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How This Grad Student Plans to Contribute to His Roth IRA Using 529 Money

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In this episode, Emily interviews Ben Wills, who is starting a master’s of science at Georgia Tech at age 29. They discuss the interesting jobs and experiences that Ben had in his 20s and why he is now pursuing a graduate degree. Ben’s main financial goals for graduate school are to not accumulate any debt and to max out his Roth IRA each year, and he shares how those goals align with his values. Ben and Emily discuss how to remove money from Ben’s 529 account without penalty to supplement his stipend and keep him on track to reach his financial goals while living in Atlanta.

Links Mentioned In This Episode

529 Roth IRA grad school

Teaser

00:00 Ben: Have a little kind of metacognitive experience and, you know, watch your feelings, watch the stories that are in your head and just have, you know, a sense of curiosity like, oh, where did this come from? And how is this helping?

Introduction

00:18 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 1, and today my guest is Ben Wills, who is starting a master’s of science at Georgia Tech at age 29. Ben relays the interesting jobs and experiences that he had in his 20s and why he is now pursuing a graduate degree. Ben’s main financial goals for graduate school are to not accumulate any debt and to max out his Roth IRA each year, and he shares how those goals align with his values. We discuss how to remove money from his 529 account without penalty to supplement his stipend and keep him on track to reach his financial goals while living in Atlanta.

01:05 Emily: I’m excited to announce that with Season 10, we’re resuming a once-per-week publication schedule! Lots of great interviews are coming your way… which means I have to record lots of great interviews. If you are interested in being a guest on this podcast, you can do exactly what Ben did, which is to go to PFforPhDs.com/podcastvolunteer/ and submit your info there. I highly encourage you to volunteer now as I will batch record interviews over the next few months that will be published through April 2022.

01:37 Emily: If you’ve listened to at least a couple of interviews you know that they are pretty low-key and casual. Many of my guests have told me that this was their first podcast interview ever and that the had a great time! Don’t worry if you’re not super sure of the topic of your interview. A lot of volunteers type a few ideas into the form and then we settle on one over email. Again, now is the time to volunteer! Go to PFforPhDs.com/podcastvolunteer/. I can’t wait to speak with you! Without further ado, here’s my interview with Ben Wills.

Will You Please Introduce Yourself Further?

02:13 Emily: I am delighted to have joining me on the podcast today Ben Wills. He is entering graduate school in fall 2021. He’s going to be a master student, and is not quite a traditional student. He’s actually 29. And so we are going to be talking about his career-to-date, why he’s pursuing graduate school, and what his financial goals are going to be as a person with a little bit more financial experience than someone coming into graduate school right out of college. So, Ben, thank you so much for volunteering to be on the podcast. And will you please introduce yourself a little bit further?

02:42 Ben: Sure thing, thanks for having me. Ben Wills, again, I use he/him pronouns as you got right. I am 29. I studied cognitive science as an undergrad way back when, at this point, and basically since undergrad, I’ve done kind of a potpourri of fun, like life-building, resume-building sorts of experiences as I’ve kind of approached it. So I spent an AmeriCorps year in Juneau, Alaska working with men who committed domestic violence and betters intervention programs. Then I worked at a law firm doing disability law for a couple of years, and I got funding from my Alma mater to do some research in Australia with a research mentor. And then I got my current job, which is, I’m a project manager and research assistant at a bioethics think tank in New York. And I’ve been here for almost three years and coming to the end of my tenure.

03:34 Emily: Wow. Let’s discuss that further in a minute. That was exciting. What is the program that you’re going into and where will you be?

03:40 Ben: Yeah, I am going to be starting a master’s in science in the history and sociology of technology and science at Georgia tech.

Work Experiences Prior to Master’s

03:49 Emily: All right. Congrats. And that is a mouthful. My graduate degree has many syllables as well and many words that sort of trip people up who aren’t in the field. So that’s fun. Well, yeah. Tell us more about these work experiences and like maybe was there a direction you were going in or you were just kind of looking for that like interesting, fun, next thing? Like how did that go?

04:09 Ben: Yeah, I basically knew that I will probably end up in a career where it’s kind of my career. You know, right now I’m looking at kind of going into a law or public policy sort of space after this degree. And if I get really sucked into, maybe academia. I kind of saw opportunities and did what felt right at the time. So for the AmeriCorps program, I was in college, I was working on a senior thesis, and I was just so focused on me and my work that I really felt like I needed to kind of turn my attention outwards. And so doing a year where it’s called a service year and the particular program I was in we were living in an intentional community, all like working in social service organizations, and we had a very kind of structured experience. And it was really perfect for me.

05:00 Ben: After focusing on magnetic resonance imaging of people and researching what the self is with a neuro imaging scanner, such a thing can be done, to focusing on, you know, humans and what people’s needs are and kind of like social context. So that was really important and generative for me. And then after that, I moved back home to my folks and I’ve been interested in law for a while, and I was fortunate enough to be connected to someone who was looking for a legal assistant. And so I started working at a law firm downtown. And then yeah, my Alma mater has this kind of pocket of money that you can apply to called the Maguire Fellowship. And you can basically use it to, it’s a competitive fellowship, but you can use it to fund study or independent research abroad.

05:51 Ben: And I had read a book called Delusions of Gender by Cordelia Fine in college that was really cool to me because she was one of the first people that I had read who within science talked about, kind of like, the social construct of science. And, you know, if you have scientists with, you know, gendered expectations of what, you know, men and women and other people’s kind of reality is, then those expectations will be born out in their research methods and their results. And that kind of blew my mind and I wanted to work with her. And so, you know, I just emailed her and said, Hey, if I get some money, can I come work with you? And she said, sure. So I applied for it and got it. So I was in Melbourne, Australia for a year.

06:29 Ben: Then, yeah, I was kind of testing what does law look like? What does academia look like? What is the intersection of the two kind of in a public policy sort of facing academic sort of situation? That’s where I am now, which is a place called the Hastings Center. And I’d actually taken a class with one of the scholars at my school, Vassar. He had adjuncted there, and his name is Erik Parens, and I took a class with him on the post-human future which is all about, you know, gene editing humans and all this sort of wild cool stuff. And I thought it was great. And I kept that kind of organization in the back of my mind when I was in Australia, applied to a project manager research assistant position there and got it. So I flew back to Oregon, bought a car, and 10 days later, I was in New York, starting up a new job.

Decision to Pursue Master’s in Science

07:20 Emily: Wow. This is so exciting. And what brought you specifically to the decision to pursue the master’s in science over maybe a law degree or some other kind of further education that you might do?

07:31 Ben: Yeah, so I think, you know, at this point I’m really interested in kind of doing more of an applied kind of work. So, you know, compared to the kind of academic environment that I’m interested in, which is, you know, a little bit more social science, humanities, I’m interested, you know, in terms of topic areas that I’m interested in. I was interested in doing more of an applied thing and, you know, when you’re going to law school, when you’re doing a terminal master’s in public policy, for example, those are kind of like, you know, they’re vocational schools basically. You’re getting a degree and you’re learning skills, and you’re learning a way of thinking. And I still had questions that I want to answer and kind of ways of thinking and topics of exploring. I’m particularly interested in direct consumer telemedicine like Hims and Hers and Roman.

08:15 Ben: If you’ve ever seen subway ads with phallic cacti or on your Instagram feed, those are advertisements from these direct to consumer telemedicine startups that I’m interested in kind of researching their kind of ethical implications. And I want to explore this more and you can’t really do that, you know, in law school. But I didn’t want to commit to a whole PhD, and Georgia Tech’s program is interdisciplinary. They have people who are coming from history of technology, coming from sociology of technology, also medical sociology. They have folks, faculty there, and it seemed like a great opportunity to kind of learn more about what I’m interested in without having to commit to a whole PhD to do it. And also, I was lucky enough to get funding to do that, which was a real difference maker.

09:03 Emily: Yeah, I was just going to say, I think the funding, like it’s clear from your work history. Like you’ve had some, not really jobs, but they come with money, right? Like the AmeriCorps thing, the fellowship that you did, or whatever it was, in Australia. So you have found a way to get money, at least some, while you’re still exploring these different areas. And the masters seems to be an extension of that as well.

09:25 Ben: I think that’s fair to say. Yeah, I definitely wouldn’t have done this program if I hadn’t gotten funding. I’m only going to take on debt for something that has a little bit more kind of monetizable potential.

Shifts in Money Mindset: From College to Present

09:38 Emily: Well, yeah, let’s talk more about the money stuff then. Through these various different jobs and experiences that you had since college, or maybe even before then, you know, what do you know about money or what is your money mindset right now that you think is different than what it was for you coming out of college or going into college?

09:57 Ben: Yeah, that’s a great question. I think college is a really weird time for finances. If you have the privilege that I did going to school, you know, I had to go to a school that had really good need-based financial aid, but I wasn’t financially independent. I didn’t have to make sure that I could afford rent and stuff. I was living on campus. And so I didn’t quite know how money worked really. So, and then living in Alaska, we all kind of shared expenses. Everything was very structured. So it was kind of, you know, the kiddie pool version of understanding what it is like to be a person who lives in a world where everything costs something. And so I think it was about the time I was 24 that I started living on my own for the first time, got a lease with a friend, and I started learning how things work. But of course I had some kind of money mindsets that I came up with.

10:48 Ben: And some of those were things like, my folks are very frugal and they went through a pretty lean time when I was in middle school. And so I definitely have a frugal kind of ethic. And I don’t spend money that I don’t need to. And I, you know, learned things like, you know, take advantage of credit card intro offers, but don’t carry a balance ever, ever, ever, or it’s not worth it. You know? So I was really lucky to learn some pretty smart ways of thinking about money from my folks. And also my mom does kind of investing almost as a hobby. She gets really into, you know, managing my dad’s and hers, you know, retirement finances, and, you know, thinking about how, you know, the best way to kind of help them to retire. She’s 10 years older than my dad and close to retirement. So this is something that’s very much on her mind and I’ve learned a lot from what she’s been able to learn, which I consider myself very lucky. Because I think, you know, this kind of, what you don’t know costs you. And that’s not fair, but I’m glad that I know what I know.

11:47 Emily: I’m really interested in hearing more about your AmeriCorps experience in particular, because I don’t think I’ve interviewed anyone on the podcast who did AmeriCorps, we haven’t had a detailed discussion about it. But I, as a person who didn’t do it, kind of think about AmeriCorps as even more financially difficult than your average grad student situation, like living on less. And I understand a lot of it is like, it has to be subsidized like your housing and your food and so forth in many places. So how do you think that you having had an AmeriCorps experience in your past, how do you think that specifically affects how you’re thinking about graduate school and your finances in graduate school?

12:25 Ben: Yeah. Great question. I think, so the interesting thing is, so it’s an AmeriCorps program, but it was AmeriCorps-funded to an organization called Jesuit Volunteer Corps Northwest, which has existed since before AmeriCorps existed. And so they take funding from the federal government for that, but they, you know, they already have a house where I lived, you know, they put me with these other people. And you know, the house’s rent is like prearranged with the landlord. So there’s a lot of that sort of stuff, which is so stressful about moving to a new place and expensive about moving to a new place. You know, it’s already furnished. The house just gets, you know, new people every year. So that was great. But you’re right. We had very little money. You know, we had, I think like $180 a month for fun, a hundred dollars a month for fun total. That’s if you want a burger, if you want a beer, if you want to, you know, take an Uber, whatever. You know, and we were challenged to not access any money that we had saved, but to actually try to live within our means.

13:27 Ben: And so I know, you know, preparing me for grad school. I know that I can live leanly. We, I think our whole house lived, we were six people and we spent $80 a week on food. Like we ate a lot of rice and beans, and if it’s beans and rice then that’s two dishes. You know, so I don’t intend to be living quite as lean, but I know that like, you know, I know that I can do that. And I definitely have some kind of ethic about like, do I really, is it going to be that much worse to do the easier option and save a lot of money, you know, for any particular thing? One example of that ethic is, you know, when I flew from Australia back to Portland at the end of my tenure, it was like $400 cheaper to fly to Seattle and then take a train down.

14:13 Ben: And so I did that. And you know, it’s kind of looking for that sort of thing. I think that’s a little bit of a mindset that I’ve picked up with my family. It was reinforced with AmeriCorps. And just one more thing quickly on that, you know, there’s definitely some negative sides to, you know, I think I still have a little bit of kind of a food scarcity mindset, you know, I’m always like, Hmm, this fridge is looking a little bare. You know, because we did run lean, you know, so there’s positives and negatives as well, but that was all part of it. And I’m, I’m really glad for the experience.

Financial Goals for Graduate School

14:40 Emily: I can’t remember where I heard this from, but it was recently and it was some well-known personal finance personality who phrased it something like spending money, like this is this person’s default mindset. Spending money is a failure of creativity. Like you can get anything or just about anything for no money, little money. And it’s only a matter of, do you want to put in the effort to be creative and you know, maybe take some extra time or something? Or do you want to go, as you were just saying, the easy route, which is spending a little bit more money to get, you know, the convenient option. So I’m not, I mean, that’s a very extreme view, but I can see a little bit of that, you know, in, in what you were describing. So going into graduate school again with your stipend, do you want to share what your stipend is by the way?

15:28 Ben: Yeah, so the standard graduate stipend is about $18,000. I have a little internal fellowship on top of that. That brings me up to about 22 or 23. And then I can also work as a research assistant for a faculty member and also work a little bit over the summer. So my understanding is that I can make between 30 and up to $36,000 a year, most likely.

15:57 Emily: And are you, have you already arranged for that assistantship or do you know that’s coming or is it like a possibility?

16:04 Ben: It sounds like an “everybody who wants one can get one” kind of a thing, is my understanding. So I haven’t started that process yet.

16:13 Emily: Okay. I feel a little bit relieved because when you said 18, I was going, oh no, Atlanta. Wow. Okay. But no 30. Yeah. Okay. We’re getting into a reasonable range there for, you know, for a graduate student. And so knowing that stipend or that range that you’ll be receiving, you know, looking at that, looking at the cost of living and so forth, what are your financial goals, if any, for graduate school?

16:35 Ben: Yeah, I think I have two big goals, which is to not go into debt, and continue to try to fully fund my retirement. I think that’s maybe a big thing that sets me apart from just people who are just coming out of undergrad is I’ve realized and, you know, thanks to folks in my life who have impressed this upon me, how important it is to, you know, save for retirement. And if literally, if all you do is max out your Roth IRA from the time you’re like 19 or 20, you can probably retire comfortably. You know, if you just do that, or comfortably enough. And that’s huge. And I know, you know, that what I wasn’t contributing as a 20 or 21-year-old, it’s all the more important that I, you know, max out my Roth IRA contributions now. So when I talked about that with the graduate advisor, that was, you know, that’s something that certainly wasn’t on her mind for us. And maybe a lot of graduate students aren’t thinking about that, you know, but for me, I’m not expecting to come into a lot of money later in life, and I want to be financially stable, and I don’t want to work until I’m 95. So those are the two main things, I think. Also have little fun maybe.

Retirement Savings History

17:45 Emily: Yeah, well, fun can be frugal, but if you want to max out that Roth IRA, there’s a definite dollar sign attached to that. What’s been your history with retirement investing through these various different jobs? Have you been able to do some or has it been kind of patchy?

17:59 Ben: Hmm. Yeah, I think it’s depended. I have typically, I think after the AmeriCorps year, I have contributed at least some to my Roth IRA. With my current job, they have a fantastic 403(b) program, which is like a 401(k) for nonprofits, I think. And they do a match, too. So what I do is I do the minimum for the full match from them. And then I contribute because I like Vanguard better than TIAA-CREF. I contribute to my Roth IRA separately. So I’m doing the best now that I’ve ever done as far as that’s concerned, but I have been contributing you know, anywhere from a couple thousand to the cap for the past five years or so.

18:45 Emily: Yeah. That’s great. And I love that you have these two goals that you articulated, don’t go into debt and max out the Roth IRA. I mean, as you said, like just those two things alone, you’re going to be in such good shape. You know, if you can do that through your master’s program or if you decide to go on for the PhD as well. Those are two very, very strong goals. How do you think you’re going to make it happen? Like, have you done any projections about cost of living in Atlanta? And you said you’re moving from New York there, right? So it’s going to be a big cost of living difference.

19:14 Ben: Yeah, actually it’s interesting. So I’m in Beacon, New York right now, which is in the mid-Hudson Valley. And Beacon is not cheap. My current living situation with utilities is probably $750, $800 a month, a room in a house. And so I think it’s realistic to get about that in Atlanta, just from the little bit of Craigslist slewthing that I’ve done so far. So I haven’t done a lot of planning. For all the stuff that I know about what you’re supposed to do with money, I’m not very good at actually budgeting for, for worse. But I think my mindset is assuming that expenses are not going to be that much different.

19:55 Emily: Okay. And when is your, when are you planning on moving?

20:01 Ben: My family is going camping in mid-August. And so I think I’m going to try to move right after that, which will mean that I’ll be like moving into a place and starting school in like five days, or something like that, in the mid-August heat and humidity which will be a heck of a time. But that’s what I’m thinking about right now.

529 Tax-Advantaged Savings Account

20:20 Emily: Yeah, that’s great. We’re recording this in April, 2021. So you still have quite a bit of time to be planning and finding a place and finding that assistantship and so forth. And I understand as well that you have a 529 that you wanted to talk about. And so for the listeners who do not know what that is, do you want to explain briefly what a 529 is and how you got one?

20:42 Ben: Yeah. Correct me if I’m wrong, but my understanding of a 529 is it’s a tax-advantaged savings account specifically for qualified educational expenses. So you can put money in there and then, you know, there are tax advantages that I think depends on the state at least to what the tax advantages are, but then you can spend that money on things like tuition, room and board, fees, other sorts of things.

21:11 Emily: That’s exactly right. But just to add onto it, so the growth, so money that’s contributed to a 529, similar to an IRA, typically if you invest it, it’s going to grow. And that growth is tax-free as long as when you end up withdrawing it, it’s for, as you said, the 529 definition of qualified education expenses, which is like tuition and also living expenses for a full-time student. And it depends on what state you live in, whether or not there is a tax advantage on the contributions. So there’s no federal like deduction the way you could have for like a traditional IRA, but your state, depending on what state you live in, when you do the contribution, they might give you a tax break on their state tax for doing the contributions. And it’s most common for parents to do this for their children or their grandchildren or something like that. So it’s something that often people start when their children are very young, so there’s lots of time for the investments to grow.

22:02 Ben: Yeah. And to the second part of your question, in my particular case, my folks did this great thing where, you know, I was expected to contribute two or $3,000 a year to my education in undergrad that I made from working over the summers. And my folks said, we’re going to take that money, instead of sending it to Vassar, basically, I think, we’ll cover that. And we’ll just hold it in a 529. And so when you go to grad school, you better go to grad school, when you go to grad school, that’ll be there and have grown and be there waiting for you.

Commercial

22:39 Emily: Emily here for a brief interlude. These action items are for you if you recently switched or will soon switch onto non-W2 fellowship income as a grad student, postdoc, or post-bac and are not having income tax withheld from your stipend or salary. Action item number one: fill out the estimated tax worksheet in form 1040ES. This worksheet will estimate how much income tax you will owe in 2021 and tell you whether you are required to make manual tax payments on a quarterly basis. The next quarterly estimated tax due date is September 15th, 2021. Action item number two: whether you are required to make estimated tax payments or pay a lump sum at tax time, open a separate named savings account for your future tax payments, calculate the fraction of each paycheck that will ultimately go toward tax, and set up an automated recurring transfer from your checking account to your tax savings account and to prepare for that bill. This is what I call a system of self-withholding, and I suggest putting it in place starting with your very first fellowship paycheck so that you don’t get into a financial bind when the payment deadline arrives. If you need some help with the estimated tax worksheet, or want to ask me a question, please join my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers common questions that PhD trainees have about estimated tax. Go to PFforPhds.com/QETax, to learn more about and join the workshop. Now, back to our interview.

529: To Use or Not to Use?

24:19 Emily: Yeah, so you have this nice little nest egg that’s available to you but is kind of specifically tied for education expenses. So what are your thoughts about that? Like, is it something that you want to draw on during graduate school or that you feel you have to, or what are your thoughts?

24:35 Ben: Yeah, well, it’s kind of a use it, or it just sits there sort of thing. So I guess if I didn’t use it, then I would have to be doing something like giving it to my sister if she just needs it or giving it to a cousin or something like that, I suppose. So I definitely want to use it. And one of the questions in my head is like, does it make sense to use it now? Or if I’m probably, but not definitely, going to something like law school or a public policy program or even a PhD, you know, I could definitely use it for those. So would it make more sense to use it now or later, is one question I have. That’s kind of what I’m thinking about. And the way I’ve thought it is, basically, it would be really hard to max out my Roth IRA while earning between 30 and $36,000 a year at the most. But if I have, you know, the 529 is worth about $12,000. If I pull $6,000 a year from the Roth IRA, or excuse me from the 529, that covers my Roth IRA contribution. So it would be as if I was making 36 to $42,000 a year and maxing my Roth IRA contribution. And that sounds pretty good to me. That sounds doable. So that’s kind of how I’m thinking about it is making that possible.

25:56 Emily: Yeah, I was thinking kind of the same thing, because you were phrasing it just now as like using the money in the 529, but I’m thinking about it more as getting the money out of the 529 in a reasonable way where you’re not going to be taxed and all the growth and so forth. Just getting it out so that you can use it for whatever, if that is your Roth IRA contribution, I mean, money is fungible, right? So it could be the Roth IRA. It could be anything else. It doesn’t really matter. But yeah, to give you that extra cushion, and then let’s say it was sort of a, it feels like almost direct, like withdrawal from the 529 and a contribution $6,000 to the IRA. All you’re doing then is making the money more flexible actually, right? Because in the first case, it can only be used for these well, without penalty, can only be used for these qualified education expenses, versus with the Roth IRA, well, you can withdraw your contributions at any time or you can leave it and let it grow for the decades and, you know, withdraw it tax-free and so forth.

26:50 Emily: So yeah, I really see it more of it as not using the money, but just transferring the money to some other place in an indirect way, which you can only do without taxes and penalties and so forth when you have qualified education expenses as you do in this upcoming phase of life. Another thing to think about, another twist in this is, and I don’t know, I haven’t looked it up for Georgia Tech, but some, especially public, universities do allow their graduate students who are employees to contribute to the university’s 403(b) or 457. So that’s also something to look into before you, again, make a final decision about what to do with the 529 is, do I have access not only to a Roth IRA, but also a 403(b) or 457? And could I even supercharge my retirement savings above that $6K per year level? Yeah. So something else to think about.

457 Retirement Plan

27:39 Ben: What’s a 457?

27:42 Emily: 457 is another tax-advantaged retirement account. It’s a little bit similar to a 401(k). So 401(k) and 403(b) are very similar to one another, as you said. One is in the private sector, one is in the nonprofit sector. A 457 was originally constructed, I guess, for like highly-compensated employees. And so it’s available usually in addition to a 403(b) or something similar. But in some cases, at universities, it seems that it’s often, if they have one, it’s sometimes available to any employee, not just, you know, C-suite or whatever. So just something to look into whether or not there is one, whether or not you’re eligible for it. And the 457 has some slightly different benefits than a 403(b) does. If I remember correctly, you can actually access the money more easily than you can in a 403(b), like you don’t have to be like retirement age necessarily to do it. So I’m speaking a little bit out of my like zone of competency here, but yes, it’s sometimes available to graduate student employees.

