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budgeting

How This Grad Student Budgeted for Having Her First Child

September 11, 2023 by Jill Hoffman 1 Comment

In this episode, Emily interviews Madeline Hebert, a rising second-year PhD student in Human Development and Family Sciences at the University of Connecticut. Madeline’s household has an irregular income; her assistantship stipend varies between the academic year and the summer and her husband is paid hourly throughout the year with a variable schedule. Madeline details her household budget, which accounts for their irregular income, irregular expenses, and financial goals. Their biggest financial goal at the moment is to provide for their new baby, due just a few weeks after this interview was recorded. Emily and Madeline discuss the Big Five expenses that new parents need to account for: health insurance, parental leave, childcare, baby stuff, and home/car. Madeline shares all she’s learned about the benefits she receives at the federal, state, and university levels (she is part of a union), and how important it is to talk with your peers about their financial experiences.

Links mentioned in the Episode

  • PF for PhDs Office Hours
  • PF for PhDs Quarterly Estimated Tax for Fellowship Recipients Workshop
  • PF for PhDs Subscribe to Mailing List
  • PF for PhDs Podcast Hub
  • Madeline Hebert Twitter
How This Grad Student Budgeted for Having Her First Child

Teaser

00:00 Madeline H: Really look and consider that quality of life package portion of the Ph.D. like research interest that is super important. But having a livable arrangement is also extremely important for peace of mind, for, I knew that for us, pregnancy was a very real option for us during my Ph.D. So, I want to see like, what would that look like? What what coverage do they have and what kind of protections do they have? So.

Introduction

00:31 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others.

01:01 Emily: This is Season 16, Episode 1, and today my guest is Madeline Hebert, a rising second-year PhD student in Human Development and Family Sciences at the University of Connecticut. Madeline’s household has an irregular income; her assistantship stipend varies between the academic year and the summer and her husband is paid hourly throughout the year with a variable schedule. Madeline details her household budget, which accounts for their irregular income, irregular expenses, and financial goals. Their biggest financial goal at the moment is to provide for their new baby, due just a few weeks after this interview was recorded. Madeline and I discuss the Big Five expenses that new parents need to account for: health insurance, parental leave, childcare, baby stuff, and home/car. Madeline shares all she’s learned about the benefits she receives at the federal, state, and university levels—she is part of a union—and how important it is to talk with your peers about their financial experiences.

02:08 Emily: My Office Hours are open to you this fall! About once per month I host a free Zoom call to which you can bring any financial question or topic that relates to your journey as a PhD or PhD-to-be to discuss with me and the other attendees. These sessions are limited to four people each. Register through PFforPhDs.com/officehours/. I look forward to speaking with you there! You can find the show notes for this episode at PFforPhDs.com/s16e1/. Without further ado, here’s my interview with Madeline Hebert.

Will You Please Introduce Yourself Further?

02:55 Emily: I am delighted to have joining me on the podcast today. Madeleine Hebert. She is a rising second year PhD student at the University of Connecticut. Now, we are recording this interview in late July 2023. By the time you hear this, Madeleine will ideally have a new family member joining her, which she will talk about later on in the interview. So first, we’re going to discuss irregular incomes and supplementing your income as a graduate student. How Madeline and her husband budget for irregular expenses and irregular income. And finally, about how they’re budgeting for their baby, who will be born by the time you hear this. Okay. So, Madeline, thank you so much for joining me today. Will you please introduce yourself to the audience a little bit further?

03:37 Madeline H: Thank you for having me. Yes. So my name is Madeline. I am a rising second year over at the University of Connecticut and the Human Development Family Sciences Department. And me and my husband are excited to be expecting our baby from Louisiana. I just started my PhD this past year, and then we got married in November and found out we were expecting in December. So lots of new changes that we’re really excited for and lots of things to consider when it comes to our financial budget.

Income Details

04:07 Emily: Yeah. What a year. What a blockbuster year for you. And it’s only going to get more exciting. All right, let’s jump into this. So let’s cover what are the incomes that you have in your household between you and your husband? And like, what are the pay frequency, the pace schedules for both of you?

04:23 Madeline H: Yes, so I’m on a graduate assistantship through my university is a nine month stipend type assistantship was like a W-2, so it’s not a fellowship. And then we get paid biweekly roughly. And then my husband works at a hospital where he also gets paid biweekly, but it falls on every other week in between my paycheck. So every single week we are receiving some sort of income just about. And then in the summer, during those 2 to 3 months that I’m not covered, we can receive income through our department sometimes, but not guaranteed. And a lot of students, myself included, find some supplemental income as well for that.

05:11 Emily: Wow. I don’t know if I’ve spoken with anyone before whose household has income coming in literally every week between two different jobs that pay go to that is actually really interesting. I’m so excited to get to your budget in a second. Would you like to share your income level approximately or specifically yours and or your husband’s.

05:29 Madeline H: So my school I have a master’s already and so they change how much you make based upon whether you have came in with a bachelor’s degree or a master’s degree or or a Ph.D. candidate, have defended your competence, taking your competency exam. And so I came in with the master’s and it’s getting bumped up to about 28,000. I think, for this upcoming year. Every hour we are unionized. My job is unionized. And so that means that they have negotiated a pay raise every year for us. And so it was 27 roughly this past year and now it’s moved up to 28. My husband’s job pays of roughly about the other 50%. We make about roughly the same per month, and so that makes it really easy for budgeting and stuff.

06:22 Emily: I can see that your income changed a little bit from your academic year income. It sounds like it was a little bit lower over the summer. But you also told me during our prep that your husband’s income is also irregular, even though he’s, you know, paid regularly like biweekly. So how what’s the nature of his irregular income?

06:38 Madeline H: So my husband works hourly and he is a he works at a hospital, so they have shifts and stuff, but his paycheck is by the, by schedule. It’s mostly regular, except every now and then he’ll get double booked or he’s able to pick up shifts or he, with everything with the travel and such, like my job covers for those kind of vacation funds. And it’s a lot easier for me to know like, okay, like if I have to miss a day or such like that covered fairly easily. But for my husband, if he misses any hours or if he has to leave early, those hours might get dropped and such. And so we have to kind of budget for those kind of factors as well.

Budgeting for Irregular Income and Expenses

07:22 Emily: Mm hmm. Yeah. So he experiences both. The upside of you work more, you get paid more. And also the downside of you don’t work, you don’t get paid. So, yeah. Okay, let’s dive into more about how you budget then with this frequent but very, very irregular and challenging kind of income. I’d like to talk both about how you budget for that irregular income and also for irregular expenses in addition to whatever financial goals you have. So however you want to tackle that, let’s get started.

07:50 Madeline H: Sure thing. So I track our spending using Excel spreadsheets. For me, that’s the easiest way. And what I’ve done when we before we even got married, I’ve kind of thought to myself, okay, like how much is it going to cost and how much is my expecting to make for myself and what kind of living situation would allow for us and for myself, even if I were just to live here by myself, Which was the plan the first few months before we got married was to make sure that the living situation I had that roughly that 50, 30, 20 budget that a lot of people kind of discuss about. And so when I did that, when he came up, we made a plan for, okay, you know, you find a job that makes roughly this much if you can try to like negotiate for pay. So this way it fits with our current living situation and this labor able to save. And so the way that I started budgeting was figuring out like, okay, this is how much the necessities cost our rent, our bills, our insurance. I just those are just solid numbers that we had to include. And then figuring out, okay, this is how much we already came in with. For a while he didn’t have a job, so we had to budget and figure out like, okay, what can we afford versus how much are we willing to take out of our savings? And then once he did get a job, I tried to budget to where we were maximizing our savings because we knew that we want to kind of replenish our savings after the wedding and such. And we kind of discussed, okay, like how much are we willing to spend on going out? I did a little bit of tracking, as you have always recommended, of like figuring out like, well, what are we already spending on groceries? What are we already spending on going out to eat and such and figuring out, okay, like, can we live on less?Can we can be budget a little bit more or figure out a way to make those expenditures last longer. So we got like a Costco membership, for example, so we can book by a little bit better to make it easier for ourselves for when we go get groceries instead.

09:55 Emily: So let’s talk more about the the budgeting that and especially with his income being irregular, how how does that work?

10:01 Madeline H: So to kind of account for that, what I do, I tried to make that not be such a stressful factor by having us use a credit card together and making sure that we are both having access to that credit card and to see like how much we’re spending on that. And we kind of talk regularly about like, okay, this is where we’re at in our spending, because it took a while for him to be able to see like what we’re spending. But, um, so even though we are getting paychecks every single week, that actually doesn’t factor into my budgeting so much because we are, we just pay everything on a credit card that we pay off at the end of the month. And but what’s nice about our budgeting practice is that because receiving income every week and we’re also tracking it with our credit cards, we’re able to see like, okay, has our credit is our credit card above what we are currently at in our bank, and then we’re able to kind of adjust. So I can see like, oh, he didn’t make the expected income that we were hoping for that we would have expected for like a full week, for example. And then we can adjust based upon that being like, okay, well maybe we’re just not going to go out to eat this week or we’re going to wait to buy this item that is not in pure necessity. And by that layer next month, for example.

11:17 Emily: Mm hmm. I see. So you’re kind of allowing the spending to accumulate on a credit card throughout the month and you can kind of look at those numbers and compare them to how much income you’re making throughout that same month and make adjustments, as you’re saying. And I assume also your husband might be able to volunteer for extra shifts like you might be able to increases income if he’s, you know, available and healthy and so forth.

11:39 Madeline H: Yes. So so in fact, he’s signing up for additional shifts. So this way we can kind of have a little bit of a buffer with the baby. And because of how parental leave is working for us. 

11:50 Emily: Yeah, definitely. Okay. So that explains kind of how well that explains a little bit of the irregular come and the irregular expenses to a degree because you mentioned maybe deferring some spending that’s not strictly needed to happen right away. Is there any other detail you want to give us about how you’re budgeting for irregular expenses?

12:08 Madeline H: For the most part, that is kind of how we work for irregular expenses. Although every month I also make sure to put a budget itself, a number being like about $100 being like, okay, this is for irregular expenses that we’re not into, that we don’t have like a specific category before. And as well, if I know that there’s an upcoming expense, like I know if we have like a doctor’s appointment or a dental appointment, I put that into our budget and see like, okay, where can we adjust the numbers for other categories when we expect an irregular expense, such as like a water bill or like a doctor’s appointment like that. And so that also gets kind of put into the budget that way for this Labor avoiding creating a habit of dipping into our savings.

12:50 Emily: Okay, so it sounds like in addition to doing the tracking that we were just talking about and the adjusting on the fly, you’re also budgeting proactively. Okay, So the beginning of the month, you can see, okay, here are some things on the calendar or some special things that take some extra money. So you already have a plan for how you’re going to account for all of that, and then you just continue to tweak it throughout the month.

13:08 Madeline H: Yes. That’s exactly what we did.

Savings Goals

13:11 Emily: Yeah, that sounds great. Now, you’re also you mentioned a high degree of savings and so forth. Do you have any like specific savings goals? And let’s maybe leaving aside the maybe I don’t know, we’ll talk about the baby stuff in a moment, but were there any savings goals outside of baby related?

13:29 Madeline H: Yes. So before we found out that we were pregnant, we were planning on saving for my husband to potentially go back to college for a new house. And we wanted savings for being able to travel home since we’re from Louisiana. So making sure that we would be able to visit home at least once a year. Those savings are, for the most part, still existing, but the contributions to them are a lot different. And the new home slash college fund is kind of the same bucket at this point. So it’s more just a matter of like Craig those in addition. And then the third one was the emergency savings fund itself.

14:07 Emily: It might. I don’t know if, I may be projecting. It might feel like a setback to you that you had to put pause or at least reduce these other savings goals you have when you found out about the pregnancy, which obviously takes up a lot of money itself. And now they’ve had, you know, whatever, 15 plus years of doing this budgeting stuff like life is long and things come in cycles. And as long as you keep the habit of saving where it might go and how it fluctuates at different stages of life, that may change what you’re doing specifically for a short time, but you’ll be able to get back to it and like you’ll be able to accomplish those goals. It just might be, you know, next year instead of this year or two years from now, instead of this year.

14:50 Madeline H: Now, I appreciate that, because, yeah, sometimes it feels like that and that’s been part of this whole process of like adjusting what our goals are and trusting what our expectations are and then figuring out like, what are we comfortable in? Like how can we just create like better financial habits, like so and one thing that I wanted to add about the savings is that I have an automated account, like one of them is now automated, like automatically just draws like $10 out, which is not going to be missed. But it’s just nice knowing like, okay, something’s being saved if not even if I’m not always like thinking about her or such like that. So that helps.

15:30 Emily: You know, I think I mean, I think the automated savings is wonderful, but even just the step of having a bucket, like even though it’s different count or sub account within something, having a bucket available to just capture savings itself is a big step, even if you’re not consistently contributing to it. Because you know that if you, you know, ever got back to it or you had a windfall come your way or whatever, you have a place to put the money and like the plan is already like half there, you know.

15:56 Madeline H: That was something that, that was another step that I actually did do. I have multiple savings accounts, so this way I can visually see like, okay, this is what we have set aside for this instead of just being like, we have this big number in our emergency savings account and then thinking that’s only for emergencies, instead of being like, okay, this amount isn’t allocated for this type of expenditure and these amounts are okay to be spent for these other types of needs and stuff. So that helped a lot as well, like wrapping your head around all the numbers.

16:25 Emily: Yeah, and I love that strategy. I don’t use it as much now. But when I was at your stage with the budgeting, like I was using it so intensively and it was really, really helpful. When we were doing our prep call for this, I told you my philosophy of finances around babies, that the things that people maybe don’t notice so much are actually the things that are really, really expensive and that I’m always, like, curious about how people are handling them. So I’m going to ask you about four categories of expenses and how you are going to manage them either now or after the baby comes. Okay. So four categories. Category number one is health insurance. Whose health insurance is this baby going on? Is it going to cost you more? What’s going on with that?

Health Insurance

17:04 Madeline H: So the baby’s health insurance and my husband as well in fact, or his health insurance, they’re both online with my graduate assistantship because I found out that in order to add him to my assistance, so to add him to my my health insurance was only $100 more per month, which is more than what his job offers. But given my health insurance does not have a deductible, it has only a maximum out of pay and it has a very low co-pay. We were like this works really well for us in our current financial situation. And then to add the baby, we were very, very fortunate that there’s only like ten or $20, maybe $30 max out in addition to the current pay that we’re already making monthly for health insurance. So it’s not been the it’s not been a huge addition for having the baby added to and creating a family plan for our health insurance.

17:57 Emily: Phew. That’s great to hear, especially about there being like the low, you know, co-pays and the deductible and so forth. Because when you have a child, that child is going to go to the doctor a lot. So that’s great to hear. Now, I’m curious if your husband was not already on your plan, like let’s say he was on his workplace plan, would adding the baby to your plan be that ten, 20, 30 a month, or would it be the hundred? Is it like the second person or is that specifically that it’s a dependent?

18:25 Madeline H: I think that is specifically that the second person went from a $10 a month to a $110 a month to add a second person, a second dependent, as I put it, if I remember correctly.

18:37 Emily: PSA for you and anyone listening, correct me if I’m wrong, but I believe you have 30 days to get that baby onto the health insurance before you’re, you know, special life circumstance window expires. So I have had people who in that, you know, that fog of New Parenthood have forgotten to add that child to your policy. And it’s a huge headache. So please get your child added within the window your insurance company provides.

Commercial

19:02 Emily: Emily here for a brief interlude! These action items are for you if you recently switched or will soon switch onto non-W-2 fellowship income as a grad student, postdoc, or postbac and are not having income tax withheld from your stipend or salary. Action item #1: Fill out the Estimated Tax Worksheet on page 8 of IRS Form 1040-ES. This worksheet will estimate how much income tax you will owe in 2023 and tell you whether you are required to make manual tax payments on a quarterly basis. The next quarterly estimated tax due date is September 15, 2023. Action item #2: Whether you are required to make estimated tax payments or pay a lump sum at time tax, open a separate, named savings account for your future tax payments. Calculate the fraction of each paycheck that will ultimately go toward tax and set up an automated recurring transfer from your checking account to your tax savings account to prepare for that bill. This is what I call a system of self-withholding, and I suggest putting it in place starting with your very first fellowship paycheck so that you don’t get into a financial bind when the payment deadline arrives. If you need some help with the Estimated Tax Worksheet or want to ask me a question, please consider joining my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers the common questions that PhD trainees have about estimated tax. The workshop includes 1.75 hours of video content, a spreadsheet, and invitations to at least one live Q&A call each quarter this tax year. If you want to purchase this workshop as an individual, go to PF for PhDs dot com slash Q E tax. Now back to our interview.

Funding Parental Leave

21:09 Emily: Okay, a second expense, your leave and or your husband’s leave. If he’s planning on taking one, how are you going to fund your life when you are on leave?

21:19 Madeline H: That’s a great question. So I’m very fortunate. As I mentioned before, my job is unionized and our union fought for paid parental leave for six weeks. If you have a vaginal birth and eight weeks of you have cesarean birth. And so that will be completely paid for.

21:36 Emily: That’s 100% of your pay or is a lower percentage?

21:39 Madeline H: Yes, It’s 100% of our pay.

21:41 Emily: Awesome.

21:43 Madeline H: And that will be covered for, and we do not lose any of our benefits. We do not lose our tuition waiver. We do not lose our health insurance. It’s 100%, 100% pay. And then that’s, well, relief from work responsibilities.

21:57 Emily: Awesome. And are you planning on going back to work after that six or eight week time period? Or are you taking more time?

22:04 Madeline H: I am planning on returning back because when if I even though I would qualify under Connecticut’s FMLA, which is separate from the federal optimally, it would not. It would not. First of all, I would not be paid. And then second of all, it would not guarantee my tuition waiver. So I would potentially have to pay for the rest of the semester for tuition in order to take up to another six weeks of leave. So we decided that that was a little bit eating into too much into our savings account for that.

22:38 Emily: Okay. I’m glad you’re being paid at 100%. I’m not glad that this is only six or eight weeks. That is a short time period. I mean, in the U.S., we already have nothing guaranteed and whatever. We know how bad the situation is.

22:49 Madeline H: yes, I’m fortunate about that. And then also my department has been extremely accommodating, extremely supportive. They I had mentioned to them what my situation was and I talked with them and they were able to actually get me practically 100% remote of ga-ship for this semester. So even though I’ll be technically working, I’ll be able to do this from the comfort of home and being able to watch over my baby still. So.

23:16 Emily: That is a good benefit. Okay. I’m so glad that you asked for that note to anyone else. Negotiation is always available to you. Okay. And then what about your husband’s leave?

23:25 Madeline H: And then my so my husband, he is a he is at a job that is not unionized. And so Connecticut has a policy in place called the Connecticut FMLA and then also the Connecticut paid leave. They are two separate entities, but they both require that you’ve been working at your job for at least three months, different than the 12 month requirement by the federal FMLA. And the FMLA protects his job so he won’t be fired while he’s taking leave for so long. But then and that goes up to 12 weeks and it can be split however we need to just bye week. So like he could take six weeks off, he could take ten weeks off and one week off. And in the future, for example, as long as it’s within one year of the baby being born. So the CT paid leave is a program that works separately from the FMLA, but very similarly in that a lot of the events that qualify you for FMLA qualify you for the CT paid leave, and that provides supplemental income for while he’s on leave. So at the beginning he will be paid any PTO that he has left and so that will be full time pay and everything. But then once he runs out of PTO, the city paid leave will kick in and he’ll be paid 95% of the current minimum wage, which is $15 an hour, and they’ll be paid 95% of that at 40 hours per week. And then he’ll also be paid the difference between his current income and the minimum wage, and they’ll be paid out 60% for, I believe, 40, 40 hours or however many hours he generally works. I think he works 36 hours actually regularly. So it will be paid out 60% of that on top of that 90% of minimum wage. And so 95% of minimum wage. So that will all be going toward for however long he’s on leave. And that was very big in our financial decisions of whether or not how long we’d be on leave and for who’s going to be on leave and all that.

25:28 Emily: I’m so impressed you rattled all that off, and it just shows you like the detail that really you do need to dive into to understand all the different benefits that are available to you, both through your employer and the state and the federal government and everywhere. So that’s that’s great that you investigated that also thoroughly. And how long do you is he planning on a specific length or is it going to be like more play by ear kind of thing?

25:54 Madeline H: We are planning for him to be offered 12 weeks because we don’t have family in the area and we’re still fairly new in the area. So this way ensures that we’ll have the support that we need or I will have the support that I need. And so but we are kind of talking about whether or not maybe it might be more beneficial for him to take off six weeks and save that for another time in the future, maybe around the holidays or such. But so we’re still playing around with that. But knowing that regardless, like will be covered financially, that is really nice to know. And then I’m still trying to figure out whether or not he will be receiving PTO hours while he’s gone or like how that will kick back in. And so that might also play a role into whether or not we decide to delay further on that leave time.

Child Care Expenses

26:47 Emily: So it sounds like the pay aspect of the leave is not as much of an issue for you too, because you’re going to get your full pay and he’s going to get, it sounds like, pretty close to his full pay, but it’s more the length and it’s when to take it and so forth. So that that will be tricky. All right. Let’s move on to the third large expense, which is child care. So what is the plan for child care when you’re when one or both of you is back at work?

27:12 Madeline H: Great question. So we found out that childcare is very competitive in general. People. My cousin had told me that the minute that you find out that you’re pregnant, you should start looking for childcare. So when we were looking for childcare, I was trying to figure out like what are the general rates? I called a couple areas who’s offering where they located. We found I talked with other parents who are in our program, some other graduate student parents, and they suggested where to go. We’re very lucky that my school actually offers an on campus daycare, but there are some other daycares in the nearby city that the schools are located in. And so I called around both. We ended up deciding on the childcare that’s associated with the campus, not only because of its convenient location being close to me and my own work, but then also because it honestly was one of the cheapest options. It offers a sliding scale based upon the parent’s incomes of any I. Things should happen, especially considering the irregularity of our pays. We might be able to accommodate for that in the future years. And they also offered a legacy aspect which was important to us to ensure we have childcare in the future, something that we had considered. We’re not only the daycare itself, but the daycare is offering of like, well, they were doing it every, every few days be different than full time childcare and like if they offered partial days versus like every other day. My husband though, his job is his schedule is regular but changes every week it’s regular and that every two weeks that repeats and that does not work well for daycare. So we had to pick a daycare that has availability for the child to be there every day. And then we also looked at home care options, but us not being as familiar with the area, we felt more comfortable with the daycare, but we did notice that home care options were significantly cheaper options compared to doing like a full time daycare. But that was so that was something that we also had to consider.

29:20 Emily: That’s awesome. That University of Connecticut offers that on campus option and that it was available to you because I know sometimes those are full, full, full. And that they do a sliding scale. That all sounds really, really good. Are you going to pick up with the child care in the spring semester? Like when is the enrollment going to start?

29:40 Madeline H: enrollment actually we had to sign up for enrollment as early as February of this year. So we found out we were pregnant December. And then immediately I was like, well, and like I said, I hopped on that on that daycare list. And we found out every February is when Connecticut at least changes their rate for daycare. So I had to wait until February to be able to even ask about rate. And then by April, we were we were given a tour and then after the tour they said, you have two days to decide if you want this daycare. And when you do, you have to pay down the first month and then it will be your child will be enrolled starting in August. But then you are paying every single month and you for the entire year. So even though our baby won’t be born until August and will be with us for the first three months, we are already paying for daycare and we’ve actually been paying for daycare since May. In addition to that, in addition past the security deposit.

30:40 Emily: Whoa, I have never heard of that arrangement because you’re basically just paying to hold the spot. Yikes. And if the full rate to hold the spot, poof.

30:52 Madeline H: Yes, we have to pay the full rate and everything. Yeah, I still think it’s like that because it’s like I know that that means that the that the workers are guaranteed pay. But at the same time it’s like I’m paying first of all, my baby’s not even born.

31:05 Emily: Yeah, I mean, at least can you sublet it? Can you sublet the spot?

31:10 Madeline H: I wish. I though about that, we had asked maybe in the, if we do could it in the spring, if we could just sign up and enroll in the spring, but spots wouldn’t be guaranteed. And the difference in pay is so much that it’s about, it was looking around $1,400 roughly, $1,200 to $1,400 depending upon which we had chosen at the time per month versus $1,700 to a part time or the full time for another daycare and the difference in price per month even though its, we’re paying for time when we’re not there, if we need, the baby would need to be in daycare as early as November potentially. And so the savings technically that we’re making over the long term and being guaranteed having this lower cost daycare in the future own out over picking one that we would use for less time at a much higher rate.    

32:03 Emily: Yeah. I mean, I’m sure you were in your spreadsheet doing those calculations and the break even point and everything, but, I mean, you’re going to be in grad school for several more years, so you’re going to need this child care for quite a while. So, yeah, it does make sense. I can see how it would work out that it makes more sense to pay a little bit more upfront to guarantee the lower rate in the long term. Well, that was a tough decision, though, I’m sure, to to pay for a service that you’re not actually quite using yet, But as you said, I mean, the childcare situation is so difficult right now all across the country.

32:33 Emily: And you sometimes you got to just take what you can get, even if it’s a little bit less than ideal in this setup. But okay, Thank you so much for explaining that. Is there anything more that you want to talk about with respect to the childcare costs?

32:45 Madeline H: Yes, actually. So I mentioned kind of the numbers is like 1200, 1400 versus practically its own separate rent to kind of make this fit our budget instead of being like, okay, we’re going to like continue our high savings until we like, can’t I decide that it might be more it might be a better idea for us to reduce the overall monthly payments by spreading it out a little bit more? So we started those payments, like I said, back in May, rather than waiting until August to make the first payment. So this way those payments are definitely fitting within our budget and our monthly income rather than trying to figure out, well, okay, we’ve got to save this much and we’ve got to save as much as we can, and then we’ll take some of those savings later in the future to pay for the excess lays like it got very complicated Those the simpler to be like, okay, let’s make sure that this fits in our current income the best that we can. So that’s kind of how we do savings but ensure that we have the money each month to pay off the daycare.

Budgeting for Baby “Stuff”

33:49 Emily: So you’re kind of you advanced your budget, your budget didn’t need to be doing that just yet, but you decided I want to make sure this is all balancing and all working out. And our fourth and final category is what I call the stuff, which is what people mostly like to talk about when you’re talking about preparing financially for a baby, which is the nursery and the furniture and the, I don’t know, the clothes, the formula, the the gadgets, all these things. So how has the stuff made an impact on your budget?

34:18 Madeline H: Thankfully, it’s been not as big of an impact as as I had feared that it would be, because I found out a lot of doing a lot of research what stuff is necessary to buy immediately, first hand or like buy brand new versus what can be afforded through second hand or be afforded through gifts and registries and what’s common. So we decided that we’re going to wait for to find out the gender of our baby. And that actually plays has played a role in our financial decision somewhat in that when we had a baby and a baby shower, it was really easy for us to tell people like, these are the practical gifts we have, and because people don’t know what gender we’re having, they don’t spend as much money on like trying to get us gendered items that we don’t really need, like baby girl clothes, a baby boy specific clothes. And so they focused a lot more on getting us things like diapers and burp cloth and like little swaddle and such. So that was a that was really useful. And then because we’re from Louisiana, we had a travel, we did travel back to Louisiana for our fam for our baby shower. And we specifically requested primarily for gift cards or money. And so that was really useful for us and being able to determine like, okay, this is how much money we have now that became kind of the budget for the baby. And then and then shopping based upon that, we were very fortunate to have a lot of family support as well. Like my parents pitched in some money. My in-laws have pitched in of helping us buy things that we need for the house. But surprisingly, there’s not very many things you have to actually buy, like brand new, like you want to buy the baby crib brand new. And so that was on our registry. We told people like, this is really important for us to be able to afford because this will be the baby’s bed. But also, too, I’ve joined a lot of Facebook groups that are like the Buy Nothing project or like free items in this area. And that helped tremendously because people surprisingly give out a lot of baby stuff because baby stuff doesn’t last very long in the center. Babies outgrow it very quickly before. It’s not like before. They’re like kind of growth. And so you’re able to like get a lot of toys that way or you’re able to get like a we got a changing table, we got a bassinet, we got a rocking chair. In fact, all of those like free three things. So that’s been super useful. I have also we have have we are part of a free home visitation program that offered free dual services as well as a free diaper bank. That’s part of the Connecticut Diaper Bank as well. So we have access to all of that and that’s been very helpful in like making sure that we can afford everything. So that’s been primarily like how we’ve been managing, affording all the baby stuff, items and such. Also kind of recognizing like what is needed has helped. Like for example, you don’t have to have a traditional crib. You can have like a pack and play, which is significantly much cheaper than having a crib and also much smaller. And so choosing things like that has also been able to help us be able to afford everything that we needed. And then  the timing for, for when we had our baby happen to coincide with buybuy babies big clearance and closure. And so we were able to use that to our benefit of being able to buy some really important things like a stroller and the baby car seat that way. And figuring out things like, for example, the stroller has a car seat, come with it. That was a decision that we made purposefully so obviously we would have a car seat guaranteed and long lasting is during the summer, but having a summer baby worked out a little bit for us as well as that Amazon has Amazon Prime Day during the summer, which I found out about, and so we took advantage of the big sales going on then to when we were purchasing all of our baby items that we finally needed after the showers.

38:25 Emily: Wow. Thorough. Again, I love it. I’m so you’re such a great interviewee on this topic. This is wonderful. And I yeah, I just want to echo like a lot of you said, you probably did not use this as a strategy, but I like it as a tip for other people of like not revealing the gender so you can steer people towards some more like practical baby items that you really need instead of getting caught up in all the cute clothes and all that stuff and that long distance baby shower. I had a long distance baby shower as well, but I was not as intentional about use, about saying like, okay, cash is really something we can take back with us quite easily. Let’s save up for these bigger items. I love that strategy as well. And yeah, it’s kind of surprising. Like babies do need certain items for sure, like the car seat, you know, the you mentioned like a safe place to sleep. But beyond those like few big things, it’s really parental choice. Beyond that, whether you’re going to get things new or secondhand, how much you want to spend, whether you want to have them or not. I mean, I have love them, but I have some very bougie friends who have like the SNU, like, you know, they are able to and willing to spend a lot on their their baby’s first months of life. And their comfort is parents and their baby’s comfort. And it’s just it’s not necessary for everyone. So there’s a lot of agency in that.

Housing and Car Decisions

39:37 Emily: And you know what? Now that we’re talking about this, I have a fifth category of expenses, which is your housing and your car. I’m assuming you didn’t change either one of those, but a lot of people do when they’re expecting a baby. So can you just talk about the decisions around that?

39:52 Madeline H: Yeah. I’m actually glad that you mentioned this because we so we live in a one bedroom, one bath apartment and we had planned to stay in here for the duration of my PhD for the most part. And then like I said, maybe saving for a for like buying a home, but with the baby and everything, we were wondering like, where’s this baby going to go? We luckily have a walk in closet. And we thought to ourselves, Well, maybe the baby can go in there. We’ve decided against that. We actually just rearranged everything in our home to make space for the baby. And like I said, some of the some the living arrangement that we have has also contributed toward some of the decisions that we made, like such as having a traditional nursery space. So we thought about whether or not we might move to a two bedroom, two bath or two bedroom at least apartment. Now, something that was heavily kind of talked about, it’s still something over the bay. But right now this we decided in the end to keep because financially it just makes the most sense. We know that we can afford easily what like our living and home expenses are where we’re at and then and we don’t need to increase that the space fit. We can’t hold our parents as guests, which is a little bit tricky, but that’s been the biggest part. We kind of justify being like, You’re not staying here that long when you come up here. So it’s more important that we have financial security than being able to host our families for like two weeks, every couple of months kind of thing. As far as cars, we decide to keep our cars. We’ve joked about getting a new car for my husband just because we liked a car that we had been in in our honeymoon. But currently both of our cars are, we feel are safe enough. And I primarily take my car around for everywhere anyways. And so the idea is just that we have the baby primarily in my car because it’s going with me to the park where the daycare is. And then if we ever need to, like he has a he has a different car seat in his that a convertible since we have an infant only car seat that came with our stroller. So that’s kind of how we’ve navigated it for us.

42:08 Emily: Yeah, well, I’m glad that we covered that because like I said, a lot of people do choose to get a bigger place or get a bigger or a different car. And I think it’s a little premature just for an infant. Infants are in fact, in fact, quite small. They come with a lot of stuff that they themselves are not very big. And so I think it makes sense because, yeah, you may need to get a two bedroom place, but it doesn’t have to have have to happen this first year, you know, maybe for the subsequent year and the one after that as baby needs, you know, some more space and you two need to get some more space for yourselves, too.

Best Financial Advice for Another Early-Career PhD

42:39 Emily: Well, Madeleine, this has been such a wonderful and detailed interview. I think it’ll be super useful to anyone, especially graduate students, who are, you know, preparing for parenthood as well, or just having that irregular income that we talked about earlier. So as we wrap up, would you please share with us your best financial advice for another early career, a Ph.D.?

42:59 Madeline H: Yes. My best advice that I have for someone who is an early career PhD would be to talk with other students who are in a similar situation as you. That helped tremendously for me in figuring out like, what do we truly need? Where can we outsource some of the other options? Understanding, especially as a new parent, understanding how does paid leave work for our department? How does paid leave work for the for the government or for the state? I joined other like communities that where people were familiar with what’s going on in general. My husband talked to his colleagues about a lot of these processes. So just talking with other people who are in a similar situation was extremely helpful and I think that was kind of general advice, but I think that that was just so beneficial and useful for us. And then I guess something that would be more specific towards a Ph.D. and this may be more useful to someone who is considering PhD programs is to really look and consider that quality of life package portion of the Ph.D. like research interest that is super important. But having a livable arrangement is also extremely important for peace of mind, for for us for being able to navigate like changes in life like these and stuff. So I’ve made sure that I’ve read over like all of our health care options, for example, because I knew I was going to be married and I knew that for us, pregnancy was a very real option for us during my Ph.D. So, I want to see like, what would that look like? What what coverage do they have and what kind of protections do they have? So looking into all of that before choosing whether or not to accept a program was really important for me.

44:45 Emily: Yeah. And like, look how how quickly that information came into play for you in this first year. And even just going back that decision of like, can I afford this apartment on just my income alone? And how much like that one decision cascaded through this year and is helping you to afford all these other life changes that are going on. So it’s wonderful. Again, congratulations. Thank you so much for volunteering to come on the podcast. And I’m really excited for all of this wonderful stuff that’s going to happen for you.

45:15 Madeline H: Thank you so much. It’s been a pleasure. I’m really happy to have been able to have the opportunity to be here with you and and to share a little bit about what’s going on in my life.

Outtro

45:28 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

This PhD Student Budgets Manually and Dynamically

May 29, 2023 by Meryem Ok Leave a Comment

In this episode, Emily interviews Ariel Floro, a second-year PhD student at the Buck Institute for Research on Aging in northern California. Ariel details her budget, from the mechanics of her system to the emotional benefits she experiences. Ariel started budgeting after finishing her bachelor’s while she worked as a research associate, and she was able to adapt that system to still work for her with a lower income in a higher cost of living area. Ariel explains why she believes budgeting is an essential activity for every graduate student.

Links Mentioned in the Episode

  • Emily’s E-mail Address
  • PF for PhDs S14E11 Show Notes
  • Budgeting Apps
    • Mint
    • EveryDollar
  • PF for PhDs Season 15 Contribution Sign-Up
  • PF for PhDs Subscribe to Mailing List (Access Advice Document)
  • PF for PhDs Podcast Hub (Show Notes)
Image for PF for PhDs S14E11: This PhD Student Budgets Manually and Dynamically

Teaser

00:00:00:00 Ariel: It just gives more control and power overall and not being so, not feeling like we’re like completely powerless to, you know, grad students just make this and that’s just how it is. And I’m poor and I can’t really do anything. And I know it is really hard to live on the income that we have now, but it gives us some control back and some power so that we can really set ourselves up well financially in the future.

Introduction

00:00:27:20 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 14, Episode 11, and today my guest is Ariel Floro, a second-year PhD student at the Buck Institute for Research on Aging in northern California. Ariel details her budget, from the mechanics of her system to the emotional benefits she experiences. Ariel started budgeting after finishing her bachelor’s while she worked as a research associate, and she was able to adapt that system to still work for her with a lower income in a higher cost of living area. Ariel concludes by explaining why she believes budgeting is an essential activity for every graduate student.

00:01:29:22 Emily: If you’ve been getting value from this podcast, would you please do me a favor? This is a perfect time of year to recommend me and my work to a potential host or sponsor at your university or alma mater. In case you didn’t know, I offer numerous personal finance seminars and workshops on topics like financial goals, investing, budgeting, and debt repayment, all tailored for graduate students, postdocs, and/or prospective graduate students. These are in addition to my tax workshops. If you think that you and your peers would benefit from my teaching in the upcoming academic year, please recommend me to your graduate school, graduate student association, or postdoc office. My seminars are usually slated as professional development or personal wellness. These recommendations help me get my foot in the door with new clients or remind past clients of the need for this material. If you choose to recommend me over email, please cc me, emily@PFforPhDs.com, so that I can pick up the conversation. I really rely on these types of recommendations and appreciate them so much. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! You can find the show notes for this episode at PFforPhDs.com/s14e11/. Without further ado, here’s my interview with Ariel Floro.

Will You Please Introduce Yourself Further?

00:03:04:12 Emily: I am delighted to have joining me on the podcast today Ariel Floro. She is going to speak with us about her budgeting journey during graduate school and prior and all the things that she’s learned and how much budgeting has benefited her. So, Ariel, I’m really pleased to have you on the podcast today. Would you please introduce yourself a little bit further for the audience?

00:03:21:09 Ariel: Yeah, thank you so much for having me here. So, as you mentioned, my name is Ariel. I’m currently a second-year PhD student at the Buck Institute for Research on Aging, which is in NorCal up in Novato in the Bay Area. And it is a joint program with the University of Southern California.

00:03:41:07 Emily: Alright. I can already see that it’s going to be a very interesting conversation because obviously, budgeting is especially challenging in a high-cost-of-living area. So, actually, let’s get some groundwork out of the way first. Do you mind sharing how much your stipend is?

00:03:56:24 Ariel: Yeah, our stipend is $38K per year, which actually just recently got moved up.

00:04:01:21 Emily: Okay, nice. So, we’ll be talking a little bit about, I guess, last year. What was it like prior to being bumped up?

00:04:07:15 Ariel: It was $34K last year.

Budgeting: Peace of Mind

00:04:09:01 Emily: Okay. So, 34 up to 38, sounds decent, but again, very high cost of living area. So, I’m really curious about your strategies here. So high level first, what benefits have you enjoyed in your life thanks to your budgeting practice?

00:04:25:19 Ariel: The first thing that comes to mind and I think is really the key one, is just peace of mind amongst many different fields. So, the main thing knowing that because it’s such a low income, knowing that I’m not spending more than I actually have, because that just like really terrifies me. And along with that, just giving myself the freedom to enjoy time with friends, like going out to eat or do other fun things.

00:04:49:00 Ariel: And so that I know that if I budgeted a certain amount of money for that, then I have the freedom to really just not stress out about it and enjoy it and not like freak out or like, “Oh, I shouldn’t be doing that,” or feel guilty in any way. That’s the main one. I would say the second one is just planning for saving more or like financial goals, and just know that even though again, because it’s kind of like a low income at this moment, I’m still setting myself up well for later, even if it’s just investing a little bit of money or saving a bit of money, like any bit helps and kind of helps to build that habit.

00:05:22:07 Emily: So, it sounds like in your case, a lot of times people have this like kind of avoidant behavior with their finances, like it stresses them out, so they don’t want to look at it. But it sounds like you’re like me, which is that it was it was stressful not to know. And so, it’s easier to look and make the plan and execute the plan as best you can. Is that right?

00:05:41:12 Ariel: Yeah, definitely.

00:05:42:19 Emily: So, how did you get started with budgeting? Did this start in graduate school or were you budgeting in at any point prior to that?

00:05:49:22 Ariel: Yeah, the minute I graduated from undergrad, I worked as a research associate for two years and between, and once I knew that I was having a steady income, I knew I had to budget the first dollar that came into my bank account. And so, I have kind of been planning, you know, since that time and really built up the more efficient process that I have on budgeting now.

00:06:12:23 Ariel: I also saw it as once I knew I was going to go to graduate school while I was working as an RA, I took even more power over my budget at that time and said, okay, I’m making more as an RA right now than I would be as a graduate student. So, I’m going to make sure I know the ins and outs of my entire budget so that when I do move to that lower income, I know where I can cut costs where I want to, you know, what I can sacrifice and this and that.

Gap Years Working as an RA

00:06:40:16 Emily: Give us a few more details about that time you spent as an RA. Like, where were you? You said you’re making more, but how much more?

00:06:48:16 Ariel: Yeah, I was at UCLA working as an RA, and I think starting I made about $40K and then it jumped up to maybe a little over 45. But at the end I was making a good amount. Yeah, so that was all in L.A. and I was just planning out. Rent there is still more expensive. But you know, there are a lot of areas around L.A. that you can find cheaper places. And so, I had a roommate, we lived in a two-bedroom, two-bathroom place, which is a really good spot.

00:07:19:13 Emily: Okay. So, it sounds like your experience going from being an RA to a graduate student, your income is going down a bit. Your cost of living is probably jumping up a bit, but not huge shifts in either of those directions. So probably a lot of what you learned as an RA, that is to say with your budgeting as an RA, was able to apply. Do you want to tell us any more details about you know, you said you kind of took more control of your tightening up and then how you did that transition into graduate school with your budget?

00:07:46:24 Ariel: Yeah, I think I was definitely the main thing is I like to go out to eat a lot with friends and I’m sure a lot of people do. So, I realized that that was probably the first thing I was going to cut down was just eating out and food and being more intentional about cooking meals and like looking at prices and not just like, “What am I going to cook today?” and then just buying things off of the shelves. The other interesting thing about my program is that because we’re at the Buck Institute and USC, we actually spend our first semester at the Buck Institute, and then we have to move to USC for the second semester. This is all within the first year. And so that was another cost that my cohort and I had to think about is moving here and there and then having to do short term leases. So, I would say also the way that I budgeted this past year is different than now because I had to keep in mind just having money to move and my rent actually was even higher because it was a short-term lease.

00:08:42:10 Emily: Yeah, that’s a big financial challenge to throw at a first-year graduate student of living in two different places. And then I understand, so it was like you were living in the L.A. area, then you moved up to Northern California, then you moved back to the L.A. area. Now you’re back in Northern California. Okay. So, at least you had some familiarity with those areas.

Mechanics of Budgeting

00:09:01:04 Emily: Let’s talk more about kind of like the mechanics of how you budget. Like, do you use software? Do you use your own spreadsheets? How often are you looking at or touching the budget?

00:09:11:12 Ariel: Right now, I use an app on my phone, and I know there’s some there’s one called Mint that I’ve tried to use and it doesn’t really work that well for me. I actually use an app called EveryDollar, and I’ve used that since the beginning where they have every line item, you know rent and food for groceries, you can even add certain funds in there maybe if you’re saving up for something. And so normally, like in the beginning, I kind of took a couple of months to figure out what I was spending each month on certain things and realizing I probably spent more on eating out than I thought I did and other things like that. And so, then I kind of started to regulate and now it’s a lot faster where I just kind of copy last month’s budget and I go through and make minor changes. If I maybe have a friend’s birthday or something that I have to buy a gift.

00:09:59:18 Ariel: And the other thing that I really like about the app on my phone is that some of them can connect directly to your bank accounts or your transactions can go directly into them. But the app that I use, I actually don’t have that software for that just because it’s an extra fee for it. But I do have my bank account app on my phone, and anytime I use my debit card that’ll show up as a transaction, as a notification in my phone. And so, I kind of see those notifications build up as like a to-do list to enter into my budget later. So, I end up probably looking at it at least I once every couple of days, maybe once a day even.

00:10:36:24 Emily: Okay, so two things I want to follow up in there. So, one, budgeting, I mean, we’ve been using term budgeting, but I really think of budgeting as two different actions. So, one is budgeting, which is telling your money what to do in the future and the other is tracking, which is making sure that your money did what you told it to do. And that’s like the accountability portion of it. So, you just mentioned both of those, right? So, on the budgeting front, you are creating a unique budget for every single month. It’s based on, you know, roughly templated from what you did last month. But you’re making those individual tweaks for what’s going on in this current month, is that right?

00:11:10:03 Ariel: Yes.

Manual Tracking of Spending

00:11:10:24 Emily: And then the tracking component of it, like you, I’m a little bit familiar with every dollar, so you can pay a fee to have your transactions automatically down a little, but you choose not to. You are manually tracking. And what I love about that is, of course, it does take some time and it takes, again, accountability with yourself to stay on top of it, like you just mentioned, your system of notifications, but it keeps you very, very intimate with your numbers. There’s no like escaping, facing up what you did with your money as long as you are keeping up with the tracking. So, I think that works really, it’s not for everybody, but I think that works really, really well for some people. Can you maybe give us an example of how the manual tracking specifically has helped you? Like in behavior change, for example?

00:11:54:24 Ariel: Yeah, I mean, even just if I stop at a Starbucks or something and get a coffee and then I have to put that into my budget. And since the interface is very easy to look at, sometimes I just kind of end up scrolling through the rest and, you know, I might say, “Oh, okay, I actually only have like $40 left for eating out and it’s only like halfway through the month or something like that.” Then I can kind of keep track and keep an eye out and like, how far into the month I am and versus how much I’ve earmarked for all of the things that I budgeted for.

00:12:29:00 Emily: So, you mentioned that you started with this budgeting practice the minute you graduated from college and had this regular, you know, salary coming in. What was it that inspired you to start budgeting at that point, and maybe why not earlier?

00:12:44:21 Ariel: Yeah, I think my dad was a big influence and wanted to set me up well financially, where even going back to like the 2008 recession, I remember when our house had to go on a short sale. I mean, it was I just always style. My dad really stressed with money and so he was always, especially after that point and kind of getting a hold of his finances, he was always very intentional, telling me, like, I want you to do this. I want you to you know, when you have a steady income, you should start budgeting and kind of encouraging me to do a lot of that. And it made a lot of sense to me. So, I do attribute my dad to helping me a lot in that way.

00:13:19:03 Ariel: Before then, I didn’t really budget that hard because in undergrad I would get some income here and there. Maybe if I was teaching a private lesson for like a hobby or other things like that and I was just so used to saving anyway, it was I would just dump them into my savings. And then if I wanted to go out to eat, and I didn’t go out that often, right? Because college is just so busy, I kind of just knew, I just kept tabs on how much I had in my savings. So, it felt a lot easier once I was getting a steady income. I could say I’m making X amount of dollars per month and I’m going to designate each dollar in that to a certain point. So, I know exactly where my money’s going each month. And I felt like it gave me a lot more control over my finances and again, gave me the peace of mind to know that I’m doing okay.

Looking Ahead

00:14:06:18 Emily: Yeah, that makes sense. Do you think there’s ever a time in the future when you wouldn’t budget or would change the mechanics of how you budget?

00:14:15:24 Ariel: I do see a possibility where, if your income goes up significantly and the way you live your lifestyle stays about the same, you might have that flexibility where, you know, no matter how much you know, if you’re spending and living your normal lifestyle in your normal ways, that you’re always going to have enough in savings. I think that might be a way like a situation where you wouldn’t have to budget. But then I would still think that with the extra money there, you know, there’s a lot of potential other than just dumping it into savings. You know, you can put that into investing. You’d be giving it away to charity. So, I don’t know, I would say maybe rarely at this point, but I wouldn’t know for sure.

