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This Soon-to-Be PhD Is Facing Debt and Underemployment as He Goes on the Academic Job Market

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In this episode, Emily interviews Chad Frazier, a graduate student in history at Georgetown University who is about to complete his PhD and go on the academic job market. Chad’s career plans and personal finances have changed a lot during his PhD (and a master’s before that). When he received his stipend offer from Georgetown, he thought he had made it. But seven years later, the pay increases haven’t kept pace with housing prices in DC, and Chad has accumulated credit card debt. As he applies for faculty positions, Chad faces underemployment, and the grace period on his student loans from his undergrad and master’s degrees is quite limited. Chad argues that universities have a moral obligation to pay their grad students a living wage so that they can thrive academically. (Update: Chad successfully defended his PhD just prior to the publication of this episode!)

Links Mentioned in the Episode

PhD debt and underemployment

Teaser

00:00 Chad: I just spent the last 10 years at an institution, and I’m now actually financially worse off than I was when I started. At times that makes me really scared and angry. And that wasn’t something that I imagined it would be like when I would get to this point.

Introduction

00:21 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season four, episode 16, and today my guest is Chad Frazier, a rising eighth year PhD student in history at Georgetown. Chad and I discuss some really tough and even emotional issues in this interview including large student loan balances, credit card debt, underemployment, the difficult academic job market, and the feeling of being let down by your university. Chad shares quite openly the current state of his finances and career aspirations. We discuss what universities can do to alleviate financial stress among their grad students as well as what prospective grad students should think about when they look at a stipend offer letter. Without further ado, here’s my interview with Chad Frazier. You don’t want to miss this one.

Will You Please Introduce Yourself Further?

01:15 Emily: I am joined today on the podcast by Chad Frazier, who is currently a PhD student at Georgetown. And we’re going to be talking about the financial issues that arise, particularly as you’re getting close to the completion of a PhD. Right? You’re getting to to the end of graduate school, and what happens next and how do you handle that with your finances? It’s a really challenging situation for many, many, many PhDs. So Chad, I’m really delighted that you joined me today. And will you please tell the audience a little bit more about yourself?

01:46 Chad: Yeah, sure. First off, happy to be on the podcast, Emily. So just kind of a little background. I’m, like you said, just in the process of finishing up my PhD. I’m kind of planning to defend middle to late part of September. I focus on US history. Before that, I got my MA at Georgetown, which is the institution I’m currently at, BA at Dickinson. I guess those are kind of the broad highlights. I’ve been in the last couple of years, very active with the graduate union here at Georgetown. I’m part of the organizing committee and started getting more and more interested as part of that work in the last couple of years.

Evolution of Career Plans in Grad School

02:32 Emily: Yeah. Super interested here. Maybe not specifically about the unionization issues or your role in that, but just about your thinking around those issues as it relates to what we’re going to be talking about today. So, you’re almost done with your PhD. What are your current career plans, what you think you’ll be doing next, and also maybe how has that changed over the course of your degree?

02:54 Chad: Okay. Yeah. So when I started out the PhD, which would have been fall of 2012, the plan was generally that I was going to just tenure track, ideally at a liberal arts college. I was a peer writing tutor in undergrad and I really liked the experience of teaching. That said, I was kind of amenable to the idea of like maybe doing alternate career paths, kind of sidetracks, that led eventually to this final goal. But I can’t say that I really thought about them in any sort of depth. I think I figured, “Oh, I’ll just figure it out as I go.” So, like last year, I tried the academic job market for the first time, kind of a soft search. I didn’t get anything, which was not unexpected where I was with my dissertation. And then I’m going to try it again this year–be better, generally more competitive I think–and we’ll see what happens there. But over the course of the sort of last several years, I have just gotten more interested in other possible career paths. Because there are maybe some things about academia that I’m not always a fan of. And I think in particular, one would flag, like I mentioned, the unionization, maybe involvement with something to do with the labor movement, either as an organizer or researcher for a union. I’m also working with a professor here on building an online archive. So it looks at teachers in the labor movement. So it’s kind of up in the air.

When Does Your Graduate Student Position End?

04:18 Emily: Yeah. So it sounds like you’re getting other kinds of work experience. Right? Other kinds of, or not necessarily work, maybe it’s volunteer as well, but other kinds of experiences that’ll help you figure out what you want to do with your career and maybe you know, land, whatever that next job is. So you said you’re planning on going back on the job market again this fall. When does your position as a graduate student actually end or do you have an end date for that?

04:41 Chad: So I actually just put in paperwork with the graduate school. So the way this basically works is, I will defend, ideally late September. Once I do that, and generally, I am sure this is true for a lot of people, the assumption is that when you get in the room, you’re ready. Then there are revisions, which part of that is what your committee says, part of it is shaping it to the graduate school. And, as far as the university is concerned, when I’m in that mode, I’m still a student. And it’s just then once those are done, you file it with the graduate school, and then you apply to graduate, which for me the plan is to do that in December.

Plan for Income Until Graduation

05:24 Emily: And so as far as your income goes, in the meantime, do you have an assistantship that’ll still be ongoing, or what’s the plan for the income?

05:32 Chad: So the plan for the income by sort of Georgetown rules is basically after seventh year, which my seventh year technically concluded in May, I’m not eligible for any kind of assistantship, whether as a TA or an RA. So, the work I’ve been doing with the online archive is paid out of an Institute here at Georgetown called the Kalmanovitz Initiative. And I’m figuring out how many hours they will be able to pay me for that. But I’m also looking for sort of part time jobs. One of the advantages of being in DC is there’s a fair amount of work for research with journalists or stuff like that to kind of make enough money that I can make ends meet until I can have something more definite.

Are You Considered an Employee at Georgetown?

06:20 Emily: So, the position that you’ve had at Georgetown, not your assistantship, are you an employee technically or is that like an independent contractor position?

06:32 Chad: So, I’m an employee. It’s routed through sort of the student payroll office. It’s a little complicated just because the way the rules are here with PhD students, we have to estimate how many hours a week I plan to work and how many weeks. And then they are like, “Oh, this is his stipend.” And then that gets dispersed out in biweekly installments. They changed that recently. It used to be able to have been, oh, just hourly, as long as I didn’t exceed like some certain restraints, that would have been fine. Bureaucracy.

What is the State of Your Finances at this Point?

07:05 Emily: Yeah. So, it sounds like you have a part-time position that’ll be ongoing through Georgetown. And then on top of that you do need to work a bit more as well as actually finishing up your dissertation and doing the defense and all of that. So, it’s a lot going on at this juncture. It’s a time of transition and a challenging time. So, can you tell me a little bit more about the state of your finances at this point? It sounds like, well first of all, is that income that you anticipate making going to be enough to sort of keep your head above water or is that still a question mark?

07:43 Chad: So, the way it’s kind of shaping up is that income that I’m going to get from the job with KI, with Kalmanovitz Initiative, probably I’m hoping that’s enough to cover rent. And then the additional work–the idea is basically enough that I can feed myself and pay for Metro and sort of living expenses and hopefully get enough too that I can start paying down credit cards a bit more. Because I’m very cognizant of the fact that, six months after I graduate, the student loans are going to start coming due. And that’s going to drop like anvil from heaven, it feels like. So, I want to have hopefully something ready for that where I’m not getting hit from two sides.

History of Chad’s Student Loans

08:37 Emily: Yeah, totally. So, you’ve mentioned you have student loans. Do you want to share like the amount of that, or like which degree you accumulated them from?

08:47 Chad: Yeah, sure. So, I went to a private liberal arts school, Dickinson College, for my undergrad. And I got lucky. I got a pretty good financial aid package there that most of it consisted of scholarships and grants. And I only had to take out, I think, anywhere from 10 to 20,000 [dollars]. Most of the student debt I’ve accumulated was because of my master’s degree that I took before I started my PhD. And for that, I basically have to look through the records and that’s about 80 to 81,000 dollars. So that’s, yeah.

09:20 Emily: Yeah, that’s going to be a large minimum payment. Even if you go one of these income-driven routes, depending on what you’re doing the rest of the year, assuming you haven’t gotten like a full-time faculty position yet. Anyway, it’ll be a large payment, presumably. So, that sounds really, really tough, but it’s also pretty common as you might imagine. Okay, so you have the student loan debt from your earlier degrees, not from the PhD itself. And then you mentioned credit card debt. Do you want to share the amount of that, and how it was that you accumulated it?

Accumulation of Credit Card Debt

09:54 Chad: Yeah, because I’m not sure. I don’t think I can pull the dollar amount right off the top of my head. But it’s basically–so, a little background about how a PhD sort of works at Georgetown. I was admitted with a five-year package, which meant that for three years there was a service obligation, which I TA’d. Two years was non-service. And then basically, for year six through seven, the department was able to fund me kind of on a discretionary basis. I got a fellowship my sixth year where I got to teach my own class, and then I got a semester of non-service. And then this last year I was on service. And I got a decent enough job working kind of as an administrative assistant to a professor. But the big issue was, that fellowship when I was getting paid was only nine months out of the year, which is pretty common for humanities and social science students here at Georgetown.

10:55 Chad: And so that meant that like, I tried to set aside money so I could cover rent. I would basically always try to find an extra, some sort of job either during the semester where I could save up money or a job during the summer where I could kind of live off of that. Invariably, credit cards became the sort of go-to during the summer. And the usual MO is, in the summer months, pay them down during the year, and then in the summer months make minimum payments until–maybe a little extra if you can–you get back into the fall, and then start paying them down again. And that worked actually pretty well the first couple of years. It’s just in the last two, three years, cost of living has been going up in DC with rent. And also with like, you know, last summer I had three really close friends who got married, and I wanted to go to their weddings and I had to pay for that. And I went to a conference in November that I didn’t get reimbursed for that was on the West coast, which was expensive. And it’s been hard to sort of do that, pay it down this last year where, come June, they were all maxed out, and I just was boxed in.

