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This Former Prof Found True Flexibility and Profitability in Her Academic Editing Business

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In this episode, Emily interviews Dr. Paulina Cossette, a former professor and the owner of Acadia Editing. Paulina followed the prescribed academic path, but found herself profoundly unhappy in her faculty position. After leaving academia, Paulina stumbled into academic editing and eventually started working under her own brand. As a business owner, Paulina earns more, works less, and has true flexibility, which has enabled her to design her lifestyle in a way that was not possible within academia.

Links mentioned in the Episode

This Former Prof Found True Flexibility and Profitability in Her Academic Editing Business

Teaser

Paulina (00:00): The system makes it unsustainable, particularly if you have kids, though, not exclusively. Um, and so I think I just reached a breaking point, you know, and, and it really wasn’t planned.

Introduction

Emily (00:24): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (00:53): This is Season 19, Episode 8, and today my guest is Dr. Paulina Cossette, a former professor and the owner of Acadia Editing. Paulina followed the prescribed academic path, but found herself profoundly unhappy in her faculty position. After leaving academia, Paulina stumbled into academic editing and eventually started working under her own brand. As a business owner, Paulina earns more, works less, and has true flexibility, which has enabled her to design her lifestyle in a way that was not possible within academia. If you’ve been enjoying this podcast and want to see it continue, would you please help spread the word? Take a minute to leave a review on Apple Podcasts or Spotify, text a recent episode that you enjoyed to a friend, or give it a shout-out on social media. Any of those actions helps me to grow Personal Finance for PhDs and continue finding amazing guests for the interviews. You can find the show notes for this episode at PFforPhDs.com/s19e8/. Without further ado, here’s my interview with Dr. Paulina Cossette.

Will You Please Introduce Yourself Further?

Emily (02:15): I am delighted to have joining me on the podcast today, Dr. Paulina Cossette, who is a former professor and currently has a business called Acadia Editing Services. I’m really excited to learn about her business journey, her exit from academia, all that kind of related stuff. And so, Paulina, welcome to the podcast, and will you please introduce yourself to the audience a little bit further?

Paulina (02:36): Yeah, thanks so much for having me, Emily. Um, so I used to be a political science professor. Um, I was in academia for about 12 years, uh, and in 2019, um, I had a 1-year-old child and I was just sort of, uh, very overwhelmed, um, and getting fed up with the lifestyle of academia, having to work seven days a week, you know, just facing that burnout, especially having just had a baby. Um, and so I decided to quit and we moved aco- across the country to live in Maine near our family. And I sort of fell into copy editing. And, you know, long story short, uh, four or five years later, here I am, I have a successful editing business and I work from home for myself. Um, and life is good.

Emily (03:28): I love this concept. Okay. Are you familiar with Cal Newport?

Paulina (03:32): Yes.

Emily (03:33): Okay, so I’m gonna get his like, name of this wrong, but it’s like lifestyle centered career design, something like that. Have you heard him talk about this lifestyle centric career design? Something like that? Um, so that really sounds like, I mean, you said you fell into it, but it, I mean, it really sounds like that’s kinda what you were doing, right? You had built up career capital in academia and then said, Nope, my lifestyle is more important than this particular job, and so I’m gonna pivot and use this career capital in another area that supports how I want my full life to look like. Okay. So very, very great brief introduction, but let’s kind of dive, you know, more into this and sort of starting back from the beginning of the academic journey, like what led you into the career in academia in the first place?

Dr. Paulina Cossette’s Academic Journey

Paulina (04:17): So I, you know, I was always a good student. Um, I was a first generation college student, so I didn’t really have guidance on any of that other than my grandparents who were always saying, you have to go to college because that’s how you succeed. And I just, I liked school and I liked learning, so I just, I went to college, um, I kept, I just kept going and, you know, I started doing research, uh, as an undergrad and then went on to get a, the PhD program and I didn’t really have a plan, you know, I just sort of enjoyed being in school. And then once you get to graduate school, I think this is true for many people. Um, your advisors direct you towards academia and, you know, I was in political science, so there weren’t, there wasn’t any discussion of alternatives of industry or, you know, working in government or anything else. Uh, and I didn’t really know, uh, I didn’t know any other options. And, you know, they said, you apply to these schools and you get the tenure track job, and it doesn’t matter if you don’t like where you’re living, that’s just part of it, you know, you don’t have to stay there forever. And so I, I think like many people, I sort of fell into this funnel, you know, of like, this is, this is what you do, and I just did what I was told. And, um, it worked for a little while, but that was a recipe ultimately for disaster. So, um, so yeah, I, I loved school and I loved learning, but it was just sort of like, I, I just kept doing what I was supposed to do, uh, and ended up, you know, ended up there and not very happy.

Emily (05:56): Hmm. I wonder if I was on a track similar to this myself, um, up until the point in graduate school, um, when I discovered personal finance, actually. And that’s when I figured out like, oh, people have like all kinds of different jobs and businesses sometimes, and like some people work part-time and some people retire. And like all the, it’s just sort of opened my mind. And not that I was on necessarily an academic track, but certainly to stay in research, that was my intention. Um, so that is so interesting, and I totally, I totally understand how that would happen, but also good on you for being successful, even in something where you were like, I’m just following the prescribed path here. Um, but clearly it, it went well for you for a time at any rate. Right? And then you sort of, you know, briefly said earlier that the timing of you leaving your job was, you know, around when your child was very young. Is there anything else you wanna share about that decision to leave and like maybe what you thought you were jumping into next?

Paulina (06:52): Yeah, I think, um, it was a long time coming and I’m actually, I’m reading Annie Duke’s book Quit right now, where she talks about how we put off this decision to quit far longer than we should. Um, and it, it brings back a lot of memories. ‘Cause that was the exact situation that I was in, that I was so unhappy. And I thought, well, maybe it’s just the school I’m at. So I went on the job market and I changed schools, and I was, it was better, but I was still unhappy. It’s still, you know, and like I said, I I, I had my son. I was working seven days a week, and it was just, the system makes it unsustainable, um, particularly if you have kids, though not exclusively. Um, and so I think I just reached a breaking point, you know, and, and it really wasn’t planned. Um, my husband and I had talked for a long time about moving, um, his mom had been diagnosed with lung cancer. Uh, and so all of these factors were sort of playing on our minds until we finally reached this breaking point and said, you know, I said, I just can’t do this anymore. And it was the summer of 2019 and I resigned and we sold our house and we moved to Maine. And I had no idea what I was gonna do. I, you know, I thought I would go on the non-academic job market, trying to find something around here in Maine, which is not, you know, there aren’t a lot of options, um, trying to find remote positions. And I kept striking out, you know, people kept telling me I was overqualified or I wasn’t the right fit, or they decided not to hire anyone. Or like, it was, it was a really demoralizing experience, you know, feeling like, I have all this training and education, I’m smart, I’m hardworking, but nobody sees that, you know? And I think a lot of people go through that where they just don’t know how to translate the academic lingo into industry lingo, um, on a resume. And so I had just written a book and we had worked with a freelance copy editor in as part of the process of publishing it. And I thought, oh, well I could do that. I’m a really good writer. Everybody always tells me I’m, I’m a good writer, you know, I can edit. And so initially I thought it would be temporary, but I ended up loving it. And, you know, like you were saying about the lifestyle change, uh, this was shortly before Covid and then Covid happened and I thought, oh my God, I’m so glad I’m working from home. I’m so glad I didn’t take a job in an office. Um, ’cause especially with little kids, you know, I didn’t wanna be having to go off to work and then come home and potentially, you know, getting sick or something. So, um, yeah, so I really just fell into it, um, and ended up loving it, and everything has just grown from there.