00:14:56:19 Emily: Yeah. You’re actually describing kind of the point that I am with my like budget right now, which is the way that I budgeted when I was in graduate school and for a few years afterwards is not necessarily serving me now with a higher income, but also different kinds of goals than I had before. So, it’s like, how do I have the income that I have, meet the goals that I want to meet, not overspend, but also feel more like relaxed about how much to spend and how to balance all that together. And we’re recording this in December 2022. So, like, I’m literally thinking about this of like for the new year, like how do I adjust my budgeting system so it works more with the current realities that I’m living in rather than, you know, kind of a holdover from what I was doing before? So anyway, just a little food for my thoughts there.

Commercial

00:15:42:01 Emily: Emily here for a brief interlude. We’re doing something special for season 15 of this podcast, and as a loyal listener, I know you’re going to want to be involved. Season 15 will be a chance to share your financial experiences, even if you don’t want to give a full episode interview or want to remain anonymous. We’re going to publish compilation episodes around certain themes, and each episode will feature at least a half dozen different contributors.

00:16:12:05 Emily: If you are interested in contributing, check out PFforPhDs.com/season15/. That’s the digits 1 5. On that page, you’ll find a list of the proposed themes and how many volunteers I’ve identified for each episode. Your next step is to email me at emily@PFforPhDs.com to let me know which episode you’d like to contribute to or if you have another idea for the list. Once I’m confident that we have enough contributions for an episode to be created, I’ll give the volunteers specific prompts and directions to create their submissions. I hope you will choose to participate in this unique season! I can’t do it without you, so please get in touch! Now back to the interview.

Expected, Irregular Expenses

00:17:06:24 Emily: So, let’s get back to some more like kind of mechanics of budgeting. So, I wanted to know how you handle large irregular expenses. So, by that I mean maybe something that costs maybe a couple hundred, few hundred dollars that comes up very occasionally. And I’m always curious about this because I know irregular expenses are a really tough challenge for graduate students or anyone living on a tight income. So, how do you handle those? I mean, I know you already mentioned adjusting your budget, but let’s say for a really large one, how would you do that?

00:17:33:10 Ariel: Yeah, I think the main, so one of the points that came to mind is that you know, there’s large irregular expenses that might be unexpected and there’s those that are expected. And so, under the expected category would be things like I have a car, so car maintenance is something that’s, you know, large and irregular. I think since I’ve started budgeting, I have that as a fund where I put some money into a fund designated specifically as car maintenance. And then whenever that comes up, I know I have that fund. And I realized probably about this year that I’d put a lot more money in it that I may have needed to. And so that actually gave me a little bit of leeway for other irregular expenses, maybe like, like the current thing right now that I know is coming up is that I might want to buy a pair of skis which can be like a couple of hundred dollars or more.

00:18:20:21 Ariel: And so, if it’s something like that, then I can spend the past few months prior saying, okay, I’m going to put X amount into this fund. And then of course that might have to come out of some other aspect of my budget and just, you know, it’s only just for those three months and then I’ll have the amount needed for the item and then I can purchase that. And then other times maybe if I just, at the end of the month, I will go through my budget. And because some of the times what you actually planned isn’t going to be exactly what I end up planning, or what I end up actually spending. So, I might find that, oh, I didn’t spend as much on gas as I had expected to. I can put the excess there and to just general savings and I’m sure something might come up. But I do like having a good amount, like maybe like a little bit more in liquid savings in cash I have on hand just because I know things can come up here and there.

00:19:12:20 Emily: So, when you say, you know, moving money into general savings or moving in to a certain fund, is this like different bank accounts or is this maybe within your budgeting app, you’re like allocating things differently?

00:19:23:03 Ariel: This is within the budgeting app, so it’s all within my bank account. But just in terms of my like where I’m mentally earmarking them, that’s how that goes. And I also do have some investment accounts. And so, then if I know I want to put more into investing than I actually have to like deposit that into that account.

00:19:43:07 Emily: Okay. But you are operating for all of your cash out of a single account. A single checking account.

00:19:48:13 Ariel: Yes.

Money Mindset of a Saver

00:19:49:18 Emily: What stops you, psychologically, from spending how you didn’t allocate? That was always my temptation and the reason that I don’t use a single account for everything is that I would really be tempted to move things around.

00:20:04:04 Ariel: I think I also have just been a saver since I was little. If I would get like $20 for Christmas, I was like, “Oh, I’m going to save this all so when I get older, I’m going to have a lot of money and be financially stable.” I have with my bank, I have like a checking and savings, and technically my savings I have what my emergency fund and the checking I have right now, it’s just the remainder of my cash. But I think just because I am naturally such a saver, I do kind of get like a, I guess I don’t know if it’s a reward or reward thing when I see a bigger number in my account, but it just makes me feel safer. So, I put more towards savings and not just spending it.

00:20:44:11 Emily: And you also mentioned a moment ago about like if you come in sort of under budget in some categories, you said gas specifically. So, for your variable expense categories like gas, are you usually coming in under budget? Like have you set a generous enough budget that that’s a typical thing that you spend less? Or if not, what do you do in situations where you have overspent the budget?

00:21:06:01 Ariel: Most of the time, I put in roughly about the amount like, I’ve tightened my budget now to where I spend the amount that I plan to. There might be some instances where if I’m expecting to spend say $200, if I maybe carpool with friends to an event that we’re going to and they’re nice enough to not or they don’t ask for gas money or I tend to drive back home because I’m from L.A., so I tend to drive home a lot. And so, I know I’m going to be spending more on gas in those times. And again, that’s just a thing that if I know I’m driving to L.A., then I’ll add it in more money into the gas budget the beginning of that month. But most of the time, I think they stay pretty closely. I mean, if I come under budget on some categories together, that might come up to maybe 100 bucks, but that’s still like 100 bucks more I can put in the savings versus not really planning for that before.

00:22:05:22 Emily: So, it sounds like you’re keeping like you have a dynamic budget, from month to month you do. In the course of the month, do you also update what you budgeted for that current month?

00:22:15:21 Ariel: Yeah, I think there’s times where that could happen. I think that like one of the examples is maybe if I know I want to go out with friends and do another thing or if there’s a concert or something, and then I’m like, “Oh, I really want to go to this concert,” I would take out from my eating out budget to spend more on going out to a concert, for example like that. So, it is very, very dynamic and I think that’s super easy to do being a single person and just having me on the app. So, I really, again, I really appreciate the mobility of having the app on my phone and just deciding wherever and whatever I want. As long as it’s within the monthly income, I still know that I’m still planning where everything is going.

Unexpected, Irregular Expenses

00:22:57:21 Emily: Gotcha. And when I was starting to ask you about irregular expenses, you mentioned four expected irregular expenses. That’s a system that I called targeted savings. What about for unexpected irregular expenses? Are there any unexpected irregular expenses in your life, or do you expect everything?

00:23:14:05 Ariel: I think maybe some unexpected might be medical or something. And I know I always have an emergency fund on hand for that. I just again, I’m such a saver and I’m kind of in a transition period right now because I moved. And so, I do have a heftier amount of cash in my checking than I probably normally would. But for unexpected ones, I could always dip into the emergency fund and take that out. If it was like an E.R. visit, for example, but then the next month would have to be really hunkering down and replenishing the emergency fund back up to what it was before. Then I can go back and do fun things and all that.

00:23:54:01 Emily: Yeah, I think that system makes a lot of sense. And like the way that I sort of define an emergency is an unexpected but necessary expense. It can’t be discretionary, and you should try to anticipate everything that you reasonably can. Yes. If you get into like some sort of major accident or unforeseen illness, of course those things can happen. You may not have prepared for that. I mean, that’s why we have insurance for, right? So like insurance then accessing your emergency fund, that really makes sense. But yeah, under sort of my like system, you would you would anticipate everything like you would really spend some time brainstorming like the things that could happen and setting up either targeted savings or like you, just a general dynamic, flexible budget that will help you meet those expenses when they do come up. And then if something is truly necessary and truly unexpected, hey, that’s what your emergency fund is there for. And like you said multiple times so far, like it gives you peace of mind to have this money in your savings, in your checking, to know that you know you’re spending within your budget and so forth, living within your means.

Regular Expenses: Housing, Transportation, and Food

00:24:54:00 Emily: Zooming out a little bit more like high-level speaking about your budget, how did you set your large regular expenses like housing, transportation, food? How did you set those up so that you are able to live within the stipend provided?

00:25:11:13 Ariel: Yeah, I think even from, so again, going back to once I graduated and started as an RA, even those months prior, it was my dad and I kind of just he was helping me form what a budget is. And so, we were saying, well, you know what would rent be? I’m going to estimate this and maybe get an idea of if it was me going into an RA position, I would get an idea of what RA’s normally make and the rent that was in the area or some of the areas that I wanted to live in and just kind of do like a mock budge then and get an idea. And so, once I had had that, it was actually pretty similar because I set a rent estimate that ended up being pretty much exactly to what I ended up spending for that. And so, that was pretty easy to transition into. And now coming into this program, like the first short-term lease that I had to take for moving up here, I just did the same thing. I kind of mock budgeted on my app and I put in, “Okay, I’m probably going to spend this amount on rent. How is that going to look? Where am going to have to cut? Can I even afford this?” And it really was just kind of trial and error through the app and me taking time and sitting down and manually doing it.

00:26:22:03 Ariel: Because I know that a lot of the general advice for how much you should be spending on rent based on your income is always like, I feel like doesn’t really apply to PhD students because you spend way more. But I was just making the mock budget and when I had moved back to L.A. for that short-term lease, it was also kind of tricky because then instead of renting a place, I did like an Airbnb, and that meant that utilities and everything were included. Plus, it was for a four-month period of time versus sometimes you have to be locked into like a six-month lease. And so, with that one, I kind of had to budget long-term, but it was still amongst the same principles of just trial and error, trying it and seeing if I could do it, where would I have to cut? Is this okay? And this and that.

00:27:08:14 Emily: Let’s put aside the short-term leases because that’s obviously, it’s a big challenge, but it’s a little bit like unique to your situation. Let’s take the example of when you moved back to start, what I presume is you’re now on a year-long lease, right? Currently?

00:27:21:13 Ariel: Right now, my situation’s a little interesting. I came back. I’m actually living with my boyfriend’s parents because of some personal things with him moving back. And so, we had just signed a lease. We’re signing on to a one-year lease now. So, now I’ll be on a 1-year lease.

00:27:38:22 Emily: Okay, so in this process that you’re currently in of figuring out your housing expense for the upcoming year, locked in for a year, how are you like researching the market? I mean, obviously, you’ve lived here prior as well, so like that gives you some insight, but how are you figuring out like what’s reasonable, what is attainable for you to spend on rent in this area so that you can build as your budgeting model?

00:28:00:20 Ariel: I think just getting an idea of if you go on any of the apartment’s websites and saying what the average, you know, one or two-bedroom or three-bedroom places depending on roommates and stuff, I’m getting an idea of that. I also like when I was originally in L.A., I paid about $1200 a month for rent and I was pretty comfortable with that at that time. And even though I’m at a lower income now and knowing that it’s higher cost of living here than it was when I was in L.A., I ran the numbers again and know that looking at that, that if I do $1200, I could still be pretty good with that and feel okay.

00:28:40:16 Ariel: It’s still super tricky to find that around here. And so, my boyfriend and I actually had spent a lot of time kind of like researching like when is rent really low and rent prices are really low in winter. And so, we’re really, really grateful to have his parents nearby and letting us live with them to figure that out. But I think about like around here, I have a friend who has a one-bedroom for $1600. I have three friends that are paying, like two of them are paying $1100 and the other one’s paying $1400. And so, kind of those seemed pretty similar around to the $1200 range that I had thought. And I just realized, you know, if I did end up having to go higher like $1300, that’s just something I have to figure out. Because I really do want like my own room, if I was going to live with roommates and other things I would have to consider and just realize like a lot of things like that.

00:29:34:02 Emily: Yeah, that makes sense. I love that you mentioned that you actually know how much your peers and friends spend on rent. It’s a topic of conversation that is not as taboo among graduate students as it may be at other times in your life to kind of like share that information. So, I’m really happy about that.

Why is Budgeting Essential for Grad Students?

00:29:47:20 Emily: So, kind of to wrap up here, why do you think that budgeting is essential for graduate students?

00:29:54:10 Ariel: I think as I mentioned before, the number one thing is just that we have such a low income anyways, and it’s really vital knowing where all your dollars are going and you don’t run any risk of overspending. Like I know somebody in my program who is like, “Yeah, I kind of just put my card and see what happens.” And hearing that really just did kind of terrify me. And so, you don’t want to accidentally go into debt or you’re just more intentional. It’s more about the overspending that I think really like scares me a bit. And I think that alone is like the biggest goal to come out of a PhD without any debt.

00:30:32:09 Ariel: I was also actually pre-med and I didn’t want to go $200,000 into debt and so if that’s really one of the big things that I went into a PhD, I think that’s a good goal to have. And you’re still able to fulfill some financial goals, even though it might not be as high of a degree as you want to. It still really helps you to facilitate that and just gives more control and power overall and not being so, not feeling like we’re like completely powerless to, you know, grad students just make this and that’s just how it is. And I’m poor and I can’t really do anything. And I know it is really hard to live on the income that we have now, but it gives us some control back and some power so that we can really set ourselves up well financially in the future. Even if it’s not putting, you know, $300 into savings every single month, if it’s just building a habit of saving or building a habit of investing or building habits of this, this, and this, that’s really going to help you financially.

00:31:26:13 Emily: I love those points. Thank you so much for articulating that. I also think that budgeting is a really powerful and essential tool and especially because of not only like sort of the tangible benefits that we’ve talked about of having control of where your money is going and awareness and so forth, but also the intangible ones that just help you sleep better at night and everything.

Best Financial Advice for Another Early-Career PhD

00:31:45:03 Emily: So, I’m so thankful that you volunteered to come on the podcast to talk about this subject in detail, Ariel. And I want to finish up here with the question that I ask of all of my guests, which is what is your best financial advice for another early-career PhD? And it could be something that we’ve talked about already or it could be something completely new.

00:32:01:12 Ariel: Yeah, I would say my best advice, I mean, I’m also an early-career PhD, is having to do with investing. And I would say it’s best to start investing monthly, even if it’s something that seems kind of small and you’re wondering, is this even worth it? Again, it’s still just building that habit and building that, you know, like muscle memory and plus one is bigger than zero. So, I think anything is good. And I’ve heard some people, like a lot of people say a bunch of different things, like, “No, you should just save a lot.” And maybe it’s different for, you might be in a different situation. But I find that even just starting to invest at this time will help you get the habit once you graduate.

00:32:43:13 Emily: And to add on to that, I mean, the habit formation alone is a great reason to start investing or start budgeting or start doing other kinds of financial practices. But specifically with respect to investing, I think it’s really powerful just to get your systems like off the ground. Like with investing, you have to make a bunch of decisions, like especially with an individual retirement arrangement or an IRA, you have to decide which brokerage firm you’re going to house it at, you have to decide what funds you want to invest in. So those are like big, like they don’t have to take necessarily that much time to make those decisions, but the decisions have to be made and it’s really easy to procrastinate them. And so, if you aren’t, you know, determined to start your investing now, it could be something you end up putting off for years just because of the annoyance of like starting this system, right?

00:33:27:01 Emily: So, not only the habits but just getting like your account set up is like a great thing to do and it’ll facilitate, you know, continuing to invest going forward. Yeah, really easily. So, I’m really glad you brought that up. And I think you also want to give some advice about those two years you spent as an RA, right?

00:33:43:14 Ariel: Yeah. Those two years that I took in between undergrad and grad school were some of the best, like really was probably one of the best decisions that I’ve ever made. I was pre-med, I graduated and was a little bit unsure if I wanted to do a PhD because I was kind of not wanting to do med school at that point. And I thought, you know, what’s the rush? Let me work. I like research. Let me work in research and just figure things out. And just realistically, in terms of a PhD, it helped me figure out what I wanted to research for a PhD, what I wanted to get out of it, why I’m even doing it. But even after that, just taking the designated time for working and kind of settling into a bit of adult life and gaining an income, I really learned a lot and matured a lot mentally, emotionally, and as we’ve talked about financially.

00:34:35:07 Ariel: And so, I think those two years were really key for me to set myself out well for the rest of my time in grad school. And I can’t imagine like going straight from undergrad into grad school. I feel like that would be a complete whirlwind. So, that’s another thing I like to tell a lot of friends thinking about whether they want to take gap years or not, I think that’s like a really good time to kind of just figure things out on your own and plan out, you know, everything across the board or just, you know, just figuring out what you want to do.

00:35:02:17 Emily: And I know we already talked about you like starting your practice of budgeting that period of time, but were you also able to come into graduate school with some savings? 

00:35:12:11 Ariel: Yeah, I saved good chunk just because again, the habit. So, I think going into graduate school, I would save just general savings monthly however much I wanted to. I hadn’t invested at that point because I knew I wanted a little bit more of like a safety net coming into grad school to have on hand.

00:35:32:03 Emily: Yeah, that makes so much sense. And it’s, Ooh, it’s a lot easier to build that emergency fund when you are making a little bit more rather than, you know, having to build it up once you start graduate school. Of course, there’s no time like the present. So, start if you haven’t started already with that emergency fund, but it’s really giving yourself a leg up to have done it when you had a higher income before. So, that sounds awesome. Ariel, it was such a pleasure to talk with you. Thank you so much for volunteering to come on the podcast!

00:35:55:22 Ariel: Yeah, thank you so much. This was really great!

Outtro

00:36:02:23 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Budgeting for the First Year of Grad School Even with Financial Anxiety

April 17, 2023 by Meryem Ok Leave a Comment

In this episode, Emily interviews Georga-Kay Whyte, a first-year graduate student in history at Brown. Georga-Kay is a first-generation college student from Jamaica who grew up with financial insecurity, which spurred her to set a high bar for the financial support she expected from her graduate program. Georga-Kay was just as forward-thinking as she evaluated her housing and transportation options for her first year at Brown to set them at a reasonable level for her stipend. However, once she started living the grad student life, she realized she was overspending, especially on groceries and Amazon. She shares how she worked through her financial anxiety to confront her spending and start to budget. Finally, Georga-Kay details her financial goals for her 20% savings rate going forward. This episode is a must-listen for anyone with an upcoming career transition or move, especially if it’s your first!

Links Mentioned in the Episode

  • PF for PhDs Tax Center
  • PF for PhDs S14E8 Show Notes
  • PhD Stipends
  • PF for PhDs: Set Yourself Up for Financial Success in Graduate School (Workshop)
  • Rocket Money (App)
  • Mint (App)
  • The Financial Confessions (Podcast)
  • Her First $100K (Podcast)
  • I Will Teach You To Be Rich (Book by Ramit Sethi)
  • You Are a Badass at Making Money (Book by Jen Sincero)
  • Georga-Kay Whyte’s Website
  • PF for PhDs Subscribe to Mailing List (Access Advice Document)
  • PF for PhDs Podcast Hub (Show Notes)
Image for S14E8: Budgeting for the First Year of Grad School Even with Financial Anxiety

Teaser

00:00 Georga-Kay: There’s so much like financial literacy that we don’t have as graduate students because it isn’t prioritized. And so, the best way to sort of break that barrier is to talk to other people who are in similar situations. And that’s how it’s helped me to approach a lot of the things that I do now and how I think about creating a budget or how I think about my lifestyle. So, I highly recommend just reaching out to your community and starting those conversations. It helps a lot.

Introduction

00:31 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 14, Episode 8, and today my guest is Georga-Kay Whyte, a first-year graduate student in history at Brown. Georga-Kay is a first-generation college student from Jamaica who grew up with financial insecurity, which spurred her to set a high bar for the financial support she expected from her graduate program. Georga-Kay was just as forward-thinking as she evaluated her housing and transportation options for her first year at Brown to set them at a reasonable level for her stipend.

01:28 Emily: However, once she started living the grad student life, she realized she was overspending, especially on groceries and Amazon. She shares how she worked through her financial anxiety to confront her spending and start to budget. Finally, Georga-Kay details her financial goals for her 20% savings rate going forward. This episode is a must-listen for anyone with an upcoming career transition or move, especially if it’s your first! If you’re listening to this episode the day it’s released, you know that tomorrow is the filing and payment deadline for your 2022 tax return as well as the payment deadline for your quarter 1 2023 estimated tax. If you haven’t yet cracked the code for your grad student or postdoc taxes, there’s still time to receive my help! Go to PFforPhDs.com/tax/ and sign up straight away for the appropriate workshop for you. The workshops are asynchronous, so upon registration you’ll have immediate access to all the video modules with transcripts, worksheets and/or spreadsheets, and recordings of previous Q&A calls. Best of luck finishing up! You can find the show notes for this episode at PFforPhDs.com/s14e8/. Without further ado, here’s my interview with Georga-Kay Whyte.

Will You Please Introduce Yourself Further?

03:04 Emily: I’m so excited to have on the podcast with me today, Georga-Kay Whyte. She’s a first-year graduate student at Brown, and our subject today is budgeting and what she’s learned as a first-year graduate student about that topic. So Georga-Kay, would you please introduce yourself a little bit further for the audience?

03:20 Georga-Kay: Yes! First, thank you for having me. My name’s Georga-Kay, I’m a first-year history PhD student at Brown University. I study 20th century African American labor history and I’m actually first-gen Jamaican. My parents are immigrants. We all migrated to the U.S. And so, I sort of like had to figure out not only personal finances in terms of like living in a new country but also personal finances because like I didn’t grow up with a lot of personal finance talk in my family. So yeah, that’s just like my background.

03:51 Emily: Okay, so you get the multiple first-gen labels, right? Like you get first-generation American, I don’t know about first-generation college, necessarily.

03:58 Georga-Kay: I am first-gen in college as well. <Laugh>, first-gen graduate student, first-gen everything.

04:02 Emily: First-gen grad student, we got it all. Okay, that’s wonderful! And what age did you come to the U.S.?

04:08 Georga-Kay: I came to the U.S. actually right before I turned 18. So, I was pretty, yeah I was, I was much older.

04:13 Emily: Very new.

04:14 Georga-Kay: Very new to the U.S., yes.

04:16 Emily: Yes. And where did you go to college?

04:18 Georga-Kay: I went to college at Agnes Scott College in Decatur, Georgia. It’s a small women’s liberal arts school.

Money Mindset at the Start of Grad School

04:24 Emily: Yeah. Okay. So, wow. Okay, this first question that we have, what was the state of your finances and your financial background and money mindset coming into graduate school? So really we’re talking about what you grew up with in Jamaica, and then also just that short time you had in college. Yeah. So what was going on both in your finances and your like money mindset by the time you entered graduate school?

04:47 Georga-Kay: Yeah, so I grew up, I would say like relatively low income. In Jamaica, like I would be considered mostly like middle-class but in the larger scheme of things I grew up with a lot of financial insecurities. So, I had like an anxious sort of relationship with money from like childhood. And so, once I was coming into grad school I was super anxious about it because I had just started like looking online and seeing like the discourse around grad school and grad students being like they’re underpaid and they’re not like happy with their financial situation. And coming from someone who’s first-generation, I didn’t have a lot of financial safety nets. Like I just know that if anything, I’d have to figure it out on my own. And so yeah, definitely once I was like deciding to go to graduate school, this was before I found out about like what schools I’d be going to when I was thinking about like applying, I was like, “Oh my god, is this going to be the worst financial decision of my life to do this right at this time?” Because I came straight from undergrad, so I didn’t have a lot of time to like build up savings and stuff like that. But I really knew that I was passionate about the topic so I was like, I’m going to do this, hopefully it works out. Hopefully I can get a stipend that’s like livable. And that was my number one concern. I wanted a stipend that I wouldn’t be in a financially precarious situation just because I’ve already experienced so much like financial turbulence that I wanted some sort of safety net.

Role of Finances in School Selection

06:04 Emily: Absolutely. That makes so much sense. So, I want to talk a little bit more about maybe application and admissions process. You, I mean as anyone would be, were very nervous seeing the discourse currently going on, rightly so, about how difficult graduate school is financially. And all the unionization movements and so forth. So like, tell me about like the schools that you chose to apply to, were finances on your mind? Let’s talk about that. Like the selection process of where to apply.

06:31 Georga-Kay: Yeah, so I was super selective about the schools that I applied to, and I sort of feel like I was really naive in a way, but it worked out right <laugh>? I was like I’m going to apply to mostly private schools because they tend to have higher stipends, unfortunately. I started looking, I actually used, I forget what the platform is called, but they publish stipends for students. I think you might know what it’s called.

07:01 Emily: Is it PhDstipends.com?

07:03 Georga-Kay: Yes. Is that a website that you run?

07:05 Emily: That’s mine, yeah.

07:06 Georga-Kay: Yes. Okay, okay. Yes. So, thank you for that because I actually used that website a lot. So I looked at the PhD Stipends and I was really serious about, “Okay like is this a stipend that’s livable?” And then I would go ahead and like look at the livability calculator to see like, “Okay, is this going to work?” And I ruthlessly took schools off my list if they weren’t in that like situation of like they had a decent stipend for the area. So even if the stipend on its face was like, you know, almost $40K and the livability like it’s in New York, it’s like okay that’s still not going to work. So I was very serious about that, and I ended up applying to nine programs. And those nine programs I felt like had really strong stipends and they had other benefits like health insurance and stuff like that that I was looking at, too.

07:52 Emily: So, you’re the first I think interviewee I’ve had on the podcast who answered that question in that way. Because a lot of people I talk to, of course by the time they get into admission season they’re thinking about the financial offers and so forth. But to back that up into application season, I mean this is actually what I teach in my workshop for prospective graduate students: Set Yourself Up for Financial Success in Graduate School, is it starts way back the summer before you apply even earlier than that, understanding the funding models, just like, I mean you said you were naive, but that is a very advanced strategy that you’re applying. So that’s awesome. Yeah to really think through like why bother applying to a place that you are pretty confident already is not going to support you sufficiently? And so to just, if you have programs that you know, make your list, that’s great. You don’t need to bother with the other ones who aren’t. If this is a priority for you, which it was for you. It’s not necessarily going to be a priority for everybody, but for you it was. So, I love that process.

08:48 Georga-Kay: It was really just my financial situation, like coming in with so much student loans. Like I felt a lot of guilt over the amount of student loans I had, and I knew I didn’t want to get any more student loans in graduate school. And so I was like, I need to find a situation that’s going to work out. And the reason why I say naive, just because talking to people about like the admissions chances in graduate school. So I was like, okay, I’m going to be selective but these schools are going to have higher competition. Because they do like, they have high stipends and people know about them and stuff like that. So that’s why I was like, okay, well hopefully I get it <laugh>, you know?

Considering Other Factors

09:19 Emily: Yeah. But applying to nine schools, that’s a pretty good number. I think that’ll give you a lot of chance. Anyway, it has worked out. So let’s talk about admission season. I don’t know how much you want to share about how many offers you got, but like, you know, did your expectations bear out? And the offers that you did get, yes, they were decent stipends? And then maybe you could share how much more finances, if at all, played in the decision of where to go or if you’d already done that filter early on, maybe it didn’t really have to.

09:46 Georga-Kay: Yeah, so I got three admissions out of the nine that I applied to. I got admitted to Penn, Brown, and Maryland. University of Pennsylvania, Brown University, and University of Maryland. And those offers were pretty good offers honestly. Especially looking at like the averages for stipends. So, I got $38,000 from Penn and then I got $45 from Brown. And I think Maryland offered like $32. I don’t remember specifically, because I knew almost immediately that Maryland had the lowest stipend. So I was just mainly considering Penn and Brown. And yeah, those were like comparable in some sense. Obviously like there’s still a discrepancy there between the amount that I got from Penn and the amount I got from Brown. It was actually a hard decision for me because the programs were both equally great, but then also the cost of living was relative. And I knew that like if I wanted to, I could have probably negotiated with Penn, which I didn’t end up doing, but I definitely still considered finances when I was thinking about it. But it was like close enough where I felt like, “Okay, well what else do I want from graduate school?”

10:51 Emily: Based on how you’ve talked about your thought process so far, and I’m pretty sure I know the answer to this question, but were you only considering your first-year stipend and like the source of the funding? Or were you also looking forward to like, were you being funded for five years or were there guarantees or you know, was it a TAship versus a fellowship? Like did you factor all that stuff into?

11:12 Georga-Kay: I factored everything in. When I got my offers, I reached out to the like DGAs of each department and I was like, okay, explain to me how this works <laugh>? I was just like, I wanted all my bases covered. So I talked to both schools and I was like reading through the offers and sort of seeing, okay, like first year, they were very similar. So it was like first year would be fellowship and then you would TA for some years and then you’d go back on fellowship. And both schools offered like five to six years of funding. Brown guaranteed six years, Penn basically they’re like, you basically will get six years but we’re guaranteeing five. And so, I knew that like throughout the program I would be funded for the entirety of it.

11:53 Emily: I’m so glad that you shared that as well. This is another thing that I encourage in my workshop is following up with the directors of graduate studies or maybe the admin in the department to like explain to you anything that’s not really clear, or maybe they’re only talking about the first year but they’re not talking about subsequent years. Like they’re recruiting you, okay? They want to convince you to make good on that offer that they just made you and convince you to come there. And so they should have pretty solid answers to these questions. And they might say, like Penn did, “Okay, you know, we’re not officially going to guarantee that sixth year, but you know, in nine cases out of 10, like we do find funding for you know, that sixth year or whatever.” Like they should be able to give you those really well-thought-out answers to those questions. So I’m so glad that you went through that process as well of really investigating.

Financial Expectations in Grad School

12:35 Emily: And you chose Brown, and that’s where you are now. So, let’s kind of talk I guess about now that you knew the stipend, you knew that maybe had some degree of confidence that the precarity was not going to be as much of an issue for you. What were your expectations then about how your finances would look in graduate school once you had that offer in hand?

12:56 Georga-Kay: Yeah, once I had the offer, I sort of felt a lot more secure just because like I feel like $45,000 is like a relatively, it’s not like anything crazy, but it’s average enough where it’s like, okay, in Providence I could live on that. And I think I could save on that, which was like a big deal because I know that like a lot of times in graduate school people talk about not even being able to save. And I wanted to be able to save and like achieve other financial goals. So, once I got that offer in hand, I started to think about, okay, well now what do I want to do? Like I know I’m going to make this much money. How much do I want to spend on rent? Do I want to keep like my costs low? You know, how much am I willing to compromise for the next few years–because I’m in my early twenties–to sort of set myself up for a good financial foundation?

13:39 Georga-Kay: And so those were just sort of all the questions that I had in my head. And then also, I started to think about like the realities of graduate school and what in cost that would incur as well. So, I like when I was going through my stipend and sort of backtracking a little bit, going through my offer, I would see that, oh I had like research funds and these funds, but I didn’t know until I sat down with the DGS and asked about it. I was like, “Is this money that would be like deposited into my account?” And they’re like, “No, it’s reimbursements.” And I was like, “Oh okay.” So then I had to learn about this whole reimbursement thing. So I was like, I have to actually have to have a safety net, like some sort of savings because if I want to pay for something I have to pay for it first before I get the money back. And so I started to think about that and just, yeah, just a lot of wheels turning now that I know that okay this is how much I’m going to make, how can I make this work in order to like pay for my day-to-day living expenses?

Housing and Rent

14:29 Emily: And one other thing, again, I’m talking about this workshop so much because this is the process you just went through. One other thing I talk about in this workshop is about the big decisions you need to make in your budget that happen probably before you even arrive at graduate school, right? You mentioned housing, so like did you commit to a lease for example, in advance of moving? Or is that something you were able to arrange once you got there? It’s very different, you know, different housing markets.

14:50 Georga-Kay: Yeah, so housing for me was one of the biggest things that I thought about because it was going to be my first time paying rent because I came from undergrad where I was like paying tuition and that would like cover, you know, my expenses. So, I wasn’t paying anything monthly. So moving to Providence and then also having to pay for moving expenses. I knew that like housing was going to be a big deal and I knew that it would probably be my biggest expense. And I had to make a decision about whether I wanted to live with roommates or I wanted to live alone and what does that mean? So I decided to live alone. I’m currently in graduate housing and the housing is somewhat subsidized. I don’t know if they say it’s subsidized on their website, but it’s like a lower cost of living apartment than I typically would be able to find in Providence, essentially.

15:32 Georga-Kay: And that was great. I started that <laugh>, luckily I started the process early so I was able to sort of like compare housing situations. I looked at the average cost if I wanted to live with a roommate in a house or if I wanted to live in a studio. I currently live in a studio and my rent is like, I feel like it’s on the high end of what I would want to spend, but I knew that I would appreciate that more having that sense of like security and that sense of not having to worry about if I have a roommate that maybe I don’t mesh with or you know, like there’s things that you have to think about lifestyle stuff. So I was like, okay, I know that I’m willing to pay a little bit more to live alone and keep my other costs low.

16:10 Emily: What I love about this model, I mean you’ve listened to the podcast, you know, I’m always like roommates, roommates, good idea. But what you did was you worked with your numbers and you knew that it was feasible, especially making that you know, decision to go with the on-campus option and so forth. I’m curious now we’re recording this in March, 2023, if you’ve already made a decision for housing next year? Or like are you going to keep the same situation? Do you think you’re going to do something different?

16:34 Georga-Kay: Yeah so I’m definitely, unfortunately the housing at Brown, they only guarantee it for two years. So I’m going to keep those two years. So I’m going to keep going until next year because I really love the area that I live in. I love my apartment, and so I feel like I really lucked out with housing. So, I’ll keep it and I probably will have to move after my second year since it’s not guaranteed and that it’s a really high interest area. Like a lot of students want to live here. So, I feel like after the second year I’ll be more comfortable in the area I can find somewhere else.

17:02 Emily: Yeah, and you might have met someone you really like enough to live with <laugh>.

17:06 Georga-Kay: That is true.

17:07 Emily: So, a roommate might be more feasible.

17:08 Georga-Kay: I’ve also considered that. Yes, I’ve thought about that too.

Transportation and Other Expenses

17:10 Emily: Yeah. So, we’ve already talked about kind of what I call the biggest rock in your budget, which is housing. And I’d like to know about your transportation choice. Like do you own a car or do you think it’s necessary? What is your choice there?

17:24 Georga-Kay: So, I decided to actually sell my car <laugh>. I sold my car before. When I was living in Atlanta, I bought a car used and it was a great car. It carried me to my like last two years of undergrad. But then I was like, I’m moving to the northeast. The transportation here seems a little bit easier. There’s a lot of public transit and there’s also trains and stuff. So, I talked to graduate students and they said that it would be fine to live without a car. So I was like, I’m going to use that money to move. And now I currently don’t have one and I rely on public transit, walking, and Brown has a university shuttle that’s actually really, really good and I’m able to basically spend like less than $50 a month on transportation costs.

18:06 Emily: Love that. Whenever it’s possible to live car-free, especially if when you’re pairing that with the campus housing, it’s like, I’m sure it’s really convenient and everything, you can just, not eliminate entirely, but dramatically reduce the costs associated with transit by getting rid of your car. Ugh, I have a car but I’m such a like anti-car person. <Laugh>, I live in Southern California.

18:26 Georga-Kay: No, I love living in a walkable city and that’s something I considered too. I was like, I wanted to, I knew that like if I’m going to be paying a little bit higher rent then at least if I don’t pay transportation, it kind of evens out.

18:37 Emily: Yeah, absolutely. So, we’ve talked about these major, major components of your budget, the housing and the transportation. And so I’m curious like how you formulated the rest of your budget, maybe more with the other smaller fixed expenses and other variable expenses? And then kind of what you’ve learned through living with that budget for the last, you know, six, seven months?

18:55 Georga-Kay: Really the things that I thought about was rent and transportation and then the rest of it was just sort of like I was going to do trial and error. So I was like, I don’t know what’s a reasonable grocery bill? I don’t know how much I should expect to, you know, spend, I also have a pet. And so that’s also a part of my budget. So I was like, I don’t know how much I’m going to be spending for vet bills. And so, I really just was like, okay, like this is less than half of my, like my total living expenses is less than half of my stipend. And so I was like, whatever the rest is, I’ll play around with the numbers. So when I originally started, I realized I was overspending because I just sort of didn’t want to look at it to be honest.

19:32 Georga-Kay: I was like, I’m going to take care of the big stuff. And because of my financial anxiety, I sort of had a lot of avoidance about money, especially when I just moved because I was like, “Oh my god, like am I going to, you know, completely throw off my budget or something like that?” So I was like, okay, I have this wiggle room essentially and we’ll figure it out. And so I started just shopping without caring. And then once I started looking back at my budget, which is something that I’m really happy I did, I started actually looking at my money. I was like, oh, maybe I’m spending a little bit too much on groceries. Like, and talking to other graduate students as well. I’ll get to this later, but talking to other graduate students and realizing, oh this is like an average cost for, you know, a meal for a single person, like a grocery bill for a single person, or this is the average cost for electricity or something like that. So I at first was avoidant, but then I started slowly having those conversations, started slowly thinking about it and then I started actually setting price markers like, oh I want to spend $300 on groceries. Oh, I want to spend this much on electricity. And then actually going in and doing those numbers and keeping track of that.

20:38 Emily: I think this process that you’ve gone through is so relatable. Absolutely. You don’t know how much you’re going to be spending on all these little variable expenses that aren’t like a contract that you’re entering into.

20:48 Georga-Kay: Yes, <laugh>.

Financial Discussions with Other Grad Students

20:49 Emily: When you first get to a new city and you have a new lifestyle different than the one you had before. So it definitely makes sense to just kind of work it as you go. And really, I’m actually very impressed you’re talking about having financial anxiety around this just six months ago and six months later you’re coming on a financial podcast? Like that’s a lot of progress in a short period of time. So I’m very impressed. How did you start having these conversations with other graduate students? Like, did you just come out and say, what’d you spend on groceries last month? Or like, what was it?

21:15 Georga-Kay: No <laugh>, no it wasn’t like that. I feel like I just started getting closer to the people in my program, but also just to people that I’ve met through school. And I like to think I’m a pretty forthcoming person. So if like we’re talking and everyone’s like, how’s your week been? And it’s like, you know, if there’s something on my mind, especially now that I feel like I have a close relationship with some of the people in my program I’ll mention like, “Oh my god, like I feel like I’m overspending on groceries,” which is literally something I did. I was like, I feel like I’m overspending on groceries, but I don’t know. And then all of a sudden everyone starts chiming in, like, oh, I think I spend this much. And then we all start comparing. We’re like, oh. And so I sort of like, I guess instigated the conversation, but now I feel like there’s so much more financial transparency between us all, like within my history cohort and we’ll share things now where it’s like, okay, do you guys think this is a reasonable amount to spend for this or something? And yeah, so I just feel like luckily I’ve always been open to sharing and I feel like sharing invites other people to share.

22:09 Emily: Absolutely. What you did there was like, you were a little bit vulnerable, you said, oh I have a little weakness or like something I’m unsure about, can you help me?

22:19 Georga-Kay: Yes.

22:19 Emily: And you like invited that feedback. And that allows the other person to like be the expert for a second, because they’re the expert in their own budget, right?

22:25 Georga-Kay: Yeah.

22:25 Emily: So like then they can help you and everybody feels good about it and like, oh man, that’s a wonderful like sort of pattern that you have established. I think that’s going to help you so much throughout your time in graduate school. I remember for example, not necessarily about groceries, but like just asking other people how much they spend in rent. Like, oh I really like your place. Like do you mind me asking because this is what I spend and like how much do you have? And that was a way that I found like a really great deal on housing. My friend was like, you wouldn’t believe it. I only pay such and such for this great place. You know? And so just having that, those open conversations, I feel like it’s easier among people who are all paid the same <laugh>, which I suspect probably everyone in your cohort is more or less like being paid the same, at least at the moment, right?

23:05 Georga-Kay: Yeah, we’re all paid the same. I do have an additional fellowship just a little bit, but yeah, we’re relatively all on like similar pay scale. And I also with the rent thing, like that was also a thing that we talked about was like, okay, well this is how much I pay for rent. This is how much we all pay for rent. And having those conversations, like especially for someone I think because I’m first-gen and I’m also like the youngest in my program that I’m like the baby and I’m like, I want to ask because like you guys have had a few more years of like, people have been in master’s programs, so I know like I feel like accepting that like I’m still figuring it out and not having any sort of pride about it of being like, oh I’m not going to share because you know, maybe someone will judge me. Just being like, hey, like you know, I’m figuring out and you’ve had some experience like what is your take on this? As you said, like they’re the expert in their budget and so people like to help in that way.

Commercial

23:55 Emily: Emily here for a brief interlude! You’ve heard me mention several times during this interview how Georga-Kay perfectly lived out the principles and strategies I teach in my year-long asynchronous workshop, Set Yourself Up for Financial Success in Graduate School. If you would like to take a deep dive with me into financial tutorials designed for prospective and rising graduate students, please check out PFforPhDs.com/setyourselfup/. The workshop modules that relate to the topics in this interview are:

  • Stipends vs. Cost of Living
  • Decipher and Compare Offer Letters
  • Right-Size Your Necessary Expenses
  • Prepare for Your Start-Up Expenses

To learn more about these modules and the structure of the workshop, visit PFforPhDs.com/setyourselfup/. I hope to see you inside the workshop and to help you set yourself up for financial success in graduate school the way Georga-Kay has! Now back to the interview.

Tracking and Budgeting

24:53 Emily: Okay, so you’re on the ground, you’re figuring things out, you’re using your cohort to kind of bounce ideas off of. I love that. Tell me about your actual practice of budging. Because you said at first you didn’t want to look at the numbers, but does that mean that you were actually tracking? Like there were numbers there that you were avoiding looking at? Like practically, what was happening with those numbers?

25:14 Georga-Kay: Yeah, so once I moved, I sort of had a little nest egg to move because I knew that I would need that money. Luckily, we did get a transitional amount. We got $2,200 so I knew I was going to get that as well. So I had like a number in my head, okay, this is how much I’ll need to move. And once I paid for my moving costs, there’s a lot of things I didn’t think about. So like how much furniture costs, buying a trashcan, buying a trashcan is so expensive. Like all of these little things I’ve never paid for before. And I quickly went over budget and had to put some of those things on a card. And that was the first time I’ve ever done that, which is like put expenses that I couldn’t afford on a card, and that gave me a lot of financial anxiety as well.

25:52 Georga-Kay: And so once I did that I was like, I don’t want to look at this, I don’t want to know how much I have to spend because some of this stuff was like necessary expenses and I knew that once I started getting like regular stipends I could like then start thinking about it more critically. But in the first like month or two I was just like, I knew I was spending and I knew I wasn’t overspending, but I was definitely spending very close to like the borders of my budget I guess. My budget being the amount that I know that I make per month, that’s sort of like what I had in my head is like this is how much you make, this is how much you have to spend on your actual, like as you said, like the things I have to spend like contractually.

26:30 Georga-Kay: But everything else I was like okay, I’m going to spend and hope I don’t go over. And so I wasn’t looking at it. I wasn’t looking at it. I was just spending and not looking. And then after I would say about October, I downloaded Rocket Money, which is this app, I don’t know if you’ve ever heard of it, but it’s just like, it’s sort of like a Mint. If anyone’s familiar with Mint and they do like roundups, essentially. They tell you this is how much you spent on restaurants, this is how much you spent on Ubers this month and whatever. And so that was my first step into like, okay, what am I actually spending per category here? And then I saw the numbers, I was like, oh God, you know? And once I saw those numbers and I didn’t have to do a lot for it, I feel like that also is like something I would recommend if you’re scared about it and you don’t want to actually sit down, like go line by line, having some sort of like app that does it for you. It’s just like all I had to do was open, put my bank account in, open it and then just be like, okay, what is here? And so I looked at it and I was like, this is how much I’m spending per category. And then I started to think about changes that I might want to make in the future.

Frugal Measures

27:30 Emily: Yeah. Can you give some examples of what those changes were having realized that you were, your spending was a little bit too high? Like what were some, I would probably call it frugality, but what were some frugal like measures you started taking?

27:42 Georga-Kay: Yeah, so the spending that I saw was like mainly Amazon, which is <laugh>. I feel like people can relate to that. I was overspending on Amazon because I was constantly being like, oh I need to get this for my apartment because I had just moved and I realized, oh I don’t have like you know, I really want a toaster or something like that. Things that I didn’t need in the moment. And so I was like spending this much on Amazon, but I was doing it like in singular expenses, so I was never tracking how much I was actually spending and I wasn’t thinking about the cash flow of like, maybe I should wait a week or two until I get my next stipend to pay for this as opposed to like buying everything at once. And so I was just like not paying attention to it.

28:20 Georga-Kay: So once I saw it I was like, oh, I’m spending like $500 on Amazon, that’s like so much money. And then I was like, okay, I need to plan out what are the essential things that I need right now for my apartment since I just moved. Everything else will have to wait. And then also I looked at groceries, which I’ve mentioned a few times before and I was like, oh, I’m spending this much on groceries. I was spending like over $350 on groceries and I’m a single person and I wasn’t even eating that much. And I was like, that seems like a lot of money to me. And so I asked people and people were like, oh, like I actually spend like $300 or a little bit less than that on groceries. And then I realized it was because I was shopping at the more expensive grocery store. And I didn’t know, because I didn’t like shop around. I was like, this is the closest grocery store to me, so that’s what I’m going to go to. But literally if I just went in a like one that’s like a little bit further away, I found cheaper groceries and so I was able to get the same amount of groceries for a little bit less. And so yeah, those were the things that I realized once I looked at the numbers.

29:13 Emily: This is so relatable to me personally. And also I think the audience generally just, yeah, it’s a transitional time when you’re starting grad school and you don’t know the place to shop yet. And you do need, well need is a relative word. You want to have some things for your new place. And so it sounds like it was a combination of like finding some more frugal tactics to apply, and then also just really the proactive aspect of budgeting. You know, you were doing the reactive, the retrospective aspect, which is like looking at where your money had gone. And then you started adding in the, okay, well I only have, you know, available this amount of money for you know, discretionary Amazon purchases so I’ve got to keep it to that limit and anything else will have to wait for the next pay cycle and you know, we refill the coffers. Is there anything else that you’d like to add about that practice of budgeting?

30:02 Georga-Kay: I would say once I started doing like the automated where it was like the app was tracking it for me, then I actually sat down and like made an actual budget. Like I was like okay, this is how much, not like what the thing is telling me that I should spend based on my previous expenses, but based on my goals, like my savings goals, how much should I reasonably spend? And then that actually made me cut back a little bit more because I was like, oh, if I want to save up an emergency fund, then I can’t be spending this much on you know, eating out or something.

Resources for Budgeting

30:31 Emily: Yeah, I want to get back to those financial goals in just a minute, but before we do, so you said that you had some resources that you’d like to share about, you know, how you’ve learned about budgeting, how you’re practicing budgeting. You mentioned, I’m going to say Rocket Mortgage, that’s like the ads that I hear for them, but Rocket Money, is that the name of the budgeting app?

30:49 Georga-Kay: Yes, Rocket Money is the one that I started with. I’ve actually, in college I tried to use Mint because everyone was like, oh, Mint is a great app and I think it is a great app, but I quickly realized the interface just wasn’t like super user-friendly to me it was just, it was a little bit clunky. So I stopped using that and mainly also because I was just scared to budget at that point as well. It’s taken me a while to get into proactively looking at my money. And so Rocket Money has helped me to do that because it’s been like a really simple interface and once I put in my stuff it just sort of gave me all the numbers that I wanted to look at. And I would say also a lot of personal finance podcasts, which obviously this one I listened to, which I think is really, really helpful because there are just some things as an academic that like other podcasts will be like, oh you need to focus on, you know, negotiating for a raise or things like that.

31:37 Georga-Kay: And it’s like, okay, that’s not super practical to the life I’m going to be living for the next few years. But in terms of podcasts, I love The Financial Confessions. I feel like it talks a lot about like the social life of money, like money with friends and money and relationships, which I think helps a lot. I also like the Her First $100K podcast, which is like, I feel like that’s a pretty popular one, but it’s like Women in Money and thinking about how we perceive money, which is a lot of these podcasts are actually thinking about like how we think about money, how we use money on a daily basis. And then books. I love books I feel like as academics, like of course like my first sort of introduction to finance was through books. So I Will Teach You To Be Rich, which is a very popular one.

32:19 Georga-Kay: But also Jen Sincero’s, How to Be a Badass With Money [You Are a Badass at Making Money]. I think that’s the title of the book.

32:26 Emily: Yeah, I’ve read that as well.

32:27 Georga-Kay: That one really, yeah, that one is really good. I know people have mixed opinions on it, but the reason why I personally enjoyed it is because it’s sort of like allowed me to think about the ways that I talk about money to myself in ways that I didn’t really think about before. Because as I mentioned a lot that I’ve had anxieties around money and so I would just sort of be like, oh, like in college, like I’m so broke or I’m so this and like a lot of negative money talk and I’ve stopped doing that and I think having done that for a few years now and sort of reframed the way that I think about myself and my relationship with money has allowed me to make these like larger steps towards being like more financially competent.

33:02 Emily: Yeah, I noticed in those books that you listed, there are a lot of money psychology, like aspects there. It’s not, and that’s the hard part, right? Like the hard part is not necessarily the math <laugh>, like it’s not like the addition, subtraction, multiplication. It’s not the facts of like, okay, do I have access to an IRA or not? I mean I talk about that because it’s a little wonky, but like once you know, you know. The psychology part of it is the one that you need to work on over a time and it’s like you’re never really done with it <laugh>. You’re always evolving to like a new level with it. So, I like that you mentioned those like for that reason specifically. Yeah, any other resources that you’d like to add to your list?

33:41 Georga-Kay: I would say, I don’t know if this really counts as a resource, but what I mentioned previously, which is talk to graduate students. Like talk to graduate students, preferably graduate students are in a similar department to you or in a similar field to you because then you can get like ideas about, you know, the decisions that you can make that might help you in the future. Like just like daily living expenses. As you said, like maybe talking to them about apartments you might find a great deal or something. So I found that actually some of the best like resources have been like the other students in my department and students at Brown.

34:14 Emily: What I love about that suggestion is just that you’re going to get the most relevant information from the other people who are living that similar life to you. Like for me, like I work on a national level, so I do not get to be an expert in every single different state in every single different city. And so, sometimes when I go to speak at certain universities, I ask the people who are living it, like for their suggestions, like I can say some things that work generally, but like they’re going to know like the exact, like you mentioned earlier, the right grocery store to go to for like this specific thing. Like oh this farmer’s market is really wonderful for blah blah blah, whatever. Or like, oh, have you heard about this city-specific subsidized resource? Things like that. Like that is not what you’re going to get from from books and and national podcasts and so forth.

34:57 Emily: It’s really, you have to get it from the people who are living through it with you. So it’s an amazing resource. I’m so glad that you’ve been tapping into it. I hope people listening to this episode will follow that model as well.

Financial Goals

35:08 Emily: Okay, so I want to turn now to talking about the future. We’ve talked about how diligent and thorough you’ve been with like investigating your finances and becoming more comfortable with them in the past. But now I’m wondering like have you set some financial goals for the rest of your time in graduate school?

35:26 Georga-Kay: Yeah, so my biggest goal is to save three to six months of expenses so that I can have just like a little cushion if I need to so that I don’t end up incurring more debt in the future. I would love to be able to, you know, occasionally be able to go back home, go to Jamaica, go visit extended family or even having a pet. Like I am scared that if something happens and I need to cover like a really big vet bill, I don’t want to have to put that on a card. So my immediate immediate goal is to save three to six months of living expenses. And then my second goal is really a way to like manage my financial anxiety, which is just to automate a lot of the big picture stuff that I know that I want. So, automatically like saving 20% of my income.

36:09 Georga-Kay: And then also once I’ve done that, moving on to automating retirement and investment. So, that’s something I see as more like a building sort of building block sort of goal where I’ll be working on that for the next year or two of just slightly changing things within my account so that the money goes where I need it to go. My third goal is to increase my income, which is not something I hear a lot of graduate students talk about and I get why. But I really do feel like especially for me, I want to be able to help with family stuff and just feel more secure. And so I feel like the best way to do that is to increase my income. And the way that I sort of see myself doing that is through additional teaching responsibilities. So, I can teach in the summers and I can also do like proctorships that pay a little bit more and those will pay up to like $10,000 more per year. So, that’s just a small way that I can increase my income so that I can have a little bit more flexibility.

37:01 Emily: So, with your first two goals of building up that emergency fund and then you know, starting to invest and starting to save for like other types of goals as well, you mentioned a 20% figure. So, I’m wondering are you currently saving 20% and is that going towards your emergency fund? Or is 20% something you’re like working up to over time?

37:22 Georga-Kay: Yeah so I’m currently saving 20%. I have my account set up where once I get my stipend, it automatically takes off that 20%. I am not going to lie, I’ve had to dip into it a couple times. Mainly for my dog. She’s had some stomach issues and so I just had to pay a huge vet bill. But I will continue to save that as much as I can and do that 20% minimum. And in the future, I would actually like it to be more, but for now I feel like 20% is a good amount to save.

37:52 Emily: Definitely don’t feel any guilt about spending on emergencies. I mean that’s what it is when you have like a medical situation, whether it’s yourself, your family member, your pet, if it has to be done, it has to be done. That’s what, I mean you’re saving the emergency fund, that’s what the emergency fund is for, so you’re saving it and yeah, you spend down but you still have the 20% savings rate and it’ll, you know, not every month is going to have, you know, one where you have a big expense like that. So, that’s awesome. That’s an amazing savings rate for a graduate student. So, just congratulations to you and I’m really excited for, you know, when the emergency fund is filled and when the other, you know, cash savings goals are filled and you get to turn to investing, it’s going to be so exciting.

38:25 Emily: And I love this idea of, you know, of course increasing income as a graduate student but also that you’ve thought through what your options are. And sometimes like it seems like you identified in your case there are opportunities even at your university that you can sort of easily pivot to and just add on to the responsibilities that you know you’ll have in the moment that’ll allow for that additional income. And I like that because you know, side hustling is sometimes frowned upon, sometimes disallowed, but when it’s an opportunity that comes through your university, it’s like oh you’ve kind of already like been approved for this because it’s something they offer to you, you know? So it doesn’t have to be like hidden or you know, anything like that.

39:00 Georga-Kay: Yeah, and that’s something I thought about. I’m very much a work smarter not harder person. And so I was like I keep my, now we’ve gotten like emails about like, oh if you want to teach in the summer, I’m actually going to be teaching this summer. And that’s an additional $4,000. So I was like, actually this is great. Like if I teach every summer or if I try to, then I can make a couple thousand dollars and then if I take on like an extra TA assignment, I can make another couple thousand dollars and that’s like money that I can put towards savings because right now I feel like pretty good in my base living expenses that I don’t need to like, you know, upgrade apartments or anything like that. So, it’s like all that money can go towards my larger goals.

39:39 Emily: Yeah, and you’ve just identified another great strategy there, which is base your, you know, your typical budget, your contractual living expenses, your necessary expenses around the minimum amount of money you can expect to be taking in the course of the year so that you know, anything you’ve taken above that could be used for savings, or also other discretionary purchases. Like you mentioned, you know, going like back home to Jamaica, and so like that maybe you could do an extra trip, you know, and still have money to put like into savings as well. So, I love that balance and it’s a great strategy for pretty much any stage of life, not just graduate school.

Best Financial Advice for a Fellow Early-Career PhD

40:09 Emily: Well, Georga-Kay, this has been such an amazing interview. I’m definitely going to be pointing to it for all the prospective graduate students as a model for how to handle this. And even especially, you know, even like your self-awareness around the money anxiety and so forth and how you, you know, faced it and like trying to work through it and everything. Again, super relatable I think to so many people. So, I’d like to finish up here with the final question that I ask all of my guests, which is, what is your best piece of financial advice for a fellow early-career PhD? And that could be something that we’ve already touched on in the interview or it could be something completely new.

40:41 Georga-Kay: Okay, so I have two, but I’ll make it quick. I would say the first one is one that I’ve mentioned a few times, which is that you should talk to the people around you. Like I would say not even just graduate students but also if there are any postdocs in your department or even early-career faculty. I have just like had such great conversations, and it might be hard at first to sort of like bring things up, but I feel like you don’t even have to ask about specific numbers, but just how people make it work in graduate school because there’s so much like financial literacy that we don’t have as graduate students because it isn’t prioritized. And so the best way to sort of break that barrier is to talk to other people who are in similar situations. And that’s how it’s helped me to approach a lot of the things that I do now in how I think about creating a budget or how I think about my lifestyle.

41:28 Georga-Kay: So, highly recommend just reaching out to your community and starting those conversations. It helps a lot. I would also say the second thing is to look at your money <laugh>. I think that’s harder than it seems especially for people who maybe struggle with being scared about what they’ll see, but it really, really helps because you don’t even have to make any changes. Like I just start looking at it and like being cognizant of like, okay, this is how much I’m spending. And I feel like that automatically leads to you making some slightly different decisions.

41:59 Emily: I agree. Totally, totally agree. It could just be you don’t even have to do, like you sort of went very quickly from the looking at the numbers to the starting to budget stage. But even staying at that, like I’m just looking, I’m not intentionally making any changes, but as you said, it kind of works in the background of your mind and you’ll automatically most likely start to make at least a couple of changes and you don’t have to be too like forceful with yourself about it, just having that awareness. So that is great advice. Thank you so much for sharing and Georga-Kay it’s been an absolute pleasure. I’m so glad that you volunteered to come on the podcast and you know, I hope you’ll come back in a couple of years for an update.

42:31 Georga-Kay: Thank you! I’ll be back anytime you want me <laugh>.

42:35 Emily: Okay, lovely. Thank you so much!

42:37 Georga-Kay: Thank you for having me!

Outtro

42:43 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

This Grad Student Interrogated Her Budget and Worked on the Side to Financially Thrive

January 17, 2022 by Meryem Ok Leave a Comment

In this episode, Emily interviews Alyce Viens, a 4th-year PhD student in communications at the University of Connecticut. On the eve of her defense, Alyce looks back over her time in graduate school to share the strategies that have help her pay off her student loans, invest for retirement, and save a down payment on a home. We discuss how Alyce budgeted, practiced frugality (including with conference travel), and supplemented her stipend.

Links Mentioned in this Episode

  • PF for PhDs: Subscribe to Mailing List
  • Coupons.com
  • Ibotta (Cash Savings App)
  • PF for PhDs: Tax Workshops
  • AP Scoring Opportunities
  • Financial Wellness 101: Everything You Wish You Learned in School About Saving Money, Building a Budget, and Growing Wealth as a Young Professional (Book by Alyce Viens)
    • Discount code: GRAD 
    • E-Book
    • Amazon
  • Alyce’s Twitter (@Alyce_Viens)
  • PF for PhDs: Transcripts and Videos
Image for This Grad Student Interrogated Her Budget and Worked on the Side to Financially Thrive

Teaser

00:00 Alyce: You know, I was able to just not have to wait until I graduated and got, you know, quote unquote, a real job to start my financial journey. You know, not having to delay those things, you know, having that healthy emergency fund, but also being able to, you know, build up investments and, you know, have the down payment for a house and no debt. It’s just, it’s been very, very freeing and liberating.

Introduction

00:31 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 11, Episode 2, and today my guest is Alyce Viens, a 4th-year PhD student in communications at the University of Connecticut. On the eve of her defense, Alyce looks back over her time in graduate school to share the strategies that have helped her pay off her student loans, invest for retirement, and save a down payment on a home. We discuss how Alyce budgeted, practiced frugality (including with conference travel), and supplemented her stipend. I have a gift for you if you’re not yet subscribed to the Personal Finance for PhDs mailing list. At the end of every interview, I ask my guest for their best financial advice for another early-career PhD. My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. The document is even organized by topic so you can easily see which type of advice is most popular. I invite you to join the mailing list to receive access to this document through PFforPhDs.com/advice/. I hope this quick, powerful resource will help you up-level your finances in this new year! Without further ado, here’s my interview with Alyce Viens.

Will You Please Introduce Yourself Further?

02:02 Emily: I am delighted to have joining me on the podcast today Alyce Viens. She is wrapping up her time in graduate school, finishing up her PhD very soon. And she’s here to give us a retrospective on the finances of her PhD. Where she was when she started, where she is now, what she did in between. So Alyce, thank you so much for coming on the podcast. And welcome, please tell the listeners a little bit more about yourself.

02:24 Alyce: Yeah, thank you for having me. I’m really excited to be here. So I am, I guess now a fourth-and-a-half year PhD finishing up. I’ll be defending two weeks from today, actually. So I’m very excited about that. My PhD will be in Mass Communication from the University of Connecticut. So I’ve been studying media effects and things like that for the last four plus years. But I now work as a market researcher for a consumer and brand research company that’s based in DC, but I work remotely. I live in upstate New York. So that’s what I’ve been doing for the last six months is going on to the industry side, the dark side, as I know some people in academia call it.

Budgeting Lessons for Grad Students: Tracking Spending

03:12 Emily: I do want to circle back and hear more about that decision to take that job prior to actually finishing up. But we’ll save that for the end of the interview. What lessons would you like to impart on the grad students and PhDs listening about budgeting, particularly during grad school or maybe in general?

03:28 Alyce: Yeah, so I mean, the reality is that as grad students we’re just not making a ton of money, but we still have a lot of the expenses that we would consider to be sort of adult expenses. We still have to pay for our housing, potentially cars, and we have to buy our food and all of those things that we have to pay for now that we’re adults. But we don’t have income necessarily to match all of those things. So the one thing that I would recommend to anybody, whether you’re a grad student or not, is to spend your first month before you ever build a budget and just look at any time money is leaving your pocket, whether it’s cash or debit card or an automatic subscription, a student loan payment, regardless of what it is, write it down, categorize it.

04:14 Alyce: Like don’t just say I spent, you know, $10 on food today. Well, did you spend $10 at the grocery store, or did you spend $10 at Starbucks on food? And then do that for a month. Don’t change your habits, just make it a regular month. And I think that’s the best place to start because you can really start to see, where am I spending all my money? I find that when I had less income, it wasn’t the large expenditures that I was doing. Like I wasn’t going out and buying myself a new iPhone every few months. Like I wasn’t making any large purchases. It was those little ones that time where, you know, I forgot to pack myself lunch and I had to go to a restaurant to get it. Or I had to go to the grocery store to buy something quickly. You know, it’s a lot of those really little things that can catch up with you. And as grad students with that limited income, that has to be the first place I think that you start is looking where you’re spending your money, and then we can start to assess where you can maybe make some cuts.

05:17 Emily: Did you use like software or an app? Or do you like to do things manually, and what do you recommend to other people?

05:23 Alyce: Yeah, so I would just have like a notes file going in my phone just to kind of, so for those moments where, you know, you kind of spontaneously spend money, I would throw all my receipts in my wallet for those times that I forgot to write it down. And then I would honestly just put them into an Excel sheet because you know, it makes it nice and easy, you know, when all is said and done for you to just kind of group them and see what those totals are.

Frugality is Worth it to Avoid Debt

05:53 Emily: Is there anything else that you want to add about budgeting?

05:58 Alyce: I would say, you know, I fully recognize that that 30% housing threshold may be very hard to reach. And so, you know, reach it as much as you can, get those housing costs down as much as you can, but also recognize if you spend a little bit more on housing. Okay. Well that just means we maybe need to make a little bit extra side income, or we need to just adjust our budget accordingly and maybe we spend less on something else. So I think, you know, there are opportunities, you know, depending on where you end up. Sometimes your graduate school is going to be in Southern California and you’re gonna be paying a fortune in housing. But where can you cut? Or where can you add as much as possible? And the same thing goes with really any aspect of your budget.

06:50 Alyce: You’re going to have to cut somewhere. You know, frugality and, you know, really making it as being financially well and not putting yourself further into debt as a grad student, it is going to involve some small sacrifices. I’m not going to lie and say, it’s all sunshine and rainbows all the time. There are going to be times where you have to say no to yourself, or you have to maybe get something that’s a little bit less than what you maybe wanted to. But it’s all about finding the balance. And it doesn’t have to be this miserable existence where you, you know, live in a tiny, tiny room and live on ramen noodles, but there are ways to make it work. You have to be willing to put in the work to find out where those places are. Because it’s easier to just fall into debt.

Strategies for Minimizing Expenses

07:40 Emily: Okay. So you mentioned earlier, like, okay, cutting expenses and also increasing income. And I want to ask you about both of those things. So, what are some strategies that you used in terms of decreasing expenses or minimizing expenses?

07:52 Alyce: Yeah. So the first thing that you have to do is just, like I said, cut those small unnecessary expenses. You’re going to have to buy gas for your car. You’re going to have to pay for insurance. You’re going to have to pay rent. But what you don’t have to do is buy lunch on campus every day, because you didn’t have lunch. What you don’t have to do is order pizza because you got home late. Those are things that you don’t have to spend money on. So look for opportunities to not do that. So I always kept snacks in my my drawer just, or like a loaf of bread and some peanut butter or like Graham crackers and peanut butter or something that I could kind of default to when I was on campus longer than I intended, or I didn’t have anything at home that I could make as a lunch or a dinner. You know, we’re there sometimes for a long time, I get it.

08:44 Alyce: You run out of meals. So have those emergency meals in your desk at work or in your backpack or in your car, wherever you need to keep them. Also, I like to make emergency meals for my house. So I always, like I’ll, you know, make a lot of something, you know, if I cook chicken, I’ll cook two or three extra pieces of it. So it’s done, freeze them in the individual packages, and then it’s just a microwave away. Or have emergency kind of food ready. So when you do get home late and you don’t feel like cooking, you always have that can of soup in the pantry. You always have something that you don’t have to spend money on. You can, you know, evaluate things that you are spending your money on that you do need to, or, you know, you would like to, but are there ways that you can reduce it?

09:33 Alyce: You know, do you need the, the fanciest Wi-Fi plan for your home internet? Probably not. I can tell you, I have a very cheap one now and it works just as well as any other one. Just don’t have seven devices going at a time. You know, do you have a subscription to Netflix, Hulu, Spotify? Do you have all of these and are you actually using them? Can you share expenses with somebody else? You know, I know it’s only, you know, $12 a month, but you know, those things they add up when you’re talking about how they compound on each other. So I think it’s just realistically looking at what are you spending your money on and are there ways that you could reduce that spending if not eliminate it completely?

10:21 Emily: Yeah. I like the process that you’re outlining here, like first tracking all expenses, and then interrogating each one of those expenses. I would say even, you know, the necessary expenses are also worth interrogating. There are a little bit of, well, for example, you mentioned gas in your car. Okay. So like figure out what’s the station that you’re always going to go to that consistently has like the cheapest price that’s not too far out of your way or whatever. Like just figure that out, make the decision one time, and then you’re always gonna be getting gas from that station. It’s always at the best price that you know about. So anyway, the necessary expenses are worth interrogating. You just like go down your entire list. Like you were saying, ask yourself for every one, how can I reduce this? How can I share this? Can I go without this? I really like that strategy. And it does matter, like you said, even those small few dollar expenses per month, they do matter in a grad student budget, whereas they might not in a normal salary kind of budget.

Know What’s a Good Sale Price

11:14 Alyce: Yeah, certainly. And I think I worked at a grocery store when I was in college and it was by far probably, you know, it’s retail, so it’s miserable. But in terms of life lessons, probably the best experience that I had in terms of life lessons of learning how much things should cost. Because the reality is, if you walk into a grocery store willy nilly just to buy whatever you want that day, whatever you decide that you need that week, you’re going to end up spending more than you should. You know, know what chicken breast should cost. I’ll give you an example. You should never spend more than $1.99 a pound on chicken breast. That might vary if you live in a really more expensive state. And I know we’re in inflation right now, but knowing, you know, what’s a good sale price and being willing to, you know, freeze something because you can have it later.

12:09 Alyce: Buying in bulk. You know, if that’s applicable to you. If you have roommates, there’s no reason why you can’t buy, you know, the Costco size toilet paper, you’re probably going to use it. And you’re probably going to save a lot of money in doing so. So learn how much things should cost. You know, look at the sales fires, use coupons. I’m a big proponent of coupons and people think they’re, you know, it’s challenging and you have to be like the TLC coupon moms. You really don’t. Every grocery store now has an app that you can load the coupons right onto your app, or right onto your store card. Coupons.com is a really great place. You know, if you’re going to spend the money anyway, why not save the money on it?

12:56 Emily: I love that you brought up couponing because it’s actually not something I don’t think we’ve discussed in detail on the podcast before. But as you said, I found it also like, I coupon at a very minor level. Like what my grocery store sends me, my grocery store learns my spending patterns because of whatever I’ve signed up for with them. And then they send me coupons on the stuff I actually buy, which is awesome. And then double awesome is when you can pair a coupon with like something already being on sale and that being, you know, you’re able to like stack that or whatever. Give me another like more advanced strategy. Like for instance, how are you using coupons.com?

Advanced Couponing Strategies

13:29 Alyce: Yeah. So I will check coupons.com anytime before I go shopping just to see what is available. And the trick with coupons is don’t buy something just because you have a coupon for it, because chances are, you’re probably not getting a deal. Just because you, you know, save 55 cents on that, doesn’t mean it was necessarily a good deal, especially if it’s something that you weren’t going to buy anyway. So it’s important you only use it on things that you were intending to buy, but also, you know, compare to, you know, maybe the store brand, if that’s applicable. Sometimes, you know, if it’s not on sale, you know, using a coupon on a brand name, it’s still not going to save you anymore than if you had just bought the generic brand of it. So I’ll check coupons.com just to kind of see what’s available and take the ones that I want.

14:21 Alyce: And again, only using on things that you’re going to. I’ll check the app of the store that I’m going to be shopping at to see, do they have coupons that I might want to use? I also will Google. So sometimes like, you know, P&G might have their own separate coupons that they don’t publish on like a public platform like coupons.com, and it might just be linked to their website. And you just have to put in an email. I have a burner email just for specifically that purpose. Like I don’t ever check it. It’s just for putting in to get any kind of special codes and deals. And that’s really for everything. It’s not just for for groceries. Like Kohl’s, for example, if you need to go buy new conference clothes or whatever you might need to get at Kohl’s, almost always, if you go on their website, they have at least a 15% off coupon that you can print out or show on your phone.

15:18 Alyce: You know, stores are desperate to get people actually in stores now because you know, we’re moving so much to online. So, I find that coupons are more often available than not. So if you need something, just do a little bit of searching. The other thing I would recommend is an app it’s called Ibotta. I B O T T A. And you go onto this app, and you just select what store you’re shopping at. And it will show you just a plethora of coupons available that you’ll get cash back on. And you just add it to your list. You upload your receipt afterwards, and they put this money into your kind of Ibotta account and you can withdraw that money once you reach, I think it’s $20. So I’ve saved over two, probably over $300, by using this app. And it’s often for things that, again, I’m already buying. So if I’m going to buy that box of pasta, I’m gonna buy it and save a dollar on it because I can.

16:20 Emily: All right, I have homework now. Great ideas for me to implement.

Commercial

16:25 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. The first live Q&A call for the annual tax return workshop is coming up on Sunday, January 23rd. For fellowship and training grant recipients, please be aware that the deadline to make your quarter 4 payment, if applicable, is January 18th if you are not planning to file your tax return by the end of January. It would be my pleasure to help you save time and potentially money this tax season, so don’t hesitate to reach out. Now, back to our interview.

Conference Travel Frugality

18:01 Emily: Now, you mentioned earlier, you had a lot of thoughts on conference travel. So how have you employed frugality in that area?

18:07 Alyce: Yeah, so conferences, you know, are the bane of grad students’ financial existence, because they are so expensive. So the first thing I would recommend is looking to funding sources. And these aren’t always going to be available, but you really never know. So ask your department, you know, hopefully you’re aware by that point if they have options, but just ask them. Sometimes they’ll pay your registration fee at the very minimum. Sometimes you’ll get a travel stipend, whatever it might be. So, you know, certainly look to your department, look to the university. Sometimes, I know my university one time during your PhD, you could apply for a travel grant and it was $750. You can only use it once. But it was nice because it paid for, you know, a bulk of one of the trips that I had to make. So starting there, and then look to the conference itself.

19:03 Alyce: Sometimes they give away money to graduate students. I know one that I was attending every year, all you had to do was just check off when you registered that you were interested in graduate student funding. And when you got to the conference, you got a check for $150. Sometimes certain like caucuses, I don’t know how every you know, conference in every field runs, but at least at the communication conferences, there were different caucuses. And sometimes they would offer travel funding of, you know, $75, $150, whatever they had available. So start with those funding sources. The next thing that I would recommend, and I will preach this until the ends of the earth, do not use the conference recommended hotel or the conference recommended airline, if you do have to travel by air, as we so often do. They almost always are more expensive.

20:02 Alyce: You know, you’ve got think, when a conference is picking a hotel, they’re picking something very nice that can accommodate a lot of people, has all the conference rooms, things like that. So the room and prices are going to be more expensive. So I always, when I went to conferences, stayed no more than a quarter mile, something I could easily walk to, down the street. There’s always going to be a cheaper hotel available for you to stay at. I even did the math once. It was cheaper, even if it was a little bit further to even like take an Uber back and forth every day than it was to stay at the conference hotel. So that’s a great option that you can save money. Same thing with airlines. You know, they give you the group code, certainly check it, but also, you know, use Orbitz, use Southwest, because they’re not linked to Orbitz, and they often have really cheap prices. You know, and find the best deal. There’s no reason that you have to go with Delta airlines because that’s what the conference said you should use. If there’s a better deal on a flight, then take it. There’s no reason you have to spend more money.

Have a Conference Buddy

21:13 Emily: That’s all great stuff. And another thing you mentioned to me in our prep for this interview was to have a conference buddy. So what does that mean?

21:21 Alyce: Yeah. And I also recommend having a conference buddy. So this was somebody in my department that I traveled with. I knew we were going to be attending the same conferences most of the time. So what we would do is we would book our flights together. We would always plan to share a hotel room. It was somebody I trusted and I knew, you know, wasn’t a random stranger that’s going to steal my stuff in the middle of the night. And then we would, you know, split the cost of transportation to and from the airport, you know, we’d share the Uber. We would split the cost of parking, whatever it was, pretty much everything was, you know, minus the flight because obviously we had to pay for our own tickets, but it was all cut in half. And that, you know, saved us so much money. There was one conference we went to, we were actually able to drive to, me and my conference buddy, we actually made money on the conference based on the amount of funding that we were able to get from the conference itself and us splitting our costs.

22:20 Alyce: I think we both ended up netting like $30 each. So definitely find a conference buddy as soon as you can, somebody who you are connected with in your department or even outside of your department, if you make a friend in another school. It’s really a great way to save some money. I will also add some kind of silly ways to save money at conferences. So one, book a hotel that offers free breakfast, because that covers one of your meals. One of the biggest expenses of conferences is you’ve got to buy all of your meals while you’re there. So get your free breakfast every day. That’s one less meal that you have to pay for. And it’s a meal you’re probably never going to sit down and eat with anybody anyway. And if, you know, that free breakfast, sometimes I would, you know, take a couple extra apples or something and put them in my bag and I would bring like single serve peanut butters or something.

23:20 Alyce: And then that covered me for a lunch as well that I didn’t have to pay for. Because again, you know, you’re going from you know, panel to panel. You don’t always have time to go sit and eat a lunch anyway. So, you know, instead of spending, you know, the $10 on a small sandwich, you know, eat the stuff from the free breakfast or pack protein bars. Pack things that you can have just as kind of a go-to, because you may have to, you know, go out to eat for dinners, for networking purposes. You’re going to have to spend money for meals at conferences, but cut it where you can. Also, attend the free receptions. There’s almost always food. It’s a great opportunity for networking, but there’s always going to be food at these things or, you know, our conferences, a lot of the bigger schools would host party receptions. You obviously shouldn’t go there and just like stuff your face and leave. Like, integrate it into a networking opportunity, but there’s food. And honestly that’s, you know, a big expense at conferences that I initially found when I first started going to them was how much money I was wasting on just eating out every meal. And so I just started packing my own food as much as I could and just found opportunities to cut those costs.

24:40 Emily: Those are great suggestions. And I love the way you kind of, the outline you just gave of, you know, finding funding at your university level, finding funding at the conference level. How can you frugalize these larger expenses within the conference? How do you frugalize the smaller expenses within the conference? So clearly again, you’re sort of interrogating every step of that process and finding how to optimize it. So I just love that. Is there anything else you want to add about frugal strategies used during grad at school?

Ask for Practical Gifts

25:08 Alyce: The other thing I think I would add is just to, when you know there are going to be things that you need to have, you know, you need to buy textbooks, you need, you know, those flights, use holidays and birthdays and things like that strategically. You know, you probably really don’t need, you know, a new bag or a new pair of shoes or whatever it is that you might normally ask for for Christmas, but you may need, you know, an American airlines gift card to help you get you to that conference. You know, your life’s not going to be less fulfilled without that pair of shoes, but your life might be a heck of a lot easier if you don’t have to pay hundreds of dollars for a flight. You know, if you’re going to have to buy textbooks, ask for an Amazon gift card because you’re going to be able to buy those books and share them. I can’t tell you how many times, you know, again, my conference buddy, you know, I had sort of class buddies too. We would just buy as a class one copy of the required textbook, and we would just pass it around and have designated days that we used it. You know, there are just, if you really interrogate, like I like that word, you keep using, interrogate your expenses, there are ways to find those cuts.

26:26 Emily: Yeah. And another thing that you’ve brought up a couple times, you know, the conference buddy, now the class and textbook buddies and so forth, like use your fellow graduate students as a resource. You know, they’re in the same spot as you, more or less, right?

26:37 Alyce: They’re just as broke.

26:39 Emily: Yeah. So whatever you can share, whatever tips you can, you know, share with them, maybe you’ve taught one of them how to coupon and they’re going to teach you how to do this other thing. You know, you all are kind of a wealth of resources, a wealth of knowledge, in terms of how to manage your finances during graduate school. And again, you’re coming on the podcast, you’re sharing with everybody. That’s awesome.

Increasing Your Income

26:57 Emily: Okay. Let’s move on to increasing income then. So what strategies did you use to bring in extra income, increase your stipend, during grad school?

27:07 Alyce: Yeah, so you know, I fully recognize, you know, while we’re in the thick of it, you know, sort of that nine-month span where you’re TAing or maybe you’re an RA, it’s hard to find those opportunities to increase income. So, I would try and always make the best of those three months that I did have off. So I really did a variety of things. So the one that was probably the most lucrative was I would grade AP exams. So they’re looking for subject matter experts in, you know, these AP subjects. And, you know, I did communication, so there’s not an AP communication course, but there is a course called seminar, which is basically they learn how to evaluate and write arguments and, you know, conduct research, you know, write a research paper. And so they needed people to grade those.

28:00 Alyce: So that was something I did for the last know, six years or so. And it was one week online. So I could work from my home and, you know, you just read paper after paper and you score them. It’s certainly not fun, but I can tell you, it pays like $26 an hour. And so, one week of work was able to cover me for almost all of my entire expenses for the summer where I had no income coming in. So that’s a really great opportunity. I think you go to readap.com I think is the website for it. Or if you just Google AP scoring opportunities, it should come up.

28:44 Emily: Yeah. That’s an amazing suggestion. I think it would be applicable, most graduate students are probably going to find some kind of AP exam that they’re qualified to grade.

28:52 Alyce: I mean, they love graduate students because we’re available. You know, they’re often recruiting college professors or high school teachers, but that’s, you know, it’s a little bit harder for them. But grad students, we’re readily available and we’re desperate for money. So they know they can squeeze a lot of hours out of us. So like I said, it’s not a fun week, but you know, you can knock it out and again, you can pay for most of your expenses. And, you know, as I did it more and more, I started to get promoted to leadership positions on it. So I was able to get more hours and make more money. So it is something you can stick with long-term. Unfortunately, now that I work full-time, I won’t be able to do it anymore. But it was a great opportunity.

Balancing Summer Research and Side Hustles

29:36 Emily: Okay. So you mentioned the one week of AP grading can cover your expenses, more or less, for the whole summer. How were you spending your summers, since you didn’t have a stipend during that time? Were you trying to focus on research, or did you get other jobs aside from this AP one?

29:51 Alyce: I would do a little bit of both. So I didn’t want to spend, you know, the entire summer working all of the time. You know, I think that’s, you know, such an important time for graduate students to recharge, but I also recognize this is an opportunity for me to make a little bit of extra money when I’m not as busy. You know, you’re not going to do research for, you know, 24 hours a day, every day during the summer. You’re just not. So you know, where I could, I tried to find, you know, those additional opportunities.

30:23 Emily: Yeah. So what were some things that you did during your summers that you would recommend to someone else, like the AP grading? And then also, did you do anything during the academic year?

30:32 Alyce: Yeah, so one summer, so it was about six weeks because obviously, you know, our summer is a little bit longer than the regular school year summer. I went and substitute taught at a middle school in my town, you know, especially in COVID right now. They’re really desperate for substitute teachers. And I actually really liked it because it was such an easy job because most of the time, you know, as a substitute teacher, you’re putting on a movie or you’re giving them a worksheet to do. And so I brought my laptop and I would do work, I would do my research. And so I think, you know, I probably would’ve even considered doing that during the year if I was able to, just because it didn’t require a ton of like cognitive effort on my part. And I still was able to kind of dedicate some time. Just make sure you check with your university first.

31:26 Alyce: They usually have a policy about working any kind of supplemental income as a graduate student. You do usually have to get it approved. So make sure you check with those policies. I know some people got burned by that. So I did that. I think those were the two main ones that I did. I also would just do like little things here and there, especially during the academic year, like I would take online surveys. You know, we know how much we pay people for research. And so I would, you know, find opportunities to take those. My fiancé and I ate many a free dinner based on these online surveys and just, you know, getting the free gift cards from those things of that nature. So those were kind of the main ones that I did. I knew some people who, you know, when grocery stores have to change over all of their price tags, there was somebody I knew who would go on Saturday night, they work from like 11:00 PM to 7:00 AM, just one night a week, changing over all of the price tags. And that was the only extra job that they had, but it was enough to kind of, you know, pay for, you know, maybe one week pays for your cell phone bill, the next week pays for your electric bill. You know, when you’re accumulating 50, 60, $70 for that one night, you know, you can then apply it to a specific thing.

Financial Accomplishments During Grad School

35:13 Emily: So we’ve talked about a ton of different strategies. But I want to know for your financial picture, what did this all amount to? You know, how much did, if you wanna express that as net worth, you want to express that as not going into debt or, you know, what did you sort of accomplish financially using these strategies over the course of graduate school?

35:32 Alyce: Yeah, so you know, I’m happy to say that because of that frugality and because I was so strategic with, you know, the money that I saved, you know, if we want to quantify this, I was able to pay off all of my student loans before I ever graduated. So I’m going to graduate completely debt-free. And I didn’t have an assistantship for my master’s. I didn’t know that a thing, if anybody’s listening to this as a potential master’s student, look into those funding options, I didn’t know that was even a thing. So I was able to graduate or will graduate completely debt-free. My fiancé and I were able to buy a house. So we actually just moved into our first house a few months ago, you know, again, before graduating, which was really exciting. And in terms of, you know, if I’m quantifying this on a net worth perspective, you know, I’m sitting pretty well.

36:27 Alyce: You know, probably over $60,000, you know, in investments or in sort of cash assets, not including, you know, obviously any equity we’re building in our house, but you know, I was able to just not have to wait until I graduated and got, you know, quote unquote, a real job to start my financial journey to start building, you know, that down payment towards a house or, you know, start building my retirement income. You know, it’s so, so important. You know, the more we delay our retirement savings, the less opportunity we have to make those grow. And so, you know, not having to delay those things, you know, having that healthy emergency fund, but also being able to, you know, build up investments and, you know, have the down payment for our house, no debt, it’s just, it’s been very, very freeing and liberating. And so, I certainly encourage everybody to, you know, strive to get to that place.

37:31 Emily: I love that. I’m really glad that it amounted to all of that for you. I mean sometimes graduate students need to do everything we’ve talked about out just to break even, right? The stipends are just that, you know, dismal. But I’m really glad that for you, all that effort added up to an actual net worth increase and, you know, paying off the student loans and all the great things you’ve been able to accomplish. It’s amazing. So congratulations! Congratulations also on the job, and the upcoming defense and the house and all these wonderful things that are going on. So where can listeners find you? And I understand that you have written a book.

38:05 Alyce: Yeah. So this was kind of just a little mini passion project that I wrote because I didn’t have enough to do with working full-time and writing a dissertation that I also decided to write a little bit of a book, it’s called Financial Wellness 101: Everything You Wish You Learned in School About Saving Money, Building a Budget, and Growing Wealth as a Young Professional. And I wrote it with the intention of it really just being for those people who are kind of fresh out of college or even out of graduate school who just, you know, don’t have any idea. It’s the first time we’re really managing our money on a large scale. We don’t understand what is a 401(k), what’s a Roth IRA? What do all these letters mean? Do I really need to be saving for retirement? How do I set up a budget?

38:51 Alyce: You know, where am I spending more money than I should be? So it’s a very, you know, no frills, it’s self-published so it’s not fancy, it’s not edited by any extent. But it is available. So users can find, or your listeners can find me on Twitter @Alyce_Viens, and on that, you’ll see the link for, it’ll take you to the ebook version. If that’s something you’re interested in. And I actually set up for your listeners, if they use code GRAD, G R A D, they’ll get $5 off the cost of the book. And I will also email you an additional section that I wrote of the book that’s specifically for graduate students and some of those ways that you can save money with conferences and funding and all kinds of things like that. So it’s sort of an added perk that you would get for free, and it is also available on Amazon if you prefer Amazon.

Best Financial Advice for Another Early-Career PhD

39:52 Emily: Okay. Yeah, we will put all of those links in the show notes, that is a great offer to get that additional chapter or whatever it is. Lovely. Well, Alyce, it was so good to have you on the podcast. I ask all of my guests one final question, which is what is your best financial advice for another early-career PhD? And it could be something that we have touched on already in the interview, or it could be something completely different.

40:15 Alyce: I would say, my piece of advice is to avoid accumulating any additional debt.

40:23 Emily: Yes, very simple and very powerful advice. So that is so great. Thank you so much for coming on the podcast!

40:28 Alyce: Thank you for having me! This was fun.

Outtro

40:35 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

This PhD Student’s Intricate Budgeting System Uses Cash Symbolically

October 12, 2020 by Lourdes Bobbio

In this episode, Emily interviews Alicia Jones, a PhD student at the University of Illinois at Urbana-Champaign and the creator of the YouTube channel Alicia Does Adulting. Alicia explains in detail her intricate budgeting system, which involves creating a zero-based budget every two weeks, allocating cold hard cash into envelopes, contributing to her debt avalanche, and funding her targeted savings accounts. She uses this budget to keep her intimately connected with her spending decisions and accountable to her financial goals. Alicia and her husband have paid off $70,000 of debt in the past year and a half and now have a positive net worth.

Links Mentioned in this Episode

  • Find Alicia Jones on YouTube
  • Video: Science Behind Sinking Funds
  • Personal Finance for PhDs: Community
  • Personal Finance for PhDs: Podcast Hub
  • Personal Finance for PhDs: Subscribe to the mailing list

Teaser

00:00 Alicia: I try to turn whatever I can into a game. And finance has become a game for me. I do the little colored charts. I want to see exactly how much money I can put towards savings or debt each month and that continues to motivate me.

Introduction

00:18 Emily: Welcome to the Personal Finance for PhDs Podcast, a higher education In personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode six. And today my guest is Alicia Jones, a PhD student at the University of Illinois at Urbana-Champaign and the creator of the YouTube channel, Alicia Does Adulting. Alicia explains, in detail, her intricate budgeting system, which involves creating a zero based budget every two weeks, allocating cold, hard cash into envelopes, contributing to her debt, avalanche and funding her targeted savings accounts. She uses this budget to keep her intimately connected with her spending decisions and accountable to her financial goals. So far Alicia, and her husband has paid off $70,000 of debt in a year and a half and now have a positive net worth.

01:12 Emily: You’ll hear an exciting new addition to the interview today, which is a couple of questions contributed live by members of the Personal Finance for PhDs community. Going forward, members of the community are invited to attend my podcast recording sessions and ask their own questions of my guests. If you would like to participate in the interviews as well, all you have to do is join the community at pfforphds.community. If you’d like to check out my schedule of upcoming podcast recording sessions, you can find that pfforphds.com/podcast. Joining the community is an excellent way to support the podcast. Plus, you’ll receive myriad other benefits. Without further ado, here’s my interview with Alicia Jones from Alicia Does Adulting.

Will You Please Introduce Yourself Further?

01:58 Emily: I have joining me on the podcast today Alicia Jones from Alicia Does Adulting, which is the name of her YouTube channel. And Alicia has really fantastic story to tell us, but really primarily, she’s here to teach us her budgeting system, which is quite intricate. And I highly recommend that you go check out her YouTube channel. It’s actually really fascinating. You’ll be hearing more about it as we go forward. Ao Alicia, please introduce yourself a little bit further for our audience.

02:26 Alicia: Well, thank you so much for having me. This is super exciting. My name is Alicia. I’m a third year doctoral student and I go to the University of Illinois at Urbana-Champaige. I am studying kinesiology. I actually got my masters from U of I in kinesiology as well. And my research interests are kind of varied. I’ve not had the most traditional grad student experience. I am running on average three studies at once, just because of the way my program is. Overall, my research is how behavioral changes impact the overall wellbeing of people with and without disabilities. I also work in MS work. I work in breast cancer work. I kind of do a little bit of everything, but it’s nice being in kinesiology because you get to wear leggings to class sometimes. If you’re looking for a major or concentration, highly recommend exercise science for that.

03:20 Emily: All right. That’s really fun. Well, thank you so much for sharing that. And along the way of your grad school journey, or maybe before, I don’t know, you developed an interest in personal finance, and in particular, you started your YouTube channel, Alicia Does Adulting. The channel name is quite general, but I think that you mostly talk about personal finance stuff, is that right?

03:39 Alicia: Yeah. The way that I introduced the channel is that I’m attempting to get my life together and I’m focusing on finances first. Eventually I would like to fully adult with all the aspects of adulting, but I’m not there yet. I’m still working on the money part.

03:55 Emily: Yeah. Well, the money part is going to, it takes a lifetime to work all this stuff out.

Alicia’s Budgeting System

The Basics

03:59 Emily: Really excited to get to the topic of our conversation today, which is on your budgeting system, which of course, when I saw your YouTube videos, I was absolutely fascinated by this. Please, I know it’s going to take a little while to explain, but just kind of walk us through all the different elements that you use for your budgeting.

04:14 Alicia: Definitely. I will start off with, I’m not saying that this budgeting system is for everyone. Everyone has their own way of making this work for them. I actually originally started doing a monthly budget and it failed horribly and I started playing around with it from there. The way that I will describe my budgeting system is that it is a zero-based, paycheck-to-paycheck budget.

04:41 Alicia: What does that mean? Zero-based means that I take any remaining penny after my bills, expenses, free spending money, any of that, and it gets given a specific job. So before the pandemic, that was pretty much exclusively going towards debt. When the pandemic hit, I switched my goals and I wanted to save some money, so it all went there. So I have $0 left after my paychecks are all cleared. I do keep a little bit of money in my checking account just because math is not always my friend and sometimes I forget something. I leave about a hundred dollars cushion. So you don’t have to worry about overdraft fees this way.

05:23 Alicia: Then I do paycheck to paycheck. Between my husband and I, we have anywhere between four and eight or nine jobs at once. The paycheck to paycheck system worked well for me because every other Friday we each had a steady income coming in on those days. All of the bills that come up during that pay period, I take care of all of that during that paycheck. Then if I’m saving up for something, I can kind of devote that. It comes down to a lot of planning and a little bit of strategy, I guess.

05:56 Emily: Yeah. Let me make sure understand exactly what’s going on here, because this is definitely different from how I budget and probably how most people do it, which is one of the reasons why I wanted to have you on. When you say that you have the zero based budget, is what you mean that when you receive your pay or at least every second Friday, when you’re settling up, you are at that point, allocating all of the money for the upcoming two weeks, is that right?

06:20 Alicia: I do it within the week. Anything that was due on that Friday, I account it starting there up until the next Thursday. Whenever the bill is hit, for the most part, I tend to pay my bills about two weeks in advance, just because I’d never want to miss it. That just tends to be my system, but if you look at a true paycheck to paycheck, it would be within that Friday to the following Thursday.

Dealing with Variable Expenses

06:46 Emily: Okay. And then I understand that the bills that have come in, that’s a fixed amount, you know what it is. What about money that’s sort of up to you, like your grocery spending or some discretionary money. Are you allocating a maximum that you’re going to put towards that? Or how do you handle variable expenses?

07:05 Alicia: This is where my system probably gets more complicated to people, but it’s what works for me. I use a cash envelope system on top of it. For groceries, for example, for our household, every paycheck, I set aside $300 for household, so groceries and whatever else might come about, but then I put everything on credit cards. If you watch my channel, you’ll see I will do an expense tracker where I go through every single penny that I spent, then I actually will take the money out of the cash envelopes. The reason why I like this system is I am a chronic spender. I actually managed to get myself into $15,000 of debt in my early twenties and I never want to be in credit card debt like that again. This is kind of like a checks and balance system. If I didn’t have that check for me personally, if I say I’m only spending $50 on clothing, and then I find a $75 outfit that I really want, in my brain, I still want credit card. I want to put it on a credit card. I want it now, that kind of thing.

Alicia: What I can do with my system is, “okay, I bought the $75 outfit, I have to make a sacrifice somewhere else because I don’t have any flexibility.” That $25 could come out of my household to make up the difference, but then I can’t spend all of my money on household. It kind of becomes a checks and balance system. And for me, I’m flexible with it. Some people, with the envelope system, it’s very much like when you hit the end of your envelope, you cannot spend any more. And I just give myself a little bit more leeway. Things come up, or sometimes you just need to de-stress a little bit and maybe you go out and have a drink with a friend or something. As long as I’m making sacrifices and none of it stays on my credit card, then I’m happy with it.

09:01 Emily: So the cash aspect is actually a stand in for just, this is the limit. The important part is not literally that you’re using cash because ultimately when you make the purchases, you are not using cash, you are using credit cards. But the cash is just sort of a visual and physical reminder that, okay, that’s the end of the envelope, you’ve reached the end, now you must reallocate if you need to go beyond that. I definitely like this aspect of it because I am not that strict with my budget anymore. I used to be quite strict in a similar way, like, okay, I overspent here, I’ll have to transfer from somewhere else now. I sort of let it go, but I definitely find it attractive to, at the end of the day, make sure everything’s added up to zero to account for the entire paycheck.

How Alicia Keeps Her System Flexible

09:43 Emily: Okay, we’ve talked about it being a paycheck to paycheck budget, a zero based budget. You’re allocating every single dollar that’s coming in. We talked about the cash envelopes. Are there any other elements to your budget that you’d like to share?

09:56 Alicia: I think the big thing for me, and it’s one of the things that I think some people don’t understand if you’ve watched the channel for a little bit. It’s strict and slightly complicated, but it also allows for a lot of flexibility, and that was something that was really important to me. Everyone that’s listening to this is either in grad school or wants to go to grad school or has experienced grad school and we know how stressful it is. And I try to add as little extra stressors to my life as I can, but I have a bunch of student loan debt that I really want to pay off. I have a bunch of financial goals, like I’m working towards technically retiring early. I want to have that kind of cushion in my bank account. So I want to start working towards those goals, but I also just don’t want to stress myself any more. It is a little bit time consuming, which is why I’ll say it’s probably not for everyone, but it is something to potentially give it a try. It’s been really fun on the YouTube channel in particular, because I get to hear people trying my system and it was never really meant for other people to try it, it’s just what worked for me, so it’s been really cool to hear success stories about how it works. If you’re interested in it, definitely give it a shot.

11:11 Emily: There was one more thing that I wanted to ask you about, which is, I believe that you also use sinking funds or, I use the term targeted savings accounts for that. Is that the same as your envelopes or is that a separate sort of variation on that?

11:25 Alicia: It’s very similar, but I leave my sinking funds online because they’re usually bigger purchases and I just don’t want to have that cash on me, personally. I put all of my sinking funds into one checking account and then I have an online tracker for everything. It’s a similar kind of grace system of, I actually have three sinking funds that are negative right now, and it’s because I’ve borrowed from other places. We do an annual trip to Canada, but we didn’t this year because the borders were closed. So I have some money set aside in that account that I can borrow from. I do highly recommend sinking funds or targeted savings. They have been a massive game changer for me because that was one of the ways that when I originally started to budget without much guidance, those types of things like needing new tires, I logically knew that those that was going to happen, but I never planned for it. And then the month would come and it would be a disaster and it would go on a credit card and then I’d carry on. And that’s how I got $15,000 of credit card debt.

12:31 Emily: Yeah. Can you actually, for the listener, explain a little bit further what a sinking fund or a targeted savings account is, and actually give a few maybe examples or your list of which ones you have named.

12:41 Alicia: Definitely. Sinking funds and targeted savings accounts are things that you’re saving up for that you know will eventually happen. For me and my family, we celebrate Christmas. Christmas happens same time every single year, and I know approximately how much I want to spend. So instead of in December pulling $600 out of my budget, every single month, I put $50 into a Christmas sinking fund account. I have some for the Canada trip that I mentioned, which is usually about a $2,000 expense, so I save a couple hundred dollars every single month, so it doesn’t feel super overwhelming to me.

13:19 Alicia: I actually did some research into sinking funds because they were such a game changer and I’m a grad student nerd, so I wanted to know what the literature said, and it’s actually a concept of being able to allocate money with a name. I don’t know if any listener or if you might have this experience, but I’ve actually always been a semi-decent saver. I always had money and usually several thousand dollars, at least in my savings account, but then my tires would blow up and I would need new ones and I’d put it on a credit card because to me in my brain that wasn’t an emergency. I shouldn’t take that out of my emergency savings. That money always has to be there. So by allocating this little bit of money that just sits to the side that has a name, it makes the rational jump of, “Oh, I need new tires. I have a car maintenance fund. It comes from the car maintenance.” That is probably one thing I will keep the rest of my life, no matter what. It is a massive game changer for me.

14:19 Emily: Yeah. I absolutely love sinking funds and targeted savings accounts as well. I started using them in grad school as well, when, similar to you, I had some expenses come up and in our case we didn’t go into credit card debt, but we just had to say no to a bunch of stuff that we didn’t want to say no to. And it kind of helped us realize, okay, well we do need to do some advanced planning for these sort of large expenses that come up every so often. So I started using them in grad school as well. And I did have a year when I didn’t use them, which was the year from when we left Durham, where we were living during graduate school and moved to Seattle. And so for that first year in Seattle, everything was an upheaval and we had no idea, it was a lot harder to predict your expenses once you moved to new place, et cetera, et cetera. But after that year, I was like, “Nope, I’m tired of living this way. I need to go back to having the targeted savings accounts in place.” So they’re back in place and still in play, which has been wonderful. Of course, 2020 has thrown things off quite a bit. Like you didn’t end up using your Canada trip money and certainly we’ve had spending opportunities that we anticipated that didn’t happen, so there’s definitely been some reallocation, but you kind of have to roll with it.

Using a Combination of Cash and Credit

15:25 Emily: Actually we have a question that just came in from one of my Personal Finance for PhD community members. I invite my community members to listen in on my podcast recordings. So if you are listening to this podcast and you want to be in on these recording sessions and ask your own questions, I invite you to join the community. You can find it at pfforphds.community. The question that just came in is: why or how did you decide to use both cash and a credit card and not just cash? What do you do with the cash since you’re not actually spending it? And this is exactly the question that I was gonna ask too, so please go ahead.

16:00 Alicia: Yeah. This is one of the biggest questions that I get. The big reason why I didn’t want to use just cash is because I’m on campus very late at night. And so I didn’t feel comfortable. I have a very relatively safe campus, but I just didn’t want to have any extra money on me that I didn’t need to have. I’m also not a purse or bag carrier, so I have just like a little wallet that has my keys. So having the credit cards was more convenient for me and some places on my campus actually don’t take cash, they only take cards. So the few times I’d like go to pay for something. I would have had to put it on a card anyway. But there are a few benefits for me personally, at least I guess, not just me, but you do get a little bit of extra security. If something goes wrong, if it’s a payment that you didn’t actually make or something like that, there’s security systems built into credit cards, which is beneficial. I have a little bit of extra leeway. If something massive happens, so for a real life example, last night, I had to take my cat to an emergency vet and that is $2,000 and that was not in the budget. That will go on a credit card, which now gives me 30 days to pay it off before any interest hits. That’s a nice benefit. And you also get cash back. Eventually I do want to get into travel hacking, but right now I just use the cash back to help pay off random bills that come up that I wasn’t expecting or kind of like treat yourself things. And on average, I make about a hundred dollars a month on my cash back credit cards, so I’ll take that.

17:42 Emily: Yeah, that definitely helps with the budget as well, to give you a little bit more wiggle room. And then the other part of that question was, so you literally have cash in your home, and it just gets recycled paycheck to paycheck period? What exactly is happening with that cash?

17:56 Alicia: It kind of depends. Before COVID, I was very good at taking that money, putting it into the deposit envelope and taking it right back to the bank. Since I’ve been limiting my trips, it has been getting recycled. So the people at my bank know me very well and they know I have very specific denominations that I asked for. They were very used to me doing it, but it is just kind of like a cycle of cash. So I end my week on a Thursday and usually on Friday is when I will go through all of my expenses and pull out all the cash. If it’s convenient for me to go to the bank, that money just goes back and then goes directly to credit cards. If not, since COVID that money kind of just sits there, and then the next time I need to take out cash, I just don’t take it. So the cash that got left in the bank account that never came out, goes towards the credit cards.

Commercial

18:49 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at pfforphds.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, which I add to every month. There is also a discussion forum, monthly live calls with me, book club and progress journaling for financial goals. Basically, the community exists to help you reach your financial goals, whatever they are go to pfforphds.community to find out more. I can’t wait to help propel you to financial success. Now back to the interview.

Debt Repayment Under Alicia’s Budgeting System

19:53 Emily: You mentioned earlier that you’re working on student loan debt repayments, some other debt repayment — how does your debt repayment process figure into the budget?

20:02 Alicia: That’s one of the reasons why I like the zero based budget. I do a debt avalanche. I target one debt at a time and I specifically targeted the highest interest debt to save the most amount of money that I could in interest. I have an allotted amount of all of the previous debt that I’ve paid off. Each month $1,600 actually goes towards debt pretty much no matter what. Maybe in a massive emergency I wouldn’t, but I pretty much do that every month. Then whatever excess money I have goes towards debt. I pay all of my bills, I do all of my cash envelopes and sinking funds, and then every other penny gets thrown towards debt.

20:47 Emily: I see.

20:48 Alicia: It becomes a big part of my budget.

20:50 Emily: Just to clarify, I think when you said all the debt you’ve paid off in the past, what you’re talking about is the minimum payments of each one of the debts that you’ve made in the past that have now been cleared. You’re still quote unquote making that minimum payment. You’re just making it to the next debt and you you’re in your list, the top debt in your list. So it used to be that you had minimum payments of $1,600 and now some portion of that is you just throwing additional money at your current top loan, is that right?

21:18 Alicia: Yep. And so the way it ended up working with the debt avalanche method in particular, pretty much all of my big minimum payments were first. I did, after about five months of starting budgeting, get a $20,000 medical bill, so I put that onto a credit card and I had one year to pay that off and I made the decision to have that as part of my minimum payments and my debt snowball too. It got a lot bigger because of that.

21:44 Emily: Yeah. Wow. I’m so glad to have these examples of real life coming at you. Not that it’s pleasant or happy, but just as instructive as it is for the listeners to learn how you’re dealing with that, because I’m sure a lot of them have had similar experiences or are having similar experiences.

22:00 Emily: One comment about that debt repayment method — I think I made this name up, so I don’t know if anyone else uses it, but I call what you just explained saving first and last. In the personal finance community, we talk a lot about pay yourself first. So as soon as you get paid, you do your debt snowball, you put money towards that, all of your financial goals, you put money there, then you spend whatever remains. But I also used your system of, okay, I have my financial goals, that’s happening right after I get paid, and then whatever money I have left over because I came in under budget in X, Y, Z categories, that also gets saved or thrown into a debt snowball or debt avalanche process. I call that saving first and last because saving last is like not a good idea, but saving first and last to me that was like motivational to come in under budget in these various categories so I would have more money to throw towards the financial goals. Does that work same for you?

22:54 Alicia: Yeah. And I don’t know if you’ve read any of like the gamify literature, but that’s kind of what I do with everything is I try to turn whatever I can into a game. And finance has become a game for me. I do the little color charts. I want to see exactly how much money I can put towards savings or debt each month. And that continues to motivate me. I hadn’t thought about that it was first and last, but it definitely is.

Why This Budgeting Method Works For Alicia

23:19 Emily: Yeah. So you mentioned earlier, your system is complex, it’s intricate. That may not be for everyone, but why have you made it so complex to yourself? Why do you think that this is working well for you?

23:32 Alicia: I think a big part of it is that I am very numbers driven and I wanted to take this journey to learn as much as I could about myself and about my finances, particularly since I’m the spender of my family. I wanted to know every little piece of data and I don’t really show it too much on the channel, but I do run the numbers for myself. I like to see exactly how much I’ve increased in household spending from this time, this year versus last time. It’s complicated, but part of it just feels like I’m learning lessons every single week. And particularly with using cash and credit, I’m having to constantly remind myself that you can have certain things, but you have to make sacrifices. You don’t just get the easy win all the time. You have to balance it out.

24:24 Emily: Yeah. When I talk with people about budgeting, sometimes I talk about the merits of using an app versus like maybe creating your own spreadsheet, or at least doing manual tracking in some manner, even if it is in an app or something. And what I say about that is that, doing these things manually keeps you very intimate with your numbers. It keeps you very closely connected to facing up to the decisions that you’re making and reconciling them. It sounds like that’s why you’re doing that. In terms of recommending the system to anyone else, who do you think the system would work well for?

24:56 Alicia: It has to be someone that’s pretty motivated, I think, because it does take more time than just tracking it within an app. But I think this is someone who, if you’re very motivated by learning, I think that’s probably the biggest thing. I’m constantly diving back into my own spending habits and I really like self help type things. I love working on self-improvement and that’s, I think why I was really drawn to this method of constantly having to learn and adapt and that to me is exciting.

25:30 Emily: Yeah, that sounds wonderful. What motivates you to stick with this now intricate and somewhat time consuming system?

25:40 Alicia: Honestly, one of the biggest thing is accountability. One of the reasons why I first started this channel is I’ve found that the more that I talk about things that I experienced in my life, the more people I find to have experienced similar things, or can relate and give advice. I started talking about money with my friends and family. I started talking about it on my YouTube channel, and if you follow it, you see just about everything that I spend and do and whatnot. Unless I forget something, you see it. Knowing that that’s always there, that my friends are now tracking my progress in some ways, on the times that I’ve just really wanted to go and do something, maybe not super crazy, but a little bit frivolous I don’t because I know someone’s holding me accountable to it. And unfortunately I’m not the type of person that can just hold myself accountable. Having other people has really, really helped me in this journey.

26:39 Emily: Yeah. I’ll say another vote for that as well. My current website, my home on the web is pfforphds.com but during graduate school, I was actually blogging for under a different website, which was evolvingpf.com, Evolving Personal Finance. And I similarly, not as frequently as you, but I would do at least monthly reports of this was everything I spent and this was a very popular thing to do on the internet at that time. And I’m sure it’s still maybe on YouTube as well. And it was really, really great accountability for us, helping us to stick to our goals. We use that during the time that we were in graduate school when we really had a tight budget and we had high, lofty goals for our money. It seems less necessary in my life now, post PhD, so I’ve kind of moved on from it, but it was a really, really useful tool for that time. And just actually to mention the community again, this is something that any listener can do through the PFforPhDs Community, if you choose to use it that way. It can be great for accountability, and you’re welcome to report all your spending inside that community as well, if you want. It’ll be private. It won’t be open for everyone to see, but you will have the other community members there to at least in theory, hold you accountable.

How Alicia Uses Her Budgeting Method for Achieving Financial Goals

27:48 Emily: I was also thinking about your debt repayment journey, and now you said earlier that you’ve also started saving up more since the pandemic. Maybe your priorities are a little bit different. Can you talk about using this budgeting system and how you’re motivated to use it towards your financial goals?

28:03 Alicia: Yeah. So I started this journey with $120,000 of debt and actually just this month, I’m under the $50,000 mark, so we’re making some pretty good progress. But it comes back to the idea of kind of gamifying everything. I turn as much as I can of my life into a game to keep it fun and interesting. Each month being able to see my savings account get higher, and then you get additional interest, which is also a nice little boost because it feels like free money. And then seeing my interest amounts go down when I pay off debt or just seeing the numbers go down. Each and every month I track that I track both of those and then I also track my net worth. And so each of those has become a game to me, and again, I try to not have too much stress in my life, so if my net worth goes down, I don’t beat myself up over it. I know it’s part of the journey. When the pandemic hit, I was working really hard to pay off all of my debt by May of 2021 beause that’s when I turned 30 and I wanted to be debt free by 30. That didn’t happen and that’s not going to happen because pandemic, but now I’ve been able to see my investments grow a little bit. I’ve been able to see my savings grow. Having constant check-ins, or at least regular check-ins really helps keep me motivated.

29:21 Emily: Yeah. Thank you for telling us about that. How do you think being a PhD student interacts with this journey? I know you’re married, so presumably your husband is not a graduate student as well. Do you think that being a PhD student plays into your budgeting or your financial goals at all?

29:39 Alicia: I think in some ways. I think possibly the reason why it’s so complicated is because I do like data as much as I do, and I like being able to see those numbers. Tracking absolutely every single thing, maybe a PhD thing, but I think also being a PhD student and looking at things from more of a logical point of view has also really helped me. Being able to sit down and like logically look at the debt versus how much money I could have in retirement has really helped me on the journey. It’s helped me take some of the emotions out of finance when finance is a very emotional thing. It can be your entire life. I think that’s kind of where the PhD-ness comes out

30:23 Emily: More of like the personality of a PhD student or PhD. Will you please recommend a video or two, if people want to check out your channel, Alicia Does Adulting. So you count cash on your channel, which I had never watched a video of before, but now that I’ve seen on your channel, wow it’s actually pretty riveting. Would you recommend a video or two for people to kind of get an intro to you?

30:46 Alicia: It sounds really odd when you tell people the first time I’m a former bank teller, so the sound of cash is very soothing to me. That’s how I actually found personal finance YouTube, was cash counting. Any of the “budget with me”, you can see in detail how I do my budgets and then see the cash counting, which is very fun. I actually have a video coming out this next week, which is really exciting, so before October 1st and it’s the science of cyclical savings. I’ve kind of evolved my channel a little bit into at least two educational videos per month-ish, when I can.I dug into financial literature and I started to find different savings strategies, investment strategies. Different things that my population for the most part is not PhD students they’re not going to go to academic literature, so I kind of break it down into more lay terms for people, because I genuinely just want everyone to have a good financial standing and for it to not be stressful for them. That will be out next week and I’m really excited to talk about that, and how you can save 80% each month more than if you didn’t have a plan.

31:59 Emily: Oh, wow. Yeah. I’ll definitely watch that video and will, and get from the show notes as well beause it should be out by the time this episode comes out. That sounds fabulous.

Questions from the Personal Finance for PhDs Community

32:06 Emily: I want to take a pause here and invite any members of the Personal Finance for PhDs Community who have a question at this point. This is your opportunity to follow up with Alicia and maybe get some more specifics for your situation.

32:18 Emily: Okay, so we do have one question that came in from a community member. Would you say that using cash is symbolic for you more than anything?

32:27 Alicia: I think symbolic is a really good word for it. I just need one extra thing of accountability and I’m the type of person if I hand over $20 that actually wasn’t as painful for me as having to budget it at the end, so using just cash envelopes, didn’t really work for me in that sense, but physically going through and having to pull money out of my personal spending for an unexpected thing is very symbolic and just kind of helps visualize that process for me.

33:00 Emily: Yeah. I really liked that aspect of it as well. Thank you so much for sharing that with us. I actually didn’t really catch on to that just from watching a few of your videos, that the cash was really being recycled, at this point, not before, but at this point.

Best Financial Advice for an Early Career PhD

33:10 Emily: We’ll wrap up with our final question, Alicia, which is what is your best financial advice for another early career PhD?

33:17 Alicia: My biggest advice is it’s never too early to start and it is never too late to start. Every little bit that I’ve done along the way has helped. Every step you take really does help you and if you have never really thought about looking at your finances, today’s the day to start because you never know when one of these unexpected massive things are going to hit. Since I started my journey, I’ve had a lot of massive financial things happen and because I understood my money and I understood where I was at, I could face $20,000 of medical debt with relative calmness, which I can guarantee you, Alicia from five years ago would have been a sobbing mess over all of it and I was actually pretty calm. My biggest advice is just start. Even if it’s small, even if it’s $5, it really does add up.

34:13 Emily: Yeah, I totally totally agree. And actually just to give people some scope, you said you’ve paid off, I think it’s over $70,000 worth of debt right now. Over what time period did you do that?

34:22 Alicia: It’s been about a year and a half.

34:25 Emily: Oh wow!

34:26 Alicia: Yeah! Our first year was really good and then everything kind of hit the fan. This year has not been great, but we actually went from a negative $56,000 net worth and we’re now in the positives. We’re about to hit $10,000, which might not sound like a big net worth to a lot of people, but it was a big deal for me to be positive.

34:46 Emily: Yeah. You’re now at a $10,000-aire, right? Every order of magnitude we can celebrate. Well, this has been such a wonderful conversation, Alicia, and thank you so much for joining me and sharing your experience and your wisdom with my listeners.

35:00 Alicia: Well, thank you so much for having me. This has been super fun!

Outtro

35:04 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

Best Practices in Side Hustling During Graduate School

August 31, 2020 by Lourdes Bobbio

In this episode, Emily interviews Lourdes Bobbio and Meryem Ok, two PhD students who work on this podcast as virtual assistants. Today’s conversation is all about side hustling! Lourdes and Meryem each give their perspectives on why and how they started side hustling, how they manage their time, and how they handle their self-employment income with respect to taxes and budgeting. Throughout the interview, you’ll get a behind-the-scenes perspective on how this podcast is produced. The end of the interview is a discussion of the unexpected benefits Lourdes and Meryem have experience from working on the podcast.

Links Mentioned in the Episode

  • Find Lourdes Bobbio on Twitter @lourdesb1012 and Meryem Ok on Twitter @Meryem_T_Ok
  • Related Episode: This NDSEG Fellow Prioritizes Housing and Saving for Mid- and Long-Term Goals
  • Related Episode: This PhD Student in Texas Side Hustles to Overcome Her Unique Financial Challenges 
  • Personal Finance for PhDs: Financial Coaching
  • Personal Finance for PhDs: Podcast Hub
  • Personal Finance for PhDs: Subscribe to the mailing list
side hustle grad school

Teaser

00:00 Meryem: Every once in a while, if I need to make an extra purchase or a gift, I will kind of rationalize with myself, “Okay, I was able to make some extra income this month with the side hustle so it’s okay to spend that extra money.” And essentially that’s not a super cut and dry method, but it sort of helps me at least to rationalize my additional expenses and not get too anxious about finances during grad school, which is really, really nice to have that cushion outside of my usual budget.

Introduction

00:36 Emily: Welcome to the Personal Finance for PhDs podcast and higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 18 and today my guests are Lourdes Bobbio and Meryem Ok, who are both PhD students and work with me as virtual assistants on this podcast. Today’s conversation is all things side hustling. Lourdes and Meryem each give their perspectives on why and how they started side hustling, how they manage their time, and how they handle their self employment income with respect to taxes and budgeting. Throughout the interview, you’ll get a behind the scenes perspective on how we produce this podcast. We close the interview discussing the unexpected benefits. Lourdes and Meryem have experienced from working on the podcast. Without further ado, here’s my interview with Lourdes Bobbio and Meryem Ok.

Will You Please Introduce Yourselves Further?

01:31 Emily: I’m bringing you a little bit of a different interview today. This is the first time on the PF for PhDs podcast. We have had three people on the call at once, that is two guests interviewees, and it’s really special to me because the people I’m interviewing today are my virtual assistants who work on the podcast with me, Lourdes Bobbio and Meryem Ok, and they’re both PhD students. We’re going to get into more about side hustling today, like the side hustle that they do with me and their experience with that, maybe their experiences side hustling with other people. So yeah, we’re talking side hustling today and I have my two guests with me. I’ll have you introduce yourselves, so Lourdes, why don’t you go first?

02:10 Lourdes: Hi everyone. My name Lourdes Bobbio. I’m a fifth year PhD candidate at Penn State University in the Department of Materials Science, and I work on additive manufacturing of metallic materials.

02:23 Emily: Yeah. Lourdes was actually a guest on a previous podcast episode and we will link that from the show notes. We did a budget breakdown with Lourdes, so we talked through her budget there in State College and Meryem, please introduce yourself.

02:35 Meryem: Hi, my name is Meryem. In 2016 I started the MD PhD program at the University of North Carolina at Chapel Hill — go Heels. After completing the first two years of med school in 2018, I started my PhD in UNC-NC State’s joint Department of Biomedical Engineering. Currently I am working in the Magnus Lab, developing tools to better understand human intestinal STEM cell fate. And I’m happy to say that I’m officially a PhD candidate as of two days ago.

03:05 Emily: Yes. Congratulations! We will record and release this in August 2020, so it’ll still be fresh news by the time this episode comes out. I’m just delighted to have you both on.

Why Side Hustle In Grad School?

03:17 Emily: First question here is why did you decide to start side hustling in graduate school? Why don’t we still go with Lourdes first?

03:25 Lourdes: Financially, I was doing actually pretty okay with my stipend. As Emily mentioned, I was previously on an episode where I discussed my NDSEG fellowship, and so I generally have a somewhat higher stipend than my peers and State College has a generally low cost of living. So financially I was doing, in terms of I had enough money to live on and for extras and to save, but the reason that I got into side hustling was so that I could have money to contribute to a Roth IRA. I think Emily has done an episode on this earlier in the year, but as of this current year 2020, fellowship recipients are now eligible to contribute to a Roth IRA, but previously they were not. I started one before I was being paid on fellowship and I wanted to try to contribute at least a little bit of money monthly to that, so having that side hustle, self employment income helped me to be able to do that and continue to contribute, even though I couldn’t with my general fellowship income.

04:32 Emily: That’s so strategic. I love that. It is the advice that I was giving out for people who had multi-year fellowships, is to consider that self-employment side hustle. Meryem, why’d you decide to start that side hustling.

04:44 Meryem: For me, I guess coming into medical school, I had actually taken a gap year and was able to transfer a lot of those funds into starting an IRA, so for me, it was less of a strategic approach and more just that I’ve really always had a lot of interests in gaining new skills and collaborating with other people outside of my primary career interests. I think specifically, actually, as far as video and podcast editing, I was inspired by my dad who is always the one recording all of our family memories and making home videos. And he actually founded and produced a public access TV show called Turkish American TV. That’s been going on for 15 years, completely as a passion, volunteer project. I remember many times he’d rope me into his projects and show me how to use video and editing software, and I really just felt lucky to have his guidance. I feel like I inherited his eye for detail since that’s helped me be more confident in marketing myself as a freelancer who just really genuinely enjoys editing. I guess for me, just as someone who needs to have hobbies and tasks outside of work, I wanted to try something new and also make a little extra income in line with my career development goals.

06:03 Emily: Maybe we should say what you all actually do for me with the podcast, to give you credit where credit is due. As the listeners know, I conduct the interviews for the podcast, but kind of everything that happens after that, I hand off to you two. So you do all the video and audio editing of the interviews, and you compile the show notes, which are actually full transcripts. It’s more work than it sounds actually. We use an automated tool to generate the first transcript, but then you go through with a careful listen and make it actually readable, which I really appreciate. And you also write the social media posts that we do for each episode, and you schedule things. There’s a few other tasks in there too, but those are the major pieces of work. It’s been an amazing help for me.

How did you find your current and previous side hustles?

06:44 Emily: I know how you two landed this side hustle, which is that I reached out to my mailing list when my last VA decided to leave the position. Thankfully, she gave me a lot of notice. I reached out to my mailing list and said, “Hey, podcast listeners, do you want to work on the show?” And you two both volunteered to do a trial episode and ultimately your work was great, so I hired both of you. But I don’t know if that’s the first side hustle you’ve had in graduate school, or whether you were even particularly looking for that kind of side hustle, or really how it came about kind of from your end, so why don’t you tell us. Lourdes?

07:19 Lourdes: I had done a couple of side hustles through freelancing websites. There was actually one particular one that was captioning and transcription of usually short audio files through this company called Rev. It’s basically just pick and choose these audio files and you get paid. It’s a very low paying job, but it was something that I did just sort of in my spare time. When I heard about the opening on this podcast, I was like, “Hey, this is perfect. This is like what I was doing before, but on sort of like another level and sort of a next step up.” It seemed like a perfect fit for what I like to do in general anyway, just on a higher level.

08:07 Emily: Yeah. Meryem, how about you?

08:09 Meryem: Yeah, that’s so funny, because actually that’s the first time I’m hearing this. For those who don’t know Lourdes and I actually went to undergrad together, so the fact that we serendipitously ended up as virtual assistants for the same podcast and kind of working together was phenomenal to experience and to find out. For me, I also was trying to look into doing these things independently through similar websites, but it was not really a sustainable effort or something that was really worth the rate that they were paying. And I felt like it’s so much more useful to be able to use these skills and also benefit from all of the knowledge that I’m gaining as I’m editing these episodes, which is relevant to us as graduate students trying to better our personal finances. Really it was a no brainer when I saw that email from Emily and reached out and I’m just so glad that it worked out and that we were able to take turns, Lourdes, and still have an activity shared together despite the distance and the years since college.

09:15 Emily: Yeah, that’s why I reached out to my list first, to try to hire for this position. I hoped that there would be people who would actually be interested in the material as well as having the skill set to work on the episode, instead of going with an independent agency or something, which I could have done, maybe if it hadn’t worked out, initially. I wanted to go to people who I sort of had a relationship with, and actually it happens to be the fact that I had corresponded with both of you over the years before that — we mentioned Lourdes had been on the podcast and Meryem has been on my mailing list for a long time, so we had exchanged emails and I think had call or two in that time. It was really helpful that I knew your names at least, when it came time for people to apply for that position. Meryem you have, since we started working together, taken on another podcast editing position, why don’t you talk about how that came about?

10:08 Meryem: Yeah, that’s right. Actually, I owe it to you, Emily, for alerting me to another side hustle opportunity in podcast editing with the AcaDames podcast, which is another awesome podcast focusing on women in academia. Earlier this year, I remember Emily sent an email to us, letting us know that AcaDames was looking for help since their previous student executive producer was graduating soon, and they wanted to have somebody to overlap during that period of transition. I reached out to them about that position and thankfully we were a good fit. Now I just feel really lucky that I get to work with these two amazing podcasts. My work with them partially involves editing, but also involves a little bit more of administrative and social media management work. I’ve just learned so much from both podcasts and I’m excited to be involved. And also again, benefit from all of the career development advice that I’ve been receiving just by working with both of them.

11:09 Emily: Yeah. I think it’s kind of interesting that for these positions, this podcast virtual assisting position and the AcaDames one, it sounds like we’re looking for someone who’s going to be doing a multiplicity of different things and you come in with maybe some subset of the skills, like Lourdes, you had the transcription type experience, but then we’re asking you to learn a bunch of other stuff which expands your skillset overall, even if you’re not going to be career podcast editors. I assume you’re going to do something with your PhDs, but it’s nice to have that kind of side work, I think.

Balancing Side Hustles, Grad School, and Personal Life

11:36 Emily: Between the side hustle, your graduate work, everything else that’s going on in your life. I know you two are both in relationships — Meryem, you recently got married. Lourdes, you’re engaged. You have a lot of stuff going on in your lives. And so how do you fit in this side work that you’re doing, along with everything else? Lourdes?

11:55 Lourdes: I guess for me, what attracted me to the side hustle specifically was that it’s something that I can work on from home. I don’t have to go anywhere to do anything, and I can kind of fit it into my schedule. It’s very flexible. Emily is super nice, in that she gets us a lot of heads up time between when we get audio files and when they’re going to be released. So there’s a lot of flexibility in the position, which is definitely something that I was initially looking for in side hustles, as well, when I was doing the more freelance, low paying transcription job, it’s something I could do just in my own time, so that’s been helpful in terms of being able to work it into my schedule, work my schedule around it.

12:38 Lourdes: Also, like Emily mentioned, I’m engaged, but for the last year I’ve also been long distance, and so I’ve had a little bit more free time. It’s also been really great during this work from home time, to have something else to do. Now that you’re pretty much primarily at home, we’ve all been at home, things can get a little bit stale, but having a lot of different activities to do has been really helpful in managing my own mental health. I don’t feel like I’m only at home to do work and I get to sort of have some variety in my day, so that’s been nice.

13:22 Emily: How about you Meryem? How do you do the time management aspect?

13:25 Meryem: Yeah, I want to echo everything that Lourdes said. I think it’s really nice, even without a pandemic, but especially during a pandemic, to just have something else to turn to when you need a break from grad school or just want to use a different skill set for a bit, or just kind of escape from the world. And right now, especially because of COVID, I tend to work a later shift in lab, and my understanding is Lourdes does as well, so the rest of our work is pretty much done remotely, which makes it easier, but also I have to be a little bit more diligent about priority setting and setting boundaries, because it is so easy to kind of just switch between projects both between my main job as a grad student and then my side hustles and leaving room for my personal life.

14:07 Meryem: Usually I’ll try to do this by reserving chunks of time to work on the podcast editing, either in the mornings or late in the evenings after my shift and maybe the weekends to kind of catch up, which is very useful for particularly busy weeks. I think just like setting deadlines and trying to stay organized to prioritize all the things that are going on is helpful. I will say that I recognize that it’s probably easier for me to manage everything that I have to do given that I don’t have too many responsibilities outside of my work and extracurriculars right now. I don’t have any human babies, but I do have a fur baby named Sabine, but she’s pretty self sufficient. I think overall it is pretty much managing expectations with myself and now with my husband, but overall I think, much like Lourdes said, you get into a workflow and we do have a lot more time at home so that does help a lot.

15:06 Emily: I’m just thinking how I would answer if I asked this question of myself, of how do I manage my time? Because I do have two human babies and no childcare in a pandemic and it is definitely more challenging now than it was a few months back to be handling my schedule. But I think what Lourdes brought up initially, the fact that in our schedule we have basically a two week cycle from when I get the raw interview to you two and then we have a two week process before publication, and Ithink that really helps. I know a lot of side hustle jobs are really quick turnaround, like super short deadlines, and it’s not even really so much on your end, like I’m giving you guys a lot of time. I need a lot of time to do my part of the process as well, because I can’t necessarily jump on a response right away, because it’s just a busy long day every day right now.

Commercial

16:00 Emily: Hey, social distancers, Emily here. I hope you’re doing okay. It took a few weeks, but I think I have my bearings about me in my new normal. There is a lot of uncertainty and fear right now about our public and personal health and our economy. I would like to help you feel more secure in your personal finances and plan and prepare for whatever financial future may come. You can schedule a free 15 minute call with me at PFforPhDs.com/coaching to determine if financial coaching with me is right for you at this time, I hope you will reach out, if only to speak with someone new for a few minutes. Take care. Now back to our interview.

Budgeting Side Hustle Income

16:46 Emily: Okay, so personal financial show — let’s talk about the money that’s associated with the side hustle income. What are you doing with the money from your income? Does it have a particular job to do in your budget or how are you handling it generally? Lourdes, why don’t you go first?

17:01 Lourdes: In general, I put most of my side hustle income into savings, whether that be more long-term savings or shorter term savings, kind of depends. If I have an upcoming trip, it might go a little bit towards that. In general, how I work my budget is that, I pay myself first, in that I put money aside for savings first, and then any money leftover is my money that I get to spend for the month.

17:31 Lourdes: One of the tips I learned from the first episodes I edited was a side hustle episode, I think it was Allie Judge, and she mentioned how she holds off on paying herself her side hustle income until the month after she’s earned it. So sort of working on a delayed schedule, in terms of using the money that she’s earned. After I heard that, I’m like, that’s a great idea, so ever since then, I’ve been doing the same thing, where I count basically any money I earn in August goes towards my September monthly budget. That helps me in terms of planning and not using the money before I’ve actually earned it. That’s how I mainly handle it in terms of budgeting.

18:22 Emily: Yeah. Thank you. Meryem, how does it work in your budget?

18:26 Meryem: I’ll be totally transparent in that I don’t necessarily have a specific allocation for my side hustle income, because for me it was primarily a chance to essentially have a hobby and use a different skillset. But I kind of do try to visualize it in a way that permits me to have those extra side expenses during the course of the month that you might not otherwise be able to do. For me, it’s kind of a mental exercise, and I do have the money go straight into a savings account that I don’t really touch, but every once in a while, if I need to kind of make an extra purchase or a gift, I will kind of, I guess, rationalize with myself like, okay, I was able to make some extra income this month with the side hustle, so it’s okay to spend that extra money and think of my extra purchases outside of my needs in terms of how much of my work and effort that is worth. And essentially that’s not a super cut and dry method, but it helps me at least to rationalize my additional expenses and not get too anxious about finances during grad school, which is really, really nice to have that cushion outside of my usual budget.

19:41 Emily: Yeah. That trick, that mental framework of translating the cost of a purchase into your time, or maybe number of episodes, or however you want to structure it, is a really powerful one, a really common one for people sort of were advanced in their personal finance skills to think about really carefully, like whether they want to make a purchase and how they want to spend and so forth to translate into time. That’s a really good tip.

20:07 Emily: I’m particularly thinking about this question of how to handle your irregular income with respect to your budget because, so in August 2020, I launched a community PFforPhDs.com/community, if you want to find out more about that, but every month I’m creating new content for it. Right now I’m working on the September content, which is on how do you handle your irregular income with respect to your budget?

20:28 Emily: Lourdes, the tip that you gave is basically the first one that I’ve already put into this, which is count up your income from one month and put it towards the next month budget, that you got from Allie. It’s absolutely perfect, because you never know when something could go wrong with your side-hustle income. Like if one of you became ill, for example, maybe you need to skip an episode. That’s not a problem for us, but it would be a problem for your budget if you’d already spent the money that you expected to come in. That’s number one, baseline tip for handling side hustle income is give it a delay. Meryem, you’re doing a similar thing by putting it directly into savings, and then later on thinking about, well, how do I want to spend it, or do I want to keep it here? Different articulation, but kind of the same principle there. I’m really glad to hear that.

Side Hustle Income and Taxes

21:13 Emily: Now we come to one of my favorite subjects within personal finance, which is taxes. So you two are both self-employed, you are contractors for me, and Meryem, now you have this other contractor, essentially you’re like a real true contractor working for multiple people with the same skillset. Self employment taxes are kind of a whole other ball of wax. You’ve been doing this for a year, do you have any systems that you’ve put in place or just what are you doing with it, with respect to your taxes? Lourdes?

21:40 Lourdes: For me, it’s a little bit of two different things. I generally set aside about 30% of my self employment income for taxes. That’s taking into account the about 15% self employment tax and then income tax being around 12%. But also, I am on a fellowship that requires me to pay estimated taxes quarterly, and so at the beginning of every year, I basically estimate how much — well, I know how much I’m going to earn from my fellowship, and then I basically estimated how much I anticipate earning from doing this virtual assistant for the podcast. Basically, I have ahead of time, I know how much I have to set aside each month for both my fellowship income and this side hustle income. I immediately put that into savings and I just don’t touch that money. It’s not even money that I think about. And then I tend to over save just a little bit in terms of taxes, just because I’d rather have a cushion. Last year, I think I was off by like $150 just because of other things. I also have some investments that will change throughout the year and change my tax situation, but I do tend to oversave just so I have that little extra cushion and I don’t have to take it out of other pockets of my savings. Then if I have extra money left over, I kind of use it as my own personal tax refund. So the government isn’t giving me any, but I have some extra money left over in my tax pot. I use that and just reallocate it usually to different savings categories.

23:23 Emily: Yeah. I handle my income from my business exactly the same way, so it sounds like you’re just incorporating the self employment tax issue into your existing structure for paying quarterly estimated tax. Meryem, I want to give you a chance to answer that one as well, because I know this is shifting for you right now,

23:39 Meryem: Actually I’m absorbing all of Lourdes’ tips because for me, I just, in the month also started receiving fellowship non-W-2 income. Prior to that, I wasn’t really thinking about estimated quarterly taxes as much because I didn’t have to deal with all of that. But now moving forward for tax year 2020 into next year, I will have to kind of be thinking about that. Even though the actual amount of taxes that I’ll from the side hustle income will be less than the amount that is necessary to be able to pay estimated quarterly taxes — so my original strategy was just to collect all of the receipts that I’ll receive from PayPal and then make sure that I back calculate the amount that I have to pay for the self employment tax and pay that come tax season. That original plan is fine if you know that you’re not going to owe the amount that you would need to, to not have to pay fees for not paying estimated quarterly taxes, but I like the strategy of kind of building it in so that by the time tax season does roll around, you’ve already paid everything.

24:45 Meryem: I actually think that I’m going to adopt that policy rather than shifting it and waiting until tax season. And as for my other side hustle with AcaDames, their structure is also changing since they’re recently going through the process of incorporating and becoming an LLC. Previously, and currently during the transition, I’m being paid through W2 income because it’s very easy to me to be able to do that as a UNC student and the cohost, or at least one of the coasts now is based at UNC, so it was really easy to deal with that through payroll and not have to worry about freelancing or independent contracting. But I imagine that that will also shift within the next year as they’re making this transition into becoming an LLC. So having all of these strategies in place now will probably be really useful moving forward.

25:38 Emily: Yeah, that’s good for me to know. Interesting. I should mention also, I just brought up the Personal Finance for PhDs Community, but for the last several years, I’ve had a workshop available for individuals on quarterly estimated tax and helping them fill out their estimated tax worksheet and form 1040. That workshop is now coming under the umbrella of the community. So anyone who’s wondering about how do I file quarterly estimated tax on my fellowship, that’s where to go for that particular workshop PFforPhSs.com/community. And I just told you, I’m thinking about in September, the training that I’m going to release on handling your irregular income with respect to your budget. Later on this fall, I’m planning on doing another full workshop on the self-employment side hustle that is so common for graduate students and PhDs, and how to handle that for your taxes, so a whole other tax workshop just on this topic of self employment taxes. That’ll be available if anyone needs help with that sort of thing. I’m really excited about creating because I’ve been doing my own taxes as a self employed person for a number of years, so I have a basic familiarity with it and I’m excited to do a bit more research to figure out how it works for other kinds of businesses as well. That’s where to find out more info there.

Unexpected Benefits from Side Hustling

26:54 Emily: As a second to last question here, have there been any benefits to doing a side hustle that you didn’t anticipate when you first took on the position? Lourdes?

27:05 Lourdes: Specifically for this podcast, Emily interviews a wide range of guests and a lot of them also have social media that they promote. I’ve been able to connect with some of the different guests on social media, just as a result of sometimes promoting the episode. They’ll see that I promote it, and then we connect, we end up talking, following each other on Twitter. That’s been like something I didn’t really expect to happen, but it’s been really cool because q lot of them are fellow grad students, and then just getting into that academic sphere of Twitter has been really interesting just to see all these different graduate experiences from people all over the country and all over the world. That’s been one of the most unanticipated benefit from this particular side hustle.

27:57 Lourdes: And then also, as has been brought up multiple times, I think Meryem brought this up, just learning a different skillset that’s something very different from what I do in my normal day to day graduate work. And I, in particular, am starting to figure out what I want to do after grad school. I’m a fifth year student going into my sixth year, so I’ve been leaning towards maybe some more like alt-academic jobs, and being able to have this completely different skill set is definitely something that I think adds to my resume and adds to potential job options and sort of also gives me ideas of what other type of work is out there. Along with what I was mentioning before Emily does have so many different types of guests on the podcast, just seeing what opportunities are available to graduate students after they’ve defended and after they graduated, has been really interesting and something that I hadn’t even considered or even thought of prior to really getting to know some of these guests through the podcast.

29:04 Emily: Yeah. That’s really great for me to hear. I know that this too was an unexpected benefit for me of doing the podcast is I didn’t expect it to be such good networking. I knew some things that would happen from it, but not the networking aspect, so I’m really glad that you’ve been able to tap into that as well. So Meryem, how about you?

29:24 Meryem: Yeah, I agree completely with the networking component as this amazing side benefit of being involved with editing the podcast. And I think for me also, I just find it inspiring how relevant the episodes have been in my own personal journey as a student, often in real time. In fact, I’ll never forget that the very first trial episode that I edited was with Dr. Katie Wedemeyer-Strombel about her decision to change labs and how to prepare for the unexpected in grad school. And it just so happened that that exact same week that I was editing that episode, my former PhD advisor surprised that our lab with an announcement that she would be leaving UNC and moving across the country, and all of this was happening while I was trying to plan a wedding with my fiance, and now husband, who had just moved down to Chapel Hill to start a new job, to be with me after we’d been long distance for so many years. And anyways, it ended up working out and I was able to switch into an amazing collaborating lab and stay at UNC, but unbeknownst to Katie, her advice at that time was so timely for me and helpful for me as I was going through that transition. So I always rave about the podcast to pretty much every grad student I come across and I try to send along helpful episodes and resources to them if it sort of just happens to come across in conversation. It’s just amazing to me how many times that, that has just happened, where I’m editing an episode and realizing, wait, I really need to pay attention. This is really relevant to my life right now.

31:00 Emily: That’s really good to hear. Of course you told me at the time that that episode was striking you in that way and I’m so glad that I could help. I think that, as Lourdes, as I was saying earlier, I’ve been doing this podcast for about two years now and I have quite a few interviews under my belt and it’s not always the same type of person, as you were saying. It’s a lot of different kinds of personal finance stories coming from a lot of different sorts of people who have been in academia for a time at least. There is a good trove of episodes there, that you might find something useful to your current situation, if you do a little diving into the archives.

Best Financial Advice for Early Career PhDs

31:34 Emily: Last question here, which, you know, I ask of pretty much all the guests who come on the podcast. I’ll give you a chance to give your answers as well. What is your best financial advice for another early career PhD? And we’ll go to Lourdes first again.

31:48 Lourdes: For me, I think one of the best things for me is having a yearly budget. At the beginning of the year, and I’ve been doing this for quite a few years now, I lay out my plan for the year financially on a spreadsheet, and it really helps to be able to see a longer term plan for my money for the year. I think, especially with self employment income, side hustling, it kind of gives you an idea of…Maybe I have a trip planned later in the year, or I have some big event that I’m going to need to save up money for, and being able to more strategically allocate your money on a larger scale rather than just month to month. I think that’s been one of like a strategy that I’ve been employing for a couple of years now, and it’s just been super helpful for me, and it’s something that I will see myself doing like far into the future

32:44 Emily: That is, I think, typically a good piece of advice, but I want to know how it’s going in 2020.

32:50 Lourdes: It’s been interesting to say the least. There have been a lot of…I had some trips planned that have gotten canceled, so I have this extra money, but also different expenses that I didn’t anticipate come up. And it’s been a little bit of am eye-opener in terms of plans change as the year goes on, but I think sort of having that framework to begin with helps me realize that even if…I go back to this budget every month, it’s the same spreadsheet I use for my monthly budgeting, so it changes and updates and it’s a very fluid document, but just having that outline there to begin with has also been something that provides some structure, especially when the year got so different than what everyone anticipated.

33:43 Emily: Yeah, I also use the year as the sort of standard timeframe when I talk about irregular expenses, so expenses that come up non monthly, and you and I talked about this in our interview from a year or so ago. I think it’s a great strategy to think about what budgetarily is coming up for you — trips, as you mentioned earlier, or maybe some other kinds of irregular expenses, so you can anticipate them over the course of about a year. So yeah, I like that time frame as well. Meryem, how about you? What’s your best advice?

34:12 Meryem: Yeah, so my best advice is probably to be honest with yourself and keep an open mind about your personal finances. A wise friend once told me that disappointment happens when our expectations don’t match up with our reality, which was really helpful for me to hear at the time, as an optimist, because I used to feel a lot of guilt or disappointment if I couldn’t maintain an unrealistic budget, or if I couldn’t resist making an impulse purchase on something that maybe wasn’t necessary, but made me or someone else really happy. But I also think it’s really important for our mental and physical wellbeing to work towards a healthy relationship with money, which I know can be particularly challenging on a grad student’s stipend. So with that in mind still, I think as best as you can try to be honest with yourself and set realistic goals for yourself, not based on anybody else’s priorities or spending habits, but whatever matches your needs. That being said, if something really isn’t working for you, that’s probably a good time to have an open mind and try to adapt, effective strategies from others. I guess I would say it’s okay to experiment and even take calculated risks, while figuring out what works best for you, but being honest yourself and keeping an open mind is probably my best financial advice and general life advice as well.

35:44 Emily: I love that as well. I often think about the mismatch between expectations and reality, and how that provokes us, so I try to keep my expectations low, basically. I really love that advice and I think that’s unique. I don’t think we’ve heard that on the podcast before, but I think it’s perfect. And something that graduate students can sometimes be discouraged around their finances because they are working with such a low income, it’s for such a long period of time, and I talk a lot about investing and saving stuff and that’s just out of reach for a lot of graduate students, but they can implement your advice, Meryem. They can like learn to just figure out what’s going to work for them in managing their own finances right now and carry that skill set and that habit, whatever it is that they determined as the right system or whatever, forward into their career and post-PhD income, and hopefully have a lot of financial success at that time, having been honest with themselves and really using the time in graduate school to get to know what their preferences are with respect to managing their finances. That’s good advice for anybody, anytime. You can always implement it.

36:46 Emily: I’m so glad to have had you two on the podcast and thank you so much for volunteering to do this. Thanks for coming on.

36:53 Lourdes: Thank you, Emily.

36:54 Meryem: Thanks Emily.

Outtro

36:56 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

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