12:15 Emily: Yeah. I think what you’re describing is super common for PhD students, for people in their twenties and thirties, generally. I mean the nine-month pay, of course, is fairly unique to our mode of work, depending on what kind of field you’re in. But yeah, I mean it sounds like you had the right idea, right? Save up during the year, so you’re cognizant of that in advance. You’re trying to plan for it in advance, save up during the year, live on that over the summer, plus you work a little bit. But it’s really hard to do that planning. It’s just a really, really challenging situation to be in. So yeah, it sounds like credit cards came into that for you as well as the whole irregular expenses thing, you know, going to people’s weddings. I also really value attending weddings.

13:00 Emily: I love being able to go, I always had to travel. It was a challenge, financially. And what you mentioned, of course, the conference thing. We all know inside academia that conferences either are not paid for at all for students, or the student has to pay upfront and then the reimbursements, and it’s months later. That can definitely get people into cycles of credit card debt as well. It’s a huge, widespread problem, I would say. So, I’m sure all of this sounds very relatable to the audience, and I’m really thankful to you for sort of bearing yourself this way and sharing this because it is a really difficult thing to talk about publicly. So, thank you so much for doing that. Is there any other debt that you’re dealing with at this point aside from the credit cards and student loans?

Any Other Debt Besides Credit Cards and Student Loans?

13:41 Chad: I think those are the two biggest sort of issues. Like, yeah, there’s nothing else really out there. I rent so I don’t have to worry about like a mortgage. I don’t like to drive. I don’t own a car. So, it’s public transit. So yeah, it’s pretty much just credit cards and student debt.

14:01 Emily: Yeah. And it sounds like, given that you don’t own a car–which is one of my very go-to suggestions for people trying to reduce their expenses–you live in an expensive city. That’s how it is. You pay a lot in rent. You don’t own a car. Rent’s been going up, presumably, as is almost always the case. Stipends do not keep up with rising rent costs and yeah, it’s just a really, really tough spot to be in. I’m curious actually what your thought process was about choosing–and maybe it’s not really like a conscious choice, but like you have been accumulating credit card debt over the past couple of years. You know, at first, you said you were in a cycle of, “Okay, I build it up and then I pay it down.” But as you said, the last couple years, it’s been more building up than paying down.

14:43 Chad: Yeah.

14:44 Emily: Why did you go that route instead of taking out additional student loan debt?

Why Credit Cards Over Additional Student Loans?

14:50 Chad: I think part of that was I was just being cognizant of the fact that I had a fair amount coming in from my master’s program in particular. I actually had this conversation with my mom a couple of times. Where she’s like, “Well you should just put in for FAFSA and try to get more. You should try to get another student loan or something.” And I was like, “But I’ve already got at least 80,000 perhaps up to a hundred thousand, and it sort of seemed like I would be mortgaging my future even more so than I did. In the early years of the program, kind of you brought up the whole idea of stipends not keeping up–throughout sort of my time here at Georgetown, usually the stipend has gone up in each year by about a thousand dollars, which in year one that meant I went from 22 to 23 thousand. That was like a 5% increase. And that I think helped keep ahead of a lot of stuff.

15:50 Chad: And then, more recently it’s like now that last year–the university introduced a wage freeze this year, but the year before it was like–that amounted about 3.5%. I don’t have terribly many expenses. I used to joke that I only allowed myself sort of three very basic luxuries, which was food, like going out to eat. Not that I go out anywhere very expensive. Booze. I like beer, but I like cheap beer. Weirdly enough. And then books. And those, even there, I’m like, “Oh, I won’t spend more than like 25 bucks.” So, it was like, “Oh, these are really small things.” And it’s not like I was going on trips to Europe or anything that expensive. So it was like, “Okay, the credit cards just seemed more manageable.”

16:48 Emily: It really seems like just mentioning those little luxuries that you allowed yourself–which again, like you just said, did not amount to a lot of money–it really illustrates for me how large a chunk of your income must be taken up by your necessary expenses. Because what you mentioned as discretionary expenses have not been outrageous by any means of course. So, it just for me really illustrates this like probably 60, 70, 80% of your income has probably been taken up by like your rent and your basic food and you know, basic transportation and all that kind of stuff, which is a really, really, really tough spot to be in. There’s a benchmark that I like to reference which is called the balanced money formula, which I don’t know if it was created, but it was definitely popularized by Elizabeth Warren and her daughter in their book from, it must be 10 plus years ago now, All Your Worth*.

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

The Balanced Money Formula

17:43 Emily: And they introduce this concept of the balanced money formula. And in that, a person’s necessary expenses–so you know, stuff to keep you alive, housing, food, et cetera. Also, all the contracts that you are in, your insurance, that kind of stuff–that should amount to no more than 50% of your net income after-tax income. And that’s to live like a balanced life. On a sustainable basis, it shouldn’t be more than 50%. If you go above that, it’s like warning, warning, warning. This is not going to feel sustainable for you. It sounds like you’ve probably been in that warning zone your entire time you’ve been in graduate school most likely. And again, really, really common for graduate students, especially those who live in higher cost of living areas. So, that benchmark can feel really discouraging to people who have lower incomes. And it’s just kind of something that like, I don’t know, just you need to acknowledge. It’s going to feel really difficult to live on your stipend if you can’t fit your rent and your transportation and your food under that 50% figure. And is that something that’s worthwhile to attend the institution you want to attend and do the research and pursue our passions in our careers. It’s a tough spot to be in.

Commercial

18:59 Emily: Emily here for a brief interlude. As a listener of this podcast, every week you hear strategies that another PhD has used to improve their financial picture. But listening and learning does not automatically translate into action in your own financial life. If you are ready to change how you think about and handle your money but need some help getting started, I can be of service. There are two main ways you can work with me to create and implement a financial plan tailored for you. First, I offer one-on-one financial coaching, either as a single session or a series as you make changes over the longterm. You can find out more at pfforphds.com/coaching. Second, I offer a group program called The Wealthy PhD that is part-coaching, part-course, and part-community. You can find out more and join the waitlist for the next time I open the program at pfforphds.com/wealthyPhD. I believe it’s possible to succeed with your finances at every stage of PhD training and throughout your career. Let’s figure out together how to make that happen for you. Now, back to the interview.

Anything Else You Would Like to Share?

20:14 Emily: I wondered if you had any additional thoughts, feelings that you wanted to share regarding what we’ve been talking about. Your career transition upcoming, about the state of your finances right now. Anything you haven’t said so far?

20:28 Chad: I think in terms of sort of the way this has all been. Because again, I don’t come from money. My dad works as a supply manager at a college bookstore. My mom recently started working for Chick-fil-A. Like, working-class family. And there was even this weird stretch when I started the PhD in 2012, my dad who had gotten fired from his job like just after the financial crisis and just took the opportunity to go back to school himself, to finish first his undergrad degree. He could only find a job working part-time for a big-box retailer. And you know, there were moments where mom was calling me up and having to borrow little bits of money from me and then she’d pay them back to make their ends meet. And there was just this sort of sense of like, “Oh, I made it. I’m okay. Like this is not a lot, but it’s going to be kind of uphill, you know, all going up from here.”

21:35 Chad: And then now to be in this position where I kind of feel like at times I just spent the last 10 years at an institution, counting the same institution for both my MA and my PhD, and I’m now actually financially worse off than I was when I started. And I think at times that makes me really scared, and at times it really also bothers me–like now, my mom has to front me money for stuff like getting a new cell phone. Because my old one was four years old and couldn’t hold a charge for like a few hours–and angry. And that wasn’t something that I imagined it would be like when I would get to this point. I felt like it would be tough. There’d be an adjustment, but I didn’t think there would be quite this type of problem.

Supporting Family Members During Graduate School

22:27 Emily: Yeah. Thank you so much for sharing that. Yeah, just thank you for sharing the point that you’ve gotten to here. I think that graduate students supporting their family members to a degree–and it could be their parents, it could be a sibling, it could be a dependent child–is something that is, in my opinion, not really talked about that much openly. But it happens a lot. And your degree of like, you know, maybe short term loans to your family that happened over what seems like a relatively short period of time is a more brief, just smaller kind of support that you were able to provide at that time, which is awesome. And other graduate students support their family members for a significant fraction of their stipend for years.

23:19 Emily: And maybe it’s remittances they’re sending to another country. It could be within the US. That situation happens all the time, too. And so, I’m glad to share your perspective on the podcast of thinking, “Okay, I made it into my PhD program. I’m no longer taking out student debt. I have an income. I’m making it. I’m living in DC. The future ahead of me is bright. I’m going to be a professor.” And then, you know, seven years later coming to this point, like, “I’m not so sure what my career is going to be. I have a lot of student loan debt. I have consumer debt. I don’t quite know how I’m going to be making it from month to month starting in just a few months.” So, really, really tough spot to be in. But again, I don’t think it’s that uncommon for PhD students. What has been your observation about how your situation maybe compares to some of your other peers?

How Does Your Situation Compare to That of Your Peers?

24:11 Chad: Actually, I think you’re right. In talking with my peers, there are a lot of similarities. Like you were talking about grads supporting other grads. I’ve got friends in my program, other departments that I’ve gotten familiar with thanks to my involvement with the union, where they’ve got families–or like one of my really best friends in my cohort was from the Philippines and throughout the program he was sending money home to Manila to help his family out. And yeah, it is very common. It’s just, the more jarring thing about it is that for me, on one hand with history, more and more of an awareness of like, “Okay, the job market has sort of changed. Higher ed: We’ve seen this sort of adjunctification of labor. Okay, we need to start thinking about alternative pathways or career diversity.” Different labels get used for different fields. But there really has never been this sort of awareness about the financial dimension. I think the only time it’s ever come up in conversations with faculty are like, “Oh, the stipend’s enough, right? You’re doing okay.” Or, “You’re not having to take out loans for this, are you?” And I’m like, “No, I’m living within my means. I’m fine.” And part of it is, this stuff is kind of new-ish. It’s not necessarily out of the blue, but it is new-ish. And for a lot of faculty, this is wasn’t their experience and isn’t their experience now. So yeah, those are kind of two broad impressions.

