan money. You received it at that time, at the beginning of graduate school?

09:09 Indira: Yes, essentially they give you the loan from the beginning, and then you decide, which was scary because I’m like, I have $20,000, what am I going to do with it? But the point was for moving expenses and living other things that I didn’t account for moving from the Caribbean. So I had that, and from day one, I guess it started accruing interests, so when you get that first bill where it’s accrued about $50 an interest, because I think it was like a 6% or 7% interest rate and I’m just like what. And I didn’t even know that at the time when I applied for it because I assumed I’m in school and I’m not gonna be paying off or getting interest while I was in school, but not for grad student loans, apparently.

09:50 Emily: Yes. Okay. I’m glad to get a little bit more clarity on that. So you took out the loan at the beginning of graduate school, which was un-subsidized, as graduate student loans are, because of the expenses that you had just accrued immediately before that in the moving expenses and so forth. And also, I’m assuming you’re looking at your stipend thinking, “how am I gonna do this?” Okay, so you had that loan right at the beginning, but then by the end of it, you had paid that loan back entirely, as well as the rest of your debt. Anything else going on in your financial picture by the time you finished graduate school?

10:22 Indira: So at that time, about maybe by third year of grad school, I had started saving, just regular savings in a bank, and then I also started investing in a Roth IRA where I ranged from putting in monthly about a $100 when I started and then maybe I upped it to about $300 a month. So I had a Roth IRA and regular savings at the end of grad school and zero debt, which was amazing.

Making the Changes to be Debt Free

10:47 Emily: Yeah, that sounds fantastic. And what a turnaround story. So what were you doing in between point A and point B to have this vast change?

10:57 Indira: Right. So essentially I applied to everything, including large grants up to $40,000, $50,000, or if you account for stipend, some of them were $80-$100,000, to things that were even just $500 for anything, whether it’s for research or…What I did was, so for example, if you go to a conference and they give you per diem, where you have about maybe $90 a day for breakfast, lunch and dinner, I don’t need $90 a day for food. I don’t normally spend that anyways. And so yes, I can’t meal prep while I’m on a conference, but I usually don’t have breakfast anyways. I’m not gonna waste $30 on breakfast. So when I get back from the conference, especially say a week long conference, I now probably save at least $30 for five days from a conference that I didn’t have breakfast. And most conferences probably give you coffee and bagels in the beginning anyways. Mmost times I probably spent most of the money on dinner because that’s when you network with colleagues in the field. So $30 breakfast and maybe I’m off $50 for lunch, so $70 for five days that I would save. I think that was one of the easiest ways in the beginning that I learned to save money from money that I got legally — legally I’m saving this, but I’m not, you know, forging signatures to say I didn’t have lunch or something like that. Not signatures, receipts, sorry. Because with per diem they’re not asking for receipts.

12:15 Indira: Then the other method. I meal prepped, so I didn’t have to buy lunch, because as grad students I think it’s so easy to run to the cafe and get something there, long nights you get food there, but I generally meal prepped, most times, on Sundays. I have these Mason jar salads that towards the end of grad school I learned was amazing, and so I would prep five and that’s lunch for the week. I have no excuse to buy lunch, especially since a salad costs like $10, when I probably spend $15 for five salads a week. I had fun, I hung out with friends, but I always planned it. Not the specific event, but plan for this month, like I’m spending $120 on fun and by the halfway of the month I’ll check in, where are you in that $120. Because I feel like once I’m out I’m like, “Well, I’m out, I’m going to have fun, I’m not going to make finances keep me down.” And so I just spend whatever versus if I know I’m within my budget, it doesn’t matter. But if I didn’t plan for it, then I overspend.

13:15 Indira: I also did a lot of side hustles, in addition to funding and federal money, where I did hair braiding, dog and cat sitting. House-sitting was my first summer when I moved. I moved about two months early before grad school and instead of paying for rent, I essentially house-sat for someone and they had a cat, so house and cat stuff for that two months. I also did Airbnb with my apartment. In PA, it was a lot cheaper than New York, so I was able to have a two bedroom apartment. On football weekends — Penn state is a big football school — so from Friday evening, someone would come and leave early Sunday morning and in just one weekend I can make anywhere between $600 to $800. I would just go bunk on someone’s couch and leave my entire apartment for someone, because even within the town, they knew football weekend was big, so hotels would be about $400 a night. Instead of paying $400 a night for a bedroom, they’d easily pay $400 a night for a whole house. I did football weekends about maybe five or six times a semester in the fall, and that would essentially be my roommate. I had a two bedroom, but I didn’t need a roommate. Then on graduation weekends, which was in May or December, but usually the May graduation weekend hotel rooms would be like $800 and $900 as well, so I would rent out my entire home again. On graduation weekends, I think I did it twice, and one time I got about $1,500 for just the weekend. I don’t remember the second time how much it was, but it was around that. So side hustles, applying for everything, and also meal prepping, saved me a lot, and planning my expenses for even fun.

Balancing Different Incomes During Grad School

14:56 Emily: Yeah, that was an amazing amount of information and amazing overview of what you were up to. I want to follow up on a lot of that stuff, but just before we get there — so when you started graduate school and you had this lower stipend level and then you know, in the next year the NSF stipend is so much higher than what you were making, so you have this vast income increase — did you change anything in between those two years? Were you living in the same place, for example?

15:28 Indira: Between the first year of grad school and second?

15:31 Emily: Yeah. I’m kind of wondering if you sort of set up your life in the first year to live off of that $20,000 per year-ish, but then you had that vast income increase — did you increase your lifestyle or did you keep your lifestyle at that original level?

15:45 Indira: No, so at the very beginning I was making about $1,800 a month and so I lived in a one bedroom, but technically it was actually more expensive than the two bedroom I moved into cause it was like a apartment complex versus someone who had a home and they were like, yeah, you can live here kind of thing from Craigslist. Um, and so I didn’t intentionally necessarily go cheaper. So that was really the only thing that changed. I probably, I think I was being like $975 for a one bedroom and that I paid like $950 for two bedrooms. So it wasn’t necessarily a big change. I still had a car so that all of those things remained the same. Um, side hustling if anything. I started Airbnb my second year. So even after I got NSF, it was when I started doing it, because I was like my biggest paying side hustle.

16:29 Indira: Lifestyle-wise most of the things stayed the same which is, I think one of the beauties of grad school. Your bills, your lifestyle for the most part stays the same for at least five years. I think for things like that, I started realizing, and I did a workshop from the Black Graduate Students Association and they had something about financial literacy. I think that’s when I realized, wait, my bills are going to be the same for the next five years and we’re having all this money coming in. I could pay off my loans, I don’t have to wait until the end. I think that’s what kind of like started opening up my eyes. But as far as lifestyle, no. Those things pretty much stayed the same for five years. Aside from like emergencies and stuff like that and just like maybe a little more traveling towards the end. But the basic lifestyle remain the same.

17:14 Emily: Okay. So really what happened is you had your lifestyle set at that original stipend level that you were receiving, and then your income vastly increased both from the NSF and from your side hustling. Were you just like crazy throwing everything at debt? Like that was a huge goal that you had. What were you doing with that excess?

17:34 Indira: In the beginning it was more so I never used to save. Like I said, the year before I started grad school, I did that pre-doc program and we got about $2,500 a month and we didn’t have to pay for housing because all of that was paid for. I don’t know where that $2,500 went for eight months. So when I started grad school and I realized I’m getting paid less than I was going to get out of the pre-doctoral level, I was like, “Wait, this makes no sense. Where did that money go? I need to learn to start saving.” I started just putting that extra money in savings, but then realizing of course I’m not getting a big return. All right, I know those debts, those bills keep coming back. And I’m like, “Why am I just letting this accrue interest for the loans?” So then I started paying just the interest rates and stuff like that.

Indira: I think I just didn’t want to be in debt and I realized that I have all this money coming in and grad school and the lifestyle that’s going to be the same for five years. I started realizing that I was blessed to not have $100,000 in just undergrad debt alone because a lot of my friends did. They just have that sitting there because it’s not accruing interest and that’s fine, but I realized too, a lot of them were taking that money and living a more luxurious lifestyle now in grad school because we’re getting all this money and we could live a pretty decent lifestyle depending on how much money you get coming in. But I’m like, “why not just pay off the other debt?” because then guess what, when you’re done with grad school, the debt is still there waiting for you versus live a balanced lifestyle and paying off your debt. I think it wasn’t like a big, “I have to pay off $60,000 debt”, I was just more aware of where my money was going and one thing after another just led me to investing and putting it into different things.

19:18 Emily: Yeah, I’m really glad that you had that sort of realization. Yyou had this one year in the pre-doc program where you are making a pretty okay amount of money for a stipend, but where was it going? And you sort of had a re-evaluation point, like “Okay, I don’t know what just happened to all of that. I obviously have to change some things within like my financial management going forward.” Also, it sounds like you also went to some financial literacy events or a course or something and that also helped you think differently about your money during graduate school and realizing that you had the ability to work on it right then and didn’t all have to wait for the end.

19:57 Indira: Right. Because unfortunately I think a lot of us are just not taught about how to use the money we get. And so then when you get it naturally, we’re like, “Oh my God, I have all these extra thousand dollar a month. Maybe I’ll go somewhere and travel, do something.” Which is nice, but I mean I think that workshop from the Black Graduate Student Association definitely opened up my eyes.