28:43 Ben: Cool. Thanks.

What Are Qualified Education Expenses?

28:46 Emily: The other thing that I wanted to hit on with this discussion of 529s is what are qualified education expenses. And, you know, longtime listeners of the podcast or readers of my other material know that that term, qualified education expenses, is something that we talk about a lot with respect to figuring out your income tax as a graduate student. Now, and if you have dived really deep into my material, you know that there’s a different definition of qualified education expense for each different tax benefit that you might be talking about. And so it turns out that 529s, or qualified tuition programs, have their own definition of qualified education expenses that is vastly different from the other ones. So you mentioned earlier that qualified education expenses include tuition fees. You know, we’re, we’re accustomed to those things being qualified education expenses, but in the case of 529s, that also includes your expected living expenses.

29:38 Emily: I can’t remember what’s the exact term the universities use, like cost of attendance, I think, which is inclusive of both the educational expenses and also reasonable living expenses, whether you would be living on campus or off campus. Cost of attendance is something that I think comes up a lot for undergrads, but not so much for funded graduate students, but it’s really relevant for our conversation of getting money out of a 529. And one really good episode to listen to which I did previously on the podcast is season two, episode nine, with Seonwoo Lee. And we’re talking about 529s in that episode as well, but it’s from a different, a little bit of a different perspective, but it’s still a conversation about what is a qualified education expense and what are the anticipated educational expenses that you can use to remove money from a 529 without penalty. And so in your case, have you calculated like how much you would be able to get out of the 529 per year using that anticipated cost of attendance?

30:34 Ben: Yeah, so I think the, you know, again I have about 12 and change thousand dollars in there. And the estimated cost of attendance I think is about just by happenstance, Seonwoo also goes to Georgia Tech. So he mentioned that it was about $10,000. So if those numbers are still good, then, tell me if I’m wrong, but I feel like I’m pretty in the clear. You know, I’ll probably take about half of the 529 out each of the two years I’m in the program and that’ll go underneath the $10,000. And even if I do the thing that he was talking about, contribute $2,000 into a Georgia state 529 and pull it out for the tax advantage, credit deduction, whatever it is that’ll still be under the total of $10,000. I don’t know if that’s how it works. I assumed that I couldn’t like, yeah, like pull $10,000 out and then add $2,000 at the Georgia one and then be over my cost of attendance. I don’t know, but I don’t think I would do that anyway.

31:35 Emily: Yeah, that sounds right to me. So the way that you calculate how much money you could get out of a 529 each year is you have to take the total cost of attendance, and then you have to subtract from that all of your tax-free money. So in your case, if you’re fully funded, it would be like tuition and fees and so forth. So the cost of attendance is going to be reduced to, again, if you’re fully funded, it’s essentially just the portion of the cost of attendance that is like your living expenses. And so, I don’t know, $10,000 per year sounds really low to me, but I would have to look at the numbers too. So whatever it is, as long as you don’t have tax-free funding that is already paying for that, then that’s your cap for removing money from the 529 for that given year. And anyway, all of this, I was just reviewing it before our conversation. All of this is in publication 970 chapter eight, which is called qualified tuition program.

529 is Typically NOT in the Name of the Student

32:30 Emily: Yeah. Anything else you want to talk about regarding 529s? It’s an interesting and unusual topic for me.

32:36 Ben: Maybe just, this might be useful for listeners is I just remember that my mom did something kind of tricky or clever with 529s where she had it like, in her name, not in my name, because if it was in my name for undergrad, they would’ve taken all that money. And if it was in her name, I guess they, you know, the financial aid office looked at it differently or something like that. I never got the full story from her, but is that right? Is that how that works?

33:08 Emily: I don’t know exactly the mechanics of it, but it is recommended that 529 money be in the name of the parent or the grandparent, whoever’s doing the contributing, not in the name of the student. And I do think it’s for those FAFSA type calculations that it’s again, weighted less heavily in the assets of the family if it’s held technically by the parent. And in a 529, you have to designate a beneficiary. So you’re presumably the designated beneficiary on this particular 529, but it’s very easy to switch the beneficiary. So the money still belongs to your parents, so they could, you know, yoinks it away from you if they wanted to, because it’s theirs until it’s actually, you know, removed for your qualified education expenses and so forth. But that’s why it’s really easy to just choose a different beneficiary and move the money from, you know, let’s say in the case of like my family. So I’m about to start 529s for my two children. And I don’t really care whose beneficiary name is on it because I’m just considering it for either child. And if the oldest one has some leftover, I would just switch it to the younger one because I’m thinking of it as my money, right? Until later on in life. So yeah, so it’s really easy to switch the beneficiary and it does make sense for the contributor or the parent or whoever to hold it.

34:20 Ben: Okay.

Best Financial Advice for Another Early-Career Grad Student

34:22 Emily: Yeah. Well, it’s been so much fun to talk with you, Ben, and it’s a very kind of different story for the podcast listeners. So I’m excited about that. The question that I end all my interviews with is what is your best financial advice for another early-career PhD or graduate student perhaps in your case?

34:40 Ben: I think of two things. One is to remember that like, money is real. And sometimes you feel like you can plug your ears and shut your eyes and it’s less real, but it’s still sitting there or not sitting there. So for me, it’s really helpful to try to develop a relationship with my money where I’m not, you know, checking my balance on my phone and going, you know, I just, I don’t want to have a contentious emotional relationship with money. You know, like, the world is structured to make us feel nervous about money. And I don’t think that it’s a healthy relationship to have if you have the ability to not be nervous about it in that way. So, you know, I try to check it more often, just, you know, just so I know what’s going on and there’s no mysteries, because it’s all internal to me, it’s all my own money.

35:33 Ben: And the other thing is there’s this really insidious idea that like, in order to feel like, like we’re told that we need to buy things for ourselves because we deserve it or because we need to like treat ourselves. And so people, you know, like I just saw this person who was like living in her parents’ house, not a lot of money, she’s like, should I buy like the iPhone, like 12, actually the iPhone 12, you know, gajillion or something like that. And like, you know, you do what you want with your money. I’m not here to like make moral judgements, but she was doing it in kind of the mindset of like, I want to treat myself or I deserve it or that sort of thing. And that is just a load of bologna that like marketers have worked really hard on for the past 20 years to be like, you deserve this meal, you deserve this trip, you know?

36:20 Ben: And like the more we can extract ourselves from like taking in that, like marketing lingo of like what we deserve and don’t deserve based on you know, like what is expensive or not expensive, if we can kind of like, you know, develop a more internal sense of like, you know, rewarding ourselves and not have it be based on how expensive something is. Like, you know, I love myself a lot. So I’m spending, you know, more on myself to get the nicer thing or whatever, you know, it’s like, I don’t know, it just makes me kind of sad. And so I guess my advice is to like, you know, kind of have a little kind of metacognitive experience and, you know, watch your feelings, watch the stories that are in your head, and just have, you know, a sense of curiosity, like, oh, where did this come from? And how is this helping me?

37:10 Emily: Wow. Yeah. I find both of those points to be super insightful. And actually we could probably do a whole other episode just on what you just mentioned about like observing feelings that arise in yourself when you think about money and so forth. I love that point, but it’s a great one to end on. And Ben, thank you so much for joining me today. It was really fun to talk with you.

37:28 Ben: Yeah, it was a pleasure. Thank you.

Outtro

37:31 Emily: Listeners. Thank you for joining me for this episode. PFforPhds.com/podcast is the hub for the Personal Finance for PhDs Podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. 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 Podcasts, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. 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 effective budgeting. I also license prerecorded workshops on 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 PhD’s Money Mindset from Childhood Has Served Her Well Through Multiple Phases

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In this episode, Emily interviews Dr. Judy Chan, a PhD and staff member at the University of British Columbia. As a child of immigrants to Canada, Judy learned early on the virtues of hard work, saving, and the value of a dollar. She applied these principles consistently while she earned her PhD, started her business, and became a parent—to great effect.

Links Mentioned in This Episode

Teaser

00:00 Judy: And it was hard. I do feel that I have more advanced knowledge than my average colleague or my friend, and even going to the bank, they didn’t really take me seriously when I asked them questions. Or they assigned a very junior financial advisor to me when I actually knew all the answers myself. But I didn’t have enough money to get more experience. I don’t know. Is it just my money, my net worth, or my look, or my age, but I was never able to talk to someone who’s more experienced. So I had to do a lot of my own learning.

Introduction

00:49 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 9, Episode 5, and today my guest is Dr. Judy Chan, a PhD and staff member at the University of British Columbia. As a child of immigrants to Canada, Judy learned early on the virtues of hard work, saving, and the value of a dollar. She applied these principles consistently while she earned her PhD, started her business, and became a parent—to great effect. We have a special event coming up on Sunday, July 18, 2021! It’s the second installment of my Wealthy PhD Workshop series, and it’s on everyone’s favorite subject: investing! This workshop is for you if you want to learn how to start investing, particularly if you are a grad student or postdoc who is not covered by a workplace-based retirement plan like a 401(k) or 403(b). I will also teach you about passive investing, which is the most effective, least expensive, and most time-efficient manner of investing. Even if you’re not a novice investor, you can use this workshop to double-check that your current investing strategy is appropriate for your goals. Furthermore, we will discuss the relative merits of discount brokerage firms, roboadvisors, and microinvesting platforms. This is going to be a value-packed session, so please join us on July 18th. You can register at PFforPhDs.com/WPhDinvest/. That’s PF for PhDs dot com slash W for Wealthy P H D I N V E S T. By the way, after you register, you’ll be asked if you want to upgrade into a membership in the Personal Finance for PhDs Community. I do recommend this upgrade because you will have access to the recording of the previous workshop in the Wealthy PhD series, among other things. That workshop on financial goals will help you figure out if now is the right time to start investing or whether you should instead be focusing on saving up cash or paying down debt. Again, please go to PFforPhDs.com/WPhDinvest to register for the workshop this coming Sunday.

Book Giveaway Contest

03:19 Emily: Now onto the book giveaway contest! In July 2021 I’m giving away one copy of Get Good with Money: Ten Simple Steps to Becoming Financially Whole by Tiffany ‘The Budgetnista’ Aliche, which is the Personal Finance for PhDs Community Book Club selection for September 2021. Everyone who enters the contest during July will have a chance to win a copy of this book. Over the last year or so, I’ve become quite a fan of Tiffany’s. I am a loyal listener of her podcast, Brown Ambition, which she co-hosts with Mandi Woodruff, and we read one of her self-published books last September in the Book Club. I was thrilled when her first traditionally published book became a runaway bestseller this past spring, and I knew I had to schedule it into the Book Club. I hope you will join us inside the Community in September to follow The Budgetnista’s plan to become financially whole. If you would like to enter the giveaway contest, please rate AND REVIEW this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily at PFforPhDs dot com. I’ll choose a winner at the end of July from all the entries. You can find full instructions at PFforPhDs.com/podcast. Without further ado, here’s my interview with Dr. Judy Chan.

Will You Please Introduce Yourself Further?

04:43 Emily: I have joining me on the podcast today, Dr. Judy Chan. She’s a staff member at the University of British Columbia, and she is going to kind of tell us about her life through a financial lens. So we’re going to start with her childhood, we’re going to go all the way up to now. It’s a real pleasure for me to speak with Judy today because, you know, I interview a lot of grad students and recent PhDs on the podcast, and I love it, but I also love getting to hear from people who are more than a few years removed from that because they have a perspective on, you know, the post-PhD stages as well. So I’m really happy to welcome Judy to the podcast. Judy, will you please introduce yourself a little bit further for the audience?

05:20 Judy: So my name is Judy. I am a staff member at my university, UBC, and I have a side business and I am also a busy mom of two kids. Parents around in the city, so yes, busy, and that’s me.

05:38 Emily: Yeah. Great. Well, we’re going to hear your kind of whole life story coming up and we’re going to insert some financial advice for anyone, you know, coming up on that stage as we go through. So Judy, as everyone in therapy will do, let’s start with your childhood. You know, tell us about your childhood and how it, you know, helped you develop a money mindset.

06:00 Judy: I think I grew up in a very hardworking household. My dad was a restaurant owner back in Hong Kong and I remember him. We would hardly see him. He worked 18 hours a day. I remember him sleeping in the back storage area. But he worked really hard. And we didn’t see him. He doesn’t take days off. I remember we are the only business that opened on Chinese New Year day in the whole entire street. We can go in the middle of the road and play. So that’s how I grew up. I remember not spending any time off meaning that I was actually helping early in the restaurant throughout the Chinese New Year.

Childhood Memories and Life Lessons in Canada

06:45 Emily: Yeah. Tell us about what happened upon your parents immigrating to Canada.

06:49 Judy: I think I also learned big lessons because we are very fortunate that growing up, like we were able to move to Canada in a pretty good, solid financial stage. I remember we got a house. In Hong Kong, we lived in apartments, so we got a house here. Everything was good. My parents, my dad was telling us that he’s retired now. So looking back, it was like he worked really, really hard for 15, 20 years, and then he was able to enjoy his retirement in Canada. He also opened a restaurant for a very short amount of time. We helped out. But it was all very good and fun memories. It’s hardworking, but it was a really good memory for us. Every time when I see people who, other people who also grew up in the restaurant, I think we have some shared memory there.

07:41 Emily: I see. However, you did not take that route in your own life. So I’m wondering, you know, looking back on your childhood, I’m glad you have such positive memories, but what have you taken from that about how, you know, you’re raising your own children?

07:56 Judy: Raising my own children, we just have to work really hard and be very sensitive to money. I remember back then getting wholesale, on average, is actually more expensive than trying to get your cans of pops from the super market, from the big retail supermarket, where the retail price is lower than the wholesale price. So my dad would take us to the big supermarket and we would be loading, like hand carry, trays and trays of pops and juice to bring it back to the restaurant. So my dad got us helping all the time and he would tell us, this is how much we are buying. This is how much we are selling, and this is the price difference. And this is how we mark up, or he doesn’t say it, he just said, look, this is how people do business.

08:49 Judy: And people might pay $10 for a burger, but it may only cost us a dollar. But if we can find ways to cut the cost down to 80 cents, that’s an extra 20 cents for us, for the family. So when we go out, my kids are very lucky. They grew up, I think they are in a very privileged space, but we will continue to remind them that things that we get, there’s a huge markup out there. And we may be able to make it on our own, or like clothings or other things, at a lower cost. So telling them the value of the product that we are getting every day.

09:31 Emily: Yeah. So, it sounds like you had some real, you know, organic lessons around cost and value and the value of the dollar and what, you know, what you can add to the situation because you grew up in that entrepreneurial family, and that’s also something that you’re instilling in your children.

Funding During Grad School

09:47 Emily: So let’s move on to your university days. You were at UBC for undergrad and grad school. Tell us about your funding situation during grad school.

09:56 Judy: Oh, grad school was amazing. I didn’t know that there’s so much funding available for grad students. There’s scholarship and fellowship and TA ship. There’s also a lots of smaller scholarship that I never realized. I think in the way, undergraduate in order to get scholarship and fellowship it’s very competitive. My experience is that grad school is so much easier. And so there’s funding and scholarship everywhere, just apply to them and start saving. So again, in my situation, I was lucky enough that I started as early as six years old, I was able to continue to see the numbers in my bank book, bank account, grow. But I do feel that for most grad students that, hopefully, you will get enough fellowship and scholarship for your basic needs. And there are other source of income around campus. Like I work at UBC now. So I see there’s actually a lots of employment opportunities out there and use them to start building your own wealth, your own saving. Those are extra income that you don’t need now. The basics should be covered by your fellowship, scholarship, and the extra money should go towards the savings, if possible.

11:24 Emily: Yeah, I totally agree that probably there’s going to be a lot of work in the life of a graduate student. You know, there’s going to be your work and your dissertation. There may be an assistantship that you’re performing. Hopefully you’re applying for fellowships and winning some of them on top of that. Maybe you have a side job. There’s a lot of different opportunities. Now, some of those opportunities might be restricted by the, you know, the rules of where you’re living. So one, you know, in the U.S., international students, they’re not going to be allowed to have those side jobs, right? It’s only the, you know, 20 hours per week on campus that they’ve been granted. That’s it. Another thing would be like, if your university, or rather your department, restricts outside work in some manner. So you of course have to check into your, you know, specific situation there. But yes, there are a lot of opportunities in theory for graduate students. I also want to ask you, so did you continue to live with your parents during graduate school, or did you get your own place?

12:16 Judy: I continue to live with my parents.

12:19 Emily: So I ask this because I know that Vancouver is an incredibly high cost-of-living city, and that a grad student stipend may not be enough to support someone if they are living independently. And so that’s a real boon to your finances that you stayed in the same city, I’m sure it was partially by design that you did that. Yes. And you had that opportunity. So that’s wonderful. So you were able to work and save and, you know, live with your parents and yeah. Any advice that you have for a current graduate student or an entering graduate student aside from just apply, apply, apply?

12:56 Judy: I also worked really hard. Like I did my research during the daytime, and then I definitely carved out time to do my teaching assistantship, of the fellowship. There are times that I was doing more hours than what my department allowed. But I did work six days a week, seven to seven sometimes or later into the evening. And I was very disciplined. Any money that I earned on the side, I would spend it, you know, let’s go out for a drink, but they would go straight into my savings account.

Side Business as a Franchisee

13:34 Emily: I also understand that, you know, you mentioned during your college years, you were doing a lot of tutoring as a side job, but you also started a business during graduate school as a tutor. Can you tell us about that and why you decided to take that on?

13:46 Judy: Everything is luck, but then it’s also an opportunity. Like I was doing a lot of tutoring, and I noticed there’s a gap and there’s something that is not available here. And a friend introduced me to a franchise, and I think my friend actually asked me, wanted me, was asking me to be a manager to help him out. But I looked at the franchise, I love it. I like it. I really, I really felt the gap that I noticed myself. So I started a franchise, and at that time with my boyfriend then, he always wanted his own business. It doesn’t matter what it is. That boyfriend is now my husband. So, it worked out quite well. And to be honest, now that I look back, I take risks, but it’s all very calculated risk. Running a tutoring center has minimal cost. There’s no inventory. You just need to rent a space, very minimal decoration and renovation. So, I started a tutoring center when I was in the middle of my PhD.

15:00 Emily: Wow. And, you know, you said that a friend initially approached you about this opportunity. Was that a friend who was also in grad school or somebody from another, oh, wow. Okay. So, did he also have a tutoring center locally?

15:12 Judy: So he started, he looked into the franchise and then he started, he became a franchisee. So, then I asked him, well, how can I be one too? So he was also a grad student at that time.

15:27 Emily: Wow. This is a fascinating idea. I’ve never thought about people becoming franchisees during graduate school, except I’m now remembering that I actually knew someone who did that in a different business. So when I was in graduate school, I was friends with someone who was a franchisee for PhD Posters. I don’t know if they’re still in existence, but they had multiple locations around the U.S. And it’s a poster printing service. And so it wouldn’t be, you know, it would be grad students usually affiliated with the university and they would, you know, drop off posters that people ordered to the various lab spaces. And anyway, it seemed like a great kind of business model for a grad student wanting to run a side business. And it sounds like your business was also, you know, in a similar way, a little bit of overhead for the space, but I’m imagining you paid contractors, right? To do the tutoring. So that’s not any, you know, serious payroll costs. Yeah. Interesting.

Investing and Self-Learning Personal Finance

16:17 Emily: Okay. So when, you know, you’re getting to the end of graduate school, it sounds like you had a healthy savings account at that point. Do you want to tell us, you know, what your net worth was? Or were you doing any, like investing, or was it strictly just cash savings?

16:31 Judy: It was, oh, whoa. I started looking into mutual funds. Someone introduced me to the idea of mutual funds. My dad did a lot of stock trading. So I understand the buy low sell high idea. But he only knows about the trademark that’s in Hong Kong. He has no idea how the Canadian or the American system work. So I wasn’t able to get any support from him. Like, he doesn’t understand the system. And he’s, I don’t know, he doesn’t share much about how he managed his finances. So I had to learn everything on my own. And it was hard. I think, I do feel that I have more advanced knowledge than my average colleague or my friend, and even going to the bank, they didn’t really take me seriously when I asked them questions.

17:23 Judy: Or they assigned a very junior financial advisor to me when I actually knew all the answers myself. But I didn’t have enough money to get like more experience. I don’t know if it’s just my money, my net worth, or my look, or my age, but I was never able to talk to someone who’s more experienced. So I had to do a lot of my own learning. But I was lucky during our grad years, one of our technicians in the lab, he’s a very advanced investor. So there were a few of us, we would spend our afternoon tea time. Oh, by the way, I studied food science. So we would spend our ice cream time talking about finance. So there are a few of us who would exchange ideas on what can we do with our money, stocks, mutual funds. But I had to do a lot of my own learning.

18:30 Emily: And so that process did start during graduate school.

18:33 Judy: Yes. Officially start in graduate school. I’ve always been curious and interested about trading, buying stocks, but I just didn’t have enough confidence as a high schooler. I think in high school, I was already keen to know more, but it was, no, I would say I started in undergrad, in college, that I wanted to know more.

18:57 Emily: Yeah. That’s a really kind of interesting combination of like, seeing an example from your parent and getting some of the mindset of the importance of investing from your parent, yet not being able to receive the practical help because of being in a different context. I hadn’t heard of that before, but yeah. So it’s actually for you maybe a little bit the best of both worlds, because you got to be inspired by your parents, but still had to do all the legwork on your own to figure it out. Which of course means you really internalize what you’re learning.

19:25 Judy: I also learned how to do my own income tax when I was in high school. I had to help my parents because English is not their first language. My parents actually relied on me to look for an accountant. And I am someone who loves numbers and money. And so actually read into personal income tax when I was in high school. And so yeah, I had to do all that education on my own. So till today I still do my own income tax.

19:52 Emily: Yeah. They certainly, you were forced to grow up, and it’s benefited you. Right?

19:57 Judy: Thank you. Yes.

Commercial

20:00 Emily: Emily here for a brief interlude! This announcement is for prospective and first-year graduate students. My colleague, Dr. Toyin Alli of The Academic Society, offers a fantastic course just for you called Grad School Prep. The course teaches you Toyin’s 4-step Gradboss Method, which is to uncover grad school secrets, transform your mindset, uplevel your productivity, and master time management. I contributed a very comprehensive webinar to the course, titled “Set Yourself Up for Financial Success in Graduate School.” It explores the financial norms of grad school and the financial secrets of grad school. I also give you a plan for what to focus on in your finances in each season of the year that you apply to and into your first year of grad school. If this all sounds great to you, please register at theacademicsociety.com/emily for Toyin’s free masterclass on what to expect in your first semester of grad school and the three big mistakes that keep grad students stuck in a cycle of anxiety, overwhelm, and procrastination. You’ll also learn more about how to join Grad School Prep if you’d like to go a step further. Again, that’s the academic society dot com slash e m i l y for my affiliate link for the course. Now back to our interview.