Universities Do Not See All of Our Financial Struggles

25:45 Emily: Yeah. I think what I’ve observed from maybe more of the university perspective is they track things like amount of student loan debt taken out. And so, if they don’t see a lot of, let’s say, PhD students taking out student loans–like you have consciously avoided student loans because of your existing level of debt–then they may not be aware of the hardships that people are undertaking outside of the university system, like racking up credit card debt or like borrowing money from other sorts of lenders or from family members or whatever it might be to again sort of keep their head above water. And also, the whole side hustling thing, which is super, super common. And I’m generally a fan of side hustling, especially when it advances your own career, like what you’ve been doing with your other position. Like that’s exposed you to a new area of work and maybe you’ll keep going in that area.

26:40 Emily: So, what can be really beneficial in a lot of ways, but it’s something that can be distracting from the degree, especially if a student has a lot of other responsibilities going on too, like they have a family or whatever. So, it’s not great if a student has to side hustle. It’s okay if they want to and they can balance it or whatever. But it’s not a good situation when they have to do it to just keep their heads above water. So, all of that can be very stressful. Of course, of course it’s stressful and can affect career decisions. And I think what you’ve been talking about–that we’re specifically talking about transitioning out of graduate school–the idea that your stipend is enough to make it on like a month to month basis is kind of one thing. But is it enough to actually bridge you until you get to the kind of job that you’re supposed to have as a PhD?

27:27 Emily: And we know as you were just mentioning from the academic job market that it can take multiple cycles of going through this before maybe you get a possession or maybe you don’t. And what are you doing in the meantime? Are you adjuncting? Like that’s not a really solid situation either. So, it’s not only a stipend needs to serve you in getting, you know, from month to month, but it also should be enough that you can actually transition into the next position, you know, and not have to take on let’s say a bunch of credit card debt or whatever it is in the transition. Like to have to move and to have to have a lapse in employment and all the expenses as you enter the job market. Anyway, that’s me going on for a while about that. So, these challenges are definitely common. What do you think are some solutions or better practices that either the universities could be doing or individuals could be doing or anybody else could be doing to kind of alleviate this situation?

Solutions for Universities and Individuals

28:21 Chad: Yeah. Well, I think universities kind of start from the top and work down. Because I very much do believe in sort of this idea of agency and personal responsibility. But you have an obligation to make the best of the cards that you’re dealt. But you’re also not the one dealing the cards. And I think universities really do have an obligation–for PhDs or master’s students who are working– to pay them sort of a living wage. And there are definitely forces that are nudging them in that direction. Whether it’s like Washington DC, which has passed a referendum that I think will eventually set the minimum wage to $15 an hour which has started leading new improvements for friends that I know or master’s students who work hourly. Graduate unionization, kind of nudging for upped stipends. Also just, there’s the competitive angle of this, you know, trying to get the best recruits. I know with Georgetown we want to get the best people and we’re competing against universities like, for example, Emory or Vanderbilt that actually pay better and are also in cheaper cities compared to Washington DC. So I think universities have an obligation there.

29:40 Chad: I also think sometimes with just like master’s students, it’s a thing that is kind of maybe a joke or a truism, at least with the people I’ve talked to here, that, “Oh, master’s students, your job is basically subsidizing the PhDs or you’re subsidizing the department,” so you have an incentive to bring in more people. And it’s not necessarily going to be a funded program. And you know, okay, I paid in my $80,000. So as a PhD, I don’t always feel bad when I go into the department supply closet and be like, “I need a notepad.” But part of the function of some master’s programs is to recruit people, like identify people that would be good in PhDs. And I don’t know, the sort of like treating folks as a revenue source in that way. It’s just deeply unsettling. And not that I necessarily have an answer to that, but I think universities thinking of alternative ways to handle that or to control sort of tuition is important.

Are Students Primarily Producers or Consumers?

30:38 Emily: What I’m thinking about when you’re saying this is whether the student is primarily a consumer of what the university produces or a producer of that work. And scholarship is part of what a university produces, right? As well as the teaching and everything. So, for undergraduates I guess we kind of accept that they are consumers of the university, and they or the government or whoever should be paying for them to get this lovely education. PhD students we generally see as producers. They’re either teaching and spreading their knowledge and mentoring people, or they’re producing scholarship that is worthwhile. Master’s students I feel like could fall in either category and maybe are viewed mostly as consumers, yet as you were just saying, especially if they’re going onto the PhD level and producing scholarship of their own, even at the master’s level, maybe they should be viewed more as like producers.

31:40 Emily: But anyway, all of this is so, so complicated. And I’m really glad that you brought up like the unionization movement and how that’s affecting this conversation, as well as the competition thing. Of course. I was just thinking that, if we are going to view PhD students as producers of work, it makes a lot of sense to pay people enough that they don’t have to feel stress. Because if what the university wants is a product out of a graduate student, whether it’s a class or whether it’s a paper or whatever, it makes sense to give them an environment where they can produce a good product. And paying them enough that they don’t have to side hustle and they don’t have to take out debt and they don’t have to feel stressed, and it’s not a cloud looming over them all the time. It makes sense to me in terms of producing the best product out of those people as possible. I don’t know what your thoughts are on that.

Quality Work Requires Quality Pay

32:30 Chad: No, I absolutely agree with it. And I think it’s interesting because for me when I first got involved with the unionization effort here at Georgetown–it’s really funny if like, someone had tried to talk to me and get me involved by talking about how low my pay was, that wouldn’t have worked. It would have just been like, “Well no I make enough. It’s not a lot, but I make enough to just get by, and I have a little extra if I want to go out to eat with friends, I can do it.” For me the issue was sort of more transparency about things like job listings and responsibilities. But kind of over the last two to three years, as I have gotten closer and closer to the sort of end, it’s now much more about sort of money and like the awareness that, like what you were talking about earlier, a stipend that just allows earning a living in a livable wage that kind of also gives people a cushion. I’ve been lucky. I haven’t had any sort of serious medical problems or family issues that would’ve required like a massive outlay at one time. But there are a lot of people that don’t have that privilege. So, that’s for me like the big part of the unionization effort. Now it’s just like, we want people to do good, so we should create conditions where they can do good. Like, can do the thing that they signed up to do, whether that’s research, whether that’s teaching.

34:04 Emily: Yeah, absolutely. Thank you so much for that part of the discussion. I think we’ll just conclude the interview here by asking you what is your best financial advice for one of your peers? Maybe someone who’s anticipating the end of the PhD coming up fast.

Best Financial Advice for Your Peers

34:21 Chad: I think probably my best advice would maybe be more geared towards people earlier on, which is recognize that you’re going to change. When I started, I was 25 years old. $22,000 sounded like a lot of money. And like I said earlier, I felt like I kind of had made it. Recognizing that by about now I’m 31. I’ve had friends getting married and needs change. And seven years is a long time to be in one place. So, be aware of that, and when you’re starting out, make a plan kind of on that basis. You’ll hear some of the faculty here talk about, “You need to have like a 10-year plan for academic stuff.” Like when you’re going to publish and do all this sort of stuff. But I think also just the idea of having some sort of longterm financial plan, especially when you’re a graduate student and you’re dealing with pretty thin margins already.

Consider Long-Term Financial Goals and Changing Needs

35:17 Emily: Yeah. I totally agree and want to just underline what you said. To someone who’s in their early twenties or mid-twenties or something, that first stipend offer can seem great. Totally adequate. Fine. You’re looking at your rent, whatever it’s going to be fine. And then you get a few years down the line and your life changes and your career goals change and your responsibilities increase, often. I had another interview in season three with Scott Kennedy and he talked about getting married and having children during graduate school, which is not something that he had in his plan when he accepted that first offer letter. But it was, you know, over the years that he spent in graduate schools, something that came into his life. And so an amount of money that can seem workable at a younger age doesn’t necessarily seem so workable later. Not just because of the individual and your own life changes that you incur, but also as we were just talking about, because stipends don’t keep up generally with the cost of living and inflation, especially in these higher cost of living cities.

36:12 Emily: So, it could be that you’re actually falling behind in terms of an indexed amount of money as well as you yourself are getting older and having all these changes occur in your own life. So, it’s just an argument for prospective graduate students to be not accepting of something that seems “okay,” but really looking, as we were just saying, for competitive offers that will offer you well above the living wage for whatever area you’re moving to. Another thing which we didn’t discuss in detail, but tuition and fees–the responsibility that falls upon the graduate student for paying those–that can sometimes change. And universities who are facing funding shortfalls can change the package that you receive. So, hey, maybe your stipend doesn’t decrease or maybe your stipend goes up, as you were saying. Maybe it’s $1,000 a year, but maybe your fees are also going up by hundreds of dollars per year. That could easily be the case too.

37:04 Emily: And once you start in a program, you start feeling stuck and you’re invested, and there are sunk costs and so forth. And so, it’s just something to think about at the beginning to have more margin than you anticipate that you’re actually going to need because over five years, over seven years, whatever it is, a lot can change. So, Chad, thank you so much for this interview. It was really a pleasure to have you. Thank you for sharing so openly about your situation.

37:26 Chad: Yeah, thanks for having me. It was great talking with you.

Outtro

37:29 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the personal finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing, debt repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is “Stages of Awakening” by Podington Bear from the free music archive, and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This Part-Time PhD Student Needs Her Full-Time Income for Her Financial Goals

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In this episode, Emily interviews Patrice French, a PhD student in adult education at Texas A&M. Patrice has a full-time position at her university and is pursuing her PhD part-time. She is paying for her degree through her employee benefits and a small grant she won after searching and applying for over 50 external scholarships and grants. Emily and Patrice discuss her path to the PhD, her decision to maintain her full-time job while in her program, and what she expects the PhD to do for her career going forward. Along the way, they touch on Public Service Loan Forgiveness, repaying consumer debt, side income, investing for retirement, and the positive steps Patrice has taken with her finances over the past few months.

Links Mentioned in This Episode

part time PhD in TX

Teaser

00:00 Patrice: The reality at the PhD level is that there’s not a lot of funding for part time students and that’s just something that I had to contend with. I’ve scoured the internet, I’ve looked throughout all of our university. I looked at regional associations tied to my degree and it’s just not a lot out there for part time students, so being prepared to really fit the cost of your education is something that you have to think seriously about because there’s not going to be a lot of financial support for you as a part time student.