Building an Academic Editing Business

Emily (09:45): Amazing story. And I, I mean, I think so many people in academia, whether that’s just as grad students or postdocs or whether that’s a career in the professorship type position after that can relate to this. I mean, there’s so many like academic exit stories like floating around in the last 10 years. Um, even on this podcast. It hasn’t been published at the time that we were recording this interview, but an upcoming episode is someone with a very similar story of having gotten that tenure track position and then just, it was not the right fit and ended up quitting, moving across the country, you know, familial reasons in the mix, kids in the mix, all that stuff, not surprisingly another woman. Um, so there’ll be echoes of that same like, motivation, um, between these two interviews as well. Um, and so I’m so glad that you found something that you loved, but it, it, it does sound like you are casting around and applying for different things and trying different things and, um, not sitting stagnant, but really like pursuing some different things until you found something that was an awesome fit. And I, I just love that. So let us know more about your business now, like, um, it’s been a few years since you like started it. So what does it look like now?

Paulina (10:47): Um, so when I first started out, I was very much a freelancer. The idea of being an entrepreneur was like, that’s too much for me. That sounds like a lot of risk. I could never do that. Um, and so I started out freelancing for some different companies that we usually refer to as editing agencies, um, where you have scholars from all over the world upload their documents and then the company hires you as a freelancer to edit them.

Emily (11:16): I worked in such a service as a side hustle for several years, yes.

Paulina (11:19): Oh, fantastic. So, you know that it is not ideal and the pay is not very good, but when you’re just starting out, it’s a great way to learn the business. You know, you are, um, it’s essentially, I tell my students it’s on the job training. You know, it’s if, if you’re faculty, you know how to do academic editing, um, but you’ve just never done it at the level that is required, you know, in professional editing, fixing every mistake using advanced tools and word track changes, all that stuff. And so I think working for these agencies is a great way to get that initial experience. And my mistake was that I just stayed there too long. You know, I didn’t have enough confidence in myself. Um, I saw other editors in these Facebook groups talking about how the way you make real money is to get private clients. And I thought, oh, I’m not good enough for that. You know, like the, the academic imposter syndrome carried over into this new life, unfortunately. Um, but eventually I got more and more experience and I decided probably a year or two ago, you know what, I’m just gonna go for it. And I started, uh, connecting with some private clients. And at first it was just a handful of people, but I, my confidence grew and I, and, and people were happy with my work. And so I realized that I really am good at this. And I think, you know, I wish it hadn’t taken me so long. Um, I did have a second child in that period, so I, I, you know, had other things going on. But, um, but yeah, I think I’ve, I’ve learned so much from building a business, you know, and, uh, a lot of it is just having confidence in myself. But a lot of it also is also that, you know, a lot of PhDs, um, think that they don’t have any skills that they can apply outside academia. I think they’re, they’re terrified to leave graduate school or their academic position because they think that they’re not gonna be able to do anything else. But there’s so much about a PhD or other doctoral program that trains you to be successful. You know, you’re hardworking, you’re persistent, you’re creative, you’ve got thick skin, you know, like all of this stuff. You’re a, a pretty good writer, probably. Um, you know how to do research, you like to learn new things. Um, all of this, no matter whether you wanna go into editing or business or, you know, industry or whatever, you have so many skills that you can apply elsewhere. And I think that the process of building a business has taught me that

Emily (13:55): I agree so much. I actually, right when I was, I guess around the time I started my business, which is also the time that I finished graduate school, I was kind of, yeah, I was trying some different things, sort of like you did for a little while. And, um, I, I remember writing a blog post about like, the similarities between like entrepreneurship and, um, the academic life. And in addition, all those, all those characters, which that you mentioned are totally, I totally agree with them. And I don’t remember if you had this in there, but I really focused a lot on like, sort of being, um, like a self-starter slash really in charge of your own work in an independent way by the time you finish a PhD. Or certainly if you go beyond that, um, very similar to being like a solopreneur or like the top person in like a business. Um, and also for me anyway, working alone. ’cause like I am a solopreneur, so I work with contractors, but I don’t have employees of my own. Um, and so that was also very similar to like, okay in, when I was in graduate school, like I had some collaborators, but I, I worked my own projects. And so like, not being part of a closely working together team was very similar to me between those two like environments. So yeah, I mean, and I actually, I really relate also to your experience of like, I’m gonna try this, um, mode of work first as like a freelancer. So working for somebody else’s business, whether as an employee or as a contractor, either way you would sort of learn what the business is and then eventually gaining the confidence, as you said, to strike out on your own and sort of do it under your own branding. But coming with that, uh, there’s much more responsibility for actually getting clients. So like, that’s the part when I was doing the freelance, like editing work, I loved that I didn’t have to get clients, I just had to do the work. Whereas when you become the business owner, like the sales aspect is something you have responsibility for. So that’s a tough, like, that’s a big role to like add when you’re making that shift. Do you have anything else that you’d like to add to that?

Paulina (15:45): Um, yeah, you know, what you just said about, uh, marketing and things being just a bit more challenging. And that’s exactly what I tell my students is like, it’s not ideal to start out working for these editing agencies that pay less, but it lets you focus on that training, uh, and, and really perfect your editing skills before you then go out and try to attract private clients. ’cause marketing does take a lot of work. It is, you know, I don’t wanna paint the picture that entrepreneurship is easy because it’s not, but um, it certainly does pay off when you get there, you know, and you figure out how to connect with people. And I think, um, I also agree with what you were saying about the similarities between being faculty or being in academia and being a solopreneur is one of the biggest things that I hear from people that they’re terrified to leave academia because they don’t wanna lose their flexibility. And I always push back on that because, um, I don’t think academia is all that flexible. You know, there’s a meme that’s gone around that says, academia lets you work, or you have to work seven days a week, but you can choose any seven days a week that you want. Uh, and it’s so true, you know, but being, being an in entrepreneurship, you, you do, you get to keep that flexibility and you’re not working nine to five.

Emily (17:03): Hmm. I agree. Like it might be a big shift for like an employee to then strike out on their own in a business, an employee in the sense of like, not in an academic setting where like maybe you work your 40 or your 45 or your 50 hours, but you can kind of turn it off and you don’t have a ton of responsibilities like outside of that. But in the way that academia can be all consuming business also can be all consuming. And so whatever skills you’ve learned about, like the boundaries that you can put up can, it can also be translated between those two settings. And like you said, academia is flexible in the sense of like, yeah, exactly. You are just gonna have a ton to do. So like, pick what you’re gonna do, all that ton of work. And, you know, business ownership is a little bit different because you can sort of define the scope a little bit better. Someone else isn’t defining it for you of how much work there is to do.

Commercial

Emily (17:47): Emily here for a brief interlude! I’m hard at work behind the scenes updating my suite of tax return preparation workshops for tax year 2024. These educational workshops explain how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. For the 2024 tax season starting in January 2025, I’m offering live and pre-recorded workshops for US citizen/resident graduate students and postdocs and non-resident graduate students and postdocs. Would you please reach out to your graduate school, graduate student government, postdoc office, international house, fellowship coordinator, etc. to request that they host one or more of these workshops for you and your peers? I’d love to receive a warm introduction to a potential sponsor this fall so we can hit the ground running in January serving those early bird filers. You can find more information about hosting these workshops at P F f o r P h D s dot com slash tax dash workshops. Please pass that page on to the potential sponsor. Now back to our interview.

Personal Finances as a Professor and as a Business Owner

Emily (19:03): Let’s talk about the money part of this. So compare, you know, your job as a professor, what that paid and what it required of you to what you’re doing now. Like how have your, I’ll say, how have your personal finances changed with this transition? And there’s a lot of transitions in there. You mentioned, you know, multiple children moving across the country. Care, you know, caring for elderly parents. Like there’s a lot in there. So like how has your financial situation changed from when you had that previous position to, to now?

Paulina (19:30): So, um, with editing specifically, uh, so much of how much you can earn is based on how quickly you can edit because there are some editors who charge hourly, but I think that’s sort of on the way out. I think both editors and clients like to charge per word. So, you know, for each project you can give a quote, uh, based on your per word rate, you know about how much you’re gonna make based on your editing speed. The client knows what they’re gonna pay. And so, um, obviously the faster you can work while, you know, being accurate still, uh, the more money you can make. And so I think I am fortunate because I can edit pretty quickly, um, certainly as I’ve gotten more experienced. Um, and so I would say that, you know, my, I was making about $60,000 when I was a, an assistant professor on the tenure track in political science when I left, plus the benefits. And, you know, you, when you have a salary job, they’re contributing to your health insurance and retirement and all that, which you obviously lose when you go freelance. Um, my first year out of my first year of freelance editing, I made about 45,000, and that was working maybe 20 to 25 hours a week. Um, and you know, just kind of trying to figure out the landscape. Uh, my second year I made the same amount, but I took three months off because I had my daughter, uh, and wanted to take time for that. Um, and then within the last few years, it’s just climbed steadily, especially when I started working with private clients. And, you know, you’re not having to, you can charge much more. You’re not giving up those costs to some other company that’s employing you. Um, and this year I’m set to hit six figures. So, uh, and that’s only working about 30 hours a week. So, you know, there are a lot of editors out there who struggle with finding clients, but I’ve, I’ve somehow managed to find this formula that lets me, that has let me build up a client base with referrals and repeat clients and just new people finding me through Google or whatever. Um, and I’ve had a lot of success. And so, you know, I’m, I’m happy to share that with other people, uh, you know, to, to try to help them find their way out of academia.

Emily (21:52): Hmm. So it’s while not, and immediately upon that transition, it’s the business that you’ve built over time, I would say does compensate you well, more than, um, the academic position did, even after accounting for the benefits and so forth. And you’re limiting your work to 30 hours a week as you said, whereas it was whatever, 60, 70, whatever it was when you were in academia. Um, awesome. I’m glad to hear that both the up the upside of more money and less time both together. That’s amazing. Um, so when you volunteered for this interview, you said that you had a message for academics who are unsatisfied with their jobs like you were. So what’s that message?

A Message for Academics Who Are Unsatisfied With Their Jobs

Paulina (22:33): Um, I, if, if I could just talk to every unhappy academic, you know, I would say you don’t have to stay you if you are miserable. And you know what, if you are in academia and you’re happy, that’s fantastic. Uh, that that’s wonderful. But there are so many people out there who are unhappy and they’re terrified to leave for all the reasons we’ve been talking about, and they just feel trapped. And, you know, in the so many people that I’ve talked to in the last several months, um, you can see the anguish in their faces, you know, you hear it in their voices and, and I know exactly what that feels like. The anxiety, the stomach churn, the do I leave? Do I stay, do I leave? Do I stay? Uh, it’s horrible and I don’t want that for anyone, you know? And so if I could, if I could tell anyone who is unhappy, that’s, that’s my message is, you know, if you wanna go into editing, great. I’d love to help you get there. But, uh, no matter what you wanna do, um, you just don’t stay right. Life is too short to, um, life is too short to be unhappy and to not do what you wanna do.

Emily (23:40): Incredible. I absolutely agree. Life is too short. I’m, I’m 39 now, and so I am, I’m not having a midlife crisis, but I’m having a midlife like rethink, like, yeah, this, this is my life. Like, am I happy with the choices that I’ve been making? Most of them, yes, I am very happy. Um, what can I do differently? You know, going forward, what can make this an even better experience for me? Because you only get one life. And so to spend your twenties and your thirties and into your forties, maybe like as you just described, like dreading every day at work. Absolutely. Life is too short. Um, so totally agree. Will you please tell us more about like, well, one, where can, where can people find you if they want to, you know, employ your editing services? And I understand there’s another arm to your business actually, which is like helping other people make this kind of transition. So tell us about all that.

Get in Touch With Dr. Paulina Cossette

Paulina (24:31): Yeah, so for editing, um, my homepage is acadiaediting.com. Um, and you can also find me on Instagram, Facebook, uh, LinkedIn. Um, and that’s, that’s pretty straightforward. If you have an editing project, I usually just ask to see a draft and give a quote and happy to help whether it’s, uh, you know, a dissertation or journal article or even I’ve edited tenure packets and job market letters. Um, and then yeah, this summer I launched a digital course and group coaching program called Becoming an Academic Editor. Uh, we’ve just wrapped our first cohort. Uh, it’s a 12 week program and we’ve started our second cohort, um, so far over 20 people have gone through it. Um, and it basically, I teach you what I did, right? How to start freelance editing, how to build a website, how to find clients, um, and it’s really awesome because of that we do these weekly Zoom calls and you’re just surrounded by people who are just like you, who understand how horrible academia can be and who are ready to get started with, you know, like you were saying with that, that midlife change of, uh, really starting to pursue what makes us happy instead of what we feel like we were supposed to be doing.

Emily (25:52): That sounds incredible. And actually not to like whatever, get content out of your course, but when you described your transition, you left the job first and then you started and you found editing after having, after struggling to find another position. And so I would imagine what you’re teaching people now is, okay, you already have an idea that you might wanna edit. Let’s start that on the side before we quit the big job. Is that right?

Paulina (26:16): There’s honestly, there’s a mix of people. Um, some found me and I had one student who said she was in a therapy appointment and decided she had to leave academia and she went home and googled it and she found my website and enrolled in the course right away. Uh, other people have started editing on their own and are not having success. They’re struggling to find work, and so they find me and, and are able to get some help. Um, other people, yeah, they just wanna make some extra money, you know, they don’t wanna leave their academic job and they like that with freelancing. They can work five or 10 hours a week editing and bring in some extra cash or do it in the summer or whatever. Um, so it’s really, it works no matter what your situation is, as long as you’re a strong writer and you understand academic publishing, then you know, it’s, it’s totally doable for whatever your timing and all that.

Emily (27:10): I love it. Um, I’ll share that. Like I, when I was doing this kind of work, which I did for, I don’t know, maybe three years or so, four years, um, strictly as a, you know, contractor for another company, um, I did it as a side hustle and I started it after I defended as I was starting personal finance for PhDs and it wasn’t bringing in as much money as I wanted to bring in yet. So it was like another, it was truly like for the money, that’s why I was doing it. I didn’t anticipate having a career in this area or anything. Um, but when I started I was like, wow, I could have been doing this earlier, like I could have been doing this during graduate school as a side hustle. Like, um, and I liked that it was within, it was all within kinda my area of expertise and like that was really like nice that I still got to use those skills. Um, so I think at any stage, if you wanna pick it up and whether it’s gonna be a thing on the side or whether it’s gonna be like you are really doing this like for a lot of time and it’s gonna be one of your main sources of income, uh, maybe transitioning on to being your full-time income, like, that’s awesome. So I’m glad that people can find you if they’re curious about this career path.

Best Financial Advice for Another Early-Career PhD

Emily (28:09): Um, let’s wrap up with the question that I ask all of my guests, which is, what is your best financial advice for another early career PhD? And that could be something that we’ve touched on already in the interview or something completely new.

Paulina (28:22): So, um, so my biggest piece of advice I think is, you know, we all know we’re supposed to save and have a budget and all that stuff, but at some point, if you’re not earning enough money, enough money, you can’t save, right? I, I grew up with a single mom with not very much money at all. And so I know you, you just can’t save if there’s not enough coming in. And so for anybody who is getting their PhD and thinking about going on the job market, absolutely you need to negotiate. Uh, and I think this is especially important for women in particular who, you know, we don’t apply to jobs because we think we don’t, we’re not qualified. Um, whereas men will apply to any job that you know that they feel like they’re extra qualified for, even if they’re not. Um, so apply to jobs when you get an offer. Negotiate, right? Don’t be a don’t be afraid to ask for what you’re worth and, uh, let them tell you no, right? Like don’t, don’t assume that you’re not gonna get it and then be afraid to ask. Just go for it ’cause you deserve it.

Emily (29:25): Awesome. I love it. Okay, we’ll leave it there. Thank you so much for volunteering to come on the podcast. It was delightful talking with you.

Paulina (29:32): Thanks so much, Emily. It’s been fun.

Outtro

Emily (29:44): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

Negotiation and Long-Term Thinking Effected Financial Success for This International PhD

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In this episode, Emily interviews Wen, who recently earned a PhD in plant pathology from the University of Wisconsin-Madison. Wen came to the US for her master’s degree immediately after finishing undergrad and started learning about the US financial system, even though she had an avoidant money mindset. After overdrafting her checking account, she realized she needed to take control of her finances, start thinking long-term, and work toward financial goals such as investing inside a Roth IRA. Alongside peers, Wen negotiated the research assistantship stipends in her department, they were ultimately given a 13% raise. She has started applying those negotiation skills in other arenas. Finally, Wen explains how she pursued a career in tech transfer, starting with professional development and an internship during grad school.

Links mentioned in the Episode

Teaser

Wen (00:01): Um, yeah, I, I think I want to circle back, um, the negotiation again. Um, I want to, uh, emphasize, um, negotiation. It’s not only like what the stipend could be like, I think every grad student could ask more from their PI, um, you know, sponsor me to this conference. This is a good workshop I want to do, and this is a career event I want to attend, and can you sponsor me? Can you cover that for me? Um, and there’s everything there. There’s a lot of things online. Talk about negotiation and everything. So I, I do want to share that. Um, when I purchased my second car, um, I watched a bunch of videos on YouTube, how to talk to the dealership, and, uh, just, um, trying to negotiate the best option for myself. Um, it was a quite funny, like real life big purchase that I went to the dealership, uh, and the dealer just thought I’m a innocent, uh, foreigner. <laugh> doesn’t, didn’t know what’s going on. And, um, so I think I, um, really take advantage of negotiation and know that what’s the best for me and, um, argue that, uh, those, those terms. And, um, yeah, I, I learned a lot of from practicing, uh, negotiation. And, um, advocate for myself.

Introduction

Emily (02:02): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (02:32): This is Season 19, Episode 7, and today my guest is Wen, a recent PhD graduate in plant pathology from the University of Wisconsin-Madison. Wen came to the US for her master’s degree immediately after finishing undergrad and started learning about the US financial system, even though she had an avoidant money mindset. After overdrafting her checking account, she realized she needed to take control of her finances, start thinking long-term, and work toward financial goals such as investing inside a Roth IRA. Alongside peers, Wen negotiated the research assistantship stipends in her department, and they were ultimately given a 13% raise. She has subsequently applied those negotiation skills in other arenas. Finally, Wen explains how she pursued a career in tech transfer, starting with professional development and an internship during grad school.

Emily (03:24): I have a quick update for you on the tax return preparation workshops that I’m offering next spring. I’m super excited for my planned live in person workshops in California and Colorado and also my live virtual workshops for universities in Minnesota, Missouri, and New York. I’m sure there will be many more universities offering my asynchronous workshops as well. If you want to learn if your university is already on my list for a live or asynchronous workshop or want to help me get one offered at your university, please email me! You can reach me at emily at P F f o r P h D s dot com. You can find the show notes for this episode at PFforPhDs.com/s19e7/. Without further ado, here’s my interview with Wen.

Will You Please Introduce Yourself Further?

Emily (04:25): I am delighted to have joining me on the podcast today. Wen, who is a postdoc in tech transfer at a university in Texas, and she’s going to share with us about her sort of financial transition to the United States as an international graduate student and now postdoc. And also about, uh, her pivot to the field of tech transfer. So that’s really exciting. Uh, Wen will you please introduce yourself a little bit further for the audience?

Wen (04:50): Yes. Uh, thank you Emily. Um, my name is Wen and I’m a recent PhD graduate, uh, from University of Wisconsin Madison, and my major is plant pathology. And, um, when I started my PhD, uh, four years ago, um, I, I wasn’t sure about much about financial situations and all my career plans, so I’m glad, um, things are work out, uh, currently and, uh, really, um, happy to share with people in the, uh, going through grad school. Um, so yeah, and I currently start, I just started working as a tech transfer early professional as a postdoc position at university, uh, in Texas and help researchers to protect their, uh, IP and licensing the IP to, uh, the, the industry. So it’s quite interesting and fun new, um, career for me.

Finances During Childhood and Young Adulthood in China

Emily (05:57): Yeah, that is great. Tech transfer was very intriguing to me when I was in graduate school as well, and definitely a career that I considered, uh, before starting my business. I want to actually take a step back and would you please tell us a little bit about how you grew up and your young adulthood, at least in terms of your finances, um, up until the point that you came to the US so we can understand a little bit of your background and your mindset?

Wen (06:20): Yeah, so I came to United States in 2018 when I finished my college back in China, Beijing. So before that, um, before I was 22, I spent my whole life in China. So I would see that the bigger picture of how I grew up is China was, uh, developing country and we have fast economic and financial growing throughout my, the, that two decades is I live there and how that affect my early, uh, adult year is we, not only me, but my parents, they went through a insufficient, uh, lifestyle to kind of going to be self-sufficient and to industrialize and to eventually abundant, uh, lifestyle. Um, I think that affect me in the way that okay, situations always change and I don’t feel like I need to plan for financial situation when I grow up, especially rely on my parents. And that’s quite Asian family culture, um, that parents help children to, uh, uh, fund that college and find job and, um, kind of help them to establish their, the family, new family in the future too. So I don’t have many financial literacy, uh, when I came into u uh, the, the us. And another personal, um, background about my family is my parents they are, uh, they own a family business, so they always talk money, um, in our private family life, and they would argue and things get stressful. And when I went to, uh, sleep a lot of times, and I think that just make me, doesn’t feel positive to talk about money or thinking about what can money do. Um, yeah, so I don’t consider much about learning financial stuff, uh, even in college, uh, when I make, uh, decisions on what to study. So I just follow my interest in biology, went to, uh, plant pathology and decide to pursue higher education. Um, because I wasn’t thinking about making money, it was kind of a hard topic for me to discuss or openly to look into what do I need to do? Yeah. Until I, uh, came to United States and explore things on my own here.

Emily (09:15): Yeah, that’s really fascinating. And I’m sorry if this is like overly like reductionistic, but it sounds like you developed a bit of an avoidant mindset around money because both of being provided for by your parents and in an increasing lifestyle over time, right? Things are getting better and better lifestyle wise, and also because of the stress that money, um, caused in your household and that you absorbed some of that. And so that sort of came together to be like, well, it’s, it’s all okay and I don’t wanna think about it. Does that make sense? Yes.

Wen (09:46): Yes.

Adapting to the US Financial System

Emily (09:47): Okay. So then there’s a big shift right when you get to the us. Can you tell us, uh, about that and, and how it happened and how you were feeling and how you adapted to this new system?

Wen (09:59): Yeah, so when I came to us, I started my master program in Ohio State. Um, and I was awarded the research assistantship, so the regular RA stipend to start. Um, and it was quite efficient for me to, uh, start living there because, uh, to cover rent and, uh, groceries. Um, I was just excited to just experience all things. Um, and I got my first credit card, uh, when I came to United States. It’s not a thing in China. Um, and I got my first a used car, um, in my second year. Um, but I think there is a, there was a turning point when after I pay my, um, car payment to buy the car, my bank account, I didn’t realize it went to negative. Um, and I got, uh, a fine of the overdraft fee, $39. I still remember that. So I went, um, really anxious. I’m like, how could this happen? And, uh, the bank can just take, uh, overdraft fee from me. And, um, I think I was able to argue with them saying, Hey, it was my first time I was, I was new to this system. So at that point I realized, okay, like, um, I need to take serious on my situation. I need to plan and budget very well to buy things, um, and know how much number in my account, how much do I have. And, um, so I’d say more and, uh, during Covid I moved to Madison, Wisconsin, which is a higher cost of living city, um, for grad student. Um, I just starting to saving even more, um, for the moving and, um, adjust to their high rent here.

Emily (12:15): Can you say a little bit more about how you got into that, more of like long-term or annual planning? Um, because I can imagine that’s a really, that’s a really difficult thing for someone who’s, you know, within a year or two of being financially independent from their parents. I know it took me several years to start sort of pushing that time horizon out for the planning, right? Like, did you use any like tools or, I don’t know, anything that would help someone else who’s going through that transition?

Wen (12:45): So at beginning I do ha- uh, in my first year in Madison, I want to focus on getting to know my own financial habits, uh, tracking my spending, and I just downloaded very simple, um, Excel sheet from the website to track down my spending. Um, and I realized I eat, uh, a a I spend more money take out and, uh, some online shopping and necessary fashion stuff, um, into some unnecessary items. Um,

Emily (13:28): Sounds pretty typical pandemic spending though, right? <laugh>

Wen (13:32): I know, and investing couples hobbies. Um, yeah, I think those the first step is getting to know myself and, um, get rid of their, the spending. I didn’t realize I, I was, I was doing. And then I figured out if I want to save extra, um, cutting spend, it’s one thing. And another thing is I found some resources on campus. Um, back then, we do have international student group that, uh, we will go to their, uh, local food pantry that’s on campus. Um, and there are very fresh produce. We’ll go weekly with, uh, a bunch of international students and we, it’s just like, uh, grocery shopping and I will, I got save quite a lot of money from that. And sometimes our dining hall, um, they will have extra dining food and they will pack very well and give to students. I think all this, um, on campus activity, uh, on campus nresources help me allow to save some, um, necessary spending as well. Um, and it’s a way for me to find my community that time.

Emily (15:03): Yeah. Thank you so much for, for sharing that. Um, is there anything else that you wanted to add about kind of adapting to the US um, financial system?

Wen (15:12): I think getting the social security number and um, just a first debit card was, uh, essential for us to get paid. Um, and establish that is very important, especially, um, I need the social security number to apply, uh, the credit card later and, um, be aware that having credit card is essential for, for future, like the credit scores, um, which I wasn’t educate, educated, uh, in that perspective back in China. We don’t use credit score. Um, and also I just think it’s extremely more important for international student have the emergency, um, savings because we don’t have, um, the, the, the support that domestic students have, um, and always have that saving would just help so much. Um, and at the same time take advantage of the health insurance, the benefits that, uh, come with our student staff. And I always use my dental and vision and um, uh, insurance, um, coverage every year. Um, so those are now counted by numbers, but they are financial. Um, they could be financial spendings in the future. Um, yeah.

Stipend Increase During Grad School

Emily (16:53): Yeah, that’s great that you have that insurance provided you by your program. I know not everybody has that, but it’s something that more and more programs are adding if they don’t already have it. So I believe you told me in advance of our interview that you increased your stipend during the course of graduate school. Can you tell me how that happened?

Wen (17:10): Yeah, I think, uh, it’s just a, a process of negotiation between our grad student, um, group, uh, with our department. And when I started my PhD four years ago, uh, we had that huge inflation that like about 8%, um, that year. So I realized our department only increased like about 2% into the student stipend that year. Um, and the something I think it’s critical is timing. Um, most of the universities, or at least our department will decide how much to pay the year ahead for student. So for example, this August we, the department will submit their budget for next, um, next year’s, next fall students, um, payment. So I just couldn’t, um, thinking about like this lack of, um, catching up <laugh> eventually just will make our stipend pay so behind, um, the current raise of rent. Um, so in my first year I realized this financial hardship, but I think we started talking about it. Um, and until second year, I actually joined the student body, uh, kind of our grad student council, and I initiated more discussion. We talked to other departments, grad students as well. Um, and eventually I designed a survey, um, right after actually, uh, nature published a paper on the graduate student stipend survey results. Hmm.

Emily (19:17): Was that the biology PhD stipends one?

Wen (19:21): Yeah, I think so. It has a bunch of, um, PhD programs, data that related to our program.

Emily (19:29): Yeah.

Wen (19:29): Uh, entomology, plant pathology, horticulture. So

Emily (19:32): We’ll link to the episode that I did with the, uh, one of the co-founders of that, uh, database. So we’ll link to that in the show notes.

Wen (19:39): Yeah, that’s awesome. Yeah, I think getting the information about what’s going on with other universities really help us to push this forward. So I, um, we made, I made a survey about what’s our current inflation rate and cost of living in Madison specifically, um, and stipend numbers we quote from their PhD stipend.com, uh, a bunch of data and make, make, uh, we make a very informed, um, survey plus it, uh, plus like collection of the students data points. And we made a report, so we were able to present a report at our department meeting before they make a decision. And, um, you know, it’s hard to, um, really let them to, um, because they have their budget, uh, difficulty as well. So we will patiently, um, talk about this with our department, um, faculties and administrations, and I think we got their feedback. They want to, uh, so we ask more data from other universities, similar program, um, you can say like a competitor of our programs administration, uh, admission. So I think after two times, like monthly meeting like that, we were able to, they devote, um, increased stipend, um, about 13%, um, which includes a percent inflation and 5%, um, extra for their cover, our student’s fees. It’s, it’s like their activity fee we pay for the university. So our department, uh, help us on that. Um, yeah, so we got, uh, got a pretty good raise on that. And the good thing is, um, it didn’t make our students happier and, uh, have stronger adminis admission data to attract prospective, uh, students applicants. Also our, um, nearby like close program, they were able, the student body were able to kinda refer to what we do, we did and, uh, start some conversation with their department. So yeah, I, I think it was something that, um, really amplify, um, what I think that time was important. Just voice out, um, what we need as grad student, um, and, um, extra, uh, hardship for international student that time.

Emily (22:44): Yes, I love that example so much and I’m, I’m so glad to hear this story as well as we’ve heard a couple other similar ones on the podcast about departmental level negotiation.

Commercial

Emily (22:56): Emily here for a brief interlude! I’m hard at work behind the scenes updating my suite of tax return preparation workshops for tax year 2024. These educational workshops explain how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. For the 2024 tax season starting in January 2025, I’m offering live and pre-recorded workshops for US citizen/resident graduate students and postdocs and non-resident graduate students and postdocs. Would you please reach out to your graduate school, graduate student government, postdoc office, international house, fellowship coordinator, etc. to request that they host one or more of these workshops for you and your peers? I’d love to receive a warm introduction to a potential sponsor this fall so we can hit the ground running in January serving those early bird filers. You can find more information about hosting these workshops at P F f o r P h D s dot com slash tax dash workshops. Please pass that page on to the potential sponsor. Now back to our interview.

Low Stipends and High Costs Impact International Students Most

Emily (24:13): So you just mentioned, especially if you’re international students, so like the way I view this, you can tell me if you agree, um, is that in that period of high inflation or I’d really any time when stipends are not keeping up with basic cost of living expenses, um, the international students are the ones who suffer the most because domestic students have sort of financial pressure release options, which are, you can get a side hustle. I mean, they, your department may not like it, but it’s legal. You can do it. Um, and or you can take out student loans. And these are just not available at least to the, you know, 90% are not available to international students. And so it’s so much more important for the international student community together with domestic students to do the type of negotiation that you just outlined, which is, let’s just raise the stipends. Can we just get these stipends up to a decent level? Do you, do you agree or like, what are your further thoughts on that?

Wen (25:06): Yeah, I, I totally, um, agree on that as well. We’re, as international students, we are restricted to apply for certain funding and look for a, a, a second shift and make extra money. Um, but I, I will say that, um, getting to know the resources out there is still, um, skill to, uh, develop, even though there are, are limited. Um, for example, that’s something related to my stories about professional development and career planning as well. Um, there are, you know, all kinds of event provide free lunch, pizza, <laugh> free dinner. So I, I try to, um, take advantage of that. Um, and it’s also a form of connecting to other students getting to know what’s going on. Um, yeah, I think be resourceful even we are restricted is, um, I think one day it, it just extra skills we develop make out of the, the, the situation. Um, yeah, so I was involved, uh, in a professional development, um, student organization called <inaudible> on campus. Um, so this is an organization help grad students, postdocs to practice, um, um, commercialization of technology. So it’s really something I really want to develop. And, um, in this, uh, organization, they hosted event to, um, work on project and they gave micro grant, which is a grant. Um, I will buy linking per, uh, subscription and take professional headshot and only use for professional development events. Um, so yeah, that covered a lot of my, um, let’s say unnecessary spending, um, that I wouldn’t spend, I wouldn’t have the capacity to spend out on my personal account, but it’s important for me in the future. Um, so I think take advantage of the resources, uh, like that will, um, be very helpful.

Financial Goals During Grad School and Beyond

Emily (27:53): Yes. Thank you so much for adding those examples. For sure. I totally agree. Um, okay, so your stipend is increasing <laugh>, it’s, it’s at least catching up to, you know, the, the damage done by inflation. Um, can you tell us about some of the financial goals that you pursued during graduate school or since graduate school?

Wen (28:10): Yeah. Um, I wouldn’t say I have a specific number to target, but I know that I want to save as much as I can and start, start investing. Um, so it’s more like explore- uh, -ation of what’s going on in the market and where the, uh, where the places and learn about all the ETF, um, and the fire movement and write books about, uh, investing. So set up, um, investing, um, with, with the, the stipend I can save, um, I, I try to, because my pay is biweekly, so I set up other automatic transfer to my saving and, um, brokerage account biweekly. Um, just couple, just not couple hundred. I think like it’s, it’s probably 10% on my paycheck each time it comes through. And I have a individual investment account and a Roth IRA in investment account. Um, and yeah, I, and mostly just looking to their, uh, VOO S-P-F, um, their ETFs, um, trying to not, uh, yeah, I don’t do like day trading and all that. Just put money in there in, uh, in there.

Emily (29:52): Sounds perfect to me. That’s the type of investing that I teach and that I, um, subscribe to. Um, what brokerage firm or firms do you mind me asking? Um, did you open your Roth IRA with or, and or your taxable brokerage account?

Wen (30:05): So, yeah, <laugh>, um, first I think, uh, firstly I use Robinhood for my individual investment account because I think it was, uh, a fun app, uh, for me to get started and to get motivated. And I, I really enjoy, simplify their investing, um, using that app. So later I got to know more about, um, the long-term investing opened. I opened uh the Fidelity, um, uh, Roth IRA and the individual accounts I transferred my, uh, the investment from Robinhood to, uh, fidelity. Um, and one thing I think about learning out this is just finding the community of people comfortable in sharing that and learning that, and listen to your podcast. Um, really at beginning of my PhD to realize, okay, I need to, uh, pay attention to my PhD stipend. I think Sam, someone shared at a grad school workshop thing, so I clicked and I subscribe, and later I did follow some podcast, her 100, uh, her first 100k writes books about like the most important thing about investing. Um, and I think I started action, just got to know people have a similar background like me. Um, there is a website called Women Overseas built by, um, Chinese, um, Chinese Women Study abroad, work abroad. And that’s really the community. I learned a lot of these things from, they will share from life to work career and, and investment. And I, yeah, I think I learned a lot from them, from their experience. A lot of the members, um, in that Open Formula firm room, they started working for years. So it was really good experience to to set up myself to that path too.

Emily (32:26): I love it. I love that, you know, my podcast became a springboard for you to investigate, you know, the subject further, and that you found a community that was like exactly, exactly what you needed. And, ugh, that just makes me so happy. I’m so pleased. There’s such a huge amount of resources, financial education related areas now, um, that kind of, everybody can find their community that reflects, you know, who they wanna see and who they wanna be. Like, and I, I get to be one of the voices in the PhD space, but then, you know, everybody has multiple aspects of their identity, so like we can expand beyond that. And oh, I just, I love that so much. Um, is there anything else you wanna add about the financial goals you’ve, uh, pursued during graduate school, aside from the investing ones?

Wen (33:08): Um, yeah, I, I think I want to circle back, um, the negotiation again. Um, I want to, uh, emphasize, um, negotiation. It’s not only like what the stipend could be like, I think every grad student could ask more from their pi, um, you know, sponsor me to this conference. This is a good workshop I want to do, and this is a career event I want to attend, and can you sponsor me? Can you cover that for me? Um, and there’s everything there, there’s a lot of things online, talk about negotiation, everything. So I, I do want to share that. Um, when I purchased my second car, um, I watched a bunch of videos on YouTube, how to talk to the dealership, and just, um, trying to negotiate the best option for myself. Um, it was a quite funny, like real life big purchase that I went to the dealership, uh, and the dealer just said, I’m a innocent, uh, foreigner. <laugh> doesn’t, didn’t know what’s going on. And, um, so I think I, um, really take advantage of negotiation and know that what’s the best for me and, um, argue that, um, those, those terms and, um, yeah, I, I learned a lot of from practicing, uh, negotiation and, um, advocate for myself.

Current Postdoc Position in Tech Transfer

Emily (35:00): Love it. And that’s a skill you’re gonna be using literally throughout the rest of your life. So it’s fantastic too, um, master that early. And especially I know that the cultures around negotiation are very different. So especially to understand how to do that in an American context, it’ll be received <laugh> by other people in, in this, uh, in this culture. Um, that’s awesome. Okay. Let’s talk about then your current postdoc position and how you got to it and why you chose to, you know, make this pivot to tech transfer. And you already mentioned earlier that, you know, there was this specific professional development group that you were involved with. So maybe you could start back there with like, the preparation and then, you know, like your choice in like, getting your new position. 

Wen (35:38): Yeah. So I would say like, compared to financial goal I had at, um, beginning of my PhD, I’m more really like clear about my career goal. Um, and I took PhD as one of a professional, um, period, um, in on my resume. So I don’t think I, I don’t think I’m a student, uh, in school. I think it as a, a career I’m at right now. So I know that I am not the best person, um, best on myself to do bench science when I went in, uh, grad, uh, the PhD program here and I want to connecting people and I want to bridge the science and market, um, gap. So I know that my goal long, uh, like four years later, my PhD after PhD, I want to do that kind of thing. Um, but I learned lot doing science and talk about science. And so I think I have that goal just over my head and took other opportunities, uh, in the professional development organization. And I took extracurricular, uh, courses, um, I P, uh, that taught by another, um, economic department. And then that lead me to an internship on campus at our tech transfer office. Um, and I learned, uh, really through their internship that one year time and, and got and just confirm my interest in tech transfer space. I really enjoyed talk to scientists and, uh, about their innovation and on different, um, topics of projects and then connecting that idea to their, the, the market, what could we amplify the value of research, um, and, and license this patent. So I think like networking, uh, in, in that space and outside our university and connecting to other tech transfer office, um, just, it was a great, I talked to a lot of PhD working in that space, really see myself can make that transition. Um, so that’s what I did. I applied and talked to people and eventually landed this tech transfer, um, role. And I think it’s very, um, a good fit for me to, uh, really combine my interest in the science background.

Emily (38:34): Yeah. I love how you emphasized like we’re not in a PhD program simply to finish the PhD and do research. I mean, if that is exactly in your professional goals and you wanna just keep doing research in that area and you’re gonna stay in academia or you’re gonna pivot to something really, really close. Actually, my husband followed that path. Like his research is very close to what he did during graduate school research wise. So like, it was a good preparation, but if you wanna make any kind of a little sidestep from that, like you need to start layering on those experiences and the, that networking and, and exploration. ’cause of course you don’t necessarily know right away what your goal is going to be your career goal. So it’s, it’s about figuring things out and exploring the space. And I love that you got to do an internship. Did you say it was for a year with the tech transfer office? And so was that like a part-time thing, um, that you were doing alongside your, your normal PhD type work?

Wen (39:24): Yes. And it’s on campus. Um, it’s very flexible, uh, terms of hours with my PhD, uh, advisor’s requirements <laugh>.

Emily (39:34): So it was something you had to again, negotiate with your advisor, right? To take a little bit of time to do that.

Wen (39:39): Mm-Hmm, <affirmative>. Mm-Hmm. <affirmative>,

Emily (39:41): Yeah. Awesome, using that skill again. Um, this is so great. Is there anything else you want to tell us about that, about that career step,

Wen (39:49): Um, about transitioning to a new role or job hunting overall? I think it’s quite, um, a self discovery <laugh>, um, time for, uh, us as PhDs as we are going to this tunnel of focusing things on our field. And then suddenly we have to, I think, set up us to be very open-minded about the careers we’re, we’re, uh, we’re going to explore and I think it’s sometime we got break ourselves a little bit. Um, and it’s okay if we don’t talk in, in our research terms and it’s okay to just talk very, um, I don’t know, simple words. We don’t use scientific words. And, um, and I I think it there, the PhD is, is a, is a journey and that doesn’t represent us going to move forward, um, like connecting with others.

Best Financial Advice for Another Early-Career PhD

Emily (41:06): This is so great. Well, Wen, thank you so much for volunteering to come on, on the podcast to do this interview. And, uh, we’ve gotten so many great stories out of this. I’m really glad that the listeners got to hear, um, about your journey. Um, would you please tell us what is your best financial advice for another early career PhD? And that could be something that we’ve touched on in the interview already, or it could be something completely new.

Wen (41:31): Mm-Hmm. <affirmative>. Yeah. I think just to be able find yourself being financially independent in charge of your finance, um, is extremely empowering. And I have situations about myself going through, uh, co-living with someone and then we broke up and move out. I think all those, um, life-changing decisions need, um, ourselves have their confidence in our financials and now feel obligated to, um, make decisions around others. Especially I think as international students. I, I think the last advice is we prepare to save money for the applying for, uh, work visas EAD card. And if you want to get it on time, um, use a premium, um, service, which adds $2,000 <laugh>, um, to the application. So, um, don’t be shocked how expensive those things can take and, um, make, um, make informed decisions on that. Yeah,

Emily (42:54): I’m, I’m sure you’ve heard this since you’ve been consuming like other financial material, but I just love um, the sort of, uh, mantra or phrase money gives you options. So you’re just definitely able to, um, you know, so fully realize, you know, your potential and get yourself out of situations you don’t wanna be in and you know, pay for that premium service when you need it. Whatever needs to happen if you have the savings built up already. And sometimes we don’t know when we start saving what exactly we’re gonna be using that money for, but it’s just there as like a backstop and insurance policy just to give you, um, options in the future. So I’m really glad that you emphasize that, especially for international students. Mm-Hmm. <affirmative>. ’cause I totally agree that, um, you just, you need a, a bigger pool of money to draw from for it because a lot of expenses that international students experience are pretty large. Um, irregular expenses as I often talk about, about, um, on the podcast, like traveling home, like visa stuff and all that. So thank you again so much for volunteering to come on. This has really been a pleasure to talk with you.

Wen (43:52): Thank you so much, Emily. Thank you for, um, doing this and I, um, really benefit from this podcast and I, I know you will continue to serve a lot of PhD students.

Outtro

Emily (44:17): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

This Grad Student Channeled Her Financial Exuberance into Teaching and Coaching Her Peers (Part 2)

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In this episode, Emily interviews Elle Rathbun, a 5th-year PhD candidate at UCLA. This is a continuation of a conversation started in the last episode. Last year, Elle shifted her financial education efforts into an official position with the UCLA financial wellness office, through which she delivered presentations and provided one-on-one coaching. Having a 75% position with the university required her to adjust how she managed both her time and money. Elle and Emily conclude the interview by sharing ideas for how the listeners can start helping their peers at their own universities with respect to their finances.

Links mentioned in the Episode

This Grad Student Channeled Her Financial Exuberance into Teaching and Coaching Her Peers

Teaser

Elle (00:00): Because I, I grew up with so much anxiety regarding spending and money that is, I, I think it was actually really good for my health, mental health that I sort of figured out where, where to cut, um, that anxiety from just because I needed to be able to save time in order to do my job, um, to do both jobs and get enough sleep.

Introduction

Emily (00:28): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (00:57): This is Season 19, Episode 6, and today my guest is Elle Rathbun, a 5th-year PhD candidate at UCLA. This is a continuation of a conversation started in the last episode. Last year, Elle shifted her financial education efforts into an official position with the UCLA financial wellness office, through which she delivered presentations and provided one-on-one coaching. Having a 75% position with the university required her to adjust how she managed both her time and money. Elle and I conclude the interview by sharing ideas for how the listeners can start helping their peers at their own universities with respect to their finances.

Emily (01:37): You’re probably listening to this podcast because you’re interested in improving your own practice of personal finance, and you want to learn the best PhD-specific strategies to do so. Well, you don’t have to listen through the entire episode archive to do so. Instead, go to PFforPhDs.com/advice/ and enter your name and email there. You’ll receive a document that contains short summaries of all the answers ever given on the podcast to my final question regarding my guests’ best financial advice. The document is updated with each new episode release. Plus, you’ll be subscribed to my mailing list to receive all the latest updates there. Again, that URL was PFforPhDs.com/advice/. You can find the show notes for this episode at PFforPhDs.com/s19e6/. Without further ado, here’s part 2 of my interview with Elle Rathbun.

Financial Wellness: Struggling with Motivation

Emily (02:47): I’m curious what you learned once you, or you said you had to get up to speed on student loans and so forth. That makes sense. Um, once you started talking outside of your like biosciences peer group, were there any, aside from the financial things you already brought up that were more like taxes and bureaucratic kinds of things, any financial patterns that you noticed or issues about the PhD community more broadly at UCLA? Like what were people struggling with or what, what do they have questions about aside from retirement, aside from taxes, aside from pay checks.

Elle (03:14): One of the main things was motivation. Um, and so this is mostly to speak about the wellness side of it, but it has a huge impact on the financial side of it. And so, um, people just didn’t seem, it’s really hard to convince someone to save for something that’s like 30 plus years out, right? And so, um, a lot of the people I talked with, um, they, they just needed to feel a little bit more motivated or they’re like, I know I need to start investing. I have no idea how. Um, but also I think credit cards were a huge aspect of it as well. Um, I think there’s a lot of misinformation, um, about how to pay off credit cards, um, and when to pay off credit cards. Um, and so, so I think credit card, like debt in general, um, and student loans, uh, as well as just motivation of how to get organized to the point that you then felt comfortable going forth and either paying off that debt or investing or just saving or just spending, um, certain things. And so there was that, there was also just what, what resources are available. Um, UCLA is phenomenal in terms of offering so many student resources. Um, besides financial wellness, we also have, uh, like loan services where you can talk about your student loans and figure out a repayment strategy, but student legal services was incredibly helpful to me when I was figuring out, um, some stuff with like my employment and, and the pay schedule and overpayments. Um, and, uh, so I think there are just so many resources that students are not necessarily aware of or they needed to be reminded of. And so just being able to point them in the right direction, um, was a huge thing that we talked about. Um, and it wasn’t a huge burden to me. I was like, oh, there’s an office specifically for that, and they’re much more capable of talking about that. Um, so I would just redirect them to there.

Emily (05:03): That’s one of those great advantages of being a student that you might not realize until you’re no longer affiliated with the university is like there are so many resources available to you and a lot of them are free or low cost because they’re designed for students. And yeah, once you exit the university system, you’re on your own and you have to pay for everything. So like, yeah, get all your checkups, your financial checkups, your legal checkups, whatever needs to happen, like before you leave the university.

Elle (05:27): Yeah, absolutely. And I will say also that there are people who before graduate school, whether they’re master’s program, uh, or PhD or what have you, um, they would, they worked right? They, a lot of them worked in the UC system. And so when I helped a, there were a couple people who I helped create a, a Roth IRA with, I would just, they would screen share or I would sit next to them, um, and they would see, because uc use- the uc system uses Fidelity as, uh, its brokerage institution. They would see a retirement account with like tens of thousands of dollars in there. And they’d be like, is that mine? And I’m like, yeah, that’s yours. That’s all yours. Um, this is the type of account it’s in. This is, these are some of the restrictions. Just know it’s there and know where it is and know what you could do with it. Um, and so that was actually really nice to see that, um, you know, a lot of people don’t necessarily pay too much attention to their withholdings and um, and things like that, which is totally fair. People are busy, but also, um, you’re, you’re paying into that for, for a reason. And so it’s already there. You may as well may as well know that it’s there and know how to use it.

Emily (06:30): That speaks to the power of pay yourself first, that you can literally forget that money was being removed from your paycheck for that, you know, great purpose and oh, discover it like free money later. You didn’t even, you didn’t even miss it. That’s the whole point.

Elle (06:44): Absolutely.

Working for Financial Wellness as a PhD Student

Emily (06:45): I’m also curious about the logistics of you working, um, for this office. And I understand you’re not working with them anymore, right? So it was maybe a nine month, eight month kind of period, right?

Elle (06:56): Yeah, uh, the beginning of November to the end of June.

Emily (06:59): Okay. Were you paid W2?

Elle (07:02): Yes.

Emily (07:02): Okay. And so how did this work with your existing funding or your existing stipend?

Elle (07:06): So my income was W2, um, for the first, when I first became employed through the Department of Neurology, which is the department my PI is associated with. Um, and so they would both appear, so I had to get explicit permission from my PI to sign off so I could have a higher percentage of effort. Um, so it was basically 10 hours a week or 25% effort for this financial wellness position. Um, and then I was at 50% effort for my graduate student researcher position, uh, with neurology. Um, and then things had to become rebalanced because that grant that I applied to did get funded. And so, um, so then I was partially had partial effort on, uh, for neurology. The 25% financial wellness remained the same. And then I was a certain percentage on my own grant, which was not W2. But now is.

Emily (08:02): Yeah, that’s the highest percentage I’ve heard of a graduate student going up to in terms of employment. So it’s not at all surprising to me that you had to get like the special permission and everything to do it. And then in terms of like your own work and your own time management, did that 10 hour per week that you were devoting to the financial wellness office, was that like over and above a 40 or more than 40 that you were already working?

Elle (08:22): Yes, very much so. Um, and so it is one of the things that I had laid out in that initial email to my PI requesting to, to be able to apply for this, and then eventually, if I got it, um, that he would sign off on this. Um, and he’s been nothing but supportive. He’s been phenomenal, um, in this whole process. Um, but one of the things I laid out was this is not a zero sum game. This will not take away from my time or effort in lab. Um, I am one of those people who the more things I have going on, the more productive I become. Um, and, uh, so, so I maintained many hours in lab, um, and that never faltered during my time. One thing that I had to come to terms with was I had to be okay with spending more. So I knew that if there was a way to save time in my personal life, um, even if that meant spending a little bit more, I had to take it. So I didn’t meal prep as often, um, and I didn’t drive out of my way to get the cheaper gas because that takes like 20 minutes. Um, and so, so there were things that I just had to come to terms with. Um, I, it was definitely a net gain. Um, I was paid $24 an hour for that position, and so, um, that added up in a month. But, um, because I, I grew up with so much anxiety regarding spending and money, that is, I, I think it was actually really good for my health, mental health that I sort of figured out where, where to cut, um, that anxiety from just because I needed to be able to save time in order to do my job, um, to do both jobs and get enough sleep, um, and serve as a mentor to, you know, my undergraduate students and a rotation student who is, um, uh, working on my project. Um, and just to make sure I wasn’t slipping in any ma- major areas, I had to be able to, to pay for saving time.

Emily (10:13): So this, tell me if you thought about it this way, but I guess the way that I would think about this is that despite the fact that it was associated with the university, you had to get the special permission you’re paid by the university and all of that. Essentially what you were doing is you had a side job, you had a side hustle, maybe you were doing it, you know, during your regular, what other people would consider their, you know, nine to five. You had permission to do it, but essentially it was a side job. And really what this is, is kind of a hobby that you decided to monetize, right? So like, it’s something that you clearly had been devoting time to before that point on a volunteer basis, and then you switched at least some or maybe all of that effort into this paid position. Um, and so it absolutely makes sense to me. Like it’s essentially like you took on a side hustle, right?

Elle (10:56): Absolutely. Yeah.

Emily (10:57): And then the other thing that I’m thinking about this is that, um, just what you were talking about there of like making the decisions of like, okay, I need to manage my time a little bit differently. I need to manage my money a little bit differently because I had this extra position. Probably all the work that you’d been doing in YNAB and everything really helped you make those decisions because you already had a really good perspective on what you’re spending, how you were managing your time and so forth. And so it was probably very easy for you to make decisions about what you could shift now that you had more money, but a little bit less time.

Elle (11:27): Yeah, it did. It made me, I, I sort of looked at my budget and said, okay, um, if I didn’t meal prep, how much would I spend on eating at the hospital cafeteria or, uh, getting something from the store or, um, just, you know, going somewhere else and, and dining out. Um, and so, so I knew exactly how much I was comfortable increasing my food budget, my gas budget, um, and uh, I think those were the two main things. Um, but I also had to look at my calendar. So I think part of it is financial. Absolutely. And part of it was also where is this coming from in terms of time? So I stopped giving strangers advice on Reddit, <laugh>, that was one of the boundaries for me. I’m like, okay, um, I can still read stuff and still look for opportunities, um, and resources, um, but I’m gonna spend less time writing paragraphs. Um, so

Emily (12:14): I also had to create a Reddit boundary with myself because I loved it so much. I could not continue at all.

Elle (12:21): <laugh>. Um, yeah. And I’ve, you know, and after, uh, ending the position, um, that I, I sort of slipped back into that. Um, and so, but really figuring out where that time was going to be coming from was essential. Um, and just relying on every day I would just like wake up. I had no idea what I did the day before. I had no idea what I was doing that day. I just had my Google calendar tell me everything. Um, and so, um, so yeah, it was really, it was, it was very busy. Um, but I loved it so much. I don’t think there’s ever been another time or activity in my life where I felt like I was making such a huge positive difference in other people’s lives. Um, and so that was incredibly rewarding to me.

Emily (13:02): But you’re not with them now, right? Because I think you said

Elle (13:05): I’m not with them now

Emily (13:06): Sometimes, like the structure changed, but you, you ended the position basically last June.

Elle (13:11): Yes. So, um, I got my NRSA funded, um, and that started in 2024. And so the NIH has the stipulation that I can’t work more than 25% elsewhere. Um, and there was a little bit confusion around that. Um, I thought, great, I can, that’s financial wellness, 25%. