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

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.