Finances Post-PhD: Real Estate Advenures

21:27 Emily: Okay. Let’s talk about the post-PhD phase. But we’re not going to quite get to kids yet. So let’s talk about your finances, you know, after you finished grad school.

21:37 Judy: Yes. So it was time to get married. Looking back, my boyfriend then, my husband now, he said I was crazy. Because we just started a new business. We were still very young, and before we got married, because we were in a very stable relationship, we knew we were going to get married. It’s just a matter of Judy finishing her PhD. Everything was on hold until I was able to finish my PhD, and my choice.

22:06 Emily: I think that’s a common story.

22:09 Judy : And then sometime around that, after the business, before my PhD, before we got married, I said, “Let’s get an apartment. We need to get into the real estate market.” The real estate market in Vancouver has been crazy for the last 15, 20 years. It’s been always up with a little dip, a little dip, but it’s always up. So I said let’s go buy our first apartment. So we got our first apartment, and one of my criteria is we need to have a tenant in the apartment. It will be a bonus if there’s an existing tenant in the apartment. We would just carry over the rental lease. So we did that before my PhD was done, before we got married.

22:58 Emily: Wow. So I’ve learned that this, this term is house hacking. Buy a property, live in it with your tenant. And whether that is, you know, in an apartment where you’re sort of, it’s a roommate situation. That could also be like a multi-family if you went that route. But yeah, really glad to hear that you used that strategy. It’s one I’m very excited about, learning more about this spring. We did a focus on, well, I’m not sure when this will be published, so it’s either in the past or upcoming, but in March, 2021, we are reading The House Hacking Strategy in our book club, inside the Personal Finance for PhDs Community. So if that hasn’t happened yet, listeners check that out if this strategy interests you. I’d like to know some of the numbers on that. Like how much did having a tenant there help you out? You know, was it worthwhile to sacrifice, you know, the privacy and so forth?

23:47 Judy: Yes!

23:48 Emily: And how many years did you do that for?

23:50 Judy: So we had the tenant for less than a year, and then we got married. So we moved into, we asked the tenant to leave because we need to get into, that’s our place. So that’s when I officially moved out from my, our parents, same for him. He was living with his parents. And then, so we got married, I finished my PhD. Finished PhD, got married, and you know, all those orders are important in Chinese culture. So, and then I was pregnant. And then when I was pregnant, I was in the elevator in the apartment, and I go, no, I don’t want my kids to grow up in an apartment. I want my kids to grow in a house. You know, this is why we come to North America. We want to live in a house. And then I did like very quick, it wasn’t too hard to find out that we can actually afford a house. If we rent out the basement, that fits into what you just told us now, the house hacking, because the tenant will basically be able to pay for the difference that we have to pay in our mortgage. That’s it? Why not? Right? We got to sell our apartment, get a bigger house. The rental that we can get from our basement will pay for the difference. So it was a very logical change or purchase for us, for me.

From House Hacking to House Upgrading

25:14 Emily: Yeah. It enabled you to upgrade your housing situation, get more space and so forth without having the full, full burden of the cost solely on your incomes. And so how long did you stay in that arrangement?

25:26 Judy: We stayed in that arrangement for about four years. That was after my second kid was born. And, again, I’m so lucky. I have a girl and a son. A girl and a boy. And then at that time I had that illusion, because I came to Vancouver, Canada when I was 14 and my parents put us in the basement. I was happy. Like my sister and I, we were just happy to be in the basement. So I had that illusion that I can put my kids in the basement. So we can ask our tenant to leave. They can go into the basement. But I forgot that in between five years old and 12 years old, I cannot put them in the basement. So we, at that time in the main floor, we had two bedrooms. So, we really need a third bedroom, because you know, two kids. So, and then we were really lucky again. We were looking for, it was about time to upgrade, oh, by the way, my money advice, any extra money we have, we put it into our mortgage. So, when I shop for mortgage, I really look for a very flexible repayment method. So any extra money goes in, we actually, every month we pay more than we need to. And then at the end of the year, we also put all the savings into the house.

26:51 Emily: That’s on top of investing though. Right? Because you’re still, were you doing any like retirement stuff through your work?

26:57 Judy: Yes, yes, yes, yes, yes. Retirement stuff. Take advantage of the retirement pension plan at work and then putting any extra money into the mortgage. So we were able to, four years into the house, we were able to upgrade to a bigger house.

27:17 Emily: So that strategy, it sounds like is because you knew that you would be not in that house for decades, you knew you’d be changing. And so you get the mortgage paid down. So you have a lot of equity to go into your next property. Is that the idea?

27:29 Judy: No, no. We didn’t know that. Like, when I purchased the house with the, I call that a smaller house with the two bedroom in the main floor and two bedroom in the basement, I really thought that my kids would grow up in the basement because I enjoyed it as a teenager, but I forgot about that “in the middle” time. And so, when it was time, when I needed to have two bedrooms, one bedroom for my son and one for my daughter, I felt that we need, to upgrade the house. And having so much of the mortgage that’s been paid down, helped us upgrade our house.

28:06 Emily: Gotcha.

28:07 Judy: I paid it then, what was the reason, I just don’t want to own that much money. I have extra money, then just pay down the mortgage because everything that I pay then will go straight to the principal, and then I don’t have to pay interest on them.

28:24 Emily: Yeah, absolutely. I’m inquiring about this because, you know, we are in a super low interest rate environment right now.

28:32 Judy: Yes.

28:33 Emily: What was your interest rate at that time?

28:36 Judy: 2.5. It was super low. Yeah. It was super low. Yeah.

28:40 Emily: So this was really about you, as you just said, not being comfortable with holding that much debt and as you know, I’m tracking through your story, this is the first debt that you’ve actually taken out, right?

28:50 Judy: Yeah.

28:50 Emily: Yeah. So you’re just, you’re just a naturally debt-averse person. And this is part of that.

28:58 Judy: But at the same time, it doesn’t matter. Okay. Let’s say just pick a number. 3%. 3% is pretty low. I see where you’re going, why don’t I put the money into the stock market? I have to earn 6% return because I have to pay tax on that return in order for me to earn that 3%. And so to me, and the stock market is known to be volatile. It’s not a guarantee. So on one hand I feel that I am getting that guaranteed 3% saving instead of putting the money in a stock market that I need at least just like rough number. Right. I need at least 6% because I have to pay tax on my, on my earning. And I don’t want to do that calculation. I don’t want to worry about that.

Business Updates and Additional Family Expenses

29:53 Emily: Yeah, no, the guaranteed return on debt repayment is very attractive. I agree. So we’ve talked about, you know, real estate changes. Let’s get an update on your business, you know, from that time period.

30:08 Judy: Business was going well. It was going well, we were happy, word of mouth. We were able to generate the money that we forecast. It was going well. Until the pandemic. I have to admit, pandemic has a huge impact on our finance right now. But it’s okay because I do have a stable job at the university.

30:30 Emily: Yeah. So you have your full-time position. Was your husband’s full-time job the business, or did he have a job in addition to that?

30:35 Judy: No, very soon once we made the decision to go into the franchise, and as we were doing our renovations and as we’re getting the prep work going, he had a full-time job at that time. He felt that he needed to dedicate, and he wanted to. And I said, sure. Because I knew he always wanted to be a business owner, and I was doing my PhD. So it made sense that there’s a dedicated person at the business. So he’s full-time there.

31:06 Emily: Gotcha. And let’s talk then about the addition of the children. And you’ve already mentioned that that’s caused some real estate, you know upheavals, but you know, how else have your finances changed upon having children?

How Have Your Finances Changed Upon Having Children?

31:20 Judy: A lot. A lot. Children are very expensive for financial life. Yeah. It’s like daycare. Daycare is expensive in Canada. You know, every month is one TV, right? Every month is one iPhone, if you have to compare it to material. Also because, in Canada, the illusion is we can get a whole year off, but the whole year off for me also means a significant pay cut, right? Yes. Legally, we can get the time off, and then we will go back to having a job, but there’s a difference in income. So, that was okay. Because I think the business was doing well, and I have enough savings. I never need to worry about that. But I have to say that every month that the childcare, the daycare fee, was hard to swallow in the beginning. Whoa, that’s another iPhone. That’s another TV. So, it’s expensive to have kids.

32:26 Emily: So then what happened with your finances overall? Does that translate to a lower savings rate or, you know, did you change your lifestyle during that period?

32:36 Judy: I think we had to change our saving strategy. Like we just have to put more expenses, and less saving. Yes.

32:45 Emily: Yeah. So I have two children, they’re ages four and two. Of course, pandemic year is a weird year, and we’re not paying for childcare right now, but I am looking forward to my daughter turning five and starting kindergarten. And maybe there’ll be some, you know, before or aftercare, I don’t know, but I’m really looking forward to that state-sponsored childcare that’s coming. I’ll still have to pay for the little one for another, you know, few years, but yeah, it’s a really, really significant bite. And so it’s kind of a, you know, it’s a phase of life, right? When you have to pay for childcare, it’s a phase of life you have to accept. Yeah. Your savings rate is going to be lower than it would have been, but Hey, once the expense goes away, you just can put all that money back into savings and your rate will shoot up.

33:28 Judy: Oh, Emily, I don’t know when that will be, when we can get into that stage. Because when they are four and two is the daycare. When they are five to nine is all the extra curriculum activities. My daughter, she dances. Her first dance dress that she needs for her performance was more expensive than my wedding dress. That’s it. That’s it. That’s expensive.

33:57 Emily: Yeah. I’ve heard that too. Both about expenses with kids, is that, yeah, the daycare is a lot of the beginning, but also just shifts later on to being other things. And then also, you know, the intensity of the parenting is much more like it’s physical when they’re young, but it’s very emotional when they’re older and you just have different kind of roles to play as they age. And how old are your children now?

34:18 Judy: They are 10 and 12.

Financial Advice for First-Time Parents

34:19 Emily: Okay. And so what is your advice for someone, you know, anticipating the birth of their first child or who has young children, you know, financial advice for that person?

34:30 Judy: For kids stuff? I would say, I feel a lot of people, they would like to invest into one thing like a car seat, a stroller. I would say, go ahead, buy that luxurious thing that you really want for your kids. But everything else, get hand-me-downs. Get it from your friend. Because they grow up so fast. They grow up so fast. They don’t need all these fancy little cute dresses. And by the time you actually can fit into the dress, we live in Vancouver. So the summer time we only have three sunny days ever. Like hot sunny days. I mean, I remember we had so many cute little dressed that we really couldn’t use them. So, hand-me-downs. Get hand-me-downs.

35:11 Emily: Yeah. I think we followed your advice for our children. The one big, nice expensive thing that we bought was a Bob stroller. Right. Jogging stroller. And then everything else, we did buy new cribs, but we bought like Ikea, like bottom of the line, like so simple, stripped down Ikea cribs and tons and tons of used clothes. We were so fortunate to be, you know, sort of passed used clothes and then we pass them on to the next family afterwards. That’s exactly it worked. Yeah. Yeah. It’s a wonderful boon, if you can get into a parenting community that does that sort of thing. But yeah, I do think we followed your advice. We picked one thing that we wanted and everything else was just really just as cheap as we could get it.

35:49 Judy: And then the other one advice, well, for me that works really well, is I told my kids that I would pay for their education, for their readings, and everything. Because I think my mom was really frugal to a point that looking back, there are moments I go, mom, you know, you could have spent a little bit more money on my education. Because I think we have PhDs. So we care about education. So I really wanted to let my kids know. I am willing to spend money on things that are important to me. And the thing that is important to me is your education. So they know, they know that they can go into the local bookstore, we call it the bookstore. They can buy almost anything in the bookstore, including toys, you know, the bookstore has so many other gadgets. But they take advantage of it. And I actually allow them to, you know, as a bookstore, we will buy something educational. So I don’t, when it comes to book, I have no limit for my kids. Yes.

36:52 Emily: And is there any other advice that you want to add in at this stage for new parents or parents of littles?

36:59 Judy: The phone is a very attractive thing. You know, it’s just one phone. You have so many toys in there, but stay away from it as much as possible. Get your toys from your friends. Get your free toys from your friends. That costs very little money. And, for me before the pandemic, I’ve been strictly using cash in front of my kids. I carry cash. I really want to show them the exchange of money. But during the pandemic it was a lot harder, but they are older now. I think they understand the money, they have some understanding of money, but before the pandemic, I strictly used cash, especially in front of the kids.

37:44 Emily: Yeah. I think that’s a really good tip. Actually, so I mentioned, my daughter is four, she turned four during the pandemic. And at four we were like, okay, we’re going to start really teaching her about money. Like, what is this concept? You know? But because it was during the pandemic, there was no way that we wanted to handle cash coins, anything. So we did get a toy that, you know, represents money, but it’s something that I feel she’s missing out on a little bit now. And I want to somehow, you know, establish that for her later.

38:11 Judy: Well, four is still young. Right? So you still have a lot of time. There’s no hurry. And yeah. She still has a whole lifetime to learn about money.

Best Financial Advice for Another Early-Career PhD

38:22 Emily: Yes. So Judy, thank you so much for this interview. I loved hearing about kind of your journey and your advice. To wrap up my interviews, I always ask my guests, what is your best financial advice for another early-career PhD? It could something that we haven’t mentioned so far in the interview or something you just want to circle back to and emphasize.

38:40 Judy: You don’t really need to spend money on things that you need to impress other people. You know, just really know what is important to you and what you need. Really understand what you need and what you want, the difference between the two. I mean, I’m not saying that you cannot get the thing you want, but knowing that this purchase is what I need, and this is a purchase that is what I want. And have that differentiation in your head, in your mind. I think that’s already a very good start.

39:11 Emily: Yeah. I think that’s an incredible insight. Especially, to me, I always think about this when it comes to recurring expenses like recurring, fixed expenses. So, you know, we talked about housing a bit earlier. So what in your housing cost is a need, and what is an upgrade to that, a want? And I think it’s important just to keep in mind in case you ever come upon a situation where, you know, you want to cut back, you’ll know, okay, well, you know what, the house actually is bigger than what we needed at this point, or the car, or whatever it is. Like if you differentiate between, okay, well, I could have this, I can afford this, you know, more of a want thing right now, but just to keep in mind. Yeah. There is a way that I can scale this down, you know, should it come to it in the future. Like you said, to differentiate in your mind, I really like that advice. And will you let us know, you know, about your business and you said, you know, it’s a little bit on the skids during the pandemic, give us kind of an update on that and where people can find you if they’re interested in learning more about it?

40:06 Judy: Well, my business is more catered to kids. And so it’s a reading center, we specialize in fostering reading and writing. We have lots of books. Good levels from the state. And so it’s called Reading Town, it’s a franchise and, and I love reading with kids. And we have programs that are good from Kindergarten all the way to grade 12. Lots of readings. Yes.

40:38 Emily: Yeah. Thank you so much for letting me know about that. And thank you so much for joining me today.

40:41 Judy: Thank you, Emily.

Outtro

40:43 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me! 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. 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.

How to Eat Well on a Grad Student Budget

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In this episode, Emily interviews Jen from the Budget Epicurean (formerly College-Approved Food) about her experience as a grad student. Jen finished a master’s and spent several years in a PhD program, but decided to leave before completing her dissertation. They discuss her reasons for leaving and the career she built and what role finances played in the decision. In the second half of the interview, Jen gives her best tips for eating well on a grad student budget, including curating go-to meals and ingredients, where to shop, how to track prices, and what kitchen appliances are the best bang for your buck.

Links Mentioned in This Episode

grad student food

Teaser

00:00 Jen: I almost tripled my income within two years of leaving the program. It was very exciting to get those paychecks and say, oh wow, this is what real money feels like.

Introduction

00:17 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 9, Episode 4, and today my guest is Jen from Budget Epicurean. Jen finished a master’s and spent several years in a PhD program but decided to leave before completing her dissertation. We discuss her reasons for leaving and the career she built, plus what role finances played in the decision. In the second half of the interview, Jen gives her best tips for eating well on a grad student budget, including curating go-to meals and ingredients, where to shop, how to track prices, and what kitchen appliances are the best bang for your buck. I have found through facilitating my workshop Hack Your Budget that early-career PhDs are highly interested in food spending. I poll the attendees about what budget category they most want to discuss, and food always comes out on top, plus the vast majority of the frugal tips submitted are related to food. I think this is because grocery spending is typically the largest variable expense category in a grad student or postdoc budget. It’s quite gratifying to try out a new frugal strategy and immediately see the effects on your spending. In fact, Season 4 Episode 13 with Dr. Brielle Harbin was devoted to the subject of meal planning, and I almost always interrogate my budget breakdown guests on their cooking and food shopping habits.

01:51 Emily: Keep in mind, though, that your frugal journey should not end or even necessarily start with food spending. I am a firm believer that you should re-evaluate your large, fixed expenses, such as housing and transportation, before any other categories. It may take a long time, a lot of research, and even some money up front to reduce your spending in one of those areas, but once you do make a reduction, that lower spending level is locked in indefinitely and requires no conscious action by you to maintain. That is the big advantage of reducing fixed expenses first. However, I also love the idea of using frugal strategies in the kitchen to start what I call a frugal stack, which is when you use variable expense reductions to leverage yourself into fixed expense reductions. If you would like to learn more about strategic frugality and frugal stacking, check out the Personal Finance for PhDs Community at PFforPhDs.community. I taught these strategies as part of two monthly challenges held near the end of 2020. I also devoted a chapter of my ebook The Wealthy PhD to frugality; it discusses the philosophy of frugality and gets into really nitty-gritty strategies for each one of your budget categories. I hope you will join us this month inside the Personal Finance for PhDs Community PFforPhDs.community.

Book Giveaway Contest

03:30 Emily: Now onto the book giveaway contest! In June 2021 I’m giving away one copy of The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach, which is the Personal Finance for PhDs Community Book Club selection for August 2021. Everyone who enters the contest during June will have a chance to win a copy of this book. If you would like to enter the giveaway contest, please rate and review this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily at PFforPhDs dot com. I’ll choose a winner at the end of June from all the entries. You can find full instructions at PFforPhDs.com/podcast. The podcast received a review recently titled “Preparation and survival!” The review reads: “Excellent resource to get prepared for graduate education and to navigate it. I think the specifics of your personal situation and institution will always vary. So some things you take with a grain of salt, however, the biggest asset of the pod is the variety of people interviewed. People from different backgrounds and programs and the amount of topics covered. Most of these topics are discussed behind closed doors and in private, but this podcast makes you remember you’re not alone and there are way more people out there navigating difficult situations like you.” Thank you to this reviewer, and I fully agree that the strength of this podcast lies with the guests! I really appreciate my guests being transparent about this taboo topic. Without further ado, here’s my interview with Jen from Budget Epicurean.

Will You Please Introduce Yourself Further?

05:10 Emily: I have joining me on the podcast today Jen from Budget Epicurean. And we kind of ran into each other on Twitter. And I realized that Jen would have a lot to say to us on the podcast. So that’s why I invited her on. And she is both a former grad student and, as you can tell by the name of her blog, Budget Epicurean, has a lot of content to offer us on managing a budget with respect to groceries, with respect to cooking, food spending. So we’re going to learn about both these things. Why did Jen leave her graduate program, and then what are the food tips that she can give us for, you know, eating well on a budget? So I’m really excited for this interview. Jen, will you please introduce yourself to the audience a little bit further?

05:59 Jen: Sure. Thanks Emily. Yeah. I was a graduate student for a very long time. My mom’s a nurse, my dad’s a chemist, so I’ve always been interested in science and knew from a young age that I wanted to go to grad school, get a PhD, run a lab. So that was kind of my path. And I got my undergraduate degree in biology and then I pursued a master’s degree right after, also in biology, and then got into a PhD program in genetics which was wonderful. I loved being in school and learning, but I realized after about a year of talking with the other graduate students, the other postdocs, and even some of my advisors who said funding kept getting tighter and tighter. Tenure-track jobs were almost non-existent anymore. And it just seemed like a big struggle. So it took me about two and a half years to decide, it was a really hard decision, but I did not complete the PhD program. And we can get more into that later. But throughout all this time, I was also blogging because I love food and cooking. So it started out in undergrad as College Approved Food, that most of it you can make in like a dorm room. And it’s just kind of grown from there and morphed over time into the Budget Epicurean as my personal cooking skills and interests expanded.

What Were Your Career Aspirations at the Start of Grad School?

07:24 Emily: One thing I love about blogging, and I used to blog about personal finance, is that you have this wonderful record to look back on, you know, years later. When you can’t quite remember as well, you know, what was going on day-to-day, you have that blog. So it’s so fun that you were focused on food for all those many years and that you have the record of it. So I want to go back to, you know, when you started graduate school, you said you were basically going straight through, undergrad, master’s, into a PhD program. What were your career aspirations? Was it definitely to have a tenure-track job or, you know, was that the only thing you were there for, or what were you thinking when you started the PhD program?

08:00 Jen: So early on, I guess I just had this dream of having my own labs and writing papers and grants and, you know, like I’d cure cancer someday or some kind of fabulous scientific discovery. It just seemed so interesting and just a thing I wanted to do. And then the more I got into it, it’s kind of, they say, you know BS is bull crap, and then MS is more crap and then PhD is just piled higher and deeper. And the longer you go, the more narrow your focus gets on your field. So you know a lot about a little. And so my ideas of big discoveries kind of just became more like fixing this one little problem that we don’t know enough about. And I think that was the further I got, the more I saw people in the end goal as like a professor, as someone running a lab and saw what their lives were. They don’t actually do the science anymore. They’re lab managers and money managers and politicians almost to a point. So I think that’s where the kind of disillusionment started.

09:19 Emily: Yeah. I think, you know, I had a similar trajectory, I would say at the beginning of grad school, like came in wanting to run my own lab, not necessarily in academia, but just to be doing research. And I realized as you did that, once you’re at the top of that, you know, hierarchy of your own lab that you are not doing the day-to-day in the research. And so I then started thinking, oh my God, I actually sort of idealized a postdoc as like the perfect job. And of course there are, you know, staff scientists, those positions can exist, although they’re not super common in academia. So for me, it was never about like academia and like the tenure-track and so forth, but rather about doing research. That was until I got sick of doing research and decided never to do it again later on. But yeah, I’m just thinking about like, I’m sure you considered this because you took a lot of time for this decision, but what were the jobs that you maybe could have had without the PhD? And did you just still have that sense of like, no, I’m going to be overeducated by that point, according to what your interests were? Was that kind of how the decision was made? That even if you didn’t stay in academia, if you finished the PhD, you would still be pigeonholed so much?

10:30 Jen: Yes. I think that ultimately is why, because I did finish a master’s program before going into a PhD program, so not everybody does that. So I had the masters already, so I knew I was that like one level above a college degree, which was, you know, good financially-speaking and did lead to the career path I’m currently in. But not wanting to go the full PhD without wanting one of those “You need a PhD to do it” jobs. I was lucky we had a group that was called careers, alternate careers in science, something like that where once a month they brought in people. So I saw a couple of different options of people who, you know, were clinical scientists in pharma and they advise drug companies or clinical illustrators for textbooks and things like that. But none of those really spoke to me. So I kind of got into that thought process of, okay, well, if I finish the PhD, then there’s nothing really at the end of this tunnel, so I should stop now.

Role of Finances in the Decision to Leave Grad School

11:31 Emily: Yeah. Again, I see myself so much in this path because when I went through the same career exploration process, I did identify a career track that I was like, well, that sounds really cool, and I do need a PhD to do it. Or not need, but you know, it’s helpful. And so I decided to keep going kind of with that in mind. And of course after I finished my PhD, I started my business and it has nothing to do with that career track or anything. So it’s just so interesting, like that can make all the difference is really seeing a career that you’re interested in. Obviously, why would you finish it if you didn’t think there was a career on the other end that needed the degree and that, you know that you were super passionate about? So what role did finances play in this decision?

12:12 Jen: So, there are definitely pros and cons to going straight through. Sometimes I kind of wish I had just taken a few years off after undergrad or after the masters to try and get a career and see if I liked it and then go back. But I think it was also helpful that I had just come out of undergrad where, you know, you’re very used to living on a low income. So going into the master’s program, I think I made $12,500 per year. Which now seems completely absurd, but this was in Ohio and my rent was only $350 a month. So it was doable.

12:47 Emily: What year was that? Or years?

12:50 Jen: 2010 to 2012.

12:53 Emily: Okay.

12:54 Jen: I believe. And it was an attic. So I was literally just living in an uninsulated attic apartment in Ohio. So, you know, my electric bill was probably almost that. But then going into the PhD now I was making 20 something in Colorado. So this is circa 2012 to 2014, something like that. And it just was getting very difficult. I was starting to think about wanting a house someday. I met my future husband there. So we’re thinking about, you know, buying a house, having a family, getting married. And we were both graduate students at the time. So even combined, we were 40 ish. So it was just really difficult to save anything or feel like, you know, you could start doing those adult things as a grad student. So that’s one of the many things we discussed was, okay, if we want to buy a house, we need more income.

High Attrition Rate Amongst Grad School Cohort

13:53 Emily: And you mentioned to me when we were preparing for this interview, that most of your friends left grad school too. Was there a pretty high attrition rate from your cohort?

14:02 Jen: Yes. we had four start and, to my knowledge, only one is still in the program. And the year after us I believe they had the same, they had four people start and only one is still in the program. And now six, seven years later the one person who stayed is still not graduated and had switched labs twice already. So.

14:28 Emily: And do you think that finances are playing a role with those decisions as well? I mean $20K a year, you know, 6, 7, 8 years ago in Colorado, not a low cost of living area, by any means. It sounds quite difficult, even as you said, in a two low-income, two low-income household combined, I still think that would be quite difficult. I’ve just been thinking a lot recently about the strain that we put–“we,” academia–puts on our young, our trainees, of the financial strain that we put on them and the effect it can have on our mental health, our career outlooks. Obviously the financial directly affecting that, even physical health because, you know, food security can be an issue. Housing security. So, yeah. Did you talk about that sort of thing with your cohort mates?

15:21 Jen: We didn’t really, I mean, we weren’t close enough to talk about the numbers and the details, right. But I know I’m the only one who stayed, I think a large part had to do with, he had a lot of family support. Family lived in the area, so he lived with them. So even though he was married and had a kid with another on the way there was, you know, no costs for housing, he had support to help watch the children, to support, to get food and things. So I think that probably helped him a lot, that, that low-income didn’t matter as much. He had that social safety net. One of the other girls who dropped out it was because she got pregnant along the way and got lucky that her husband got a pretty high-paying job about halfway through her first year. So they were comfortable enough that, you know, they said the amount that she was making wasn’t worth the stress it was putting on her. So she left and didn’t come back. So I think that if you don’t have that type of support or other income, it’s really hard to make it as a grad student.

16:22 Emily: Absolutely. It sounds like you, and you know, these other friends, you mentioned like you’re starting to kind of lift your heads up and say, what do I want the rest of my life to look like outside of my career, and what finances are needed to support that? And is grad school currently, or in the future, going to take me to that financial place that I want to get to? And you know, I’ve had a previous interview actually, we’ll link it in the show notes, with Dr. Scott Kennedy, where he talked about, you know, his aspirations initially to become a faculty member, you know, tenure-track, and just realizing as he started his family that a postdoc and, you know, an assistant professor position was not going to cut it for him and his wife and three kids and so forth.

Improved Finances and Current Career Trajectory

17:06 Emily: And so, I mean, so he changed career tracks and he’s very satisfied with that and is paid very well. But yeah, sometimes, you know, the decisions you make when you’re 22, 23, 24 years old, you’re not thinking super far, like you might be thinking decades ahead in your career, but not necessarily about how things might change in your personal life. And they can change very quickly when you’re in your twenties. And a lot of people are, you know, forming families and so forth. So yeah, I just, I find that really interesting. So, you know, what career have you had after leaving your PhD program and how are your finances looking now?

17:39 Jen: Yeah. So once I had made the decision that, yes, I did need to leave. I didn’t want to just jump ship, right. I didn’t want to have zero income. So I started looking at other options and as I said earlier, having the master’s already really helped because that gave me a leg up and a lot more options beyond just, you know, being a research tech, cleaning beakers at a university somewhere. Not that that’s a bad thing. But I think it was actually through one of the people who came to talk to us. It was someone who worked for pharma as the medical monitor for clinical trials at a pharma company. And so I started looking into clinical trials, which prior to then I hadn’t really thought about. Every drug that’s approved, that’s what they have to go through. And so I looked into, you know, how does that happen?

18:27 Jen: What are the different careers you could do on the pharma side, on the site side? And I just had good timing. I found an opportunity with a research group, very close to where I was and interviewed. And even though I had no research experience, clinical research experience, I had the master’s degree. And so I convinced them that I could learn quickly and they decided to go ahead and take a chance and hire me as a research associate. And I loved it. It was the first time I ever had patient interaction with people in a clinical setting. And it was just so much fun and it was a very eye opening moment of like, this is like the thing. This is the thing I want to do.

19:08 Emily: Wow. And it sounds actually like, you know, based on, you mentioned your parents’ careers earlier, that it’s kind of an interesting melding of the two, like still doing research, but having patient interactions, like probably, yeah. They probably both do each side of those things, right?

19:21 Jen: Yes, yes. It was perfect. So I still get to read scientific papers. I still get to browse Google Scholar. It’s just, you know, looking at the background of my drugs and standard of care and being on the cutting edge of research is so much fun. So yeah, it was a very good fit. And having the masters, I think is the thing that really pushed me into it. And then once you’re in clinical research and you have years of experience, then the whole world opens up to you. So I’ve switched companies several times, moved up in the ranks and now I’m in essentially a clinical coordinator management position. And so I think doing that was an excellent choice. I don’t know that I could have done that right out of undergrad. So ultimately I’m glad it all worked out the way it did. But I almost tripled my income within two years of leaving the program. Because I mean working full-time, I think I started at like 40. So just by getting a job, a 40-hour-a-week research assistant job, I had doubled my income there. And then after I had a year of experience, I went to a different company and then I was at like 58 or something like that. So yeah, it was very exciting to get those paychecks and say, oh, wow, this is what real money feels like.

20:43 Emily: Yeah. Incredible. And that’s the thing that, you know, I often talk the income jumps that can come along the PhD process, but guess what, if you’ve been living on a grad student stipend, almost any job is going to pay you quite a bit better than that. So yeah, I’m sure that did feel incredible.

Commercial

21:02 Emily: Emily here for a brief interlude! This announcement is for prospective and first-year graduate students. My colleague, Dr. Toyin Alli of The Academic Society, offers a fantastic course just for you called Grad School Prep. The course teaches you Toyin’s 4-step Gradboss Method, which is to uncover grad school secrets, transform your mindset, uplevel your productivity, and master time management. I contributed a very comprehensive webinar to the course, titled “Set Yourself Up for Financial Success in Graduate School.” It explores the financial norms of grad school and the financial secrets of grad school. I also give you a plan for what to focus on in your finances in each season of the year that you apply to and into your first year of grad school. If this all sounds great to you, please register at theacademicsociety.com/emily for Toyin’s free masterclass on what to expect in your first semester of grad school and the three big mistakes that keep grad students stuck in a cycle of anxiety, overwhelm, and procrastination. You’ll also learn more about how to join Grad School Prep if you’d like to go a step further. Again, that’s the academic society dot com slash e m i l y for my affiliate link for the course. Now back to our interview.

Best Tips for Eating Well on a Budget

22:30 Emily: So let’s switch focuses now and talk about the food side of things, the subject of your blog. And so I’m going to kind of let you like drive this half of the conversation, but like, what are your best tips for us in terms of shopping, cooking, whatever it is, as I said earlier, eating well on a budget?

22:45 Jen: Yeah. So I’m also lucky there. My mom is a fantastic cook, and I grew up in a household that we were just very thrifty and frugal and creative. So I got to use all of those skills to feed myself, you know, better than ramen all throughout college. So my house was always the place to go for dinner parties and game nights. And I love hosting, so I had to find ways to, you know, feed six of my grad student friends without, you know, we can’t afford $60 worth of pizza every Friday. So I think one of my best tips is to just try new things. And eventually you will find some recipes that you like, and put those on repeat. So for your standard meals, I have tons of like cheap ingredient lists and less-than-five-ingredient meals on my blog. Things like stir-fried rice. That is just infinitely possible to mix it up. You can put beans in it, you can put whatever meats are on sale in it, and whatever vegetables. It’s good with canned or frozen seasonal produce. So find those couple of recipes that are very flexible, that you almost always like, it’s easy to cook, and that saves you tons of time and money. If you just say, okay, it’s Tuesday, I’m hungry. What can I make? And you just have these like three, five things that you just know you have on hand in the house.

24:10 Emily: One of the things that you just mentioned that I thought was really key was short ingredients lists. Because I know when I started cooking, and I did not have extensive cooking experience growing up or through college. I was always on like a meal plan, so I didn’t have to really cook outside of that much. So when I started with that, I was looking at whatever, I don’t know, standard recipe at that time books. And they would have like 10, 15 ingredients for like a recipe. And it would be cool and like taste good at the end, but the work that went into handling all those different ingredients, and also just the fact that I did not have a stocked kitchen and it would be like, oh, you know, three different spices for this one, you know, meal. And they’re like several dollars each and I had to pick them up and so forth.

24:55 Emily: I realized that it was the wrong approach, looking back at it, and now I cook much, much more simple meals, usually that have usually, you know, much shorter ingredients lists. And I think that’s really a key when you’re just starting out. And yeah, like I said, your pantry is not already stocked with, you know, the sort of esoteric like spices that some fancy recipe might call for. So I really love looking at yeah, five ingredients or less, like those kinds of recipes. And I also really like the idea of having some kind of generic base kind of meal that you can then tweak and alter with, depending on what you have on hand, or as you mentioned, what’s on sale. Something that’s flexible, like a stir fry. Do you have some other examples of that? I’m thinking like salad, you know, that works too.

25:39 Jen: Yeah, for sure. Salads are a great one. You can, you know, can a corn, can of black beans, suddenly it’s Tex-Mex. If you got, you know, walnuts, cranberries, some kind of cheese, salads are great to mix it up. Whatever proteins on sale. I love chickpeas or, you know, a little flank steak. You can get those for a couple bucks, slice it up. It makes a great salad. Soups are really great. If you’re a person who likes soups that’s always a good kitchen-sink meal. Like I don’t know that I could think of anything that you couldn’t throw in a soup and make it work. Casseroles are also great. Omelets, you would be surprised at the things you can put in an omelet and make it delicious. I’ve had like leftover French fries that normally taste terrible. Chop them up and throw them in an omelet. Now they’re basically hash browns. So yeah, I love meals like that. We still have them all the time.

Time Management Tips for Food Shopping and Cooking

26:30 Emily: And so what’s another kind of suggestion, maybe on the time management side of shopping and cooking, which I know can be a real challenge for graduate students?

26:40 Jen: For sure. So again, I would start with what you like, and then branch out a little bit from there. So a list is very helpful if you’re the type of person who likes lists to keep you focused and not spend eternity at the store. Plus it’ll keep you from, you know, just being confused in front of the spice rack, like there are 7,000 things. What do I get? Like, you look at your list, you know, I need like salt, pepper, cinnamon, that’s it. So having that also keeps you from spending money because grocery stores, you know, want you to spend more money than you intended and having a list can help not do that, although I still do.

Process for Making a Grocery List

27:23 Emily: And what about when you’re making that list? Like, what’s your process for that? Like, are you looking at the circulars that are produced by, you know, I don’t know how many different grocery stores you kind of cycle through, but is that, is that another strategy that you use, like shopping multiple stores? Like, let me know how you’re doing in terms of making a list, how you do that with your budget in mind.

27:42 Jen: Yeah. So I have a number in mind that I’m trying to hit every week, right? So let’s say you only want to spend 50 to $70 a week for one person. So you should definitely look at the circulars because stores have what they call loss leaders. So it’s usually whatever’s in season or they can get a lot of, and they want to use that to get you in the store. So like it’s wintertime and cabbage is on sale and Brussels sprouts are on sale. So they’re super, super cheap per pound. So you start with those things and say, okay, what can I make with those things? I can make soup. I can roast them as a side dish. I can put them in a casserole, and just come up with some ideas for meals. And so I would then make a list of, okay, I want this thing, this thing, this thing, they’re all on sale.

28:33 Jen: Check your pantry as well. So like, you know, I have some pasta noodles still, so I’m going to make pasta one night. So I don’t need to buy that, but, oh, I don’t have any sauce. I’ll put a jar of that on the list. So between what you need that’s not in the house and what’s on sale, you can then kind of build your meal ideas around that. And then when you’re at the store, you can look around because, you know, sometimes I’ll find deals that weren’t advertised in the circular, but they have, you know, there’s like a markdown on pineapple because it didn’t sell well enough or whatever. So I’ll pick up some of that too. So I think the idea of flexible meal plans is what works best for me. I’m not like, okay, Monday I will have oatmeal and then sandwiches. And then a tuna noodle casserole. It’s more like, I’ll probably make tuna noodle casserole this week.

Using a Price Book

29:23 Emily: Another strategy that I use. So, my husband always makes fun of me. I do not know the prices of things. I don’t like look at price when I’m shopping, especially in something like a grocery store. So it’s really important for me to kind of study the prices because it’s not something that I like naturally will just absorb. Like he just naturally absorbs that. He knows the last time we bought this, we paid this. The price I see in front of me is lower or higher. That helps me know when to buy it or not, or to skip it. But I actually have to use a price book. So especially when I am, so we recently moved to a new state. And so we were kind of like, well, we don’t know what the prices here are. So we started using a price book again.

30:02 Emily: It’s not something I do all the time, but just to check out, okay, well, this is what we’re paying over here, studying the receipts, basically. This is what we paid for this food at this store. This is what we paid for this food at this store. Okay, that price is the same every week. Okay, sometimes that price is lower and sometimes it’s higher. We need to like pay attention to when it goes to this level and then we can buy it. So the price book to me is really helpful as someone who does not naturally incline to, you know, notice the prices of food to know when something is a good deal or something is not a good deal. Because for me, if it’s not going to appear on the circular, unless I have that price book, I’m not going to know if it is a good price or not a good price.

30:37 Jen: Mhm, that is an excellent point. Absolutely. And I think I’m like, I must be like your husband. I just know in my brain like, oh, last time I bought Italian dressing, it was about 1.50 and it’s, you know, 10 for 10 while on sale. That’s a dollar. So I’ll just get three of them. Should last for, you know, until the next sale comes around. But if that’s not a thing you notice then a price book is definitely a good idea. And I would suggest a price per unit as well. Because sometimes they do get you there. You assume, you know, the big package, cheaper per ounce, but maybe it’s not, maybe you should get two of the one-pound bags instead of one of the two-pound bags. And that’s one way to know for sure.

Finding Your Go-To Stores

31:17 Emily: And one strategy that I just mentioned with that was shopping multiple stores. And so I’m wondering, you’ve lived in multiple places now, someplace for your undergrad, master’s, PhD, maybe you’ve moved since then. How have you found like your go-to stores in those new areas?

31:34 Jen: So I think it’s a lot of the mental price book thing. So we did move around a lot. We’ve lived in Colorado, Connecticut, and now we’re in North Carolina. And so when I go to a new place, I usually do go to all of the grocery store options at least once just to see, you know, what’s the layout, what do the prices look like? How far is it from home? And then I kind of choose the best one based on prices and now a little convenience, because we have that wiggle room in our budget to sometimes pay a little bit more just because it’s closer. But yeah, so I would definitely recommend going to the stores, just checking things out, write down in your price book the things you commonly buy. So that’s another way that you’ll know your eating habits like, oh, I always buy chicken and spinach and milk and bread.

32:20 Jen: So those are the things you’re buying every week, even if you’re only saving 10 cents, 20 cents every week, that’s going to add up. So I usually go to our Harris Teeter because they have pretty good prices. They have regular rotating sales on things we use all the time. Then I supplement once a month, once every other month with Aldi, which is one of my favorite discount grocers. And they’re expanding, they’re in most of America by now. So they just have great super cheap prices on your common everyday staples, like canned tomatoes, canned beans. So those are my two I use most frequently.

33:01 Emily: I’m glad you mentioned that you were in North Carolina. I did not know that. I did grad school in North Carolina at Duke. And so actually when my husband and I first got married, the closest grocery store to where we lived was a Harris Teeter. So we were doing a hundred percent of our shopping at Harris Teeter, which I do not think was a good idea, especially because we were not, again, paying attention to the sales cycles and so forth. It was just, it was all about the convenience of that being like super, super close. So after we started paying attention, after I started paying attention a little bit more to the grocery prices, we mixed in Kroger in North Carolina and Costco and Aldi. And so we would not definitely hit up, you know, Kroger and Costco and Aldi every week, but it would maybe be kind of on a two-week rotation.

33:45 Emily: And yeah, another kind of vote for Aldi. I recently moved from Seattle to Southern California. There were not any Aldis in Seattle, I don’t think, that I was aware of, but there is one really close to where we live now. And so I’ve been, like, as soon as we got here and we were like, oh my gosh, there’s an Aldi again, like we are so excited to be able to go back to Aldi. So yeah, definitely that’s where we do, like, our kind of primary shopping, I would say. And then sort of supplement it with like a regular, you know, grocery supermarket kind of situation.

Tips for Meal Prepping

34:11 Emily: I asked earlier about time management and I was thinking about like, I don’t know, meal prep or like bulk cooking, batch cooking. Do you have any tips around that for someone who maybe is just cooking for themselves and has a busy schedule? I know when I was in graduate school, a big problem for me was staying on campus till, you know, post-six, post-7:00 PM and coming home hungry. And what do you do in that situation?

34:36 Jen: Yeah, absolutely. So I think as a grad student, if you don’t eat leftovers, you should start now. I think I only met one person who refused to eat leftovers and they spent way too much money on food. But that is the best way to just make sure you always have something ready. So I would say, seek out things that freeze well. Things like pasta bakes and soups and chilies, and even some casseroles, and you can make those things in bulk. And honestly for one person, that’s not very difficult. You make one pan of, you know, like a rotini bake or lasagna, and you can eat some then, have some for tomorrow, and then freeze the other half. And that’s 2, 3, 4 more meals for you. So you can start out with cheap Tupperware or even Ziploc bags. The way I do it now is not necessarily cooking whole meals, but I batch prep when I make ingredients.

35:33 Jen: So say I’m making rice for stir fry and burritos this week, and I need like a cup or two cups of rice. Well, I can cook like six or eight cups all at the same time and freeze it in Ziploc baggies. And then next time I need rice, I don’t have to cook it. It’s already made, I just pull it out of the freezer, stick it in the microwave. And that saves me 40 minutes of not having to boil rice next week. So if you’re making things like that, I would say definitely batch it and freeze it if you can.

Go-To Kitchen Appliances

36:05 Emily: And also with, you know, someone budget-conscious in mind, what are your go-to like kitchen tools or small appliances that you would say are good for facilitating the kind of things we’ve been talking about?

36:19 Jen: Yeah, for sure. It’s a little hard looking back now, now that I have the luxury of so many things in my kitchen. But I would say if you can only get one thing right now, probably a pressure cooker is my absolute favorite accessory right now. And the newer ones that are super fancy and have a million things that can do are great, but you don’t need a super fancy one. Like I have an ancient pressure cooker from my grandma and it gets the job done. But that will definitely save you time. You can cook something like a roast from frozen in 30, 40 minutes. It’s amazing. So that helps you maximize your freezer usage of foods like that, and it’ll save you money because you can make your own dried beans. My biggest problem with dried beans was that they take so long. You’ve got to soak it overnight, put it in a Crock-Pot for hours. You can take dry beans, stick it in the pressure cooker, and 40 minutes later, you’re good to go. So the price per pound of dried beans is way better than canned, and a pressure cooker makes them almost as convenient. So that would be my top one right there.

37:35 Emily: That’s a good tip. I’m like pulling out my Amazon like wishlist, like, oh, I need to add one. Because I don’t have a pressure cooker right now. Oh yeah. That sounds really. Because I have far too many times left, you know, some meat or something frozen until way too late and have to kind of scramble and remake the plan. So I mentioned, I don’t have a pressure cooker, but the appliance that I used most when I was in graduate school, and I think it was something like $40 when I received it, was a slow cooker. And I really liked that too, because it was so easy to cook in bulk, again for one person or two people. Like you can cook one meal in a slow cooker and it’s going to last you all week pretty much in terms of like taking it for lunches or whatever.

“Leftovers” Avoid the Takeout Trap

38:13 Emily: So that was my, like, when I started using that, it like completely changed my like cooking life. It made things so much easier. And I really, like we mentioned about like, you know, freezing meals and having things ready also, you know, leftovers. I don’t even like the word leftovers. I love eating leftovers, but I don’t like calling them leftovers. I feel like it’s really pejorative. Like they’re like an afterthought. No, you intentionally created food than you needed, you know, initially. And you had a plan to eat it like over time. I love that because yeah, I think a big sort of trap is being hungry and not having anything really easy to go to at that moment. Especially as I mentioned, like coming home from lab late, I remember when I was blogging at some point and I mentioned something about cooking.

38:56 Emily: Like, you know, not eating out, basically. Like not eating out for convenience. I remember I got a comment from a grad student like, well, what do you do? Because you know, when you get home from lab, like you have to be, it’s late. Like you’ve got to be hungry. And I was just like, oh, I realize I never cook at that time. I always had something already ready to go in the fridge and the freezer because yeah, I came upon that situation over and over again. And I would be tempted to grab takeout on my way home if I didn’t know that there was something there waiting for me that was appealing.

39:25 Jen: Yeah, absolutely. And, the Crock-Pot would be my second for sure. They probably are a little bit more affordable, but yeah, you can make a lasagna in a Crock-Pot. You can make a huge batch of chili or soup or casserole or cook a whole chicken and shred it up and save it for later. So yeah, just having a bag or a Tupperware you can pull out of the freezer, the refrigerator, whatever, you know, it’s eight 30 at night. You just need something before bed. That is definitely a huge time saver, huge money saver.

Find What’s Cheap Per Pound Near YOU

39:55 Emily: Do you have any other tips around budget, budget, cooking, shopping, eating?