Introduction

00:35 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season four episode fifteen and today my guest is Patrice French, a PhD student in adult education at Texas A&M. Patrice has a full time position at her university and is pursuing her PhD part time. She’s paying for her degree through her employee benefits and a small grant she won after searching and applying for over 50 external scholarships and grants. Patrice and I discussed her path to the PhD, her decision to maintain her full time job while in her program, and what she expects the PhD to do for her career going forward. Along the way, we touch on public service loan forgiveness, repaying consumer debt, side income, investing for retirement, and the positive steps Patrice has taken with our finances over the past few months. I’m very excited to share her perspective here on the podcast. Without further ado, here’s my interview with Patrice French.

01:39 Emily: I have joining me on the podcast today, Patrice French and she will be telling us about her journey to the PhD as a part time student and a full time worker. So Patrice, thank you so much for joining me today.

01:52 Patrice: Thank you for having me Emily.

Will You Please Introduce Yourself Further?

01:54 Emily: Please tell us about yourself — where you’re in school, who your employer is, where you live, all those kinds of.

02:01 Patrice: Sure. Well, I am currently at Texas A&M University. I’ve been here a little over three years and this is also where I am pursuing my PhD. I am finished with my second year in my program, which is educational human resource development with an emphasis in adult education, but I like to call it adult education for short because the degree name is a little bit long and people often don’t know what that means. Texas A&M, the main campus is located in College Station, Texas, which is approximately a hundred miles northwest of Houston, Texas. So we’re not too far aside from some major cities in Texas.

02:44 Emily: Yeah, that sounds great. I actually have a little bit of a personal connection, I guess, to your field because my mother-in-law made her career in adult education and ultimately rose to the level of principal of an adult school. So yeah that’s what she’s been up to. Tell us your backstory, maybe from high school or college and what you were studying and what brought you to your current point.

From Social Work to Adult Education

03:12 Patrice: Sure. I have a background in social work actually. I have my bachelor’s and master’s in social work. I went to Texas Christian University in Fort Worth, Texas for my undergrad and I got my master’s degree at the University of Michigan, also in social work. So for a little bit of time I was licensed to practice social work in the state of Texas, but while I was pursuing my master’s degree, I learned that my focus on social work was pretty much in the minority because I was more focused on policy analysis, whereas most of my colleagues really wante to work inter-personally with families, children, things like that. I made a strategic decision to build my skill in a way that would support the efforts of social work, but at a macro level. While I was at my master’s program, I was a research intern at a social justice education program and my experience there basically just led me to an opportunity in higher ed doing social justice and multicultural education and basically led to my switch from social work to higher ed, which is where I’ve been for the past 10 years.

04:23 Patrice: My first job outside of my master’s degree, I would definitely say parallels different areas of social work, but I’ve transitioned in some ways to being more entrenched in higher ed where I wouldn’t consider my work to be social work. I did diversity and multicultural education work for four years and I was in St. Louis. I moved from University of Michigan to St. Louis in Missouri. I did that work for four years and then I transitioned to doing academic student success and retention work, where I oversaw unit that was tasked with supporting students who are transitioning to make sure they have their tools and things to be successful for retention, et cetera.

05:11 Patrice: I moved back to Texas about three years ago and some of that was precipitated by a major health event with my father. I was searching at the time, but by happenstance I happened to apply right around the time my father became ill. While I was in Houston, which is where I’m from, being with him, I basically got a really quick offer from Texas A&M. and I said, “well, I guess it’s meant to be that I’m back in Texas.” And a couple months later, I was back and that was in 2016 and I’ve been back since.

05:45 Patrice: As far as my trajectory to pursuing a PhD, I had been thinking about that really since I was in my master’s program and thought that I would work for three years and go back to school and become a social work researcher. But since I’ve kind of floated around outside of social work for so long, I didn’t think that was a good fit anymore, but I really was still interested and ended up exploring different programs either in psych or communication or an education for probably two or three years. I decided to take a break from looking at it because I thought it’d be more advantageous to work. I was not willing to sacrifice my income, and with my father’s health, I just put that on the back burner so I can be closer to him and my family to make sure that they had what they need. I was back at A&M and learned that they had an adult education program in my university and I actually work in the college that also hosts my program. I did some research and just decided to apply and got in. So a year into me working at A&M, I started my doctoral program and I started part time and have been pursuing the program part-time since 2017. It’s been a bit of a journey. I will say that I don’t know if I would recommend working full time and being in a doctoral program part-time or even, I know some colleagues that do it both full time. For me, I don’t really have any major life commitments to where I can’t balance it. I have a dog, but I am child-free, I don’t have a partner. Outside of going to visit my family, which is about an hour or 40 minutes drive away from me, which I usually go twice a month, I don’t have those huge commitments to where that it would make it harder to balance outside of just the commitment of supporting myself and making sure I’m doing what I’m meaning to do with my main employment position. And then just figuring out life and making sure I take care of myself, health wise and things like that. It’s been a lot.

Deciding on a Part-Time PhD

08:11 Emily: I can definitely see how you got to the PhD though. It’s clear from the point when you were in your master’s that the more academic kind of work and training was going to be a good fit at some point and you got there in a slightly different field than you were expecting. That’s great. I think you mentioned a little bit earlier that you didn’t want to sacrifice your income, but was that the main reason to do what you’re doing this way, with full time work and part-time PhD, rather than doing the PhD full time or are those programs not like well-funded or how did you come to that decision?

08:48 Patrice: I believe the year I started at A&M as an employee, they just started a new benefit where staff employees who could pursue a degree and get some tuition assistance. You had to work at the university for a minimum of one year to be eligible for that. The way that it was marketed at the time, I thought it was only $2,000 maximum for your pursuit of your degree or maybe between $2000 and $5,000 just for one year. So I was under the impression that I would be funding most of it myself and my program funds traditional full time students that are able to serve in TA, GA, or RA positions. Funding was not an option for me through my program nor was it at the larger university level because most of the graduate funding and fellowships were full time students. Or all of them actually. I haven’t seen any part time student funding fellowships at the university level. Financially, it would not have worked for me to go back to school full time because I think our average GA/TA salary is about $1,900 a month and most of them fund just traditional fall and spring hours, and the summer. My amount of bills and needing to be available if it was necessary to support my family. It just really wasn’t an option for me and I just didn’t want to sacrifice getting to a place where I was sort of comfortable. I didn’t want to struggle like I had been in graduate and undergrad and so I just decided not to do that.

10:31 Patrice: Up until the time when I got admitted, I was searching furiously for funding opportunities and I think I applied for over 50 external scholarships. I have a very detailed spreadsheet that tracks all of that and I didn’t get anything. I was applying to $500 scholarships from law offices or foundation repairs. It was just everything that didn’t have a stipulation for what a student should be, I applied for, and nothing. Right into the start of my program, I talked to our benefits people at the university and that’s when I learned that the benefit actually is as long as I’m employed at the university full time, I will get up to $5,000 a year in tuition assistance, which breaks down to $2000 for the fall, $2000 for the spring and $1000 for the summer. That, in combination with some fee waivers, which I think equate to about $300 a semester, really covers about 80% of my overall tuition fee costs. That ended up being way more affordable for me to have to come up with maybe $400 or $500 a semester in comparison to $2,600. In my college, our tuition and fees, excluding some of the fees that I don’t have to play as an employee , the tuition is about $2,547 per semester if I’m taking six credit hours. It sounds really inexpensive in comparison to some other institutions and I’m in state as well, so that makes a big difference, but still it wouldn’t be affordable on my salary to pay out of pocket without pursuing any external aid or scholarships or loans.

12:25 Patrice: I made a very intentional decision not to pursue any more student loans because I have them now and they are continuing to accrue interest and things of that nature, based on the payment plans I’m under because I am pursuing the public service loan forgiveness and have been under the income based repayment plan for four years. Now I’m on the pay as you earn, but my balance has increased and although I’m in school, I have chosen to waive my deferment so I can continue to make payment towards my loan so I can increase my qualifications sooner than later. I just didn’t want to occur any more debt and so I decided either I’m paying for this out of pocket as much as I can, so that might mean that it takes me 10 years to finish my degree, or I’m going to try to find some aid. Gratefully, I have been able to cover all of my costs for my program. I also found a small grant that I have to apply for annually, but I’ve gotten each year, that is for $1,500 for the fall and the spring.

13:36 Patrice: My net costs for my degree program has been negative for me out of pocket, meaning that in many cases between the grant and my tuition assistance, I actually get a little bit of a refund that I’m able to put towards books and supplies, software and other general living expenses. It’s actually worked out very well and I’m very grateful that I’m able to pursue my degree pretty aggressively. I think two courses per semester is a lot to be doing while working full time. And I do one in the summer. So far it’s been a very affordable degree. And even with that, I have a very detailed spreadsheet to the penny where I’m able to project how much my total degree is going to cost with fees, tuition, even diploma fee, the dissertation fee, even the regalia, I already haven’t an estimated a cost of total attendance. I’m being very diligent towards those costs, even though they have primarily been covered by my institution.

14:43 Emily: This is a very thorough explanation. Clearly you are on top of all of these different areas, in terms of the, and I’m, I’m glad that you mentioned pursuing all of those like scholarship applications that you did. I mean, only one grant has come of it, which is good, it’s what you needed, but not more than that because it was such a limited pool for part-time options. But it definitely sounds like you’ve been funded to the degree that you need to be and you just have to keep working your full time job and time to do the graduate work on the side. It’s different to work a full time job than to be like a TA, because a TA, tt’s only a 20 hour week per hour per week commitment and you have a presumably 40 hour per week commitment, but also as a professional, you’ve been doing this for a while, you’re very efficient. I can see how this would work out like pretty well, definitely financially, and also how you can manage your time. Before we move on from this, what does the future look like for you? What are your career goals with the PhD?

Post PhD Career Goals

15:56 Patrice: I always wanted to get a PhD for the credentials and that is still my primary goal. When I was admitted to my program, since Texas A&M is such a huge research institution, I wanted to open myself up to opportunities that would expose me to the academy, to what a tenure track faculty position could be for me. Is this something that I can see myself doing? So I’ve been building my experiences to both pursue the degree itself and also build my CV to give me opportunities, through publications, research experience. I’m still on the fence about whether or not I’m interested in an academic career and I’m leaning towards that not being for me and I do feel like I have a lot of skill and I’ve gotten some really positive feedback from my professors and peers in the field at conferences I’ve attended, but I don’t know if it’s for me in terms of the work with the writing and a lot has changed in the academy with how competitive it is. And quite honestly, based on my research, I would likely be taking a pay cut and would essentially be transitioning to a new career track that would take me maybe five to seven years to recoup the my salary that I had built thus far. And I don’t know if I’m willing to sacrifice that. I don’t really foresee myself getting a partner anytime soon, that may contribute to making a change in that decision. Aafter this, I do foresee myself staying in higher education. My current role right now is that I’m in an academic administrative position overseeing a program assessment that’s tied to some accreditation needs. It’s very much an administrative role, but there are lots of opportunities in higher ed that with the PhD specifically will open up opportunities. So I’m not too worried about where I’m going to land. I’m just gonna hold on for dear life for right now so I can finish my degree and then make some decisions about that. I’m crossing my fingers, I should be finished by the end of 2021 with everything. I have a year and a half left of coursework, so I should be done fall 2020, and my goal is to devote 2021 to writing. By 2022 I should be at a place to evaluate where I am and make some decisions, things like that. I don’t know, we’ll see.

18:30 Emily: You anticipated my next question because you had offhandedly said earlier, “Oh, might take me 10 years to finish,” but that definitely does not sound like the plan that you see yourself on, so that’s really, really good to hear.

Commercial

18:45 Emily: Emily here for a brief interlude. As a listener of this podcast, every week you hear strategies that another PhD has used to improve their financial picture. But listening and learning does not automatically translate into action in your own financial life. If you are ready to change how you think about and handle your money, but need some help getting started, I can be of service. There are two main ways you can work with me to create and implement a financial plan tailored for you. First, I offer one-on-one financial coaching, either as a single session or a series, as you make changes over the long term. You can find out more at PFforPhDs.com/coaching. Second, I offer a group program called The Wealthy PhD that is part coaching, part course, and part community. You can find out more and join the wait list for the next time I open the program at PFforPhDs.com/wealthyPhD. I believe it’s possible to succeed with your finances at every stage of PhD training and throughout your career. Let’s figure out together how to make that happen for you. Now, back to the interview.

Side Hustling for Extra Income

19:59 Emily: So in terms of funding your PhD, we’ve talked about you have your salary. Thankfully you haven’t, it sounds like, had to use your salary directly to fund the PhD. You have your tuition assistance from your employer. You have this grant that you won. But you told me that you also side hustle, so can you tell me about that?

20:16 Patrice: Yes, I am trying to find multiple ways to supplement my income even though I feel like I’m pretty stable. I did buy a home a couple of years ago and so there’s some costs that I’m looking to cover in terms of maintenance and repairs that are eating away at my salary more than I anticipated and I’m trying to recoup my savings. I have done a number of things. I have done freelancing editing work. I am renting out a room in my house with a colleague and friend of mine. I have done a lot of freelancing stuff as well, mostly editing. And something that’s more towards my student loans, I am partnered with an organization that basically connects nonprofit organizations with freelancers that have a level of skill that the organization needs and upon successful completion of a project, that organization will pay my student loans directly in the form of a stipend. And so I’ve done a couple projects. I haven’t done that many because I’m super busy, but that is another way that I’ve tried to indirectly try to pay down some of my debt with my loans even though I still plan on pursuing public service loan forgiveness, but I don’t know if I will continue to pursue that because it’s counted as income. So I did get a miscellaneous 1099 and it’s taxed, so I don’t know how advantageous it is for me to not see those costs directly, and how it affects my taxes. That’s pretty much what I’ve done. I don’t have a lot of time to do a lot of freelance stuff. Before I started, before I moved here, I did Ubering for a while, which was more lucrative for the drivers than it is now, hearing what I’ve heard, because I do still have some peers that drive for it. But I’m pretty busy so I don’t have a lot of times to do work that takes a lot of time, so any way that I can make free money, that’s where I’m kind of looking at now. The rental income is an easy way to do that and it works out both for myself and my friend because she gets to save money because she’s also in a doctoral program and is really looking to save on costs from renting her own apartment. And I’m able to get a little bit extra income that can go to other things.

22:45 Emily: Yeah, I was going to say the rental income sounds like the perfect solution in your situation because a full time job plus being a PhD student plus trying to side hustle where the side hustling involves trading your time for money, that is a lot on your plate and as you said, you’re visiting your family and so forth. The rental income is really just leveraging another asset you have, not your time, but your home, in a new way. That sounds like a really a really good fit. I’ve published an episode on the podcast before about a homeowner who rents out, who at the time was renting out rooms to his friends and how it was really just, while interpersonally challenging in a couple of ways, really overall very beneficial, mutually. So a good situation when you are able to rent to someone that you know and like and want to be around and trust to pay the rent on time and so forth.

Student Loan Repayment as a Part-Time PhD Student

23:38 Emily: You’ve mentioned your student loans a couple of times and your pursuit of PSLF. I meant to say earlier, it actually makes a lot of sense to me if you are into PSLF to not, I guess go to graduate school full time because I think that would have stopped the clock on that, I’m assuming.

23:56 Patrice: Yes. As long as I’m have my employment verified for full time employment, it would not. It still defers my loans automatically, but there is a one-time option to submit for a waiver of the deferment. You have to either stick with it or you don’t, they’re not going to give you the option to go back and forth, so I made that decision before I started, so I never had a lapse in my qualifying payments for that reason. I’m just sticking very diligently to and really connecting with the loan servicer in regards to where I am and I’m making my minimum payments and just chugging away.

24:37 Emily: And I think you may have mentioned earlier, are the student loans totally from your master’s degree or also from undergrad?

24:44 Patrice: They’re a combination. My undergrad degree was, my first two years were fully funded by scholarships and due to some transition and changes, a part of that was there was an increase in tuition of about up to 7% per year. And TCU is a private institution, so that 5-7% on $19,000, it makes a difference. My last two years of my undergrad, I think I took a total out of, I think, $14,000 and my master’s degree, I took out $24,000 and my master’s funding was only to cover my living expenses because I had a scholarship that covered all of my tuition and fees. While I tried to find employment while I was at Michigan, it was getting really tricky, so I just decided to take out the loans. I was only there for a 13 month program anyway, so I figured, let me just focus on my education and get out and just deal with the loans later. Total for both my degrees it’s about $36,000, but my balance is about $37,500 now eight and a half years later due to the accrual of interest and capitalization since I’ve been on the income based repayment plan instead of the standard option. So it’s just sitting there.

26:01 Emily: I’ve also done other other episodes where we discuss PSLF, very common in our community to be either pursuing it or considering it. What do you think about that decision now, eight and a half years in? Was PSLF the right route for you?

26:17 Patrice: I think it is. My salary when I was right out of my master’s degree was about $30,000 a year and it was in a state that took out state and local taxes, so my take home was about $1,800 per month. I think my standard payment at the time would’ve been about $400. That is a little bit under a quarter of my salary, and so I was really intentional about thinking about the options. I know I’m likely going to stay in nonprofit higher ed. That really wouldn’t be too much of a challenge to pursuing other employment options in lieu of a public service option. Really the salary and then my employment options were my main decisions behind that. I’m a little bit antsy about it given the challenges that I’ve been hearing about, but I think by the time that I’m qualified for forgiveness, there will have been…One, I think that any changes they make will affect new borrowers and not existing borrowers. Let’s say they take it away. I think that it won’t affect me. I think a lot of the hiccups that have happened with the borrowers that are qualifying now will have been remedied by the time that I qualify, which honestly should be in 2022, but I have some payments that are under review that I’ve not gotten a straight answer on in over a year. So my date is September 2023. So within 2022 or 23, I should have a qualification for forgiveness. I’m trying to stick to my decision. That’s why I’m on the fence whether or not I’m going to ambitiously start paying them down, or if I should just stick to the minimum payments because it really aggravates me to see my balance to staying. Because I’ve also been able to maintain a taxable adjusted salary that is, that keeps my payments pretty low. I have a very good accountant that’s able to, with my freelance income, to reduce my income a lot to where what’s reported helps to keep those payments low, which is a goal of mine since I am still covering a lot of other things. But I don’t know. We’ll see. If it happens that it no longer is advantageous for me, then I will make plans to pay them down because I am on a pretty ambitious consumer debt plan right now to where I should be done with all of my consumer debt, excluding my mortgage and my student loans, by next year. And so that should free up a lot of salary, especially if I continue to get some supplemental income through renting my room or stuff like that. So if it happens that I want to change my mind, I’ll just start ambitiously paying it down and will get rid of it.

29:19 Emily: You sound, overall, pretty optimistic about the program. I share your optimism.

29:25 Patrice: Cautiously, I’m cautiously —

29:27 Emily: Yeah, very good point. And really since you’ve been on the plan for eight years, it makes sense to hold out for that last 20% and just see it through and hope for the best.

Other Financial Goals

29:40 Emily: Tell about your other financial goals. You mentioned other debt repayment.

29:45 Patrice: Yes. So my goals right now are to really get a hold on my consumer debt. I have a little bit of credit card debt. I have a car that I have a year and a few months left back on that. I actually have been listening to a lot of your podcasts and reading the blog and have put together a debt plan where I think I’m using the avalanche method to really just target one area of debt at a time. I’m targeting the highest interest rate and then just tackling it and then going to the next. I have a pretty robust plan that if I stick to it, I should be done with everything by the end of June. I have a couple of credit cards and I have a car payment that I think has about $6,000 left on it. I had a really good interest rate on that. It has 2% interest on my car. Really, it wouldn’t save me that much. I have a loan for doing some home repairs and I would pay off a year early, a little bit under, maybe 10 months early on my current plan. I’m really just focused on getting the consumer debt down.

30:57 Patrice: I also want to build up my savings because partially me buying a house, there were some unanticipated expenses of repair really early on to me purchasing them. Since I had done so much on the down payment, I didn’t have the savings to do the repairs, so that was part of the reason why I have a loan for doing some of their repairs. By paying off all of this debt, it will free up a lot of my income so I can start saving, which is a big goal. I’d really like to have more of a cushion than I have right now. Besides that, some larger goals are to just do a lot better at my mid-term and long-term planning. I usually would just plan month to month and all my bills are really the same, so they’re on auto repayments. Any overspending I’m doing or not planning ahead is my fault, quite honestly, unless there’s an unexpected expense, like if my tire blew out or something. But a part of it is just me just being too social and liking to go out and drink and eat out when I can easily just eat at home. It’s just being more fortuitous on my budget so that I could meet some of these financial goals and I’m being less reliant on overspending and really trying to plan out.

32:19 Patrice: I actually have a spreadsheet that is between now and 2020 that kind of plans out how much I’m expected to spend on all my bills, which really shouldn’t change. And then as those debt balances go down, I anticipate that my salary is going to go up so I can start planning for more savings and planning around travel because that’s a big thing that I don’t do a good job at. If I’m traveling for a conference, which a lot of that is self funded, or I’m just going to visit friends and stuff, I kind of just figure it out, and usually me figuring out is putting on my credit card and paying it off later, which isn’t the best approach. I’ve actually applied for a credit card that has a really good mileage rate. There are no airports that are really close to me where I have a preferred airline and so I’m really focusing on putting my recurring bills on that card to build up points, so that I can use that for more of my travel instead of just relying on just any old card. I’m trying to be a little bit more savvy with things. I definitely think when I get through with my debt, I won’t really have to worry about trickling back to my credit cards since there will be so much more flexibility in my salary or my take home anyway. That’s about it.

33:40 Emily: Yeah. It sounds like you’re tackling now the personal finance side of things with the same kind of diligence and energy that you were in these other earlier areas that we discussed more related to your career. That sounds amazing. There are so many wonderful strategies that you just laid out and so I hope that everyone caught them the first time around. Great stuff that you’re doing right now. How are you doing on long-long-term, like retirement stuff? Does your employer already do a lot of that?

Retirement Savings

34:10 Patrice: Yeah. My previous employer, I worked at and institution in St. Louis, I forget what they matched up to, but after the year I was able to contribute at a matching rate up at least to 5%, but I think I might be wrong.I have a 403b that is sitting, that I haven’t touched, I’m just letting it accrue. And then I have a separate retirement plan since I worked for the state of Texas. They take a little bit longer to get vested in, so they’re contributing an equal amount, which is 7.6%, that I’m contributing each month. But after five years I’ll be fully vested as an employee. Um, so if I ever leave I can just let it stay there, I can come back and it’s a really robust retirement system. I will definitely be here long enough to get vested. Those are my main two things and because of that, I haven’t really pursued any other retirement options such as a Roth IRA or things like that, because I’m well-matched at my institutions and I think it’s the equivalent of a pension retirement with the state of Texas. I don’t think it’s your traditional investment fund. I think it’s fully funded and that my eligibility I think is at 55 years age or the equivalent of I think 20 years of service or something. If I wanted to, if I ended up staying in the state of Texas or at this institution, I would have the option to retire at 55 because I’ve been working here since before I was 30. I think it’s a good option. That’s something I’m paying attention to more readily, but I’ve been contributing to my retirement since I was 22, at a minimum of at least 2.5% of my salary, which was not a lot at the time because I was making $30,000 or $33,000 or whatever. But definitely at a point now I’m maxing out the full contributions and maybe if my salary is freed up once I start paying off my debt and have a more sizable savings and I might take out in a Roth IRA to maximize their savings as well. Or I think I’m also looking into some investments, but that’s kind of a long-term thing. I would feel more comfortable pursuing investments once all of my debt is free, so I’ll have a lot more pocket money to play with, assuming that I’m in the same role I’m in now, making the same salary that I am.

36:41 Emily: Yeah. I can definitely see this as one of the advantages of doing the PhD part-time while working full time is that not only do you have the higher salary, but you have these benefits that graduate students never receive. That’s awesome. And it seems like over the next two, three, four years, a lot of different pieces of your finances are going to get a lot easier, right? That’s going to be paid and PSLF will either come through or you’ll have to focus on paying off in another way. Other consumer debt will be gone. It really seems like…And of course when you finish your PhD and your salary hopefully will change, it’ll really be a pretty nice rosy picture at that time and you’ll be able to pursue the IRA or other types of savings, or whatever lifestyle stuff, whatever you want at that point.

37:29 Patrice: Yes. Yes. That’s my goal. Something I neglected to mention is hat my tuition benefit that the university is actually really smart in this because if you’re pursuing graduate level work, and you get tuition assistance from your employer in excess of $5,250 in a calendar year, anything over that amount would be taxed as income. And my previous institution gave a hundred percent tuition remission, but it was a private institution and tuition was about, I think $25,000 a year. So even if you were pursuing part time, most of my colleagues that were pursuing degrees, they would actually end up owing taxes annually because of that. Then our employer worked out a deal where you can just pay the taxes out of your salary, so it wouldn’t feel like such a big hit. But I don’t have to worry about the tuition assistance being a taxable benefit because it’s right under that mark in a calendar year, which is fantastic.

Financial Advice for Part-Time PhDs

38:32 Emily: Yeah, because I mostly deal with full time students, it’s something that I’m like, “Oh yeah, I remember those numbers, I remember being aware of that,” but it’s not something I’m intimately familiar with, so I’m glad you can tell us about that on the podcast. As we wrap up here, what is your best financial advice for another PhD student? Perhaps a part time student.

38:54 Patrice: I would definitely say, look and find as many resources as you can to fund your education. Depending on your program, there may be funding through grants. For example, I’m on a research project right now, that I’m not being funded on, but they got a little bit of money to fund graduate students for extra work. I know that it may be something to consider between the time you’re already spending working, but there is funding out there within your programs, through a lot of the research that’s being done. It’s really just being proactive to ask for it and also don’t feel like you have to rush to graduate and get it done. That’s something that I had to reconcile with, and I had to keep asking myself, why am I really pushing to get this done by this date? And there’s no real answer to that. So if you are reasonable with your time, that is something to make it really affordable, in terms of whether or not you’re going to pursue self funding or program funding or even things like loans and stuff like that. I have a colleague of mine that she and her husband actually bought an RV and we are a huge tailgating community at Texas A&M and she actually rents out her RV during our football season and that is partially how she’s able to fund her cost of her program. And so I’ve heard of some really creative things in addition to just the taking out loans or paying out of pocket that have helped support them.

Patrice: Unfortunately the reality at the PhD level is that there’s not a lot of funding for part time students and that’s just something that I had to contend with. In doing my exhaustive internet search, I was on some premium scholarship websites where you pay a fee to look in databases. I’ve scoured the internet, I’ve looked throughout all of our university. I looked at regional associations tied to my degree and it’s just not a lot out there for part time students. So being prepared to really fit the cost of your education is something that you have to think seriously about because there’s not going to be a lot of financial support for you as a part time student, even if your program gives a lot of flexibility in the pursuit of your degree, which my program does by offering a number of courses online and then in the evening. So it doesn’t really conflict with my nine to five, eight to five work schedule, but it just is hard. There’s just no way around it , there really isn’t. Maybe for some people that are in a partner relationship that it’s more feasible for them. Thankfully through my benefits I am able to not really worry about my cost, but if I wasn’t, I definitely would be taking a lot more time to pursue my degree because I am very much committed to not incurring any more student loan debt.

41:45 Emily: Yeah, I think the listeners can pretty well trust what you’re saying, when you say I have scoured the internet because you’re obviously very thorough in your work and so it’s disappointing to hear that, but better to be realistic about the situation than to go into it hoping that you’re going to win something that’s just not available to you. Thank you so much for joining me on the podcast. I am so glad to have your perspective here.

42:08 Patrice: Thank you so much Emily. I’m glad I’m able to share.

Outtro

42:12 Emily: Listeners, thank you for joining me for this episode. PFforPphDs.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars covered the personal finance topics PhDs are most interested in, like investing, debt repayment, and taxes. Four, subscribe to my mailing list at PFforPhDs.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Poddington Bear from the Free Music Achive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

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

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

Links Mentioned in the Episode

grad student union experience

Teaser

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

Introduction

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

Will You Please Introduce Yourself Further?

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

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

Finances while at a Non-Unionized University

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

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

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

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

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

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

04:38 Emily: How about dental and vision?

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

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

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

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

05:51 Carly: No. Pretty tough.

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

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

Finances while at a Unionized University

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

06:05 Carly: Right.

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

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

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

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

What about Travel Funding and TA-ships?

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

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

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

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

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

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

Paid Leave and Other Union Benefits at UMass Amherst

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

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

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

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

Departmental Differences in Pay Rates and Raises

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

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

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

Additional Experiences with the Union

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

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

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

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

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

16:23 Carly: That’s right.

Commercial

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

History of the UMass Amherst Union

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

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

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

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

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

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

How About Changes in Fees?

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

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

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

Any Downsides or Tradeoffs with the Union?

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

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

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

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

Other Union Groups on Campus

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

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

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

26:56 Carly: Right.

Anything Else About Your Union Experience?

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

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

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

Grad Students: When are you Working versus Studying?

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

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

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

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

31:31 Carly: Yep, absolutely.

Financial Advice for Early-Career PhDs

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

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

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

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

Outtro

32:49 Emily: Well, listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing, debt repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

Negotiating PhD Funding Offers: This Grad Student Did It Successfully

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In this episode, Emily interviews John Vsetecka, a second-year PhD student in History at Michigan State University. When John was a prospective PhD student, he attempted to negotiate the stipend and benefits of the three admissions offers he was seriously considering. John shares exactly how he initiated the negotiation process and the outcomes at each of the universities. His negotiation method is well-researched and well-considered and is applicable to many if not most other prospective graduate students. John and Emily also discuss how prospective PhD students should combat imposter syndrome during the admissions process.