20:13 Emily: Yeah. Sounds super valuable. I’ll make a shameless plug for my own services here. Probably not exactly the same as what you experienced, but I do offer seminars and webinars for universities, specifically for grad students and postdocs on, I don’t call it financial literacy, but I call it personal finance. So anyone out there who’s looking for that kind of programming that can be incredibly life changing, please think of me. My website, pfforphds.com/speaking, is where you can go to find out more about that.

20:38 Emily: Back to Indira’s story. Okay, so we’ve seen the beginning of the end point. You’ve talked about a few of the strategies that got you from point A to point B. I want to dive into each of them a little bit more. So as you said, you were applying for everything to increase your income, including, I mean obviously you won the NSF, you’ve already mentioned that. That’s awesome. Probably the biggest difference of any of anything that happened. You were talking about how you were using per diems from conferences, but just being frugal right around your food spending. So instead of spending 100% of what you are given, that really is a little bit of like windfall money. You come home from a conference, you realize, “Okay, I was receiving X amount of money, only spent whatever it was, 50% of that.” Hey, a little bit of extra money. That’s something that I think having a plan for, that’s what I call windfall money, unexpected money that enters into your pocket somehow. Did you just throw that towards whatever your current goal was? Savings or debt? How did you think of it?

21:41 Indira: Yeah, so in the beginning, whatever extra I had, I just had it in savings and then I realized my savings was looking really nice and I was like, “well, what am I doing with this money?” I don’t have kids. I send money home to family and stuff in the Caribbean, but aside from that, I didn’t have a need to have a big cushion. Especially, like I said again, I know I’m not going to get laid off of grad school, so I didn’t have to have this big cushion in case I lost my job. I was like, “what am I gonna do with that?” In the beginning, I put everything into savings and then I started doing the Roth IRA because I’m like, “Oh well maybe I can get a bigger return there.” Now, as a postdoc, I’m doing some regular investments as well. But at that time it was just a Roth IRA and savings. I started calculating, if I have this in my Roth and this in my savings, where there’s still a “life happens” emergency fund in my savings, the extra I put towards starting to pay off my student loans. I think at one point I just put a lump sum on my car payments. That way, in case something happened, I just didn’t have like the feeling of every month I had to pay a certain amount and if I didn’t then all of a sudden it’s a problem, so I just put a lump sum down. Technically, I was always about three months ahead of my actual payments due. So starting with savings, then the Roth, and then started paying off the student loan and the car loans and the other health insurance and credit card debt. It’s like the highest interest rate and from there, just started working my way down. One thing I liked about what you said is that extra money. I had a monthly income, then I said this is what I’m spending and when I calculated my spending, I had fixed, flexible, where fixed is like the things that you need — there’s no ands, ifs or buts about it. And the flexible is like Netflix or eating out and stuff like that. Those were budgeted based on my $1,800 a month, and then when I had NSF, it was budgeted on my $3,500 a month and then all the extra staff, I never budgeted. Those just went into my savings and paying off debt. I never felt like I was using it and then extra stuff, that I used for extra fun.

Side Hustling as a Grad Student

23:55 Emily: I see. Yeah. Thanks for going into the that detail about your budgeting. You also mentioned that you had tried out several side hustles and I wanted to know because a couple of them are pretty accessible. So the first one that you mentioned was, house-sitting or cat-sitting, which basically meant that you didn’t have to pay rent for two months and this is like sort of a holy grail of things to pursue. How did you land that gig?

24:23 Indira: The house-sitting the first semester — I told my advisor that I wanted to move early and do an RAship, or research assistantship, so she paid me what they would pay a regular RA. I also asked her if there was anyone — on the faculty list there’s always people going on sabbatical or going away for the summer, for a month or during the summer. I know a lot of faculty members, from being at Pittsburgh, I know a lot of them were going away for about at least a month and they were looking for places or people to house-sit, or cat-sit if they had pets. So I was like, “Oh I wonder if people at Penn State do the same thing.” And lo and behold, they did. There happened to be a faculty member who was going away for the two months that I needed a place before grad school. I asked my advisor, she gave me a few different people who were looking, I reached out to them, told them I was moving, going to be a very responsible grad student and I would love to take — at the time, I didn’t have a dog so I didn’t have any recommendations about being a pet-sitter. But I mean, it was a cat, so I think it was easier to sit for a cat. I just applied and reached out to people and interviewed through Skype and stuff like that and then moved all my stuff into their basement, until I was ready to move into an apartment for grad school.

25:31 Emily: Thank you so much for sharing that because, as I said, I think it’s very accessible. It’s maybe not something you’d do 100% of the time and obviously later on you rented an apartment, you didn’t end up doing that 100% of the time. But for a bridge kind of period of time, it’s really perfect. And again, for the summer, as you said, faculty do travel quite a bit. Even someone going on sabbatical or whatever, could be longer than that. What you did is so easy to do. You asked your advisor, you got some recommendations, you followed up with those people, you land —

26:04 Indira: Sometimes our advisors may not know, but once I was in grad school, I also knew what people who needed house-sitters. I think even asking just the grad students, “do you know any faculty member who needs someone,” is another way to go about it, especially again, even sabbatical. I never did it, but for sabbatical, if someone’s going away for a year, that’s a year you can save in rent. I know one person who did that, so there’s definitely ways to save for rent.

26:27 Emily: You know someone who has sat for a year, like nine months?

26:31 Indira: Yeah, it was a little tricky. She house-sat for about four months. It was half a year, so it was just a semester, and she just stayed at their house. She still had her apartment, because she had a partner and he had to stay there and whatnot, but assuming she didn’t have a partner, that would’ve been saving rent for an entire three, four months. I know other faculty members who leave for six, eight months or usually two semesters I guess, and if they have a pet, that’s usually the key thing, where they need someone to stay there because they can’t take the pet with them or they rather not. They usually just have students who can just come and check in, but because usually we have our things set, and especially in a small town, it was a little tougher because you can’t get a six month lease or three month lease, it’s always a twelve month lease and you don’t want to break your lease. But given that opportunity, depending on the state that you’re in, the city, you would be able to just stay at that person’s place.

27:32 Emily: Yeah. This is a great idea for anyone who’s again doing something like moving somewhere on a little bit of an off schedule from what the market is accustomed to. That’s amazing. What were the other side hustles that you mentioned?

27:46 Indira: I did some hair braiding, so doing people’s hair. I have locks now, but before that I did all kinds of hair, and all kinds of races too. Especially being in State College, a lot of the faculty members kids wanted braids, for example. I know a lot of friends for example, who braid hair, but it’s a little tricky to braid ethnic hair versus someone who’s white or Hispanic. I braided all kinds of things. I would do the kids’ hair and of course they love it and be excited and be like, “Oh my God, I want you to do it to my hair all the time,” so that was a client automatically, at least once a month. Then I also did Airbnb.

28:22 Emily: Right. Airbnb. Yeah. That was the other thing I wanted to follow up with you about. It’s very evident to me that you have this, I don’t know if I want to say entrepreneurial, but you just go after things. You just take opportunities as you see them, which is amazing. The Airbnb thing I think is so clever and it’s again, something that I haven’t heard of from a PhD before. I wanted to talk to you a little about it a little bit more. You were renting during this time, right? And was that kind of usage of your rental in accordance with the lease?

28:53 Indira: I know in New York there’s a lot more, I didn’t realize there were so many restrictions with Airbnb. I know there were some rental properties in State College that didn’t allow Airbnb. I was pretty up front with my neighbors. They were these old little couples, so they were pretty flexible. I told them, you know, I’ll have people coming into my, I didn’t say Airbnb because I didn’t think they knew what Airbnb was anyways, but I was like, I have people who will be visiting and they would stay here on the weekend, especially a football weekend, Friday to Sunday. I will make sure they don’t damage anything, everything will be my responsibility, although Airbnb I think reimburses up to like $1 million in damage, I never had that issue. I essentially just reaffirmed them that I will have strangers in my apartment for short periods of time and I will make sure that they don’t disturb the neighbors or anything like that, but if you have a problem let me know. But actually, I think they never lived close to me anyways and like I said, they were older couples, so maybe there was some leeway there. Even after I started doing Airbnb, I told all my friends about it cause I was like, there’s so much money to be made here. Some of them illegally did it and others, their apartment people were fine with doing it as well, for the most part. I think it depends on the city. I think New York is definitely a big no, no, but in PA, unless it was one of those big fancy new student-based apartments, most apartments allowed it.

30:13 Emily: Yeah. This is definitely something that if someone’s interested in this idea, they definitely just have to keep on top of the regulations because it can change really quickly. But yeah, your place in time, it sounded like it was perfectly acceptable and the numbers you were throwing out earlier were very impressive for the amount of money you were able to rent for, especially the graduation weekends. I’m just thinking, you saw a huge influx of people coming in for a game day, coming in for graduation, and you saw what hotels were charging and you just said, “well, I have a place to offer too.” That’s just amazing that you did that. It sounds like some of other people are doing as well, so it’s not like you are the only person who thought of it.

30:49 Indira: I think about maybe four or five of us did. I don’t know anyone who was doing before me. Not like I’m the person who told everyone about Airbnb, but I think everyone was a little hesitant about having someone in their apartment. Is someone going to steal my stuff? And so I think after just being like, “no, there’s no harm because Airbnb also reimburses you up to $1 million,” that’s what they say anyways. I think when I got a dog it got a little trickier. Towards the end of grad school, I had a dog and it was easy for me to just go stay on someone’s couch, because you have friends, you’re probably spending the night there anyways, but with a dog you have to bring a crate and then if they don’t allow dogs in their apartment that gets a little tricky. I would do it a little less frequently when I had a dog and then the last year I just didn’t at all because it just became inconvenient for both me and him and my friends. But I think without a dog or if it’s a really small dog where you don’t have to bring a crate and all that stuff, then I think that’s more flexible too. Or like my friends, if they did it a weekend, I would take their cats and stuff and because it’s easy with a cat and stuff. I just think it depends. For the most part it was, I think, my most favorite side hustle because it brought in the most money for the least effort. Then the second one would have been hair braiding because I just loved doing hair.

32:05 Emily: Yeah. That sounds incredible. And I think this is again, potentially very accessible for other people who live in college towns who can see the same patterns emerging of people flooding into the city for big events.

32:17 Indira: I mean anywhere, especially college towns that have football games because people are just going to spend money. They come with families, they want a big place or a place versus just a hotel room. And there’s a really low risk because the whole day Saturday they’re at the game, so they’re not really there and you can decide whether or not you want them to have parties at your house or not and then they usually leave early Sunday morning and they come late Friday night. It’s really one full day that they’re there. Even now in New York, I was looking into it before I found out that you had to do at least 30 days or something like that. New York would be a good place too if it wasn’t the 30 day limit because again, it’s just another place where people are always coming in. I think as long as it’s a place that people like to visit, I think you can do it.

Lifestyle Changes as a Debt-Free Postdoc

33:03 Emily: Yeah. Oh my gosh, I’m so excited about this. Thank you so much for sharing that. We’ve talked a lot about your time in graduate school. Now that you’re a postdoc and you have even more experience in a different city now as well, you have a whole different set of challenges. What does your budgeting method look like today? What are your best practices?

33:23 Indira: I still use the same thing. I have a monthly budget, I have fixed and flexible spending and I still pay off my credit card in full. Recently, I’ve been experimenting with just trying to calculate the percentage of things that I’m spending for each expense. You know, because of the whole don’t spend more than 30% on rent kind of thing.

33:44 Emily: Exception, New York.

33:46 Indira: Exactly. I’m like, I don’t have a choice. So just having a better sense of my income and where it’s going and what I’m doing. Because in grad school, for example I just had my main fixed spending, flexible spending and everything else just went to debt. Now that I don’t have necessarily debt to pay off, but I have a huge rent and living expense, I just want to know where that money’s going. I still have a Roth IRA and now I am also doing regular investments with stocks and bonds and all that stuff. I just have the one you just leave it and you forget about it. I don’t do the following the stock market. That’s a lot for me right now. Maybe eventually one day, but right now I don’t think I have the time for that.

34:27 Emily: Stick with your current strategy, it’s a good one.

34:29 Indira: Exactly, stick with what you know. For the most part I’m doing the same strategies. I have a Mint app and I also still have an Excel sheet just to kind of visualize where all the money’s going because I think it’s a lot of anxiety of just spending way more than 30% of my postdoc salary on rent, but I’m okay. It’s more of an emotional thing to just feel okay about it. I don’t have a lot of money and I’m spending a lot on rent, but I’m still okay. I’m still doing the same thing.

35:02 Emily: Yeah. Okay, great. What frugal strategies are you using? Are you still meal prepping?

35:08 Indira: Definitely. I still meal prep. My Mason jar salads are still part of my lunches. Depending on my workout schedule and whether I am consistent with working out, I do breakfast, but I haven’t figured out a meal prepping for breakfast yet. Sometimes it’s just a shake. And then dinners, I also still meal prep. I have been trying to strategize and trying to figure out whether I need to meal prep all dinners. Because it’s fine for me to eat the same salad for months and years while I’m at work, versus when I get home, if it’s winter, I don’t really want the same food I had yesterday or maybe want something hotter. It just depends. I’m still trying to figure out dinner, but for the most part I still don’t eat out a whole lot. I still budget, like this is what I’m going to budget for lifestyle this month and if it’s the second week and I’ve gone through that, then I guess we’re done eating out for the week or the month or you know, hanging out or whatever. I still budget everything for the most part and just try to not overspend on things that I don’t need.

Indira: I don’t really take Ubers. The train is pretty reliable in New York. Unless I’m really, really late for something and it’s important that I can’t be late, then I’ll take an Uber, but for the most part, I still take the train everywhere. I feel like a lot of people are just like, “let’s Uber and I’m like, no, I’ll meet you guys there. I’ll take the train.” There’s just so many ways to lose money in New York. It’s ridiculous. I’m still trying to figure that out. I’ve been here about nine months and so I’m still trying to figure out going out. I was a big outdoors person in PA, so parks and hikes were great. Not so much in New York, although I do live close to a park, but it’s not like a hike. I’m trying to figure out those new things because I know there’s a lot of free things in New York, I just need to figure those out. But I still for the most part have a lifestyle and it’s just a matter of, again, budgeting that lifestyle.

Final Words of Advice

36:53 Emily: Thank you for sharing that. Final question as we wrap up here. Thinking back to yourself, your starting graduate school, you have a low-ish income coming in, for the stipend. You have this debt load. In fact, you even took out a student loan because you were unsure about how things were going to go with your finances. What advice do you have for another person facing that kind of financial challenge and also on a grad student kind of income?

37:19 Indira: I mean I think it’s kind of the same things you just summarize. I think apply to everything, no matter how small or large the grants are, because I think the more grants you apply to, the better you get at grant writing. In the beginning it may seem like, “Oh my God, I don’t want to write this essay or this statement.” But over time I reuse statements. And as you get deeper in the program, you learn to write better. You change things, but for the most part I never really rewrote a grant from scratch after my second or third year. Apply for everything no matter how big or small. Don’t doubt that you’re not going to get it, because a lot of grants I got, I didn’t think I was even eligible. Especially for diverse, minority students. I think there’s so much money for minority students that people just don’t even apply to. And then they give it to, not anyone, but people who actually needed versus who don’t. Because people who need it don’t apply or they don’t know about it. Ask other students because there’s so much. A lot of the grants I applied to was because another student had applied to it before. Imagine one person may not have five or ten grants, but if you ask ten different people who had ten different grants that’s ten different grants you can get, so apply for everything.

Indira: Definitely pay off debt while you’re in grad school. Don’t let it sit there and whatever money you get, don’t use it for other lifestyles until after you pay for your debt. One thing I did was paying off debt and then whatever was left over I would have for fun, travel, and stuff like that. And it’s okay to take out a loan in the beginning, especially people who have like $100,000 in debt in undergrad. Yes, it’s not accruing interest, but if you want to take out a loan and just pay a lump sum for now and just to get in the habit of like paying something down, take out the loan. And apply for a lot of things. Have a strategy to pay off the loan before you finish grad school because that loan is going to accrue interest. But in the long run you paid off more in grad school and then it’s like it never existed anyway. So apply for everything, pay off debt while you’re in grad school, and do what you need to do to also still balance life and paying off debt because you don’t have to be miserable paying off debt.

39:21 Emily: And I definitely would also add to that, from your story, just go after it. I mean you were going after funding, you said no to your program: “No, you’re not going to cut my funding. I won so much money. No, you’re going to pay me more.”

39:34 Indira: When you’re starting, so I know I asked after, but even in the beginning, once I was through the program and seeing behind the scenes, you can ask for more money in the very beginning before you even start grad school. They’re not going to take back your letter and say, “well, you asking for too much” because if they have it, they’ll give it. The worst they can say is no. So if they have it, they will give it. So ask.

39:52 Emily: Yeah, I totally agree. And I’ve done one podcast episode on negotiating grad student stipend, before in season one. I’m planning on releasing another one, actually a compilation of stories in the early months of 2020. So if you’re very interested in grad student salary, stipend negotiation, please tune into those episodes.

Emily: Indira, thank you so, so much for sharing this story. Where can people find you?

40:16 Indira: I have been trying to be a lot more active on Instagram, so on Instagram it’s just my name, Indira Turney, so @indiraturney, I N D I R A T U R N E Y. And it’s the same on Twitter, as well. I think those are my two main networking platforms. Email is Indira dot Turney at gmail dot com. It’s fine if you want to ask me questions, please reach out. I’m always open. Like I had mentioned earlier, I’ve been trying to be more open, even about just budgeting on a grad school stipend on Instagram, but also I’ve been also doing a lot of one-on-ones with people just talking about their process because there isn’t a one size fits all for budgeting because people have different scenarios. If you’re interested, send me an email, reach out to me on social media and I’m happy to answer any questions.

41:05 Emily: Yeah, that’s amazing. Thank you for that work that you’re doing, and thanks so much for coming on the podcast today.

41:09 Indira: Thank you for having me. I had a lot of fun.

Outtro

41:12 Emily: Listeners, thank you so much 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’s show notes, a form to volunteer to be interviewed, and a way to join the mailing list. I’d love for you to check it out and get more involved. If you want to support the show and my business, please go to PFforPhDs.com/helpout. There are plenty of ways to sell without laying out any of your own money. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it doesn’t hurt. The music is Stages of Awakening by Poddington Bear from the free music archives and it’s shared under CC by NC.

The Graduate Student Savings Act Fixes a Major Flaw in Tax-Advantaged Retirement Accounts

October 14, 2019 by Meryem Ok

In this episode, Emily interviews Abigail Dove, a PhD student at Johns Hopkins. Abby spent last summer as a science policy fellow at the Federation of American Societies for Experimental Biology (FASEB). Her major policy accomplishment during her internship was to secure FASEB’s endorsement of the Graduate Student Savings Act of 2019 (GSSA), a bill that has been proposed in both chambers of Congress. Graduate students and postdocs are not currently permitted to contribute their non-W-2 income, which typically comes from fellowships and training grants, to Individual Retirement Arrangements (IRAs). The GSSA would allow this type of income to be contributed and have a very beneficial effect on the PhD trainee workforce. Abby explains her role in shepherding the GSSA endorsement through FASEB, what the GSSA would do for graduate students and postdocs, and how the GSSA relates to the SECURE Act, another bill that has passed the House and is before the Senate.

Links Mentioned in the Episode

Teaser

00:00 Abigail: But it was a little tricky for FASEB to first navigate the waters. They’ve never supported a tax legislation before. You think that experimental biology doesn’t have that much to do with legislation on tax. But here was a perfect one for them to start.

Introduction

00:22 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 four, episode nine and today my guest is Abigail Dove, a PhD student at Johns Hopkins and recent science policy fellow at FASEB, the Federation of American Societies for Experimental Biology. Abby’s major policy accomplishment during her summer at FASEB was to secure FASEB’s endorsement of the Graduate Student Savings Act of 2019, or GSSA, a bill that has been proposed in both chambers of Congress. Graduate students and postdocs are not currently permitted to contribute their non-W2 income, which typically comes from fellowships and training grants to individual retirement arrangements or IRAs. The GSSA would fix that problem and have a very beneficial effect on the PhD trainee workforce. Abby explains her role in shepherding the GSSA endorsement through FASEB, what the GSSA would do for graduate students and post docs, and how the GSSA relates to the Secure Act, another bill that as of this recording has passed the House and is before the Senate. Without further ado, here’s my interview with Abigail Dove.

Will You Please Introduce Yourself Further?

01:33 Emily: I have joining me on the podcast today, Abigail Dove, and she is a PhD student who completed an internship at FASEB last summer. And she has a lot to tell us about the Graduate Student Savings Act. So if you have been wondering about your IRA and why you can or cannot contribute to it, that’s what we’re going to be discussing in today’s episode. Abby, thank you so much for joining me today and will you please introduce yourself a little bit further?

01:59 Abigail: Sure. Thanks for having me. My name is Abigail Dove. Currently, I’m a PhD student at Johns Hopkins and I just started my sixth year. I work in fruit flies and study the gonad development. A little bit of my background: I first started as an undergraduate at Bard college, a small liberal arts school in upstate New York. And then I did a postbac for two years at the NIH NIDDK (National Institute of Diabetes and Digestive and Kidney Diseases) before starting at Hopkins. What we’re talking about is kind of the work that I did at my internship at FASEB, which is the Federation of American Societies for Experimental Biology, which I guess to be a little more descriptive it’s a society that represents 29 member societies, which has about 150,000 scientists that they represent.

Tell Us More About Your FASEB Internship

02:57 Emily: Excellent. You and I have common that we both did a postbac at the NIH. In fact, I’ve interviewed several other people on the podcast who have that on their resumes as well. So very popular program. Anyone still in college considering going for a PhD in biomedical sciences or related areas should definitely consider the NIH postbac program. It’s amazing. Okay. So you had this internship at FASEB last summer. What exactly were you doing in that role? Because it’s a little bit unusual for a graduate student to have an internship. And I think especially a graduate student in the biological sciences because, I don’t know about you, but I sort of observe the culture as like, “ah, you need to stay at the bench 120% of your time and never do anything away from the bench.” So please tell us a little bit more about what you were doing in that internship.

03:40 Abigail: Yeah, so I was really fortunate. I have a PI that–we both know that I’m interested in a career that is outside of the academic track. So, I did a lot of science outreach and I knew that I like communicating science to the public. So I wanted to pursue this career of science policy as a way to talk to the public about science and its importance. So what I did at FASEB, I had a lot of responsibilities. I was particularly interested in training and workforce policy. So, policy that relates to students, postdocs, and even faculty as it’s something that everyone can relate to. So that was one of the reasons that I was most interested in it. And I did a wide range of things. I hosted a webinar on work-life balance and the lab culture and we can include a link to that if anyone wants to watch it later. I represented FASEB on Capitol Hill and at the NIH for different events and I generated comments on sexual harassment that will soon be sent to the NIH. I also helped organize an online symposium series for the FASEB Science Policy Committee on challenges facing women throughout their career lifetime. And then I compiled minutes for the meetings, I drafted talking points for committee members, and then the big thing that I did was I spearheaded FASEB’s endorsement of the Graduate Student Savings Act.

How to Land a Science Policy Internship

05:13 Emily: Excellent. And we’ll get a lot more into that in a moment. But that sounds like a really exciting internship. It’s absolutely fabulous that your PI was supportive in you completing that. I actually did a science policy internship as well. The Mirzayan Policy Fellowship out of the national academies. That was actually after I finished graduate school. But it’s available to current graduate students as well. So, if what Abby was describing sounds amazing to you, that’s another potential avenue for you to get that kind of experience in science policy. Okay. So how did you actually land this internship if other people are interested in doing something similar?

05:46 Abigail: Yeah, so I first started–we have an office at Hopkins, it’s called the Biomedical Careers Initiative Office. And it’s really great for people that are looking for careers outside of the academic track. They were offering a course on science policy and advocacy that was actually being taught by the Director of Public Affairs at FASEB, Jennifer Zeitzer, and the Director of Science Policy, Dr. Yvette Seger. So the class gave us a background on legislation and how bills get enacted into law. And we did some case studies on different issues in science policy. They also taught us how to be a science advocate. But finally, we had to write a policy memo on an opportunity or challenge in research activities supported by federal funding, and we had to give an elevator pitch on that to the class as well. And I did mine on saving for retirement as a graduate student and a postdoc.

06:48 Emily: Yeah. Excellent. And so was it through that paper and that pitch that you gave that you found the Graduate Student Savings Act?

06:56 Abigail: Yes, that’s how I found it. Oh, I guess we didn’t cover how I got the position too. So this office that hosted the class actually also hosts internships for students. And so FASEB was also accepting applications for science policy fellows through the Biomedical Careers Initiative Office. So I applied for that directly. But they also have internships for a wide range of different careers outside of the academic track, including industry and consulting and patent law as well as policy.

What is the Graduate Student Savings Act?

07:33 Emily: It sounds like a great deal of support actually, that Hopkins is providing and helping you sort of step a little bit outside of academia into another role that can really presumably help your post-PhD career, should you decide to pursue one in science policy. So let’s kind of back up a second and explain more about what the Graduate Student Savings Act is because it’s probably not one that most people have ever heard of. Right? Like probably a lot of people in my audience, they know about IRAs. Maybe they don’t have one, but they sort of know they’re supposed to or maybe they know they might not be able to have one. So what is the Graduate Student Savings Act?

08:06 Abigail: Yeah, so the Graduate Student Savings Act. There’s a bill in both the House and the Senate and they’re essentially the exact same bill, so they’re called companion bills. And they would allow graduate students and postdocs who receive their income through either a fellowship or stipend to contribute to an IRA or an individual retirement account. The current issue right now is that on the current tax law, trainees who are receiving their income through a fellowship or a stipend are actually prohibited from contributing to an IRA because it’s not considered compensation or earned income.

08:44 Emily: Exactly. And I like to further kind of clarify this for people by saying within academia we might use the word fellowship in different ways. We might use the word stipend in different ways. Nobody’s ever heard the word compensation. But what it really boils down to is, is your graduate student or postdoc income reported on a W2 or not reported on a W2? It could be reported somewhere else, it could be reported not at all. W2 income is the kind of income, taxable compensation, or earned income that can be contributed to an IRA under the current law. And anything else in terms of graduate student, postdoc income non-W2 does not fall into that category, unfortunately. So that’s how things currently stand. The Graduate Student Savings Act includes this type of non-W2 or fellowship income in taxable compensation for the purposes of contributing to an IRA. Is that correct?

09:39 Abigail: Yes. And unfortunately, it doesn’t change its designation universally. It doesn’t make it earned income or compensation, but it just allows it to be saved for retirement purposes in an IRA.

09:51 Emily: Yeah. This is one of those confusing things about the tax code in general is that they use these terms like “taxable compensation” and “earned income” under different contexts. And so sometimes they have different definitions under different contexts. So earned income has other implications in the tax code, like around the earned income tax credit. Whereas, taxable compensation has a different meaning. It’s under the section for IRA contributions and so forth. So it’s sort of defined there as “taxable compensation for the purposes of contributing to an IRA is these things,” and currently, it says explicitly, “does not include fellowship income, not reported on a W2.” So that’s the current status. But then there’s this Graduate Student Savings Act bill as you said, it’s sort of on the floor in both the House and the Senate.

How Abby Got FASEB to Endorse the GSSA

10:37 Emily: I was looking at the history of this and I think the first time it was introduced was 2016 and it’s introduced every year I think in more or less the same form until now, 2019. We should actually say we’re recording this interview on September 25th, 2019. It will be released within a couple of weeks of that date. So things might have changed. But as of September 25th, 2019, the Graduate Student Savings Act has not been passed but it is, I guess, available to be passed. So, what was the process like for getting FASEB to ultimately endorse the Graduate Student Savings Act, and what work did you do to make that happen?

11:15 Abigail: Yeah, so originally before I even did the class, FASEB was not aware of the Graduate Student Savings Act at all. It wasn’t on their radar. It wasn’t until I wrote my policy memo on the issues of graduate students saving for retirement, and I actually did the research and I was just Googling it and I came across it on my own, that we both kind of became aware of it. And so I kind of took this on as a task that I wanted to complete in my fellowship and I thought it was an important task and FASEB was great. If there was an issue that I really wanted to take on and it was something that was good for FASEB to endorse, they would have no problem with me taking the lead. So this was my big accomplishment of the fellowship.

12:04 Abigail: And since FASEB is a nonprofit organization any bill that they support needs to have bipartisan support for endorsement. And that thankfully both the House and Senate bill had bipartisan support on both pieces of legislation. I think some of the previous iterations of the Graduate Student Savings Act didn’t have bipartisan support. So this was really important for FASEB to get on board. But it was a little tricky for FASEB to first navigate the waters. They’ve never supported a tax legislation before. You think that experimental biology doesn’t have that much to do with legislation on tax. But here was a perfect one for them to start.

Personal Impact of Flawed Tax Legislation

12:49 Emily: Yeah. As you were saying earlier, it’s a clear workforce issue. Right? So that’s the definite connection or conduit between what they do generally and this weird little tax quirk that happens to deeply affect their own workforce.

13:03 Abigail: Well, yes. So this actually personally affected me. From when I was in college and doing other side jobs, I was always contributing to an IRA, if possible. My dad is very financially responsible and he just told me when I was young, “you need to have an IRA.” He always recommended a Roth IRA. He always thought it would be better to get tax first and any profit you make later you don’t get taxed on. So there’s two different IRAs, a Roth and the standard IRA. So maybe some clarity on that. But this personally affected me when I was a post-bac for those two years I was receiving stipend income and wasn’t reported on a W2 so I couldn’t contribute to an IRA for those two years.

13:51 Abigail: Then my first year in graduate school I was on a training grant, so also not receiving a W2 so I couldn’t contribute. My second year I was actually a teaching assistant, so I was being employed by the university somewhat and getting my income reported on the W2. So I was for that year able to contribute, which was really great. And then I got awarded the National Science Foundation, Graduate Research Fellowship award.

14:20 Emily: Congratulations, but also, dun, dun, dun.

14:23 Abigail: Yeah. So it was really great. But then I also couldn’t contribute to my IRA because it wasn’t reported on a W2. So that affected me for my third and fourth year of graduate school. My fifth year I got married. So that changed things a little. I was still on my NSF fellowship. But because I was married to someone who had a real job and was receiving income that was deemed compensation, I was able to contribute to my Roth IRA just because I was married to my husband. so that was my last year of my fellowship. Now I’m back at Hopkins and I’m TA’ing for this year. So I will again be able to contribute even if my husband wasn’t receiving earned income himself.

15:14 Emily: Yeah, I have a little bit of a similar story of flip-flopping between RAs and fellowship income. And at some point I got married and so my husband, having a similar situation of flip-flopping between RAs and fellowship income, it helped in certain years one of us would have a taxable compensation, maybe the other one wouldn’t. So one of the things that helps people in this situation–under the current status of fellowship income, non-W2 income is not eligible to be contributed to an IRA–one thing that helps is that the academic year and the calendar year do not line up. So, if you have different sources of funding in two different academic years, maybe you can be covered for one calendar year in terms of being able to contribute. It helps if you’re married of course, to someone with taxable compensation. And the other workaround is actually having a side hustle that is self employment income. So self-employment income is taxable compensation that can be contributed to an IRA. So that’s something I sometimes float with people who are frustrated by their multi-year wonderful fellowship packages that don’t allow them to contribute to an IRA. If it’s possible to side hustle, that’s another way to kind of sneak in that eligibility. So, your stipend wouldn’t be eligible, but that side hustle income would be eligible. All these are workaround solutions, the real main solution is just changing the tax code because this is ridiculous that this is happening, right?

Commercial

16:35 Emily: Emily here for a brief interlude. Through my business, I provide seminars and webinars on personal finance for graduate students, postdocs, and other early-career PhDs for universities, institutes, conferences, associations, etc. I offer seminars that cover a wide range of personal finance topics and others that take a deep dive into the financial topics that matter most to PhDs, like taxes, investing, career transitions, and frugality. If you are interested in having me speak to your group or recommending me to a potential host, you can find more information and ways to contact me at pfforphds.com/speaking. That’s p f f o r p h d s.com/speaking. Now back to the interview.

Anything Else About Your Role in FASEB?

17:25 Emily: Okay. So, anything else to add about your role with getting FASEB to endorse the GSSA?

17:31 Abigail: Yeah. So, because it was a tax bill and FASEB had never endorsed a tax bill before, they want it to go through full process of endorsement. They wanted to get everyone’s feedback on it. So the first step was going through their Training and Career Opportunities Subcommittee. So, they have a monthly meeting, I prepared talking points for the chair of that committee, and we discussed it and they couldn’t see anything wrong with it. So, we got a full endorsement from that subcommittee. Then we had to go up one level to the Science Policy Committee and did the same thing, had to talk to the entire committee, got overwhelming support of it. So, it got pushed up to the next FASEB tier, which was the executive committee. They gave the final approval. Actually, for the Training and Career Opportunities Subcommittee and the Science Policy Committee, I made a one-page summary of the current situation and how the Graduate Student Savings Act would change that. So, a one-page review for them. And then when we went for approval for the Executive Committee, we had the full letter drafted for them to approve, and we can also give you a link to the FASEB’s endorsement letter too, as well.

18:56 Abigail: Normally, it would go to the FASEB board for approval, but the board was jam-packed with what they had to do for that month. So, because we got unanimous support from the two committees before that, they thought that the Executive Committee approval would be sufficient. But I started my internship in June and it wasn’t approved until the first week of September. So, it does take a long time for this approval to go through because you have to wait every month for the next committee to happen. And if there are changes and edits to it, then it can also take a lot of time. You want to do it as quick as possible so the endorsement actually has an effect if the bill is getting voted on soon.

19:47 Emily: Yeah, exactly. This is fascinating to hear kind of how the sausage is made, and not even to make the policy, but just to get something like this: an endorsement from group whose endorsement matters in this kind of thing. What I’m just thinking is how good it is that FASEB has connections to the current trainee workforce like through you and other interns they accept because they had you to tell them, “Hey, this is an issue that’s going on. And by the way, there’s a solution to it and it’s in front of Congress right now.” So it’s just, I guess it’s really good for them to offer these kinds of internships programs to get those fresh ideas and those connections to people who are still in training.

20:30 Abigail: Yeah, I think they really appreciate the fellowship program for that same perspective. The younger generation. People serving on these committees and the boards are faculty members that have been serving for a while and they’re very removed from this training portion. I think there might be–and correct me if I’m wrong–but I think there could be a few postdocs who are serving on boards, but I think that’s very unlikely. Most of it’s always faculty. There’s never a postbac representative in these meetings. So, having a fellow there, they really value so they can get that younger perspective on what’s happening currently.

What is the SECURE Act?

21:10 Emily: Yeah. That’s excellent. Okay. So that was your role with FASEB and then with respect to the GSSA, the Graduate Student Savings Act. There is a different bill before Congress that has sucked up a lot more attention in terms of changing the tax code than the GSSA has, and that is the SECURE Act. Can you tell us what the SECURE Act is? Not in a lot of detail, but basically just how it relates to the Graduate Students Savings Act?

21:35 Abigail: The SECURE Act is Setting Every Community Up for Retirement Enhancement Act of 2019, and it’s just a massive retirement savings bill. For some perspective, the Graduate Student Savings Act is a two-page bill, whereas the Secure Act is 124 pages. So it’s just way too large for FASEB to endorse something so big. But fortunately, it has almost the exact same wording as the Graduate Student Savings Act in one of its sections. So it would get across the same thing as the Graduate Student Savings Act. It would allow graduate students receiving unearned income to contribute to an IRA account. It just was too big of a bill for FASEB to endorse because we can’t vet everything and it’s a little bit out of FASEB’s wheelhouse.

22:22 Emily: Yeah. So, basically what sounds like has happened is that the Secure Act has absorbed the Graduate Student Savings Act pretty much verbatim. And it’s making a lot of other changes as you said to retirement accounts. I’ll link to a couple articles on the Secure Act from the show notes, but some other things that caught my eye that it’s trying to address are like having part time workers have more access to 401k’s. It’s changing a little bit of the distribution rules, like once you’re actually in retirement and about inherited IRAs and there’s just a lot of changes there. Abby and I were glancing over it and we saw something that, “Oh maybe this addresses the kiddie tax.” We’re not even sure about that, which would be amazing if it does. So there’s a lot of different things that it touches.

23:02 Emily: And as you were saying earlier, like for FASEB being able to endorse the GSSA, the GSSA had to have bipartisan support. In fact the Secure Act does have bipartisan support. It passed the House and is currently hung up in the Senate as of, again, September 25th. Because the Secure Act passed the House with such strong bipartisan support, everyone kind of thought that it would pass the Senate really quickly. But it’s been hung up, so its future is uncertain but hopefully it will get through. And the wording that was adopted from the GSSA, hopefully that would actually be maintained. And in the final version we would actually see this benefit be extended to graduate students and postdocs where it wasn’t before. But that’s kind of where things stand as of today as of this recording. Hey, maybe by the time this is published something will have changed on that front. That would be awesome.

23:56 Abigail: I think something also important to note is that the wording of the bill, I don’t think that it would also apply to postbacs. It seems very specifically to graduate students and postdocs. So I think, unfortunately, postbacs would be still excluded from the Graduate Student Savings Act.

How Will the Internship Help Your Future?

24:12 Emily: Hmm. Interesting. Yeah. I’ll have to take a look at that because I didn’t realize there were distinctions being made among different levels of training. We’ll see how that actually shakes out. It’s always sort of uncertain until kind of the next tax cycle rolls around how these things are actually going to be implemented and everything. Thank you for pointing that out. For postbacs out there, this might not be the news you’re looking for. Maybe you still need the side hustle or maybe you still need to get married to have one of these workarounds. Just kidding, people don’t do that. Okay. So Abby, how do you think that this internship experience with FASEB is going to benefit your future career?

24:52 Abigail: Oh, I think it benefited me already tremendously. Besides from just getting a sense of what science policy really is and getting to immerse myself in it and what I would expect in a job. I got great networking. I already met a bunch of people because FASEB represents so many other societies. You know, I really got to get my name around and people know my work now. I also just got a ton of experience. I generated a bunch of writing samples, which is really crucial in the science policy job search, and I think I’ll get great references also for future jobs. So, it’s benefited me tremendously.

25:30 Emily: Do you have specific plans yet for after you finish? Like what positions you might apply for?

25:35 Abigail: Yes, I’m probably looking for science policy analyst positions. When I graduate. I don’t see really any benefit of doing a postdoc afterwards. There are people that continue to do more science policy fellowships. I’m kind of in the boat where I would just like to be out of fellowships and schooling and just want a real job. And I think with this internship I generated enough experience that I would be able to get an entry-level position and be a sought-after candidate.

Final Advice for Early-Career Grad Students

26:08 Emily: Yeah, I have a great deal of sympathy with that position of, “okay, I don’t need any more training. I’m trained. Let me have a job. Finally.” Definitely. So Abby, last question here, which is one I ask all of my guests. What is your best financial advice for another early-career PhD? And that could be related to something we’ve talked about today or it could be something entirely different.

26:29 Abigail: Yeah. So I think of course I would recommend that everyone should open and save in a Roth IRA account and start saving what they can, even if they can’t hit the max. But I think more importantly, we know that graduate school is a really stressful time, and I think it’s really important to invest in your personal wellbeing. And so if that means, paying for workout classes or traveling or if it’s even retail therapy. I think whatever it is, if it’s important to you and if it makes grad school a little bit saner for you it’s important to put some money aside and make time for yourself.

27:08 Emily: Yeah, it’s, it’s actually a little bit weird that sometimes we have to give graduate students permission to spend money on themselves. But if you think about it like more broadly, other people when they receive the financial advice to cut back on those discretionary expenses, cut back on those Wants and so forth, it’s usually because they’re spending at such a level that’s actually endangering their other financial security.

27:35 Emily: Graduate students I would say in general are not spending a sufficient percentage of their income on discretionary things for themselves. Actually, sort of to tie this back to the GSSA, one of the co-sponsors of the GSSA is Senator Elizabeth Warren. She’s sponsored every year in the past, whatever, four years that it’s been up. Many years ago, back when she was a consumer advocate, basically, she wrote this book called All Your Worth*. She co-authored it with her daughter. And that book promotes the balanced money formula, which is to spend, of your after-tax income, no more than 50% of your after-tax income on Needs, 30% on Wants and 20% to Savings. And I was looking at that the other day and I’m thinking that graduate students, I would be surprised if they spent 30% of their income on their Wants.

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

28:28 Emily: Usually, it’s that Needs category that gets up to 60, 70, 80% or more because of rents and high costs of living areas and low stipends and all of those kinds of problems. So yeah, in fact, sometimes we do need to hear the advice that it is okay to spend a little bit of money on yourself to help bolster your mental health and help you get through graduate school in great shape. Of course, it’s ideal if you can do that alongside saving for your future and doing all these other great things, but we want you to get through graduate school in one piece. So yeah, thank you for that advice, Abby, and for giving this interview today.

29:02 Abigail: Well, thank you for having me.

Outtro

29:05 Emily: Listeners, thank you so much 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, a form to volunteer to be interviewed, and a way to join the mailing list. I’d love for you to check it out and get more involved. If you want to support the show and my business, please go to pfforphds.com/helpout. There are plenty of ways to do so without laying out any of your own money. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it doesn’t hurt. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC.

This PhD Student Feeds Her Family Largely from Her Garden

October 7, 2019 by Lourdes Bobbio

In this episode, Emily interviews Jane CoomberSewell, a PhD student in Media and Cultural Studies at Canterbury Christ Church University. Jane is self-funding her PhD through several part-time jobs and self-employment as part of the gig economy. Jane and her wife embrace this lower-earning phase of life by making frugality and budgeting into a game for their household of five. They are serious gardeners with a long-term plan to become almost completely self-sufficient in their food consumption. Jane explains what she grows in her garden, how she creates standard daily meals from the produce, and how gardening helps her work-life balance.

Links Mentioned in This Episode

Teaser

00:00 Jane: Financial balance is tricky. If you treat it as a challenge that it’s almost certain that you’re going to overcome and therefore it becomes a bit of a game, then it all becomes a lot more fun. And why are we here if not to be enjoyed and enjoyable?

Introduction

00:27 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 four, episode eight and today my guest is Jane CoomberSewell, a self-funded PhD student in media and cultural studies at Canterbury Christ Church University. Jane and her wife are avid gardeners. They have dramatically reduced their food spending by eating largely from what they produce and have a 10 year plan to become almost totally self-sufficient with respect to their food. In addition to discussing her garden and favorite recipes, Jane shares her positive attitude toward this lower income phase of life and how she makes budgeting and frugality into a game. Without further ado, here’s my interview with Jane CoomberSewell.

Will You Please Introduce Yourself Further?

01:15 Emily: I am delighted to have joining me today on the podcast, Jane CoomberSewell and she’s gonna take a moment to introduce herself to us a little bit further right now.

01:26 Jane: As you said I’m Jane. I’m the equivalent of a third year PhD student, but it’s a bit complicated because I’ve been part time until very recently, so I’ll be looking to submit in March 2020. I have a wife and we’ve been married for nearly eight years and in our household we have three grown-up young men, a 20 year old and two 24 year olds, all of whom are on the autistic spectrum to whom we give care. We’re trying to go self-sufficient, as much as we can, but we also have a range of jobs that we do to keep the wolf from the door and because we love doing them. My background is that I was a civil servant, I worked for the local authority, and now I work as a study skills support tutor to mainly students with disabilities at a couple of local universities. That gives you a starting point on me.

02:33 Emily: Could you say what your field is and where you attend, if you like.

02:39 Jane: I go to Canterbury Christ Church, which is one of three universities in the city of Canterbury, which is about 45 minutes drive from where I live. I come under media and cultural studies this week because they keep changing the name of the department. Might be media and design by the time we finish this. What I’m doing is I’m studying the life of a British war-time and post-war comedian/entertainer/actress called Joyce Grenfell.

03:14 Emily: Thank you. So you’re not employed by your university as what we would say in the States as an RA or TA. What is your relationship with your university and where does your money come from?

03:31 Jane: My relationship with the university, as such, is that of pure grad student. I’m counted as self-financed, so I don’t have any scholarships from any external bodies. My bio on university websites says I’m funded by the sweat of my own brow, and that’s basically how it is. In the past, when I was part time, I had up to four jobs that I was juggling along with studying, but now, because we’ve been able to secure a contract directly with disabled students allowance, it means we’ve been able to become become more stable. I’m actually better paid per hour, so I can cut my hours back and be full time on my PhD. But I also do all sorts of portfolio career and gig economy work. Whatever it takes to keep a roof over my boy’s head and keep funding. But yes, it’s my bank account that my fees come out of every month, not anybody else’s.

04:36 Emily: Right. That sounds like a very busy lifestyle. Full time on your dissertation, part time work, full time parenting of multiple children.

04:46 Jane: Yep, never bored, never bored.

04:49 Emily: Can you share with us what is your household income?

04:55 Jane: Okay, so it’s actually quite difficult to work out. Our household income is low enough that of the last seven years, we’ve only actually paid income tax twice so that indicates that in pure earned money, we’re earning less than £26,000 a year between the two of us, who as such, are heads of the house hold. But because of the boys disabilities, they get a variety of other income streams which works out to not huge amounts, but the impacts on the sort of total household income, about another £12-15,000 pounds a year. That’s all. So if you put that together, you’re talking, you’re still talking under £40,000 pounds. Not quite sure what the dollar conversion is but I think that would be about $60,000 for five of us.

05:53 Emily: Yeah, that’s a pretty tight of income to work with. Can you give us broad strokes how you’re making that work at a really high level?

06:04 Jane: Okay, so at a really high level, we treat it as a game because if you treat it as stress you would probably go a bit kabloo-y. So everything is a game. When the boys were younger, it was about challenging them. How quickly could they turn off all the switches so nothing’s on standby except the freezer and the fridge. Everything is a game. Everything is about how low can you get the costs for the necessities, so then you’ve got a little bit of money left over for fun, but also how much fun can you have for free. That’s basically how we treat our total income. We’ve very lucky we don’t have a mortgage, because in past years we earned more and we were able to get rid of the mortgage when we got married. We’re also very lucky because we live in a beautiful part of Kent in the Southeast of England. We are less than a mile from a beach and well, if you want some entertainment, go outside.

07:11 Emily: Yeah. I love that attitude of keeping the necessities down, leaving room to spend money on fun, but then also just maximizing the amount of fun that you can have for free. I love that.

Food Spending and Starting on the Path to Self-Sufficiency

07:23 Emily: So, specifically what we’re going to be talking most about in this podcast is food. Food spending and generating —

07:29 Jane: My favorite subject!

07:31 Emily: Yeah. So please give us kind of a sketch of how food works in your house.

07:37 Jane: So how food works is the two biggest boys, who are husband and husband — one is our grandson, so the other is our grandson in law — they have an apartment down the side of our house and they have part time jobs, so they generate their own money for food, or nearly generate their own money for food and they’re responsible for their own shopping and their own cooking. As I said, they’ve all got disabilities, but hopefully by the time they’re in their mid thirties, those two will be completely independent. When I’m talking about food and budgeting and I’m talking in the context of three people. Now the first thing to say is that, bless him, the youngest, the one who’s still most dependent on us, he has some food issues with his disabilities and he doesn’t eat any homemade food. He will only eat ready meals. So of our, approximately £40/week food budget, about £12 is for Ruki’s food.

08:43 Jane: After that, one of the ways we do it is that, my wife’s gone vegetarian. That’s for health reasons, but it has benefited the budget. I’m a bit cheeky, I only eat meat when I’m at my mum’s so she can pay for it. Or you know, if it’s a treat. Going vegetarian isn’t to everybody’s taste, but if you’re careful and you like veggie food, it can save you a lot of money. We are in love with beans, pulses and lentils and things like soya mince. Cooking is one of the things I’m best at, so I’m really good at flavoring things so they don’t taste boring. But we also have a Costco card and a Booker’s card, because it’s a similar cash and carry type thing, and we’re really good at stretching that out when they’ve got deals on.

09:49 Jane: But we’re also going self-sufficient. So until very recently, unfortunately I’m between flocks at the moment, but until very recently we had six chickens. We were producing our own eggs. And we have an enormous garden. My wife’s a lot older than me, so we have raised beds so that as we get older we can still garden and we are probably seven years into a 10 year plan to go almost entirely self-sufficient. We’re not quite there yet, but very nearly. We grow all our own, particularly potatoes, tomatoes. Then big crops at the moment I’ve just planted 240 sweet corn, or corn on the cob. We have three freezers and as long as you run them full rather than empty, they’re very cheap to run.

10:45 Emily: So when you say self self sufficient, is that the term that you used?

10:49 Jane: Yeah.

10:50 Emily: What does that mean?

10:51 Jane: Okay. So within as far as we can without actually starting a small holding, we’re trying to produce as much of our own food and to an extent later on, I want start adding so herbal medications as we can. We’re also beginning to try to be kind to the environment, so we try to keep, not only to keep costs down, things like single-use plastics out of the house as much as possible. We’re not quite there yet and realistically, I’m never going to own a cow and make my own cheese, but as much as you can in an ordinary domestic, suburban street, it’s about having as much in-house as we can.

11:46 Emily: Yeah. I’m glad you added that detail of the kind of place that you live. So it is a suburban environment? You have like sort of a back yard, we would say here.

11:55 Jane: Yes. When we talk about yards, we tend to think of something that’s concreted over, but yes, we have a very large garden. It’s 50 feet wide by a 100 feet long. I’ve got enough room to have — I mean my chickens are so spoiled. They don’t have a coop, they have a whole summer house that I’ve adapted and they have an 8 foot by 10 foot run, plus a mobile run on wheels. We have a greenhouse, and basically apart from one area that I let one of the boys have to plant flowers, if I can’t eat it, I don’t grow it.

12:35 Emily: Gotcha. So it sounds like, for your 20 year old, that’s most of the grocery budget you said, which was about £40 a week which is a over $50 in US. That’s almost all supporting him, is that right?

12:53 Jane: Well, no. I would say considering, considering that he’s one person, about half the budget is being spent on him, but even then, one of his disabilities is a very bad relationship with food. And if he doesn’t finish it, it supplements the chicken’s feed. As long as it’s nothing that can harm a chicken, I have a bit of a thing about feeding chickens, chickens, but apart from that, there’s very little things chickens won’t eat. So if Ruki can’t finish it, then either the chickens get it or the cats get it. Nothing, nothing is wasted. We have a lot of composting. It’s not only about how little you can spend, but it’s also about how far can you stretch it.

13:42 Emily: Yeah. So then the other half of the grocery budget is for you and your wife, but really mostly you’re eating out of your own garden and you’re cooking at home, it sounds like exclusively vegetarian meals.

13:57 Jane: Almost exclusively. At the moment we’re about 50% self-sufficient. We’re not quite to growing entirely out of the garden. I’m not sure whether I’ll ever crack the volume of beans and pulses that we would need to last us all year round, but certainly for six to eight months of the year where we’re pretty much eating out with the garden. And eventually I hope to make that all year round.

14:26 Emily: Well, yeah, I’m glad you mentioned seasonality. So how does that work there? Is your actual money you spend weekly on food, higher in certain seasons and then lower in others and how do you handle that?

14:39 Jane: I think it’s certainly lower in high harvest. We do a little bit of bartering as well. So among neighbors, friends and family, if I’ve got a glut of rhubarb, I’ll happily swap it with a neighbor for some green beans if mine haven’t been very good this year. And the wonderful thing about the barter economy, of course, is you can’t be taxed for it. But yeah, our fresh fruit fruit, veg, and salad bills are a lot cheaper in the summer than they are the winter. But as I said, I have three freezes and as harvest time approaches, everything has to be finished from last year, so we can start fresh and really stock them up.

15:31 Emily: Do you do any other food preservation, like canning or anything like that?

15:35 Jane: We are practicing. I don’t think we’ve quite cracked it yet and I’m very fortunate in that I have a very — they live a ways away but I have a very efficient mother and I’m not very good at things like jams and jellies, so I will turn up with the fruit, the sugar, the pan, and the jars and she will give me back the jam and the chutneys. I am very lucky from that point of view. I think the big thing with going self-sufficient — gardening, cooking — is you never stop learning. I think that’s maybe that’s one of the reasons why I love it so much. At the moment, I could honestly say I’m really good at making fruit syrups to go on ice cream, but my jam never sets, but next year I might crack it. I’m going to keep trying.

16:22 Emily: I liked that attitude as well.

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Long Term Plan for Food Self-Sufficiency

17:14 Emily: So you mentioned that you have a ten year plan and that you’re seven years into it, I was just wondering how you have managed to make that plan, and to plan for that kind of long term time period? And you said at the end of it you want to be nearly self sufficient, but what’s changing between now and then?

17:36 Jane: I think part of it is about getting the boys as independent as they can be. The more independent they are, the more time I have to spend on the garden. So the reason why I say seven years of a ten year plan, originally it was a five year plan. We bought this house seven years ago, August coming, and it was a very different house to how it is now. And at the time we had a little bit of savings. So what do you do when you find the perfect house? You rip it to shreds and reconfigure it. The first two and a half years were about making the house how we wanted it. What is now the boy’s apartment had been the office of the previous owners. So that was a big part of it. We knew for the first two and a half to three years that the garden would be on the back burner and we really weren’t self sufficient then, but it was always part of the dream. Then, we were on track and we had a really bad year. We lost my mother in law. Ruki came to live with us having been in a very desperate house situation. He’s another grandson. He’s the one who we have to buy most of the food for. Also, another of our grandsons was murdered. It was a hell of a year and it was also the year I started my PhD, and that’s when your relationship with the university becomes really important because several times they offered me an interruption and it took me quite a lot to persuade them that actually, doing my PhD was my solace and what was actually keeping us going because it was the one part of my life that wasn’t wrapped up in all this chaos. That, and doing a bit of gardening, so that’s one of the things that slowed well.

19:46 Jane: I think we’ve always wanted to go self sufficient and be as independent as we can. I think the plan has developed and I think any plan that doesn’t develop and isn’t organic is just a document. Ours is a document, it’s on pieces of paper and backs of envelopes, but it is a working document. Every few months we’ll go out in the garden, we’ll say, “You know what, that crop isn’t growing there on the plan of our garden, next year we’re going to grow it in raised bed — they’re very originally titled raised bed one, two, and three. It’s not growing in raised bed one, let’s try it in three next year or it’s not growing under the cherry tree. It’s too much shade. Let’s try it next to coop where there’s full sun next year.” And so I think one of the big things, whether you’re planning a business or anything that you’re planning to develop yourself, you have to keep revisiting that plan. And I’m hoping it’s not going to turn into a 12 year plan or a 14 year plan. I’m hoping that by 10 years the garden will be fully productive and every year it will just be about giving it that first seasonal weed and getting the crops in, or indeed, not even having a seasonal weed because it’s productive 365 days of the year. My big dream this year is having spuds I’ve grown myself for Christmas dinner.

21:12 Emily: How much time are you devoting to it?

21:21 Jane: Well, an ideal day for me looks like getting up around seven, being in the garden by eight. This is obviously if it’s not throwing it down. Doing a couple of hours and if Joyce is free to come with me too, so much the better. And then spending the rest of the day either studying or earning money. In an ideal world, I literally do that seven days a week. When you have a portfolio career like us, there’s no such thing as a working week. Every day has the potential to be a day off or a day of work. That’s why we also try and only do things that we love because then it never feels like hard work. You might be exhausted at the end of a day of heavy digging or of working very hard with students who nearly got what you’re trying to get across them, but they’re not quite there, but Joyce says if it doesn’t move, touch and inspire you, you can do without it in your life.