40:00 Jen: I would say just look, I mean, there are so many resources on things that are generally cheap per pound. Take those lists, but compare them to what’s near you. Just because the internet says eggs are cheap, that might not be the case where you live. Just because, you know, carrots are supposed to be cheap, maybe they’re not in Canada, I don’t know. But find the things near you that actually are cheap per pound and just keep trying different ways to make them until you find one you like. Because if you can make your average cost per pound lower, that’s going to make your cost per meal lower. And that’s going to be much friendlier to your budget.

40:38 Emily: I have to say, I’ve been doing this recently with cabbage. I’ve been on the website, like Budget Bytes, a lot recently and noticing a lot of cabbage recipes coming up on there. So I was like, okay, I need to find a way, because I never ate cabbage earlier in my life, but yeah, that’s the one I’ve been experimenting with recently. Haven’t quite found the thing that we love yet that’s made of cabbage, but maybe I’ll try one or two more before I give up.

Best Financial Advice for Another Early-Career PhD

41:01 Emily: Okay. Well Jen, thank you so much for giving this wonderful interview. As I ask all my guests at the close of our interviews, what is your best financial advice for another early-career PhD?

41:13 Jen: I would say, learn all you can about investing, but then do it. I spent far too many years just reading, reading, reading, but never actually opened an IRA or a Roth. I had a savings account, you know, but it wasn’t much. And even if all you can do is $10 a month, you know, at least I would have had something building, because time is your biggest ally and don’t let it slip away. Just do it. Open it. That’s what I told my sister. She’s six years younger than me, and she probably already has more than me in her retirement account. So just do it.

41:51 Emily: Yeah, that is perfect advice. I see the same thing with many, many people who come to me, come to my material that they know kind of what they’re supposed to do. They’ve been reading about it, but that step of getting off the sidelines and doing it is really where they get kind of held up and tripped up. And I guess my message to like that same audience is like, you don’t have to be perfect from the start. You don’t have to have the perfect investing strategy figured out. It’s much better to get started imperfectly and figure it out as you go along than do everything perfect right from the start. However, the start is two, three years later than it could have been if you had just been willing to, you know, take the leap. So I’m really glad you mentioned that, it’s yeah, a very, very common problem.

42:35 Emily: I don’t know. Maybe it’s a PhD thing, like a grad student thing, like wanting to do the research and wanting to be right and wanting to not mess up. And I certainly understand that. I actually did mess up when I first opened my IRA and didn’t catch my mistake for like a year, but you know what, I’m glad I started when I did, even though I didn’t do it right at the start. And I’ll mention actually for anyone who’s, you know, hearing themselves in that situation. I have a challenge inside the Personal Finance for PhDs community that is specifically about opening an IRA. So if you join the Community, PFforPhDs.Community, you can go to that challenge and find a six, I think it might be seven, actually, seven-step process. This is exactly how you open an IRA. This is what you need to do, the decisions you need to make at these different points.

43:17 Emily: This is how you research it. It points to resources I’ve created that are inside the Community. So it just, for exactly that problem, people getting off the sidelines. And so it just provides a little bit of accountability, too. Like you kind of go in there and you call me and say, okay, I’m taking the challenge. I’m going to do it. And then by the end of the month, I’m going to be asking you, did you finish? Did you go through all the steps? So thank you so much. Thank you so much, Jen, for this interview. And it’s been great talking with you and hearing about your journey and hearing these great grocery budgeting tips. Thanks.

43:46 Jen: Yeah. Thanks so much, Emily!

Outro

43:48 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me! 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. 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.

Pursuing Your Passion in a Financially Healthy Manner

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This episode is a podcast swap! Emily’s guest is Dr. Stephanie Schuttler of Fancy Scientist. Emily and Stephanie interview one another on the financial challenges of a career in wildlife biology and how to pursue your passion while preserving financial balance and health. They discuss the necessity and prevalence of volunteer and pay-to-play experiences in wildlife biology and how to have realistic expectations about the job availability and compensation at various levels of education. Stephanie is an expert in careers in wildlife biology, but this conversation is applicable to PhDs who are following their passions into many other competitive fields.

Links Mentioned in This Episode

Teaser

00:00 Stephanie: In this field, so much is about those experiences. So if you really want those pay-to-play experiences, because, I mean, some of them are super cool, you could focus more on getting into a school that’s more affordable and do some of those things rather than go to a really expensive school.

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 9, Episode 3, and today Dr. Stephanie Schuttler of Fancy Scientist and I are publishing a dual interview! Stephanie is a wildlife biologist-turned-science communicator and expert in careers in wildlife biology. We have a great topic: How to pursue your passion in a financially healthy manner. Stephanie gives the financial and career lay of the land for wildlife biology, a popular and competitive field that requires volunteer and pay-to-play experiences prior to being admitted to graduate school. Even completing a graduate degree in wildlife biology doesn’t necessarily lead to the type of job young people dream about when they enter the field. Sound familiar? Stephanie and I discuss how to limit the financial risk of pursuing a career in a field that you are passionate about.

I have some exciting personal news, which is that I finally received my full vaccination course against COVID-19! I have to say, it was tough to watch my friends and acquaintances who have university and hospital affiliations receive their vaccinations over the last several months while I was waiting for them to become available to my age bracket in California. But my turn finally came. I am ecstatic that my parents are visiting us this week, whom we have not seen in person since November 2019.

01:51 Emily: Prior to COVID, as you likely know, I gave in-person seminars and workshops at universities. I honestly wasn’t sure how my business would fare without being able to travel and with universities facing the uncertainty that they did early on. As it turned out, in the 2020-2021 academic year, my speaking services in the virtual format were more in demand than ever, particularly this last spring. I feel really, really fortunate about that! My calendar is now open for engagements in the 2021-2022 academic year. I am of course offering virtual events, which I assume will continue to be popular. I’m not sure if professional development events and conferences are switching back to being in person this year to any degree, but if they are and I am asked to present, I will certainly consider it. I am over the moon about how I have adjusted my offerings for early-career PhDs this year, which you can check out at PFforPhDs.com/speaking/.

02:53 Emily: First, I got honest with myself about my most popular seminar, The Graduate Student and Postdoc’s Guide to Personal Finance. The Guide is my comprehensive overview of multiple personal finance topics. I was trying to cram it into 90 minutes, but it really is a two-hour seminar with Q&A. It’s great for the end of a workday, not so much for a lunch hour.

03:15 Emily: Second, I clarified the topics for my in-depth seminars, which are financial goals, investing, debt repayment, saving, and cash flow management. Each of these seminars comes in a one-hour lecture and Q&A version or a two-hour workshop version. The workshop version includes the teaching from the lecture version plus spreadsheet templates, worksheets, and/or small group discussion prompts. These seminars work well as stand-alone events or part of a series.

03:45 Emily: Third, I took my tax seminars off my slate of offerings. This is honestly a big risk for my business because my annual tax return seminar was second to The Guide in popularity and always drew my biggest audiences. The preparation of an annual tax return and calculating estimated tax on fellowships are my audience’s most universal financial pain points.

04:10 Emily: However, I am not leaving you in the lurch with respect to tax education and assistance. Stepping back from giving live seminars on this topic actually enables me to scale the delivery of the help. In place of these live seminars, I am licensing access to my pre-recorded workshops on the same topics. I have been offering these workshops for the past several years, and I know that they are even more effective than live events in guiding graduate students and postdocs to their goal of an accurate tax return and up-to-date income tax payments on their fellowships. Please keep these workshops in mind as we draw closer to tax season for 2021. If you would like to book a virtual or in-person event with me or recommend me to your graduate school, postdoc office, or graduate student association, the best place to go is PFforPhDs.com/speaking/. From there you can learn about all my seminar offerings, read reviews from previous event hosts and attendees, view my speaking fees, and schedule a call with me to discuss your event. I look forward to partnering with you this year to deliver high-quality, high-impact financial education to the early-career PhDs at your university, in your association, or at your conference.

Book Giveaway Contest

05:29 Emily: Now onto the book giveaway contest! In June 2021 I’m giving away one copy of The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach, which is the Personal Finance for PhDs Community Book Club selection for August 2021. Everyone who enters the contest during June will have a chance to win a copy of this book. The Automatic Millionaire was one of the first personal finance books I ever read, and it had an enormous impact on my financial mindset and behavior. The path to becoming a millionaire is not necessarily quick or easy, but it can be simple and automatic. I can absolutely credit the key strategy that this book teaches as the reason my net worth is as high as it is today. I hope this book effects a similar result for you. If you would like to enter the giveaway contest, please rate and review this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily at PFforPhDs dot com. I’ll choose a winner at the end of June from all the entries. You can find full instructions at PFforPhDs.com/podcast. Without further ado, here’s my interview with Dr. Stephanie Schuttler.

Will You Please Introduce Yourself Further?

06:49 Stephanie: Hi, I am Dr. Stephanie Schuttler, and I am a wildlife biologist, and now I’ve turned a science communication entrepreneur. A brief background of myself is that I kind of stumbled into this career. I didn’t know I wanted to be a wildlife biologist until my last year in college when I decided to study abroad and I randomly chose a wildlife management program in Kenya. So that changed my life. And I knew from there that I had to go to graduate school. So I got some experience doing three different types of internships over the course of three years. And then I went to graduate school to get my PhD at the University of Missouri, where I spent close to seven years there, followed by one short postdoc and one long postdoc, lasting, probably about, honestly, seven years. Yeah, so my short postdoc was at Missouri and my long postdoc was at the North Carolina Museum of Natural Sciences where I got to work on a lot of camera trap stuff that I talk about today. Yeah, and now the last part is I started my own business last year. I’ve been blogging for the past few years and I officially made it a business last year where I spread knowledge about science communication, I educate people, I started kids’ programs, and then of course I help people in their wildlife biology careers.

08:20 Emily: Fantastic. What is the name of your business?

08:23 Stephanie: A Fancy Scientist.

08:25 Emily: Great. I’m really excited to speak with you, Stephanie, today because are subject is kind of, you know, the finances of pursuing a career in wildlife biology, but it’s a little bit more general than that really, because we’re really talking about how to stay sort of financially balanced and healthy while you’re pursuing a passion that is not necessarily, or immediately, lucrative. And in fact might, you know, you might be paying for, in the form of your education, you might be paying for career experiences. So that’s kind of our general topic. So even if those of you who are coming to the podcast are not in wildlife biology, like still stick around because this is going to be generalizable information.

09:03 Stephanie: Yeah, absolutely. I would even add that our field can be more lucrative in terms of going to graduate school than other fields. Like I’ve heard about people who are getting their PhDs in English and their TAships get paid just so poorly. So a lot of the experience and advice here will definitely transfer over.

How People Develop a Passion for Wildlife Biology

09:25 Emily: Yeah. Let’s talk more about specifically how wildlife biology is positioned because it’s a science field, of course, which you might immediately think, oh, like you make money in science, of course. But on the other side of it, it’s a very competitive field and people follow it because of long-held passions. So let’s talk more about that. Like how do people develop their passion for wildlife biology and pursue that?

09:47 Stephanie: I think people develop it usually from a young age. That’s what happened for me. I always loved animals and I love nature. And like I said, I didn’t discover it until a career as later on. Like when you’re young, people always say, like, why don’t you become a vet if you really like animals? So I didn’t know it was a career option. Some people do, but when you track back to like, why people want to do it, it usually has to do with those experiences of being outside in nature when you’re young. And actually a lot of wildlife biologists, a lot of them start off like hunting and they just spend a lot of time outdoors. So I think that a big reason why people are so attracted to the field is that they think they will be spending a lot of time outside.

10:35 Stephanie: And this is definitely true for some careers. It depends on what level of education you have, and of course, what job you have. But in general, the more education you have, the less time you spend outside. It’s like an inverse relationship. And you know, we get really cool experiences. A lot of us get to travel. Of course, some of us get these really close interactions with animals that regular people can’t have, or even just accessing different types of places. Like some of the field sites I’ve been to would have been difficult to visit as a tourist and some of the experiences you have. So yeah, I think that’s what’s really attractive about it. And you’re right. It’s really interesting because there’s so much push for STEM education and especially getting People of Color and girls interested in STEM because our field is not very diversified.

11:33 Stephanie: And a reason to advocate for STEM careers is often actually like finances, that it’s a really financially beneficial career. But again, it totally depends on what you do, and wildlife biology is not very lucrative. And it’s just simply because there’s not a lot of money in wildlife and conservation work. A lot of our employment is nonprofits. The universities and, I mean, universities, you can definitely get paid well. And any of these jobs you can get paid well. But in general, if you think of like disease research, there’s going to be so much more money from the U.S. government and other sources to invest in like medical research than there is in saving wildlife. So, that’s really the big difference. But I think most people go into it because they love it so much. And that’s what I always said. I knew I wasn’t going to make a lot of money, but I loved it so much. So that’s why I went into it.

12:38 Emily: It’s so important to go into these kinds of career choices with your eyes wide open as to what the possibilities are, including the financial possibilities. So it sounds like people, maybe from the time they’re children, have a very like romantic idea of what this career is going to be, but the reality does not necessarily line up with that, especially as you advance further and further.

12:57 Stephanie: It’s interesting though, that you said that about like the romantic version, because I have a book, Getting a Job in Wildlife Biology: What It’s Like and What You Need to Know. And I had a review on there recently, it wasn’t a bad review, it was a four-star review, so it was good, but it was a parent that bought it for her daughter and she read it first, and with the intention of getting it to her daughter. And after she read it, she was kind of like, I’ll leave it up to my daughter to read. And her review was all about how realistic I was. And, and that’s exactly why I wrote it because people have this really romantic view of what wildlife biology is, like myself growing up, I saw Jane Goodall. And I mean, Jane Goodall, isn’t really considered a wildlife biologist. She’s more of a primatologist, but still that’s what you imagine it to look like, or Steve Irwin. And the reality is you’re not doing those types of things. So I pride myself on telling the truth, and I don’t want to dissuade anyone from entering this field. I just want them to know like what it’s like going into it.

Volunteer and Pay-to-Play: Are They Really Required?

14:01 Emily: So, one thing that I learned from our prior conversations is that in your field, it’s very common for people to have to do volunteer experiences or even pay-to-play experiences, to get into graduate school, to get a job, to advance. And this is not necessarily as common in other areas. So could you please tell us more about what, you know, what does pay-to-play mean? What are the kinds of volunteer experiences that people may be required to have? And are they really required?

14:30 Stephanie: Yeah, absolutely. This is a really hot topic right now. I personally think that you cannot get into graduate school without having some sort of experience. And in order to get that first paid experience, honestly, you really need experience for that. And you can, I would say you can get it in college if you volunteer with a lab and you get college credit for it. So that’s essentially not totally volunteering. And there are some work-study programs in colleges as well, but really to get your first experience, you need to volunteer. And that’s just the unfortunate reality of it. And this is a big problem because it discourages diversity from our field. So, I’m in no way, like advocating for these experiences. I just feel like that’s the reality of the situation. So there’s lots of experiences. And even our museum, when we had interns in our lab, we did have money for some of them.

15:27 Stephanie: And I constantly applied for grants to get money to pay interns, but they don’t come through. So either like I would have people email me and be like, I’m so interested in your research. Can I help you out? Or I would have a lot of research to do, and I would come across people and offer them experiences to help me with this. And there are exchanges in other ways. Like I write them letters of recommendations and I invite them to be on journal publications and stuff like that. But yeah, we can’t afford to pay for everyone. So it’s hard to deny people experiences who want them. But also, the pay-to-play thing is that some experiences are so desirable that they can afford to charge for them. And I do think there are some sort of scammy experiences out there where they profit off of it, but there are also legit scientists who are working in another country and they have to pay for the field site and the food costs and things like that.

16:35 Stephanie: So I’ve seen job advertisements where you get to maybe go to like South Africa for a summer and you have to pay to stay there. And they mention that it just covers the field costs and they’re not making money off of it, but still, I know a big reason why I got certain opportunities was because of my experience in Kenya. I had a study abroad program and an internship in Kenya. And Kenya was, it really was volunteering because I did get paid, but I got paid a Kenyan salary. And then I did have to pay for half of my airfare. So it ended up being a year where I didn’t make anything. And yeah, if I didn’t have those experiences, then I would have not had like my graduate school experience of studying forest elephants. So if somebody who comes from a financially disadvantaged background really wants to do something like work internationally, honestly, it’s really tough because those experiences are more desirable and people are willing to pay for them.

17:42 Emily: Yeah. You outlined a couple of reasons why these experiences exist. It really sounds like the field is in a bind. There’s not enough funding coming in for all the work that needs to be done, sort of from above, but from below, from the people coming up the ranks, there is an eagerness for people to do the work, even if it’s on a volunteer basis, even if they have to pay out of pocket for it. But it sounds like this just comes back to a funding squeeze, right? And the field being so popular and competitive. Those things combined have set up the conditions for this system to develop. And I agree with you. It sounds nightmarish, actually, for someone who doesn’t come from a financially advantaged background. And it’s a little bit like, you know, in the recent, I don’t know, last decade or two, there’s been so many more conversations about unpaid internships and the elimination of unpaid internships in most fields because they’re not great for anybody. Especially people who, you know, can’t afford to do them. But it sounds like that hasn’t quite touched the field of wildlife biology yet. Because these are essentially unpaid internships like on steroids, because you actually have to, in some cases, pay to access the site or what have you.

18:53 Stephanie: Yeah, absolutely. And that’s, like I said, that’s a huge conversation right now. And I think it’s especially difficult for nonprofit organizations because, you know, they obviously always need more funding. And they have been under attack, like posting unpaid internships. And I understand both sides. Like I understand that people need to get paid for their time, but I also don’t think it solves the diversity problem because if you’re just taking experiences away in general, then anything that is available is going to be so, so, so competitive. So it’s like a lose-lose situation.

Financial Risks in Pursuing a Wildlife Biology Career

19:32 Emily: Yeah. It definitely sounds like that. Okay. So we’ve kind of talked about the downsides to the field of kind of relying on these volunteer and pay-to-play experiences in the pipeline, at the beginning of the pipeline. To get into graduate school, you need to have some kind of experience. To get that first experience that maybe you get paid, well, you have to have an unpaid experience before that point. There are downsides to the field of like losing out on having great scientists, budding scientists who could be part of the field, maybe being turned away for financial reasons. What are the financial risks that are posed to an individual who tries to pursue a career in wildlife biology?

20:06 Stephanie: I think, I mean, just going into debt or living paycheck to paycheck constantly, that’s like super common in our field, but I know many people who have gone into debt for these like pay-to-play experiences or to do a volunteer experience, but they don’t have the means to cover themselves financially while they’re doing that experience. And it affects your entire life. The opportunities, I guess, like they kind of go away, but they manifest in different ways. So like once you get your PhD, well actually after your master’s too, like I talked about my friend, Rebecca, a lot of times you have these temporary opportunities, and it’s really difficult to get things lined up financially. And it’s a very demanding career. There are always things that you could be doing for your career, especially once you get to like the science route of doing more research-based things, then you are going to want to be working on your publications and things like that to get you that next job. So you don’t necessarily have the time to be able to like take on another job. So I mean, it’s really just that you have the potential to go into debt. People do go into debt, and then they don’t have the finances saved to be able to keep going, in the future, if opportunities don’t line up.

21:40 Emily: Yeah. This does remind me of the general like pursuit of the tenure-track in some fields where you need a PhD to get, and your goal is to get, a faculty position, but the employment opportunities, if you don’t end up, you know, landing that faculty position, are non-existent, very rare, not very lucrative. And so it’s like, yeah, if the stars completely align and you get that job that you’re going for, it all works out. But for most people who pursue that, it’s not going to work out. And so you have to realize that going in, it doesn’t mean you can’t like, you know, shoot for the stars and everything, but you need to have some kind of nets and backup plans and safety. Because the stats are that a tenure-track position is not going to work out for the vast majority of people who pursue one. And so it seems like there’s, you know, an analogy here with the field, the career in wildlife biology,

22:33 Stephanie: Do you see any additional downsides or risks?

Debt and Opportunity Cost: Loss of Compound Interest

22:38 Emily: I mean, mentioning, going into debt like you did is absolutely perfect. But to me there’s another layer on top of that, which is the loss of opportunity to get compound interest working for you. So if you go for many years in your twenties and into your thirties, maybe doing temporary work and underpaid work, and maybe you’re accumulating some debt, or even if you’re not, but you’re not doing anything like on the saving, investing front to get ahead with your finances, then that’s lost time. That decade or so is lost time. And it’s possible to make up for lost time, but you just have to save so much more later. But what if you end up, maybe in your thirties, in a job that pays, as you mentioned before, $50,000 a year, when you were hoping for something that paid more or was more stable or something like that? Like that’s where you are, and that’s what you have to live off of and save off of after that point and still try to make up for that lost time. So I think that people can be financially successful at all different kinds of salary levels, but like we were talking about earlier, you just have to be realistic about what the opportunities are, the salary opportunities are in the field that you’re pursuing, and also in your backup plans, if that primary plan doesn’t work out that well. So yeah, the loss of time to get compound interest working for you is the main one that I see there.

23:48 Stephanie: And I think that people in our field don’t think about that stuff at all and even, or I know they don’t think about that stuff at all. And even like talking about the loss of time with your first starting salary. You really don’t have at least a good first starting salary. I had a starting salary in graduate school, but like how most jobs work is you get your first job, and that’s your starting salary. And then that’s like the bar for you to negotiate a higher salary every job that you get. So for myself, when I graduated from my PhD, I was, what, thirties, close to 30. And you know, my husband who is an electrical engineer, he had been in his career for, for several years already. So not only are we getting paid little when we’re starting out, but we’re starting out later in age.

24:45 Stephanie: And another thing is people don’t do retirement investments either. So my dad grew up poor. His dad died when he was younger, and he had his brothers to take care of. So he was always like financially worried, and he always had us read financial books and stuff like that. So I’ve had a retirement account since legally you can have one, I think maybe 16 or 18. But yeah, like we’re not taught that. Like, you’re right. Like nobody’s talking about this stuff. And they, like, my friends would be like, well, I’ll get it through my job, when I get my first job, but some of my friends didn’t get their first jobs until they were close to their forties, and your retirement compounds. And that’s really where the money comes from. So if you are waiting a while to start that, then you’re missing out on a lot of that income compounding.

25:42 Emily: Yeah. And I think, again, to generalize, like this is something that I see with graduate students all the time, postdocs all the time is that there’s an optimism about what the future salaries are going to be post-PhD, post postdoc. And I certainly have the same optimism for them. But the other thing that happens as you age, generally speaking, is that your life gets more expensive in a variety of ways. You know, maybe you buy a house, maybe you have a child, maybe you have to take care of aging parents or other family members, like, so even if you do see a post-PhD, jump in salary in whatever field that you’re in, it might not go as far as you were hoping that it would. And so to me, my attitude is more like, you know, work with what you have now, that is, try as best you can to live a sort of financially balanced lifestyle and do some of that retirement investing or paying off debt or whatever it is that your goal is while you still have a lower salary, while you’re still in graduate school. And yes, like I do hope that that higher salary comes, the permanent job comes and it will all be much easier later, but just in case it’s not, let’s get started now so that you have that time, as we were talking about for, you know, your money to compound, or at least your debt to not compound as much.

26:54 Stephanie: Absolutely.

Commercial

26:57 Emily: Emily here for a brief interlude! Heads up, fellows: The next quarterly estimated tax payment deadline is Tuesday, June 15, 2021! This one always catches me by surprise because quarter two, strangely, is only two months long, while quarter four is four months long. Yet, a full quarter’s payment is due on June 15th. If you aren’t having income tax withheld from your stipend or salary and haven’t yet filled out the Estimated Tax Worksheet in Form 1040-ES, now is the time to do so. The worksheet will tell you how much you can expect your tax liability to be this year and whether you are required to pay estimated tax. If you need some help with the Estimated Tax Worksheet or want to ask me a question, please join my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers the common questions that postbacs, grad students, and postdocs have about estimated tax, such as what to do when you switch on or off of fellowship in the middle of a calendar year. Go to PF for PhDs dot com slash Q E tax to learn more about and join the workshop. Now back to our interview.

Advice for Pursuing a Financially Risky Career

28:13 Stephanie: Okay. So knowing that this is a financially risky career, what do you think, like, what’s your advice to people who want to pursue it in like, they’re absolutely sure they want to do this and maybe they don’t have a financial safety net or they don’t come from a really, really wealthy background? What can they do?

28:33 Emily: I think the first thing to acknowledge is that you, as an individual, are a whole person and that you have needs and desires that are perhaps independent of this career in wildlife biology that you want to pursue, or any kind of competitive and perhaps not lucrative kind of career. And what I mean by that is that I would love for you to pursue like your career kind of passion, but just as you’re doing that, keep in mind that you still have needs as a person. You have financial needs, you have relational needs, you have spiritual needs, health needs, all these things matter as well. And I think there’s a tendency for people, especially when they’re younger and in their twenties and so forth, to drive hard at their career goals at the expense of some of these other areas of life. And it will catch up to you, eventually. You will reach age 30 or age 40 and realize that you have some deficits or dearths in these other areas, because you were trying to sort of suppress your needs and desires in those areas for so long to pursue this career.

29:35 Emily: So I don’t think that’s healthy and don’t do it. So try your best. Right? And so we’re going to talk about the finances, but there’s all these other areas of life as well. So don’t forget that you’re a whole human and you’re more than just your future career or job in wildlife biology. So that’s kind of the first thing to keep in mind. So, as we’re talking about sort of financial health and financial wholeness, as you pursue these careers, I do think you need to create your own safety net and your own financial security and backup plans as you go. And so that may mean that it will take you a little bit longer to get to graduate schoo, for example, if that’s like your next goal. Maybe you might take an extra year instead of, you know, taking a one or two year gap, take a three or four year gap between finishing undergrad and that graduate degree, for example. And that’s to build up more of your own financial security in the meantime.

30:25 Emily: And so one of the things we talked about earlier, these pay-to-play or volunteer experiences, is it possible for example, for you to plan around that and say, I’m going to have a summer job? Maybe it’s not even a job, I’m going to have a summer experience, and it’s going to cost this much money, or I’m going to be paid this much, but my lifestyle needs are this much. And how can you save in advance for that? And what kind of job can you have when you’re not actively engaged with these experiences? How can you pursue a job and a career that will allow you to have the experiences, but still give you some financial stability in the meantime? And one of the things I end up talking a lot about, and that I’ve learned a lot about from people I’ve interviewed on my podcast is regarding money mindset and limiting beliefs.

Navigate Limiting Beliefs

31:06 Emily: And so a limiting belief that someone in the field of wildlife biology might hear, and they might even get this from your work, again, the realism, is I can only ever have a temporary job and I can’t have a job the other seven or eight months of the year, because that’s not in my field, whatever. But maybe there is a way for you to build a job or an income or a career in that part of the year and still have that balance where you want to do, you know, these special experiences in the summer or the spring, or what have you, but still be making money in the other part of the year. And honestly, I think one of the most accessible ways is what you and I are now pursuing, which is entrepreneurship. So maybe there’s a way to have, you know, set up your own stream of income.

31:45 Emily: Maybe you work on it more intensely in one part of the year and less intensely in the other part of the year. And you can create that balance for yourself to still allow you to pursue the experiences in the career that you want to have, but still be making money in the other part of a year or a little bit, you know, while you’re having those experiences still. So that’s one idea. The other one is about this debt, you know, either going to have experiences or on the flip side, maybe not paying down student loan debt that you’ve accumulated in the past. I mean, we’ve had a student loan debt crisis that’s been building and building ahead of steam for a long time, but especially in the last decade. And, you know, in the last decade, I think many people have come to realize, you know, your student loans, your education, especially at the bachelor’s level is not necessarily an investment.

32:30 Emily: It’s not automatically an investment. You can’t pursue any bachelor’s at any price and, you know, be sure that that’s going to pay off. Same thing for graduate degrees. You know, your home is not always an investment. There are things that used to feel safe that used to give you a path to the middle class that are not there, they’re not guaranteed any longer. And so I think you have to be really, like, in thinking about pay-to-play experiences as an extension of student loan debt. So like I’m taking out student loan debt to pursue my education. I’m taking out some kind of personal loan or consumer debt to pursue this experience that I want to have to get into graduate school. You can think about them sort of analogously. And so one rule of thumb that works for student loan debt that maybe you could extend to, if you’re going into debt for these experiences in wildlife biology, is don’t take out more debt than one year, your first-year starting salary.

33:20 Emily: That’s like the rule of thumb for an undergraduate degree. And so if you’re, you know, going into a little bit better or forgoing salary to pursue these volunteer pay-to-play experiences, can you keep the debt level down to one year of your current salary or lower? Is that possible? So like, so yes, pursue these experiences, but make sure you’re not giving yourself carte blanche, right? To spend and go into as much debt as you might want to. You’re sort of putting some checks and balances on yourself along the way to make sure that you’re not getting in too far over your head.

Consider the Cost of Your Education

33:56 Stephanie: Yeah, absolutely. And actually one of my big, I have a lot of advice for people, something I think that people should do is not worry about the school so much. Like a lot of students are super obsessed with like, what’s the best graduate program or what’s the best college to go to. And I honestly think that students should really, especially at the college level, focus on getting in the school that’s going to cost them the least, because like you mentioned your degree doesn’t necessarily pay off. If you’re going to invest, you know, $120,000 for a college degree and you can get the same result with one that’s going to cost you $10,000. I mean, I actually regretted for a long time, my experience because I didn’t know what I was doing. I didn’t know what I wanted to be.

34:49 Stephanie: An, I even applied poorly to schools. I applied to like only Ivy league schools because that’s what I knew. And the only schools I got into were my local state school and other schools that cost like $30,000 a year or a semester. And I was like, okay, I’m just going to start from my state school because I don’t know what I’m doing. And then it also felt weird to dorm at my state school, which is like 20 minutes down the road from me. So I stayed with my parents and I regret not having the college experience, but I also love that I don’t have debt and that it was, I mean, I paid, I think a thousand dollars a semester for school. So in the long run it definitely was worth it.

35:34 Stephanie: And in this field so much is about those experiences. So if you really want those pay-to-play experiences, because I mean, some of them are super cool. You could focus more on getting into a school that’s more affordable and do some of those things rather than go to a really expensive school. And this is true for graduate school, too. And graduate school in science, you do get paid, you get a stipend, but you get paid different amounts according to the different schools and even according to the different programs. So I was actually not in the wildlife biology program for my PhD, or in the department. I was in the biological sciences department, and they had a fellowship. So I was paid a lot more and I didn’t have to TA. And that played a huge role in me deciding to do that as opposed to another program where I would have to TA and get paid less.

36:31 Emily: I think that’s a great point. Both at the graduate and the undergraduate level. It’s more about what is the actual work that you could be doing? Who can you be working with? Rather than maybe the name of the school. And of course the finances come into play as well. Because again, I think my basic point here is like shore up security for yourself as you go as best you can to keep you on this route, as long as you want to be on it in pursuit of a career in wildlife biology. So that if you get to the end, let’s say of your PhD and you realize, okay, I can get the permanent job. I’ve achieved all my goals. Everything is wonderful. Well, you have some good, you know, financial, a nest egg behind you perhaps, or at least not as much debt as you could have been in.

37:15 Emily: That would be great. But if you get to that point and you say, Nope, I’m going to exit this career now. I’m not going to have the type of job that I thought I would have. I’m going to have some other type of job. At least you won’t have the financial regret behind you of, oh my gosh, I pursued this school, that school, they didn’t pay me well enough. I spent too much on this experience. Yeah. I think what you said is perfect is like focus more on the experiences. If you want to go for, you know, a less expensive college education, but save your dollars for some pay-to-play experiences that are really high impact, then that makes a lot of strategic sense to me.

FIRE: Financial Independence, Retire Early

37:45 Stephanie: Yeah. And another route, I think we talked about this in our chat, you talked about an acronym FIRE.

37:51 Emily: Yeah. So FIRE stands for Financial Independence Retire Early, or Early Retirement.

37:57 Stephanie: Yeah. So you could either do that or do a sort of hybrid model. And I interviewed somebody who did something kind of similar to that, inadvertently. He didn’t, I mean, he didn’t retire early, but he had 20 years in a corporation that was a really good job. And he participated, he volunteered in the Citizen Science programs on the weekends and in his spare time. And his corporation actually paid for him to go back to school. So he did get a degree in environmental sciences. But when he was finished and on the job market, he got the second job he applied for. And I could not believe that I was like, oh my gosh. Wow. And it was because of those volunteer experiences, he had so much experience that he was like leading groups and organizing events and stuff like that. So that all translated really well.

38:48 Stephanie: So you could start off in a more lucrative career and volunteer with conservation organizations, with Citizen Science, and make enough money then where you can take a less lucrative career. Or if you’re a real go-getter in today’s world, like, I mean, there’s really not a financial limit to like what you can do online and with entrepreneurship and stuff like that. Like, it is tough to do, but it’s, I mean, there’s so many like millionaires who are six-figure earners from selling courses online, and in practical stuff, too. Like I remember I was listening to this one podcast, this woman, she had a podcast all about goats and she made six figures just from selling a course on how to raise backyard goats. And she had like, she had like different courses, too. So it’s like, you know, you just don’t think like, oh wow, like you can make a lot of money off of information and goats, but you can. So there’s a lot of opportunities out there.

Combining FIRE with Passion Careers

39:52 Emily: Yeah. What I think is really interesting about the FIRE movement and combined with like these sort of passion careers, whether it’s wildlife biology or whether it’s maybe some other things you want to get a PhD in. So if, you know, the most intense people in the FIRE movement, the goal is to retire in about 10 years, not retire necessarily, but become financially independent in about 10 years. That would be like a fast goal. So you get out of college when you’re 22, you know, by 32, if you’re really intense about it and chose the right career, maybe you were an engineer or something like that. You could be retired by that point or, you know, financially independent, optional to retire at that point. Now that is a route to free up the entire rest of your life from age 32, to whatever, to do anything that you want.

40:37 Emily: As long as your lifestyle expenses don’t creep up to the point they exceed your investments’ ability to support you. And so that is where you could spend the next 50, 70, a hundred years of your career working in wildlife biology in any kind of capacity that you can achieve knowing that your finances are already taken care of. And that’s a very unconventional route, right? But I think it’s something that maybe more people should consider if their passion is in a field where it’s so difficult and so competitive to get a full-time position. And, you know, I think it also goes back to the realism discussion we’re having earlier. You know, maybe there’s something about wildlife biology or whatever field that you’re in that you would like that romantic version, but you are not so enamored with the reality of having a career in that field version, and maybe becoming financially independent allows you to experience the romantic versions of the career, you know, of rather the field to a great extent without having to commit to having to earn in the career and doing maybe the work that’s not quite as exciting to you.

41:43 Emily: And so that’s, I don’t know, it’s a very like interesting idea. I actually did meet someone one time at a financial bloggers’ conference who had reached financial independence in his early thirties through, whatever, he’s like a finance guy or something. And he was telling me, oh yeah, I’m considering going back and getting my PhD in some completely unrelated area because I can do whatever I want now, essentially. It doesn’t matter if I get a stipend or not. I can support myself. He can pursue anything he likes. And so I’ve never really like discussed this idea with anyone in terms of PhDs before, but I think it’s, I don’t know. It’s not the most outlandish thing.

Wildlife Bio: Career or Lifestyle?

42:19 Stephanie: Yeah, absolutely. And I actually, I mention this in the last chapter of my book is, like you said, maybe you don’t want it as a career, too. And maybe that’ll actually be more satisfying to you. So I had this talk with this very prominent biologist and he was talking about his friends, how like they’re traveling all over the world and showing him all these cool pictures and all these cool places that they’ve been to. And one of the countries that he said was a country that he does a lot of work in. And I was like, you work there, you’re like always traveling there. And he’s like, yeah, but I am in like conference rooms, I’m in meetings. I’m not going to see like this beautiful waterfall or go to the beaches. So again, it might be that romantic version of like, once you get higher up with your education, you’re going to be doing like more administrative work.

43:10 Stephanie: And you’re going to be writing scientific papers and writing grants and stuff like that. And, to be honest, that’s sitting behind a desk writing. So I just want people to like really understand what it’s like and what they’re getting into. And, yeah, like, if you’re really driven because you want to travel or have cool experiences with animals, there are Citizen Science vacations, Earth Watch does this, that you can pay for that give you those opportunities. Like you can pay to work with a sea turtle biologist and help him tag turtles or help them tagged hurdles. And so you can still have these experiences. But you’re not the one leading them, which actually might be nice because then you don’t have to worry about like all the logistics of setting everything up, and yeah. And managing people and things like that.

44:03 Emily: Yeah. I love that idea. And it’s just kind of thinking outside the box, right? Like how can I get to have this lifestyle that I want? Does it have to be my career, or can it be something I do on the side as you’re building a career in another area? Or I’ve retired from my career. And so now I can do it afterwards. I think that’s a really exciting idea that you can be in wildlife biology in more ways than just a full-time professional scientist.

44:32 Stephanie: You’re so right, too, about your, your life choices changing when you get older. I talk to a lot of young people who are like, I don’t need to live in a big house. Or maybe not necessarily live in a big house, but you do want more things as you grow up. Like you want more stability and things like that. You don’t want to be moving around all the time. And like, even myself, I didn’t want to have children, but yeah, like I want to be stable and I want to stay put and not going from here to there all the time.

45:02 Emily: Yeah. What I often repeat on my podcast is money gives you options. And so really what you’re doing when you, for instance, take out a bunch of student loan debt and then go into even more debt for these, like, pay-to-play experiences and eventually go into graduate school. And you’re there for a long time. And then, you know, all the things that you might have to do to get this final career that you are going for, if all that while you’re just accumulating debt and you’re not putting money into retirement, you’re basically hamstringing yourself into this career has to work out, or I am sunk, you know? And instead if you try to pursue it, but in a more balanced manner in terms of finances and other areas of life, you can get to that point, maybe when you’re done with your PhD and say, okay, I have options. I can still pursue this career that I’ve been going for. I can get another type of job because you have built up some financial stability along the way. So it gives you options. You don’t feel like you’re stuck in just the one type of job that you’ve been going for that whole time, which might not even be available to you.

46:06 Stephanie: Absolutely.

Best Financial Advice for Another Early-Career PhD

46:08 Emily: Okay. Well, as we’re wrapping up the interview, Stephanie, one thing that I ask all of my guests is what is your best financial advice for another early-career PhD?

46:18 Stephanie: I think probably the best is, and this is where I always tell people to start out in this career, is to look at the jobs out there now that they ultimately want. And I have a tool on my website for this it’s called the Job Tracker. And you basically just like write down, or you copy and paste, like what jobs you like, how much they pay, what your education is. And then, in my course, I actually, I also have a budget planner too. And like, see if you can afford that career and see if it works out to be the type of lifestyle that you want. So really like copy the salary and the location, and look up houses in that area and how much they cost, and see if this fits into your lifestyle. But again, like really get an idea of like, where you want to end up. So there’s no surprises and you can pivot more easily along the way if you decide, okay, I love this, but I really want to make more money. Which is okay, because, like I said, some of these jobs, they pay very little and it can be difficult to live with those jobs. I knew somebody who had what other students thought was like an absolute dream job, but she was just so sick of not making money.

47:38 Emily: Absolutely. I love that advice. It goes along with the general theme of like being realistic. Okay. So where can listeners find you, Stephanie?

47:49 Stephanie: They can go to fancyscientist.com or just Google, fancy scientist I’ll come up and they can contact me any way. I check all my messages. I’m happy to answer their questions. And I love hearing from people.

48:02 Emily: And what is the title of your book?

48:05 Stephanie: Getting a Job in Wildlife Biology: What It’s Like and What You Need to Know.

48:10 Emily: Great.

48:11 Stephanie: Very blunt. Well, thanks so much for doing this. I had a good time talking to you and I learned a lot.

48:17 Emily: Thank you. It’s exciting to me to learn about a new field and kind of wrap my mind around like particular financial challenges within that field.

Outro

48:26 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me! 2. Share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. 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.

Where PhD Candidates Are Full-Time Employees with Benefits

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In this episode, Emily interviews Dr. Veronika Cheplygina about the differences between how universities in the Netherlands and the US financially support their PhD students. In the Netherlands, PhD candidates (beyond the master’s level) are full-time employees under a 4-year contract that specifies their pay and benefits. It’s a secure position with only slightly lower pay than other types of positions. Veronika explains the financial and psychological benefits of this system and describes her lifestyle while she completed her PhD, which included purchasing a home. Prospective PhD students who are interested in doing their PhDs in the Netherlands should listen through to the end of the episode for application advice.

Links Mentioned in this Episode

phd candidate employees

Teaser

00:00 Veronika: You know, when I was doing my PhD and I saw this PhD Comics for the first time, I didn’t recognize the whole situation of like people hunting for free sandwiches. It’s not a lot compared to industry, but it’s also decent. And you can sort of take care of your basic needs.

Introduction

00:24 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 nine, episode two and today my guest is Dr. Veronika Cheplygina who holds a PhD in computer science from Delft University of Technology in the Netherlands. Veronika and I explore the differences between how universities in the Netherlands and in the US financially support their PhD students. In the Netherlands PhD candidates beyond the master’s level are full-time employees under a four year contract that specifies their pay and benefits. Veronika explains the financial and psychological benefits of the system and describes her lifestyle while she completed her PhD, which included purchasing a home. This is the perfect time of year for prospective PhD students in the US to consider broadening their search to include universities in the Netherlands and other countries with similar funding models.

01:24 Emily: On June 6, 2021 at 4:00 PM Pacific, I’m conducting an interactive workshop on choosing the optimal financial goal for you to work on right now, whether to save up cash, invest or pay down debt. I’m a firm believer that you should work on only one or a minimal number of financial goals at any given time, especially when you have a limited income like while in graduate school or a post-doc. Prior to the workshop, you’ll prepare your balance sheet, which is a record of all of your assets and all of your liabilities.

01:56 Emily: During the workshop, I’ll present my eight step financial framework, which I developed specifically for early career PhDs. I’ll show you how to break down your balance sheet to determine which step in the framework you’re currently on and what financial goal I suggest that you work on next. This workshop is for PhDs at all career stages, from rising graduate students through to PhDs with real jobs who are members of the Personal Finance for PhDs Community. If you’re not yet a member, you can easily join the community at PFforPhDs.community, and find details about the event under the course title, the Wealthy PhD workshops. If I get a good response from this first workshop on my financial framework, I’ll plan more of these live workshops for community members, which will be deep dives into money mindset, investing, debt, repayment, cash savings, and cashflow management. Sign up for the community today pfforphds.community, for access to the workshop on June 6th and much, much more great content.

Book Giveaway

03:05 Emily: Now onto the book giveaway contest. In May, 2021, I’m giving away one copy of “Bad With Money: The Imperfect Art of Getting Your Financial Sh*t Together” by Gaby Dunn, which is the Personal Finance for PhDs Community book club selection for July, 2021. Everyone who enters the contest during may will have a chance to win a copy of this book. Today is the last day to enter. The Bad with Money podcast was first recommended to me by one of the participants in my program, The Wealthy PhD. I think it’s going to generate a lot of great discussion in the book club. So please consider joining us pfforphds.community. If you would like to enter the giveaway contest, please rate and review this podcast on apple podcasts, take a screenshot of your review and email it to me [email protected]. I’ll choose a winner at the end of may, from all the entries you can find full instructions pfforphds.com/podcast. Without further ado, here’s my interview with Dr. Veronika Cheplygina.

Will You Please Introduce Yourself Further?

04:09 Emily: I have joining me on the podcast today, Dr. Veronika Cheplygina. She’s currently an assistant professor in the Netherlands, and she’s actually going to teach us today how the path to the PhD in the Netherlands compares to the path to the PhD in the United States, which of course I can represent that position. I think this will be really interesting to our American listeners, listeners in other countries, to compare these two paths, especially for anyone who has not yet embarked on the PhD. But I also think it’s going to have value for people who are already in graduate school in the United States, because there’s a very different view of graduate students there that we could really benefit from adopting, to a degree. We’ll see where the conversation goes. Veronika, thank you so much for joining me and will you please tell the listeners a little bit more about yourself?

05:01 Veronika: Thank you so much for having me it’s a pleasure to be here. As you said, I’m currently an assistant professor at Eindhoven University of Technology. My background is in computer science. I did all of my degrees in Delft, which is a different university of technology, also in the Netherlands. This was followed by, I got my PhD in 2015, followed by a two year postdoc and then, the tenure track, which I’m currently doing now. I am however, also leaving my tenure track in favor of a tenured associate professorship in Denmark, in Copenhagen, where I’m starting in February, 2021. I think that sums it up.

Overview of the Path to the PhD in the Netherlands

05:49 Emily: Congratulations on the new position and the upcoming move. We’re recording this in December, 2020, so I think you’ll have completed that by the time this is out so wonderful. Let’s get an, a quick overview of the educational path to the PhD in the Netherlands. Let’s start at the bachelor’s level: how much time does it take, how is it funded? Would you please answer that?

06:15 Veronika: Sure. Usually for the university level, there’s a three year bachelor program. It is formally separated from the master’s programs, which can be one or two years, but I think in practice, usually universities offer matching masters for different bachelor programs. I think most students end up doing the matching masters. It’s rather usually that the bachelor’s and the master’s are done together in five years or so, then that the master’s is as part of graduate school as in the US.

06:52 Veronika: And then after master’s, some students may go on to do a PhD, which would be typically a four year full-time trajectory. I think it’s different from the US in that you don’t really have a lot of courses anymore, as you would have had the research component in your master’s. Perhaps you might do some career development courses and such, or like an in depth summer school. From the time you’re, well at PhD researcher, I should say you were actually a university employee, and I think that makes a big difference for the experience.

07:36 Emily: Yes, absolutely and we’ll get into that quite a bit more. Then what about the funding? So you just said at the PhD level for the PhD training, you’re a full-time employee. What’s going on with the bachelor’s and master’s equivalent earlier than that? Is that funded by the student? Is it funded by the state? How’s that?

07:56 Veronika: The bachelors and the masters is a combination of the student and the state. I think the current tuition fees are around, for a domestic, and by domestic, I mean European union plus people with an eligible residents permit, that would be about 2000 euros a year in tuition. And the government contributes to this for the universities. So universities get funded centrally depending on the number of students there. I think the fee for non-EU students is quite a bit higher, but still, probably not at the level of many US schools. Then for the PhD, it’s an employment position which needs to be funded beforehand. As professor, you would need to acquire some kind of grant from a funding agency. And if you have that guarantee that you have this financing, then you can advertise a position. As a starting assistant professor, if you don’t have any kind of startup package from the university or already a grant on your own, you cannot say I’m recruiting grad students. Yu might have a master’s students will, of course need, will need to do a research project, but the PhD students, PhD researchers rather, you would need to finance yourself.

09:37 Emily: So to draw a contrast with the system in the US, it seems like for you all at the bachelor’s and master’s level, that’s where people are really viewed as students, right? You’re a learner you’re there to consume the product of the university and develop yourself, as a scholar. And it’s relatively inexpensive compared to here. There’s a big, big, big distinction between the master’s level and the PhD training level before you’ve actually completed your PhD in that it’s treated as a full-time job for your position and you’re going to finish in that time, it sounds like. Does anybody ever go over that amount of time or is it very firm? You’ve got four years you’re going to finish.

10:21 Veronika: Well, you get your salary for four years, unless there have been some special circumstances. For example, if you would take a 80% full-time working hours, you probably would have a longer time. Your salary will stop after that. It doesn’t mean you will necessarily defend your thesis in that time, but most people do aim to submit within then. Of course, this doesn’t always happen depending on your personal circumstances, et cetera, but I think it is doable in four years, given that you don’t have lots of courses and teaching, you would be required to help out a little bit in the department, but that’s not your main occupation. I do have to of course say that this is based on my model of how I experienced things, and I’m sure there are also departments that try to deviate from this, but this is how it should be and how I’ve seen it work in several places.

11:23 Emily: I see. Yeah, it seems like the contrast here, I guess, is that you have the opportunity to be paid at the master’s level. If you’re already, typically, if you’re already enrolled in a PhD program, you’re going through, what would be your master’s. You have the opportunity to receive a stipend usually during that time, but it’s not much. I’m curious about how much in the Netherlands, the PhD students or trainees, you know, PhD employees, PhD researchers are being paid compared to what’s enough to get by on, because definitely here, it’s a question mark, whether you’re going to be above or below that line as still a graduate student. How is the pay compared to if you had a full-time job that wasn’t PhD training?

12:11 Veronika: I think it’s a little bit less than, so for example, for, for me in computer science, industry jobs would be paid a little bit more. I think, compared to some other jobs, maybe straight after master’s, it’s not that much of a difference. I looked up, there are salary scales for these PhD positions, I looked it up just before, and it’s about 2,400 euros, before tax for the first year of the PhD. And it’ll go up to like 3000 to the last year. Of course the amount of after tax will depend on several other issues, like if you own property, et cetera. I think it should be, definitely if you’re sharing a living space with somebody else, it should definitely be okay. When I was doing my PhD and I saw this, PhD Comics for the first time, I really didn’t recognize myself…I didn’t recognize the whole situation of people hunting for free sandwiches everywhere. It’s not a lot compared to industry, but it’s also decent and you can sort of take care of your basic needs.

13:39 Emily: Yeah, I think that’s maybe the most impactful statement you could make in terms of to the credit of the system that you have there, is that it does not feel like what’s going on in PhD Comics. That’s wonderful.

Psychological Benefits to Being Treated as an Employee during the PhD

13:51 Emily: Okay, so you’ve said that once you get to the PhD candidacy stage, you’re a full-time employee of the university. What do you think is the psychological benefit of being viewed and legally treated as an employee versus as a student, like in the earlier stages? Let’s leave aside the financial for now, but just the psychological,

14:15 Veronika: I think it’s a good thing that you are in the same kind of position as your supervisors. I mean, you have, even though they will, of course be in the higher salary scale, you kind of have the same rights and I think that makes for a more equal playing field. Also several things you would not really necessarily need your supervisor’s permission for. Of course, it’s good if you inform them if you are ill or so, but actually that kind of thing would be arranged centrally by a party outside of the university. It just feels like you’re less dependent on your supervisor in personal matters. There’s just a bit less things to worry about. You can concentrate more on doing your job, your research and your life outside it.

15:16 Emily: Yeah. I’ve actually been reflecting on this recently. I had another podcast interview within the last few weeks and I believe it will be published recently before this one. It was with Laura Frater and she said something in that interview that’s really stuck with me since then, which is to not view yourself as a student while you’re pursuing your PhD. Because, and this is my interpretation of what she was saying, if you view yourself as a student, you sort of have an out for doing normal, like adulting things, like taking care of your finances and maintaining your relationships and keeping your body and mind healthy and so forth. Because we think of this, in the US we think of being a student, like being an undergraduate student as this just like magical period, when all you have to focus on is your education and no time passes and you stay healthy and everything’s wonderful, which is realistically not at all the case, especially when you do this for five, 10, whatever years into your twenties and thirties. I think that merely that switch alone of like, no, I literally am a full-time employee of this university – I’m receiving benefits, I have decent pay, would be a massive sort of, it’s like a graduation out of adolescence, when you’re not being considered a student anymore. That’s how I’m thinking about it. Does that strike a chord with you at all?

16:41 Veronika: That’s very true. I think generally, I tried to limit my hours also during my master’s, but it would definitely be the case I would study in the evenings and weekends, whenever. I think once I started this job, I would just come to the office between 8:30 and 5, which is when my supervisors were there. I just assumed that that was normal. I didn’t have like homework in the weekend and because I was in a small lab and I didn’t really have other PhD students to compare to, I didn’t really realize that people were maybe working on their projects the whole time. For me, there was no expectation to do this. This is definitely something that gets deviated from in some labs. But indeed I think just the realization you’re getting paid to do research for 40 hours a week, it’s also in your contract, that that helps with drawing a boundary there.

17:50 Emily: That actually reminds me of, I did a post-bac fellowship, so a year between when I finished undergrad and when I started graduate school, I did a post-bac fellowship at the National Institutes of Health. And it was a very different feel of an environment than a university feel, at least in my corner of that. People did work, I don’t know if it was 40 hours, but it was daytime office kinds of hours, maybe a little bit longer, that I could see. And I didn’t feel pressure to be staying super late. I would come in for eight or so hours a day, do my work, go home. Really, I was able to have some pretty good work-life balance during that time, which was not at all what I experienced during graduate school, where there was much more pressure to be working longer and just be doing a lot more. It sounds like more of a kind of professional environment rather than an environment that’s focused on the training or the trainee situation. Does that make sense?

18:48 Veronika: Yeah, that sounds that’s consistent with my experience

Commercial

18:54 Emily: Emily here for a brief interlude. This announcement is for prospective and first year graduate students. My colleague, Dr. Toyin Alli of The Academic Society offers a fantastic course just for you called Grad School Prep. The course teaches you Toyin’s four step Grad Boss method, which is to uncover grad school secrets, transform your mindset, up-level your productivity, and master time management. I contributed a very comprehensive webinar to the course titled “Set yourself up for financial success in graduate school”. It explores the financial norms of grad school and the financial secrets of grad school. I also give you a plan for what to focus on in your finances each season of the year that you apply to and into your first year of grad school. If this all sounds great to you, please register theacademicsociety.com/Emily for Toyin’s free masterclass on what to expect in your first semester of grad school and the three big mistakes that keep grad students stuck in a cycle of anxiety, overwhelm, and procrastination. You’ll also learn more about how to join grad school prep, if you’d like to go a step further again, that’s theacademicsociety.com/Emily for my affiliate link for the course. Now back to our interview.

Labor Contracts for PhDs

20:21 Emily: You mentioned earlier that there there’s a contract, like there’s a labor agreement for people pursuing PhDs. What are some of the elements of that contract?

General Benefits

20:31 Veronika: It’s the same labor agreements basically for all people in academic research. There’s a salary scale that corresponds to the kind of level you’re working at. That’s a different scale for PhDs. In comparison, so I told you that last year a PhD would get 3000 before tax per month, as an assistant professor, who’s just starting and you would get, I think 3,700. So it’s quite a flat ladder. There’s also a pension buildup. I have to confess that I haven’t really looked into how it’s done because I kind of trust that it’s done well, so it’s not something I haven’t had to worry about.

21:23 Veronika: The number of hours that you work and the number of vacation hours, you can take are fixed in there. You can also trade some vacation hours for some other benefits, like for example, extra pension. And then you get sort of like a tax advantage. There’s maternity and paternity leave, 16 weeks for maternity leave. And for paternity, I think it’s five days at full pay and then you can take a number of weeks off at lowered pay. There’s also a sick leave. So I think you can be something like 40 weeks at full pay if you need to, and then also longer at a lower pay. Lots of things like this. Basically life things that can come up, there’s usually a provision for.

22:29 Emily: Yeah. I think that must sound like a dream to a lot of PhD students and maybe even postdoc fellows right now who are in the US who are not treated as employees, or at least not as full-time employees of the university and just to have those benefits spelled out explicitly. It’s very patchwork here. In some places, maybe especially if you’re covered by a contract that’s been negotiated by a union, it can be very clear. I don’t think the benefits would be as high as that because just in the US we don’t get as much leave and so forth, but they would at least be clear.

23:03 Emily: But in many, many, many places, it’s not at all clear what your benefits would be, and it’s not until as an individual you come on to, okay, well, I’m pregnant, so I need to figure out what the maternity leave is going to be, or, okay, I need to take a leave of absence because I’m ill — I have no idea am I going to be paid? Unless you’re covered by probably a union contract, you probably wouldn’t know that until you actually encounter the situation, what the benefits might be. I think that clarity is just so, so helpful. And even on the vacation, like that’s even as a smaller issue, but something everyone encounters every year. That often has to be just negotiated one-on-one with your advisor and sort of oftentimes completely up to that person, whether or not they’re going to grant it or what you have to trade off for it. It sounds wonderful just to have the transparency.

23:56 Veronika: Yeah. I imagine that creates inequalities if you have to do it on a case by case basis, and also depending on how rich the field and the PI is. Here, there’s no difference between social sciences and technology and another thing. The agreement is the same for all academic institutions.

24:20 Emily: Yeah, I just left out something that would be super, super important. It wasn’t part of my personal experience during graduate school, but many, many PhD students here experience funding insecurity. They, they might have funding for a year, but they didn’t know what’s going to happen after that. Maybe they have funding every academic year, but in the summers, they have to scramble to find a certain grant or something. You can feel very precarious when you’re sort of careening from term to term, not really sure where the next paycheck is coming from in the upcoming term.

Funding Guarantee as a PhD Employee

24:48 Emily: You mentioned earlier that a PI couldn’t even advertise a position until the funding has been secured for all four years and so that is a massive difference. Actually in that way, it sounds even better than regular employment, like at-will employment, because I would imagine it’s unusual for a PhD student to be let go from that position, a PhD candidate to be let go, unless something has really gone off the rails with their performance.

25:15 Veronika: Usually you would have an evaluation after a year, and if you show progress in the project, then usually it’s fine and you can continue for the other three. It’s actually more secure, it’s a more secure contract that you won’t get right out of university, because you would maybe have a series of temporary contracts for industry.

25:39 Emily: Anything else you wanted to add on that question?

25:42 Veronika: Oh, yeah. About the financial insecurity. So it is possible here that if you are a student and so often students from China, and there are also some from Brazil, I believe, but they get like a scholarship from the government to come here and their salary is paid through that scholarship. This is possible, but then they, they come to the professor with their scholarship. And then they would be paid, the conditions there would probably be different than for most PhD positions. It’s less common and it wouldn’t be advertised as a PhD position because the person comes with it themselves.

Cost of Living Adjustments

26: 31 Emily: I see. In our prep for this episode, you mentioned to me something about cost of living. So earlier you said that, you know, there’s this agreement that’s been negotiated. I don’t know if it’s between universities and the government or who the parties are, but it’s a set schedule. It’s a set contract that all employees, PhD employees are under. Does the pay vary by city or is it the same everywhere?

26:57 Veronika: It’s the same everywhere.

26:59 Emily: Okay, so there is a consideration for cost of living in terms of how your lifestyle is going to be while you’re pursuing the PhD.

27:07 Veronika: So in the pay that you get there, so consideration for it, but of course, if you live in Amsterdam, it will be much more expensive than if you live in Colonian.

27:19 Emily: Yeah. Gotcha. That’s a little bit interesting, I guess, that there wouldn’t be any adjustments for cost of living.

27:27 Veronika: Yeah. Perhaps I’m not sure if that’s the case. So I know like in the UK, there’s a London allowance because London is just so much more expensive than the rest of the country. I’m not sure we have that here. I also imagine that the differences in the bigger cities are not as big. Like if you would go out more into like a more rural area, then the prices go down very quickly, but then you’d have to commute much more as well.

Veronika’s Personal Finances During Her PhD

28:04 Emily: We’ve talked very generally about the system country-wide and what you observed in your experience during your PhD. Can you tell me how your finances kind of went during your PhD? Were you able to live comfortably? Were you able to save?

28:20 Veronika: Yeah, I think it was quite okay. It was definitely an upgrade from my master’s. Then, I had a part-time job, but I had also the stipend from the government. It was enough to cover my expenses, but with the PhD things went better straight away, especially after the first year, because that’s, when you make the largest jump in your salary. I did also move out from a more student-like apartment to a more adult-like place. So my costs went up then, but I think I was still able to save a little bit.

29:03 Veronika: And actually, in the last year of my PhD, I was able to apply for a mortgage, which was very surprising to me at the time. This is because, after three years in the Netherlands, if you have…Normally for a mortgage, you would need a permanent contract, which you, of course don’t have as a PhD student. But after three years of temporary contracts, you can be seen as a kind of freelancer and the bank averages your salary. At that point in time, my PhD student salary average over three years was sufficient to get a small mortgage for an apartment. In current days this would not be possible because of how the prices have increased recently and I think you also need to have a much larger down payment now then rules used to be. I got very lucky. I definitely don’t want to say everybody in any place anytime can do this, but this was of course a combination of several favorable circumstances after which my living costs actually went down back to like the student apartment level, but for an adult-like place. So that’s been very good.

30:35 Emily: Yeah. That’s a wonderful accomplishment. As you said, circumstances had to come together to make it happen, but it did! Wonderful!

Can a US Citizen Do Their PhD in the Netherlands?

30:43 Emily: If there is a listener, let’s say in the US not in the EU, who’s thinking “This sounds amazing! Why would I deal with the system we have here in the US when I could go there?” Is it possible for an American to complete their PhD in the Netherlands?

30:59 Veronika: I don’t see why not because the vacancies are open to everybody in the world. Sometimes there are some EU specific grants, so if the EU gave you a grant, they want you to employ European citizens, but other vacancies do not have this restriction. I’ve been in groups where there were also people from the US doing PhDs, so I don’t see why that’s a problem. I guess you need to find out first about more specifically about the master’s requirements. It seems to be fairly standard, but I don’t think it’s a hard rule. So I do know of somebody from the US who didn’t have a master’s, but he had some additional research assistant experience, which sort of was sufficient. But this was of course also a couple of years ago.

31:52 Veronika: All the open positions they are listed on academictransfer.com, that’s an aggregator from all of the universities. I guess about the master’s thing, there’s always an administrative contact and the professor, so you could always contact the administrative one to check. Outside of these positions, of course you could always contact a PI if they have any upcoming vacancies, because they might be interested in writing a proposal together with you about something, or they already know something is coming up, but they have not gotten the official documents yet, so they cannot advertise it yet. It’s always worth approaching people want to work with, I think.

32:40 Emily: Yeah, that sounds amazing. And actually just the simple fact of there being a central database of all open positions is incredible. Again, in favor of like transparency and wow, making things so much easier for the applicant, so that sounds great. And I should mention, we’ll link in the show notes, because I’ve done a couple other interviews with Americans who have done their PhDs in the EU. I think they’re both in Sweden actually. But anyway, some similarities, so I’ll link to those from the show notes as well.

33:10 Veronika: For sure Sweden should be similar.

Best Advice for an Early Career PhD

33:13 Emily: Veronika, I like to end all my interviews by asking my guests, what is your best financial advice for another early career PhD?

33:22 Veronika: I would say it’s good to look at examples. Of course you need to get over some kind of hurdle of talking about finances, but it would be great to see what are other people spending on different things and how it works, or what kind of insurances and pension schemes and investment things people have. Yeah, I think you can learn a lot from that and it shouldn’t be such a difficult topic to discuss

33:55 Emily: Yeah. Another vote in favor of openness and transparency around these issues. Veronika, thank you so much for joining me on the podcast. It was so interesting to me to learn more about the system that you went through and congratulations again on your new position.

34:10 Veronika: Thank you very much.

Outtro

34:17 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest. 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 podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. 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. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.

Insights from a Financial Planner Who Works with Academics

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In this episode, Emily interviews Andy Baxley, a Certified Financial Planner who specializes in working with academics and PhDs. Andy pursued graduate school in psychology immediately after undergrad, but quickly realized the career path wasn’t right for him and the financial pressures were too great. He eventually started practicing financial planning, realizing that it is psychology ‘out in the wild’, and decided to serve the academic community he so closely identified with. Andy shares his insights from working with PhD clients nearing retirement about what they are glad they did when they were younger and what they wish they did. At the end of the interview, Andy explains how his career plans have brought him back to graduate school again. Andy brings deep insights to the interview from his years of study and practice in this space—ones you won’t want to miss!

Links Mentioned in this Episode

Teaser

00:00 Andy: It was sort of that long-term existential financial dread mixed in with just the day to day, “I don’t have enough money for anything.” I was living in a big, fairly expensive city and just was very, very much living like the proverbial graduate student. I didn’t mind that, but it was that in tandem with feeling like everyone else was just taking like leaps and bounds beyond where I was in their financial journeys, that confluence of things added a lot of anxiety.

Introduction

00:34 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode 17 and today my guest is Andy Baxley, a certified financial planner who specializes in working with academics and PhDs. Andy pursued graduate school in psychology immediately after undergrad, but quickly realized the career path wasn’t right for him, and the financial pressures were too great. He eventually started practicing financial planning, realizing that it is psychology out in the wild and decided to serve the academic community he so closely identified with. Andy shares his insights from working with PhD clients nearing retirement, about what they are glad they did when they were young and what they wish they had done. At the end of the interview and explains how his career plans have brought him back to graduate school. Again, don’t miss Andy’s deep insights from his years of study and practice in this space.

01:36 Emily: I have my own insights that I will provide to you next week, specifically regarding the home buying process. My husband and I closed on our very first home a week ago. My podcast episode next week is going to be all about our journey to home-ownership. Like many other PhDs and millennials generally, we put off buying our first home for quite a while. I’ve been open on the podcast about my regret that we did not buy our first home back when we were in grad school and I’m pretty bullish on grad students and PhDs buying homes if it’s financially feasible.

02:10 Emily: To that end, I’m publishing the episode next week on our personal home-ownership journey, which I hope you’ll listen to. I’ve also scheduled a special event with my brother, Sam Hogan, who is a mortgage originator specializing in grad students and PhDs. You’ve heard Sam on the podcast previously in season eight, episode four; season five, episode 17; and season two, episode five. We are going to do an AMA style live call over zoom on Thursday, May 6th, 2021 at 5:00 PM PDT 8:00 PM EDT. We will do our best to answer any question you have about buying a home, especially as a grad student or PhD. You can register for the event and my mailing list at pfforphds.com/mortgage. I hope you will join us.

Book Giveaway

02:56 Emily: Now it’s time for the book giveaway contest. In April, 2021, I’m giving away one copy of Walden on Wheels by Ken Ilgunas, which is the Personal Finance for PhDs Community book club selection for June, 2021. Everyone who enters the contest during April will have a chance to win a copy of this book. Walden on Wheels made a splash when it was published, because the author wrote about how while he was a graduate student at Duke, he lived in a van on campus instead of renting a home so that he could avoid taking out student loans. This was an even more counter-cultural move than it appears to be now because it was before the rise of hashtag van life. I’m looking forward to learning more about the author’s motivation to make such an extreme choice and discussing it with the members of the Personal Finance for PhDs community. If you would like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review and email it to [email protected]. I’ll choose a winner at the end of April from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Andy Baxley.

First Go at Grad School

05:12 Emily: Yeah. And we’re going to get ton of that insight later on. I’m so excited for it. But first we want to go back in your own history back to when you were pursuing your own PhD the first time, so could you please tell us about the graduate program that you entered and what you were studying?

05:30 Andy: Yeah, absolutely. It’s funny, when I look back on my own personal history, I would have been really surprised 10 years ago, if I could have gotten in a time machine and seen where I am today, I don’t think I ever would have guessed that I ended up exactly where I am, but I also wouldn’t have guessed that I’d be as professionally fulfilled as I am either. It turned out well, but definitely a number of unexpected turns along the way. To go way back, I think the best place to start this story is probably in high school. I was a really sort of uninspired student in high schoo,l to say the least, and my parents always said, you have to get a 3.0 at minimum, so I always got like exactly a 3.0, I just didn’t really have much direction or passion.

06:15 Andy: All that kind of changed when I got about halfway through college and I just got very inspired by a couple of professors and started doing research assistantships and teaching assistantships in my undergraduate work and ultimately decided to pursue becoming a professor myself in psychology. The second half of my academic career, I think I was an excellent student and that was the first time I’d ever been excellent at anything. I really was just very excited to be good at something. I started thinking about life after undergraduate work and ultimately went to a master’s program, that was well-known for being a feeder into really good PhD programs, and so I thought that was the path. It didn’t end up working out that way, and I can tell you more about that story certainly.

What Drove the Decision to Leave Grad School

07:07 Emily: Yes, please do. I mean, I think we all know the beginning of this path, but where your story gets interesting is when you start to deviate from it. So why did you end up leaving that master’s program?

07:17 Andy: It was a mix of things, it was definitely a confluence of things. First and foremost, I think I got there and I realized that while I was fully funded in the program and I had a stipend, I sort of looked around and I realized that I didn’t have the same sense of purpose or direction that a lot of the other students in the program did. At first it didn’t seem like that big of a deal, but the more I thought about it, the more I realized that the further on I got in that journey, the competition was only going to get fiercer and fiercer. I sort of had this mindset that as long as I can do the next thing, that’s where I’ll find happiness. If I can just get into this master’s program, then my path is paved and I’ll find happiness and all will be well.

08:05 Andy: Then I was like, well, that’s obviously not true and I was thinking, okay, well maybe if I get into a great PhD program, once I do that, all will be well and my life will be pretty much set at that point. And I kept talking to people who were either one step or two steps or three steps along in the journey and realizing that some of them are happy, but a lot of them were under a tremendous amount of pressure financially. They just had a lot of stress in their lives that I wouldn’t have expected, and that wasn’t just true. One or two steps beyond. The more people I talked to, I realized that even all the way up to tenured faculty, those folks were under a lot of pressure as well. Some folks were extremely happy with their lives, but not all of them were and I just realized that I wasn’t on a path to sure happiness or professional fulfillment.

08:52 Andy: Also, I was going up against people who were really super passionate about the research topics that they were focused on and I just didn’t have that. All I had was that I was really excited to be good at something and excited to be a good student, but I just didn’t have that passion and didn’t have that drive. Those were sort of the personal reasons. And then there were certain financial ones as well, which I’m certainly happy to go into.

09:15 Emily: Let’s do that in a moment. I am really impressed with you as a, whatever you were 22, 23 year old person, really being able to kind of take a step back from the day-to-day rush and rigor of the program and evaluate “is this really where I want to go” and to do that, looking ahead to your older people ahead of you in the program and older mentors and so forth and asking yourself if you really want that out of your life. And to do that so early on, right within the first, it sounds like about a year of that program doing that evaluation. I really encourage the listeners to periodically step back and reevaluate and see if the path that you’re on is really the one you went to beyond because bailing out like you did earlier is much, much less sunk cost, than getting to the end of the PhD and realizing that you don’t want the career that’s on the other side of that PhD, the one that you thought you wanted. I really commend you for that. Can you talk a little bit more please about the financial pressures that you were experiencing and observing?

10:13 Andy: Absolutely. And one thing I’ll add to what you just said as well, is that that was the hardest decision I’ve ever made to leave that program. It felt like it felt like my world was crumbling down. So much of my identity was wrapped up in that path that I had chosen for myself. At the time it was truly like crushing at a personal level to make that decision, but looking back, it truly is the best decision that I’ve ever made. That’s not to say of course, that everyone should leave their PhD programs or that everyone should leave graduate school, but it is to say that if you have that hunch, that maybe that’s something worth considering. It may feel like the end of the world in that moment, but it will get better later on as you find your path, it just doesn’t seem like it in the moment.

10:57 Andy: To circle back around to the financial side of things, I think I had this experience that a lot of folks probably do, which is that I was seeing a lot of my peers from college who hadn’t chosen the same path, start to experience some degree of financial success. I always had assumed like, “Oh, financial success isn’t for me like that that’s for other people, that’s, that’s not really a thing for me”. But then I had this weird experience where I started to see other people get jobs and decently paying jobs and I felt a little bit of jealousy there. Also I just felt, my stipend was generous, but it wasn’t quite enough to live on, so I was accumulating more student loan debt on top of what I already had for my undergraduate work.

11:42 Andy: I was by no means into personal finance yet at that point, but I was just doing some very simple math and thinking about when am I actually going to make enough money to start to dig out of this hole? I started playing around with compound interest calculators and realizing how delayed I was going to be, not only in paying off my debt, but also in starting to accumulate assets long-term. It was that long-term existential financial dread mixed in with just the day-to-day “I don’t have enough money for anything”. I was living in a big, fairly expensive city and just was very much living like the proverbial graduate student. I didn’t mind that, but it was that in tandem with feeling like everyone else was just taking like leaps and bounds beyond where I was in their financial journeys, that confluence of things added a lot of anxiety, I think.

12:32 Emily: Yeah. I think what you’re expressing is, again, common enough if people take the moment to think about it. And certainly when you’re actively taking out student loan debt it’s really in your face that this it’s not a long-term sustainable thing to be doing. I think it’s a little harder when you have the stipend and it’s enough to live on, but you don’t quite realize, like when you were playing around the compound interest calculators, you don’t quite realize the long-term effects of not being able to save, not being able to invest, so you can make it day to day, but it’s easier to not think about the long-term. You had the pressure of both the day-to-day and the long-term bearing down on you. I really appreciate those observations.

Life after Leaving Grad School

13:12 Emily: Can you tell us what you did next — after you left your program, after you world crumbled around you? And on that path, how you fell in love with personal finance?

13:22 Andy: Yeah, absolutely. After the program, I spent a couple of months just sort of wallowing in uncertainty and not knowing what I would do. Ultimately what I landed on — I love to travel, so I moved to South Korea and taught English as a second language. I intended to do that for one year, just to sort of get my financial house in order and also have a really neat, unique experience. I actually ended up staying for four just because I really loved it. And I knew that I didn’t want to be — I was teaching anywhere from kindergarten to middle school, depending on which year I was there. I knew I didn’t want to do that forever and I also knew I didn’t want to be a teacher forever necessarily, but I just found the experience kept getting more and more interesting and so it kept me there longer than I thought.

14:07 Andy: Somewhere about halfway through that journey, I picked up a book called Millionaire Teacher by a guy named Andrew Hallam. And first of all, the term “millionaire teacher” seemed like an oxymoron to me, which I think is kind of the point of the title. And again, like I said earlier, building wealth, and certainly becoming a millionaire, never felt like something that was for me. It just always felt like that’s that’s for rich people and I just don’t know anything about that. I sort of always buried my head in the sand and was never a great saver, never even thought about investing. I don’t remember why exactly I read this book, but I started to read this book and realized that actually, if you start early enough and you save even just a bit, and as your earnings increase, if you can save a bit more, there’s a pretty clear path to wealth for a lot of folks. I don’t want to make it seem like it’s, it’s available to everyone because I think we have systemic structural issues that do make it really hard to build wealth. But I think it’s, it’s available to a lot more people than most people think. If you can be prudent, especially in your younger years, that there is a path to wealth and, and that wealth isn’t, we can talk more about this certainly, but wealth isn’t just about, how big your accounts are getting, but it’s also about what does that allow you to do. What sorts of freedom does that allow you to pursue? Once I realized number one, that wealth isn’t just for rich people, you know, building wealth isn’t just for people with trust funds, I think I just started reading every book I could possibly find on personal finance and just became sort of obsessed. So that’s how the interest was born in personal finance and then the career part came later.

15:41 Emily: That’s a fantastic entry point into the subject matter. Finding that perfect book that you could see yourself in — The Millionaire Teacher. And I love that you said it’s a provocative title, it’s an oxymoron. I also have a program called the Wealthy PhD, which is similarly designed to be provocative and “What a PhD can be wealthy? How could that possibly be?” Of course, we’ll talk about that in a moment.

Transitioning into a Career as a Financial Planner

16:05 Emily: You’re falling love the subject of personal finance. How did you make it into your career?

16:10 Andy: The first part was the realization that building wealth isn’t just for rich people, but the most important thing was the second realization, which was that personal finances is not just about finance. It’s not just about the numbers. There’s kind of a corny saying that I’ve heard, but I actually like. It’s that personal finance is more personal than it is finance. I started to make this connection. I was also really deeply immersed in the positive psychology movement at that time. I was reading a lot of work by Marty Seligman and other folks who were really just making the statement that it’s not just about fixing our deficiencies, it’s about how do we get from our baseline and transcend beyond that and live a life that is maybe even better than we ever could have expected.

Andy: I started to make this connection that like, “Oh my God, if building wealth is available to everyone, maybe that can also be a tool for helping people, to use another cliche, live their best life.” How can wealth become a tool to live in accordance with our values and live a life filled with joy and fulfillment? And once I made that connection, that personal finance is the best applied psychology there is, it just clicked for me. I was like, Oh my God, I can do this thing professionally that I’ve become really interested in and sort of honor my love of psychology and that original career trajectory I had set for myself. It was like psychology out in the wild. And that was really exciting for me. I didn’t have to just become, I shouldn’t say just, I didn’t have to become a professor. There were other ways to do that. That was really exciting for me. I was hooked at that point and I haven’t really looked back even a single day since then.

17:49 Emily: That’s such a beautiful expression. I’m completely on board with you, but I hope the audience is hearing this as well, the insights that you just gave, because I think it can maybe explain a lot to them about why they haven’t been successful with personal finance in the past. Even if they’re obviously super smart if they’re PhDs or whatever. But like you said, it’s psychology. It’s personal.

Insights into Personal Finance for PhDs

18:09 Emily: So, you get into this as your career, and I know you’ve had a couple of jobs, but what I want to focus on now is what you have learned from and observed in the academic clients you’ve been working with since you did switch to having a focus on that population in your practice. What does the future look like for someone who is maybe currently in graduate school or otherwise early on in their PhD career? What happens a few decades from now, if they are intentional now with their money?

18:40 Andy: Yeah. That’s such a good question because the answers are very different about when you think about the person who’s intentional versus the person who isn’t. To talk about the people who are intentional, there’s this quote I really love by a guy named Morgan Housel, he just came out with a book called the psychology of money and he says “the ability to do what you want when you want with who you want for as long as you want is priceless. It’s the highest dividend money pays.” And so what comes later down the road for folks who are really intentional and diligent about their personal finances early on is freedom. I guess that’s just the best way to put it. And that can be intellectual freedom, it can be creative freedom, it can be — the one thing I would add to Morgan’s quote is the ability to be wherever you want to.

19:25 Andy: I think when people are investing and saving, it can feel abstract, but the way I think about it is they’re just saving little units of freedom and flexibility and how they end up using those units of freedom and flexibility later on, we don’t necessarily know that on the front end, but when they get there, they’re so happy to have them. I’ve had clients who spend half of the year abroad in South America. I’ve had clients who retired and started a little boutique motel. I’ve had clients who were able to afford to do sort of part-time work very early on, like in their fifties and do a half retirement, half working thing for a period of time. So truly the limits are non-existent. The possibilities are as big as your creativity. What comes later on, I can’t say specifically what comes for each individual person without knowing them, but I can say that everyone I’ve ever talked to who did a good job saving early on was really glad they did. I’ve never once heard somebody say that they regret it.

20:24 Emily: I really love the way you phrased that of, saving up units of freedom and flexibility for the future. I’ve expressed that before as money gives you options. Whatever you want to do, having money is going to make it easier to accomplish that. But I really like the way you phrase it, because I know that for me earlier on when I was in graduate school and so forth, and I still don’t to a degree, didn’t have a clear picture of what my retirement or my long-term future would really look like. I wasn’t really sure what kind of career I would have. I wasn’t really sure where I’d want to live or. I have children now, but when I didn’t, I didn’t know how big my family would be. There was a lot of uncertainty and I think that’s really common for PhDs because if you stay on that track, like you may end up moving many times, it’s very difficult to tell what your life is going to look like many decades from now. That can make it a little more difficult to save for and get motivated about because if you think about the vision board technique, for example, you are supposed to have like a really crystal clear vision of like what you’re going for. When you’re facing reality about what your career might look like as a PhD, it might be difficult to have that clear vision, but I love the way you phrase that of just whatever it ends up looking like, saving up for your freedom and flexibility now we’ll give you your options later on for living wherever, doing whatever with whoever, everything you just listed from Morgan Housel. I really love the way you phrased that.

Commercial

21:51 Emily: Emily here for a brief interlude. Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the, or have a question for me. Please join one of my tax workshops, which you can find links to from pfforphds.com/tax. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

Pitfalls to Avoid as an Early-Career PhD, According to a Financial Planner

22:57 Emily: Do you want to talk about the converse side about mistakes that you’ve seen your clients make or pitfalls that younger people earlier on in their career should avoid?

23:08 Andy: Yeah, absolutely. The number one mistake is a pretty obvious one and it’s just not saving. It doesn’t have to be, Oh, I didn’t have a super high savings rate, it’s people who just decided, I’m going to wait until much later to start saving. And the thing about investing and saving is that time is your best friend. A lot of people think Warren Buffet’s secret is that he’s this fantastic investor, but the truth is Warren Buffet’s secret is that he’s a fantastic investor and he’s been investing now for like 80 years or something like that, so he’s had that time for, for compound interest to take effect. I think starting really late is one thing that a lot of folks end up regretting. When I meet clients who are 60 and maybe they didn’t start saving until they were 45 seriously and they’re a bit behind or a lot behind, I think what really rings true for me is that it makes it very clear in meeting with these folks is that money doesn’t buy happiness, certainly, but it does pave the way for you to build happiness and joy and fulfillment over the time.

24:13 Andy: Conversely, a lack of money can make it really hard to achieve those things. When you’re 60 starting to think about retirement, but knowing you don’t have enough money to fund a decent lifestyle in retirement that you can enjoy, that’s a really tough place to be. And that stress really weighs on people, in my experience. I think a piece of advice I would give to younger people sort of like cautionary advice is just we’ve all probably experienced some version of resource scarcity at some point in our life, especially folks who’ve gone through graduate programs where you just feel like it’s really hard to make ends meet. And we know how stressful that is. I guess the pieces of advice I would give to a lot of folks is that that stress is amplified by 50 to a hundred times, if you’re at the end of your career, because you no longer have three or four decades of earning potential in front of you. It can be really scary for folks. That’s one of the things I’m most passionate about when I work with younger clients is these small changes we can make on the front end, end up making these tremendous differences on the back-end.

25:15 Emily: Compound interest truly amplifies your actions from early on, given that timeline that you were talking about. I’m thinking about someone in the audience who — you mentioned earlier, systemic barriers to building wealth that many people experience. Of course, we have a student loan crisis now that did not exist for the people who you’re working with who are nearing their retirement years. I’m thinking about someone in the audience who is really struggling, or maybe they were really struggling until recently and only in their thirties or forties, they’ve finally gotten to a point where they feel like they have a career and they have the paycheck and they can start saving. What can someone who is struggling or has been struggling do to — I know that time is your best friend, but like what can we do to make up if the time has already passed?

26:04 Andy: What I often tell clients who come to me with that question, because I do get clients who are like, honestly, it’s too late for me. What I tell them is certainly the best time to start building wealth is the first paycheck you get. That’s the best time to start doing it. Knowing that the vast majority of people don’t start then, the second best time is just today. Just start today, wherever you are, whether you’re 30, 35, 45, 55. And I think the best advice I can give people is just start really small. If you don’t have a lot to save, if you don’t have huge amounts that you can put towards paying off your debt, start very small and build up from there. Even if say you’re almost done paying your student loans off and you’re starting to think about saving for retirement, even if you can start saving 1% of your pay and then commit to moving it up by a percentage point, say every three or four months, programs like that eventually will get you on track.

26:58 Andy: And I think taking those baby steps is important because the idea of saving for retirement, it’s one of the biggest financial burdens we’ll ever have to face and it can be really overwhelming. I think for a lot of people, when they hear numbers like, Oh, you need to save 15 or 20% of your income, they think of it in this very binary way. They’re like, well, can’t do that, so I guess I just won’t do it at all. I think what I would really emphasize is just start small and just build up incrementally and you will get there and no matter how much you’re ultimately able to save, you’ll be really glad you did it.

27:32 Emily: Yeah, I completely agree, especially about people being turned off by the big numbers of savings percentages. I remember when I was in graduate school and reading the advice of like have a three to six month emergency fund, I was just like, no way, there’s no way I can save up whatever that would have been at the time, $6,000 or something like that. I saw that as totally out of reach and so I really just didn’t even try. I fell prey to the same kind of psychology that you just said there. But like you said, just saving as much as you can or putting as much as you can towards debt — could be $5, could be $10 — I think one of the most transformational things about that is not necessarily the amount of money that you’re putting towards savings, but just the fact that you have changed your identity to “I am a saver, I am repaying my debt and I am a person who invests” and that alone can be super powerful and is a great building block on this path towards wealth, even if the numbers are not that big yet.

28:31 Andy: Absolutely. I couldn’t agree more. I think that identity piece is as important or more important than those initial dollars that you’re able to save. I hope people take heart and realize that when you’re just starting on the journey, it’s a little bit like when you watch a rocket ship take off, like watching a space X launch or something. It starts super slow at first. It’s really hard. There’s a gravitational pull that you have to get past, but the momentum builds over time. And once you start to build that momentum, it gets easier and easier. The hardest dollar to save is that very first dollar and every dollar will just get a little easier beyond that. Then eventually once you’ve started to invest as well when you’re at that stage, those dollars will be making more dollars for you while you sleep. That’s the idea of compound interest. Just know that it will never be harder than it is right now and that it does get easier progressively over time.

29:26 Emily: Yeah. Thank you so much for adding that insight. I totally agree. You hear it in the personal finance community: the first hundred thousand is the hardest to get to in terms of your investments and then getting to the $200,000, $300,000 is so much easier, it takes so much less time. But if we’re talking to grad students, let’s lower that scale — the first $10,000, the first $1,000, the first $100 — every order of magnitude that you go down, it is the hardest at that stage. Once you get that compound interest working in your favor, it happens while you sleep, as you said. I know I’ve experienced this in my own life from grad student years, scrimping to save even $5 more per month was like a big accomplishment and now things look very different 10, 15 years later, in terms of the compound interests working in my favor. I can kind of personally attest that yeah, that first hundred thousand, which I’ve well-documented in the first podcast episode that I published actually, was definitely the hardest. It’s been a lot easier since then.

Going Back to Grad School After a Career Shift

30:25 Emily: Andy, I want to get back to your own story because that’s taken another twist. You’re a CFP, you’re working with clients, but you’ve also recently decided to go back to graduate school. Tell us about that decision

30:40 Andy: There’s still that part of me that identifies as a great student and a person who loves school and I’m actually really grateful to have held onto that identity and so a couple of years ago, I started thinking about going back to school and I ended up signing on for the Masters in Financial Planning Program at Kansas State. I did a dual concentration. Half of the degree was really focused on advanced financial planning, so kind of the numbers side of things — taxes, estate planning, that kind of stuff. The other half was focused on financial therapy, so really taking a very deep dive into the psychology of money.

31:18 Andy: I’m finishing that degree actually in March, so I’ll be done in March and my next juncture is to decide if I want to do the PhD, which it’s so funny to me to think that I might yet again, be considering a PhD, but I think I’m doing so with a different head on my shoulders than before. If I decide to do the PhD program, which I think I will at this point, it’ll really be to further what’s been done with regards to academic research around the field of financial planning because not a ton has been done. It’s a very under-researched field.

31:52 Andy: I wouldn’t want to stop being a financial planner. The way a lot of folks do it in the industry is they get the PhD and then they sort of spend 70% of their time in practice and then the other 30% of their time doing research and publishing and doing some teaching. That for me seems like a pretty good balance, kind of having my foot in one door and the other as well, right now. We’ll see! Hopefully we can check in again in a couple of years and I’ll tell you what I decided.

32:17 Emily: Yeah, that would be excellent!

Best Advice for an Early Career PhD

32:18 Emily: Andy, I wrap up all my interviews by asking my guest, what is your best financial advice for an early career PhD? We’ve obviously already said a lot of advice throughout the course of the interview, but did you have something that you wanted to underline for us or maybe something new that you wanted to throw in?

32:34 Andy: Absolutely. I don’t know if it’s new, but I would definitely say that if it isn’t new deserves to be reemphasized and that is to me, the best investment you can make at any age, if you haven’t already made the investment is in your own financial education. Before you even start thinking about index funds and long-term savings and 401ks and things like that, just investing in your own knowledge and establishing a baseline understanding of personal finance, I think is the best possible thing anyone can do.

33:05 Andy: One critique I have the financial services industry is that I think a lot of the messaging has been set up to tell people this is too complicated or too time consuming or whatever “too this” or “too that”. It’s not for you to do, it’s for you to hire us to do. I think in some cases that’s true. When things do get complicated, it is really helpful to have a professional. I believe that obviously as a financial planner. But the basics are not complicated. It’s not to say it’s easy to master them because you know, saving money is never easy, but the principles are not complicated. I always just recommend folks, if you can take 10 or 12 hours, you will basically have mastered the fundamentals of personal finance.

33:49 Andy: A couple of books that I always recommend to people — one is The Index Card by Helaine Olen and Harold Pollack, which is rooted in this idea that basically everything you need to know about personal finance can fit on one five by seven index card. I love that idea and I tend to agree. A second one I’ve already mentioned is The Psychology of Money by Morgan Housel. If The Index Card tells you how to do it, The Psychology of Money is like a user’s guide to your money brain, which is a pretty interesting part of your brain as it turns out. And then the third is The Millionaire Next Door by Thomas Stanley. That’s probably my all time favorite because it really shows that the type of people who become millionaires actually aren’t the ones who you would think become millionaires. It’s not the people driving Mercedes and BMWs and living in fancy neighborhoods. It’s the people who have high savings rates. You don’t see their wealth because it’s all stowed away in investment accounts. I find that book just to be very empowering. Invest in your education, that would be my advice.

34:51 Emily: Yeah. I completely, completely agree. And also starting with books, I really love that idea. It’s kind of old school, but it’s how I started my journey into personal finance as well was reading some well curated material. Actually since you mentioned books, inside the Personal Finance Community, we are currently as of December, 2020 reading The Millionaire Next Door in our book club. Morgan Housel’s book is on the slate for January, 2021. And then The Index Card is one I have not read before, but it’s actually been on my list as another book to consider for that. I’m not sure when this will be published, but when it is, if you’re interested in reading these kinds of books along with some of your other peers, check out the Personal Finance for PhDs community, pfforphds.community, you can see what the current book is we’re reading, the next one on page. If that’s your thing, please come and join us and have some discussions around these books because I love taking these sort of general personal finance texts and bringing it into, okay, well, how does this apply to graduate students and post-docs and early career PhDs? What is this really saying to our population with our particular psychology and career path and so forth. I totally agree with your advice about investing in your education. That’s one way people can do it if they want to do it with me and with others in our community.

36:03 Emily: Andy, last, last question here is where can people find you if they have really connected with you during this interview? Or maybe they want to recommend you to someone in their life?

36:13 Andy: Yeah, absolutely. ThePlanningCenter.com, you can find me there. You can find my email there as well, which is [email protected]. I’m on LinkedIn, very active on LinkedIn for a time. Tried to get active on Twitter so you can find me on Twitter, but I will say I’ve neglected my Twitter page and find the whole thing to be a bit overwhelming. So probably email or website or LinkedIn would be the best.

36:36 Emily: Thank you so much for joining me today and for giving us your insight

Listener Q&A: Are Fellowships Taxable

Question

36:47 Emily: Now on to listener question and answer segment. Today’s question was asked in advance of one of the live Q and A calls I host as part of my workshop, “How to complete your grad student tax return and understand it too.” Here is the question. “Is the NSF GRFP fellowship taxable? It’s not listed on the 1098-T form. I have no tax documents relating to it.”

Answer

37:12 Emily: Yes, the NSF GRFP is, generally speaking, taxable income, even if it’s not reported on any tax forms, I’ll quote from publication 970, page five: “A fellowship grant is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research.” Fellowships can be tax-free under certain conditions, which implies that they are not tax-free if they don’t meet those conditions. Publication 970 page five further states: “A scholarship or fellowship grant is tax-free only to the extent it doesn’t exceed your qualified education expenses.”

37:52 Emily: There are two additional points that further limit the conditions under which fellowships are tax-free but just going off of that first one, if your fellowship exceed your qualified education expenses, it is not tax-free. The NSF GRFP is composed of two parts, a $34,000 stipend and $12,000 for a cost of education allowance. If the $12,000 to the institution goes entirely to qualified education expenses, for example, tuition and required fees, that portion would be tax-free. To whatever extent the $34,000 stipend goes toward qualified education expenses, it would also be tax-free, but I suspect that little to none of it does, perhaps just some required course related expenses at most. You probably use the stipend for your personal living expenses and savings and that means that it’s not tax-free. Strangely enough, the IRS does not require universities and funding agencies to report fellowship income in any way. Some universities do report the NSF GRFP award on the form 1098-T, but others do not. It’s completely up to their discretion.

39:03 Emily: If you would like to learn more about the taxability of fellowships, please listen to season two, bonus episode one. To go even deeper into how to calculate your taxable income and higher education tax benefits as a grad student, whether you have a fellowship or not, please join “How to complete your grad student tax return and understand it too” at pfforphds.com/taxworkshop. If you’d like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

39:41 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. 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 podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. 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. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.