Links mentioned in episode

negotiating PhD offer

0:00 Introduction

1:05 Please Introduce Yourself

John Vsetecka is a second-year PhD student in the Department of History at Michigan State University. He studies modern Ukrainian history, with a focus on the 1932-1933 famine. Before beginning his PhD program, he worked as a GEAR UP advisor. This is a federal grant agency that works with low income students, called Gaining Early Awareness and Readiness for Undergraduate Programs. He worked in Colorado to help middle school and high school, low income students prepare for college. Before this job, he got a Master of Arts in History in 2014 at the University of Northern Colorado.

2:55 What PhD offers and interview requests did you receive from universities?

When John applied to PhD programs, he applied to eight schools and faced some rejections. He considered four offers, then narrowed his list to three. The first offer he eliminated would have required that he start with MA and work into PhD. Since he already had an MA, he felt he was ready to move on. He seriously considered three offers. He accepted the offer from Michigan State University, where he is now. He visited “University 2” in person for an interview. He had a virtual interview with “University 3.”

4:21 What did you think about the offers from these three universities?

John wasn’t sure what a fair offer was for a PhD position in History. Generally, PhD students are shy about sharing their financial experiences. So he did research and his mentor from the University of Northern Colorado guided him in this process. He talked to other PhD students, who would say they had enough to live on or that they were struggling. He used the websites GradCafe and PhD Stipends. He got a sense of what people were being paid, including their health insurance and fees. From all of this information, he decided two offers were fair and worth considering.

Emily shares an important piece of advice for prospective PhD students is to do your research. Anonymous databases, like PhD Stipends, provide more transparency around these offers. But you should talk to current graduate students, because it’s one thing to look at the numbers, and another thing to get a feel for how it is to live on that amount.

Further Reading: How to Read Your PhD Program Offer Letter

7:54 How did you initiate the negotiation process for your PhD stipend offers?

John negotiated his stipend offers during his interviews. He went to visit two universities in person for interviews, and had a virtual interview a University 3. His first interview was at University 2. During the visit, they have an itinerary and fully scheduled day. The experience is like a whirlwind. He prepared a set of questions for faculty members and set of questions for Graduate Director. With the Graduate Director, he talked about the PhD program as a whole to get their insight. Then he directly asked the Graduate Director if there is any other money available, such as other fellowships, and explained that he has other offers with higher financial value. The Graduate Director is the one that can control the money. The faculty can only put in good word on a student’s behalf. So as a prospective PhD student, you should know who you can talk to and know who you can negotiate with. You don’t need to be afraid to ask tough questions about financial aid.

The PhD program interview was a good time to negotiate PhD stipend offers. John waited until he received all offers to see where he stood across the field, and this gave him some leverage. Negotiating like this is is what people do with any other job. John told the Graduate Director that he had other offers, but he didn’t show them the letters themselves. Negotiating before receiving all other offers and before the interview can seem desperate. But if he negotiated after the visit, it might seem like that offer wasn’t his first choice and he was only negotiating after losing another offer. John also believes that talking in person is the best type of communication. Negotiating in person puts them on the spot.

During his interview visit for University 2, John asked the Graduate Director about the potential for a better financial package. The Graduate Director told John that they would get back to him a couple hours. Later that day, John received an email with a offer for a fellowship package. This showed John that they were willing to work on his behalf. He was surprised by this because he had expected them to negotiate and push back. During the interview visit, the department is most focused on recruitment, so they quickly considered his request and acted on it.

John went into the meeting with a set plan for negotiation. He had a notebook and visibly took notes during the conversation, which indicates that he took the negotiation seriously. Treating graduate school interviews like a professional scenario sets you up for success.

14:35 What new offer did you receive after negotiating?

Because he negotiated with the Graduate Director, John received an offer of a university fellowship instead of a teaching assistantship. The new offer was university-based funding, not department-based funding like his original offer. The university fellowship had different teaching requirements than the department teaching assistantship. It was more money in total, as well as better health care coverage. This showed what kind of control the department and university has over financial awards for PhD students. Even if the university can’t raise stipends, they can cover more fees or provide better benefits.

16:22 What outcomes did you get from negotiating with the other two universities?

John learned that not everyone would negotiate. At Michigan State, he had a generous offer that he was already happy with. Even so, he asked the Director of Graduate Studies at Michigan State about his financial award. The director kindly told him that his original financial award was what the department was willing to offer. John later learned that his department offers different financial packages based on a tiered system, and he was happy with the offer he received.

At University 3, John had a virtual meeting with the department. John brought up that he had offers with much more value than what they had offered him. John says that honestly, he was displeased with University 3’s financial offer. He learned that due to financial constraints at University 3, the department couldn’t offer more money. The department suggested term-to-term options. John didn’t want to be on his toes every semester wondering if he’d get paid. Though University 3 offered paid tuition, the money offered for teaching/research was not enough to even consider.

It’s important for prospective PhD students to recognize that some offers only tell you about the first year, while others present a five-year plan for funding.

19:35 Based on what you experienced, what would you do to negotiate differently?

John says he wouldn’t change much. While he knew negotiation was possible, he personally didn’t know anyone in his cohort group that negotiated their stipend offer. John heard from his advisors and mentors that it’s ok to ask, but you have to know to ask. John says this is one of those hidden things in academia. If prospective graduate students receive multiple offers, this is a chance to use offers against each other.
even if you get one offer, be happy, but if you get more offers you can use them

Emily brings up that often, applicants don’t feel a lot of confidence. They often think, “Who am I to be receiving these offers?” This imposter syndrome deters prospective PhD students from negotiating their stipends and ensuring that they receive the best offer.

22:27 How did you know negotiating your PhD offer would be possible and welcome?

John’s MA program advisor told him how to negotiate PhD stipend offers. First, you have to apply to multiple universities and know their programs well. Second, you need to know who you want to work with. Third, you need to talk with current graduate students. This is the most important advice. If you find their email on department websites, you can email them directly. Fourth, online communities like GradCafe help you connect with people who can help you.

John says that graduate school applicants should treat a PhD position like any other job. John says this profession should not be excluded from the process of negotiation. John’s experience at GEAR UP, where he helped low income students fight for undergraduate school money, showed him that there is a lot of money out there. He says it’s unfortunate so many undergraduates go into a lot of debt, when there are all types of money out there for different skills and talents. John wonders why graduate students can’t have that money too? There are different organizations, based in different fields, but money is out there. He suggests prospective students apply to everything they’re qualified for, but they also ask universities and departments what they can give.

Emily adds that prospective PhD students need to consider cost of living. If you have school A versus school B with higher stipend and in lower cost of living, you can ask the school A’s department what they can do to make the offer comparable.

26:44 Has your negotiation had any lasting impact on your graduate career?

John says the negotiation process doesn’t stop when you receive your final offer. Negotiation is a longer standing issue to think about in the future. At Michigan State, John and his peers negotiate for conference money, travel money, research money for the summer. Some graduate students can’t find money beyond teaching assistantships. Because he considered these benefits in his financial offer, he accepted a position that allows him the time and money to not worry. He has summer funding and he can teach online. For instance, he taught a seven week class online while being in Ukraine for research. He chose a school with an institutional investment. The department is doing well and it is investing in its students. He saw that the department was willing to invest continually in their students. He thinks the investment will continue after he graduates.

29:33 Final Comments

John says prospective graduate students should feel free to reach out to him. He likes to help in any way he can. When you get your offers, the first thing you should do is celebrate, and get a round of applause. After celebrating, look over your financial offer, and look beyond stipend to health insurance and benefits. If you get multiple offers, compare them. Be confident about your acceptance into a program and don’t be afraid to negotiate. Know that you have power in these situations. Even though graduate students often don’t have much power, this is the situation where you do. You have all the power and you should use it while you can.John treated PhD offers like job offers because it’s also a job, in literal and figurative sense.

31:27 Conclusion

Investing Strategies to Grow Your Wealth During Your PhD Training

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The most important investment you make during graduate school or your postdoc is in your career. But alongside that primary objective, many PhDs also invest money during their training. By far the top challenge or impediment to investing during graduate school or a postdoc is the low pay, and only a fraction of trainees are financially able and ready to invest. However, investing even a small amount of money on a regular basis throughout graduate school and a postdoc can have an enormous impact on lifetime wealth. The even better news is that the process of investing itself is simpler and easier than you probably think.

investing strategies phd training

 

Many investors, both novice and experienced, fall into the trap of thinking that to maximize their investment outcomes, they should focus on choosing the best investments. In fact, there is no reliable way to pick winning investments. There are only three aspects of your investments that affect your investment outcome that you can control: your savings rate, your investment asset allocation, and the cost of your investments.

This article outlines how to grow your wealth during graduate school by optimizing those three factors and implementing a few other key strategies.

A version of this post was originally published on GradHacker.

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Choose Passive Investments

Empirical studies have borne out time after time that passive investing is a more successful strategy than active investing after costs are factored in. Basically, what that means is that buying a set of investments that is representative of a market sector overall (e.g., the entire stock market) is more successful in the long term than trying to pick winners from that same sector. In trying to beat the market, both professional investors and individual investors consistently fail to even match it.

Passive investing is a far simpler strategy than active investing and much less time-consuming to initiate and maintain because there are plenty of high-quality passive investment products available. To enact a passive investing strategy, buy an index fund or an indexed exchange traded fund (ETF). For example, there are index funds and ETFs that reflect the entire stock market or the S&P 500, among numerous others.

The great bonus here is that passive investing is far more time-efficient than active investing. You don’t have to research individual investments to death; just buy them all!

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Maximize Your Savings Rate

Instead of putting your time and energy into agonizing over your investment choices and trying to optimize them, direct it toward increasing your savings rate into your investments. You can free up more cash flow for your investments by decreasing your expenses or increasing your income.

As simple as that sounds, every grad student knows that both time and money are very tight during this phase of life. If you pursue increasing your income or decreasing your expenses, you must be very selective about how you do so. The following posts discuss both of these strategies in much more detail.

Decreasing your expenses:

Increasing your income:

Increase Your Income

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Pick an Asset Allocation and Stick with It

Your asset allocation is the percentage of your investment that is in each asset class or sub-asset class. The three main asset classes are stocks, bonds, and cash. Your asset allocation should be chosen with respect to your investing goal. For a very long-term goal, such as retirement for someone in her 20s or 30s, a very aggressive asset allocation is appropriate, such as 80-100% stocks. If you are a DIY investor, your brokerage firm can help guide you to an appropriate asset allocation.

Your asset allocation should change as the timeline on your goal grows shorter, but not quickly or dramatically. A common pitfall that investors fall into is trying to time the market by changing their asset allocation, i.e., they pull money from stocks into bonds or cash when they anticipate a stock market drop and then try to find the right time to push it back in. While the theory of selling high and buying low is fine, it’s almost impossible to successfully time the market consistently, even for professionals. Instead, maintain your appropriate asset allocation and ride the market down and up.

Minimize Investing Costs

All investments have costs associated with owning and transacting them. You can think of those costs as directly coming out of your investment returns. Over the course of several decades of investing, these costs can reduce your balance in retirement by hundreds of thousands of dollars!

In fact, costs are one of the big reasons that active investment strategies fail to perform as well as passive investment strategies. While active strategies sometimes do generate higher top-line returns than passive strategies, their higher cost almost always knocks the real return experienced by the investor below than that of passive strategies.

With mutual funds, index funds, and ETFs, the cost of owning the investment is expressed very clearly in its expense ratio (a percentage). A low-cost ETF or index fund will have an expense ratio of a couple tenths of one percent or lower, while a high-cost, actively managed mutual fund will have an expense ratio of one percent or higher. For a passive strategy, look for funds with very low expense ratios.

Watch out as well for fees tacked on top of the expense ratio of the fund you purchased itself; these are often charged by the person or institution managing the account, such as a 401(k) administrator, a financial advisor, or a roboadvisor. Make sure that you have a compelling reason for paying such a fee before signing up for one, because it will come directly out of your returns.

Dollar Cost Average

The strategy of dollar cost averaging (as opposed to irregular lump sum investing) is to invest a set amount of money on a regular basis. If you receive a regular stipend/salary, this translates to investing the same amount of money every pay period, ideally through an automated transfer.

One of the big advantages of dollar cost averaging is that committing to the strategy prevents you from attempting to time the market. When you use your discretion over the timing of your investment schedule, many of us will try to guess whether the market is on an upswing or downswing and shift our buying behavior accordingly. This is rarely a successful strategy, whether it is done haphazardly or very deliberately.

In fact, dollar cost averaging actually guarantees that you “buy low and sell high” in a sense, although you are not selling. Because you invest the same dollar amount every period, when the market is low you buy more shares and when it is high you buy fewer shares.

Use a Roth IRA

If your investing goal is to save for retirement – likely the first investing goal you should set as it is the longest-term – it is a great idea to use a tax-advantaged retirement account. A tax-advantaged retirement account protects your investments from taxes over the decades between your contribution and withdrawal in retirement; paying tax year after year would otherwise eat away at your returns. Therefore, using a tax-advantaged retirement account maximizes your returns, as long as you abide by the restrictions on access that it imposes.

Only very rarely do graduate students have access to a tax-advantaged retirement account through their universities; therefore, an individual retirement arrangement (IRA) is their only option if they are eligible. Some postdocs receive retirement account benefits through their universities and some do not. IRAs are set up independently and managed entirely by the investor. This may sound like a big responsibility, but this freedom of choice means you can pick the optimal investments for you.

IRAs come in two varieties: traditional and Roth. Roth IRAs are generally recommended for current lower-earners with great income growth potential, so they are an excellent fit for graduate students and some postdocs!

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Get Started ASAP

Probably the biggest investing mistake you can make is to procrastinate getting started. On average, the stock market ends two out of every three years higher than it started; if you’re ready to start investing but put it off, more times than not you miss out on earnings that could have gone into your coffer. I frequently speak with PhDs-in-training who stay stuck in investing analysis paralysis for years on end. You can always course correct if you realize you made a poor choice with your investments initially, but you can never recover lost time. So even if you aren’t confident you’re making the perfect investment, just get started!

My Experience with Investing During Graduate School

Investing is one of my favorite subjects on which to teach, write, and coach, and my enthusiasm for the subject is due to the thrilling experience I had with investing during my seven years of PhD training. Starting at $0 in 2007, my husband (also a grad student over the same period) and I together grew our retirement investment portfolio to approximately $75,000 by the time we defended in 2014. The success we experienced is largely attributable to our aggressive and increasing savings rate and the long bull market that started in 2009.

I had an inauspicious start with investing when I first opened and funded my Roth IRA. I didn’t actually purchase the investment I intended to when I opened my account, so my money was going into cash! The really embarrassing part of the story is that I didn’t catch my mistake for over a year. When I finally did, I moved my IRA from that first brokerage firm to one I preferred and made sure that all my money went into my investment of choice, a target date retirement fund.

Deciding that a target date retirement fund was right for me only took a couple hours of research, and as it’s a set-it-and-forget-it strategy I have spent zero time over the last decade-ish maintaining it (though I do regularly check the balance). Instead of spending my time and energy monkeying with my choice of investments, I used them to find ways to add more money to my investments.

When I first started contributing to my Roth IRA in 2007, I saved 10% of my gross income, which was $200/month. After we married and combined finances, my husband and I set a lofty goal to max out two Roth IRAs each year. We used frugal strategies to incrementally reduce our spending to free up more money for investing. (Our top five frugal strategies alone helped us reduce our yearly spending by approximately $6,000.) While we didn’t quite achieve our goal during grad school, we did end with a 17.5% retirement savings rate.

Investing is about far more than just numbers to me. Investing throughout graduate school has not only given my family financial security, but it enabled both my husband and I to pursue our post-PhD dream jobs, even though they are risky and less remunerative in the short term.

I want other early-career PhDs to experience a similar degree of financial freedom as soon as possible in their lives, which is why I am such a proponent of investing even during the incredibly financially challenging graduate and postdoc training periods. If you’d like to go even deeper into this subject matter, sign up for my free 7-day email course on investing for early-career PhDs.

Give Yourself a Raise: Inexpensive Entertainment on or Near Campus

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With respect to entertainment and socializing, graduate students are facing a bit of a catch-22: their university affiliation affords them tons of opportunities for free and subsidized entertainment, yet they often think they are too busy to take advantage. However, all work and no play makes for a burned-out PhD student. When you do manage to escape from the lab or library, there are numerous ways to have fun without straining your wallet. When you plan a night out with your peers or want to see a show, check on your free or subsidized options through your university before paying full price.

inexpensive entertainment campus

A version of this post was originally published on GradHacker.

Low-Cost On-Campus Entertainment Ideas

University, school, and department social events

From happy hours to dances to sponsored outings, universities put on tons of free events year-round for students, anywhere from once per year to as frequently as once per week. Your graduate student government is probably the best place to start looking for sponsored activities and opportunities to socialize with your peers. The graduate student government at my alma mater hosted happy hours about once per month, paid for students to go bowling and to minor league baseball games, and hosted trivia nights and ice cream socials. Other student organization may sponsor similar nights out to bars or local attractions such as museums and planetariums.

Spectator sports

I have to admit that I was not a fan of any college sports until I got to graduate school, but I found my alma mater’s basketball culture irresistible. Grad students who enjoy watching football, basketball, or many other sports will be able to attend events for free or at a highly subsidized rate. Or if watching sports isn’t your thing, maybe tailgating is!

Intramural sports

Intramural sports are a great combination of entertainment, exercise, and socializing. There are most likely grad student teams competing against each other and undergraduate teams in softball, volleyball, flag football, basketball, etc. Because you are using university facilities, the fees to participate in such teams are typically nominal.

Theater, museums, movies, and concerts

Similar to spectator sports, you can likely attend student theater productions on campus for a very low price. There may be a museum or botanical garden on campus that is free for students. Free or subsidized concerts and movies are also common, though you might not see the newest releases. My alma mater screened both of the PhD Comics movies for free, which were wonderful events designed specifically for graduate students, and also hosted two large free outdoor concerts each spring.

Orientation activities

The start of the school year is a great time to find free entertainment as clubs are recruiting new members. You can keep an eye on club calendars for events that you might enjoy, such as stargazing, games, gardening, hiking, or volunteering.

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Low-Cost Off-Campus Entertainment Ideas

City events

Most cities cultivate a calendar of events for residents and visitors to reference. Over the summer months, these calendars burst with lovely outdoor activities that are often free or inexpensive, such as festivals, concerts, and movies. This can be a great way to stay entertained when the university’s calendar tends to be more dormant. Local bars and coffee shops in college towns also frequently host live performances that draw in a student crowd.

Theater, movies, museums, sporting events

Your graduate student ID almost always works just as well as an undergraduate’s for scoring reduced-price tickets in the community. Many venues such as theaters, sports stadiums, and museums offer discounted rates of entry to students on set days of the week or month or a few times per year. My husband and I held season tickets to the Broadway shows at our local theater for several years on Sundays or Tuesdays, which were the student discount nights.

Movies

You don’t need a subscription to Netflix, Hulu, or Amazon Prime to enjoy watching movies in your home. Your university and local public library should have an excellent selection of titles that you can check out for free.

Do-It-Yourself Entertainment Ideas

Social gatherings

One of the best aspects of grad school is the built-in social network it gives you within your school or program. Parties can be easily planned alone or with a few other hosts in homes, at pools, in bars or restaurants, or in parks, and designating them as potluck, Dutch, or BYOB means that no one is shouldering the cost alone.

Watch parties

One of my favorite aspects of grad student life was getting together with other basketball fans to watch our team play away games on TV. We even had an informal arrangement with another couple that we would host watch parties for all the games that were broadcast over the air while they would host for all the games shown on cable (removing the primary argument for us to keep paying for cable). You can arrange watch parties at home and sometimes at bars for whatever kind of entertainment you enjoy – sports, popular TV shows, movies – as long as you know a few other people with that common interest.

How do you keep yourself entertained and socialize on campus and in your city without busting your budget? How have you used your student status to get discounts on entertainment?