22:29 Emily: Yeah, I love that. And I relate to it very much, as well, as a self employed person. It never stops, but if you’ve chosen what you love to do, then that’s great, because it never stops. It sounds like you’re trying to have, maybe not work-life balance in the sense of hard weeks versus weekends, but just the daily “I’m doing what I love, I’m doing what’s rejuvenating, what’s refreshing” right away after you get up and then you can tackle the rest of the day.

22:56 Jane: Yeah. And I think particularly for trying to create a balance between study or an external job and growing even some of your own fruit and veg — lots of people go to the gym first thing in the morning, I go and garden. And because I have to put the chickens to bed, they don’t have their own little beds, I wish they did, I’m also out in the garden probably for the last 20 minutes before I go to bed, or before I start getting ready for bed. That starting and ending the day, even if it’s just time to have a walk round and see where I’m at, really helps set my mind up. Especially with one of my part time jobs, it’s all a bit stressful at the moment. Just keep it in perspective sometimes. Actually, just don’t do anything for a day or two, wait, see what develops, and the garden could really give you that message.

23:54 Emily: Yeah. Thank you for sharing that with us.

Frugal Food Recipes

23:57 Emily: I asked you to prepare to tell us a few different recipes that you like that are both inexpensive, and you mentioned earlier that you are great with seasoning, so I want to hear how you’re doing with that because I am not so good with seasoning the food that I create. What are some of your favorite low cost recipes?

24:13 Jane: Okay, so really simply, you asked me t0 think about each meal of the day. Nine times out of ten, we’ll have — okay, mandatory translation — porridge or oatmeal for breakfast. So this time of the year, that might be in the form of overnight oats or Bircher where I’ve taken the fruit, we’ve grown ourselves. Yesterday we had our own strawberries. We have a microbiotic drinks that we buy, one of the few things I will never be able to replace, called Actimel. So it would be, oats, this microbiotic drink, and the strawberries. Goes in the fridge the night before and just get it out the fridge next day.

25:03 Jane: Lunch. Our favorite is always some kind of salad, which at the moment is very much from the garden. We are also quite fortunate that one of the boys works part-time at a local salad packing factory and anything that they’ve decided is not appropriate to sell, they’re allowed to bring home to supplement their wages, and he’s not a salad boy, so he passes it all onto us. So yeah, we have a lot of salad, often, as I say Joyce is vegetarian, with a boiled egg or with a little bit of grated cheese.

25:40 Emily: And then what about a dinner meal?

25:43 Jane: Okay, so a a dinner meal. I’m a big fan of, as I said, lentils and pulses, and also, soya mince. But supplementing it with as much fresh fruit and vegetables as in season as I can. I’ve almost got what I would refer to as a soya mince base that I can then get a tub out of the freezer. That’s what I’m going to do tonight. Tthen I add to it to turn into, so it’s a bit like, again, post-war Britain or post-war anywhere really. You would often have the stew on the stove that you added to every day. My absolute classic one is the equivalent of a can of tomatoes, half cup of lentil, any lentil, normally red in this house, an ounce per person of soya mince and whatever small vegetable, for example peas, sweet corn, mushrooms, onions, peppers, that you’ve got available, chopped up, really small. I make a vat of it in the slow cooker, and then I will portion that down. And then today we want something akin to Shepherd’s pie or cottage pie, so I will take out enough for the two of us I’ll add more vegetables that probably need using up, yet more mushrooms, yet more whatever. And we’ve got some potatoes that need using up, so I’ll put a top on it, but then next week I might get out the same base add some red kidney beans and some chilies. I’ve even managed to dry and caramelize my own chilies now. And that will be chili. Joyce’s mom was always teased because she could take mince, add different flavorings and turn it into anything. But actually if you’re imaginative, especially if you’ve got access to fresh herbs in the garden — right now my rosemary bush isn’t doing very well at the moment and we grow rosemary at university, so every time I’m on a break at uni, I go around and pick some rosemary from the university garden. And I’ll bring it home and dry it. I make rosemary biscuits.

Jane: And really if you’ve got those core mixes that you can cook very quickly and have available — we do a lot of batch cooking — then it being a good cook doesn’t have to be standing in front of the stove for another two hours when you finished your day’s work. It also doesn’t have to be having things sent to you in a box with a recipe card. When you said to me, what’s some classic recipes, it’s actually really hard for me because I am very much a “this is what I’ve got available” type of cook. How much have I got? Chuck it in! My boy Jason, the eldest, he says, you know you’re a good cook when you can open the fridge. Go damn, there’s nothing there. I know what I can make from that!

28:59 Emily: Yeah, very good point. I’m really, really glad that what you shared with us basically is what you’re eating on a daily basis. You have patterns in what you eat every day, and I like that because, of what you said. When you have more or less the same mix of things available or at least things that you can sub out, like this is going to work or that is going to work, depending on the time of year, you can be really efficient with using up everything you have. And it doesn’t take a lot of mental energy to figure out what you’re going to eat every day because it’s more or less a variation, it’s the same pattern.

29:36 Jane: It’s also, both budget-wise and health-wise — I mean I’m not exactly wasting away here and I’m trying to lose a few pounds –if you plan it will become sort of easy. Normally, Friday is shopping day for us. The boys have to be taken to the shop because neither of them have passed their driving license test yet. On a Thursday evening, while Joyce is watching the news, because I know everybody should be interested in current affairs, but I’m not, I will write the menu for the following week and then every day I will check, so I’ve got out what I need.

Tips for Starting Your Own Garden

30:16 Emily: As we conclude, we’ve talked a lot about like cooking tips, which I think is awesome, but do you have any tips for let’s say another PhD student or busy person, busy PhD, who’s interested in maybe dipping their toe into gardening? Not doing the full ten year plan that you have, but where would you get started? Maybe even for someone who just could do container gardening for example?

20:41 Jane: People would say start with the simple things, like potatoes and tomatoes. I would say yes, they are great things to start with, but don’t just grow things because they’re easy. Grow things because you like them. Okay. If all you’ve got is a window sill and you like spices, grow ginger and garlic. You can grow ginger from just planting a knob of the little head of ginger you buy from the supermarket. And if you’re patient and you water it, well, it will grow. I suppose my big thing for gardening is, as with everything that we try to live by, only do the bits you love or start with the bits you love until you get the bug.

31:38 Emily: Thank you for that suggestion. I don’t do any growing of my own food or anything right now. I live in an apartment so it’s inherently challenging, but I do love garlic and so I really liked the idea of having a little container in the window sill and having fresh garlic because I don’t really buy fresh garlic right now even though I love using it. It’s that you just use a little bit at a time. So, thank you for that suggestion.

Living a Frugal, Yet Enjoyable Life

32:00 Emily: Anything else you’d like to add before we sign off?

32:04 Jane: I think I’d go back to what I said earlier which is that I was a very serious person before I met my wife. I’m very lucky in that she will always see my funny side. Financial balance is tricky. If you treat it as a challenge that it’s almost certain that you’re going to overcome, and therefore it becomes a bit of a game, then it all becomes a lot more fun. And why are we here if not to be enjoyed and enjoyable?

32:43 Emily: Yeah, I do like that shift, because really, if you’re living on, let’s say a fixed, fairly low income, like you said, there’s certain challenges or certain realities to that, but your attitude towards it goes so far to make it bearable, enjoyable, horrible, whichever way. It can really go a lot of different directions just depending on how you approach it.

33:10 Jane: And however busy you are and however passionate you are about your studies, because we are after all dealing with PhD students or people who are maybe doing a postdoc even, try and put something aside for another passion, whether that’s playing the guitar or walking your neighbor’s dog or whatever. Anything you do that you’re passionate about, will benefit the PhD as well.

33:43 Emily: Thank you for adding that. I think PhDs can, some of them can get caught in this trap of 100% of my effort has to go towards my studies. And as you said, having some balance is good for you. It’s good for your work. You can’t be so 100% into that. It’s not healthy.

34:02 Jane: I sometimes get accused of telling people to abandon their responsibilities and that’s not true. I have very high sense of duty, but actually, if we don’t love it, especially if we are serving somebody else like helping to try and bring up the boys or doing some charity stuff, if we don’t love it, we’re not blessing the people we’re serving. So the more we love what we do, the more we’re not only blessing ourselves, but we’re blessing well the people around us. And I try to live like that. It’s not always easy because I’m not a naturally positive person, but I’m really lucky in that I have a wife, and who particularly around the boys, who is almost always positive. And you know, if you’re not surrounded by positive people and you need that positive energy, go and find somebody who is.

35:04 Emily: Yeah, thank you for that. Can you share with us your Twitter handle or where else people might find you so that they can get some doses of that.

35:12 Jane: So my personal one is, I’ll just spell out, is at J A N E, capital C, O, capital S, E. So @JaneCoSe and our business one is @CoomberSewell. But I have said the business one is slightly neglected because I’m so busy trying to finish this PhD at the moment.

35:32 Emily: Okay. Well, thank you for sharing that with us and thank you so much for joining me today.

35:36 Jane: Thank you very much for inviting me. It’s been lovely.

Outtro

35:39 Emily: Listeners. Thank you so much 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’s show notes, a form to volunteer to be interviewed, and a way to join the mailing list. I’d love for you to check it out and get more involved. If you want to support the show and my business, please go to PFforPhDs.com/helpout. There are plenty of ways to sell without laying out any of your own money. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it doesn’t hurt. The music is Stages of Awakening by Poddington Bear from the free music archives and it’s shared under CC by NC.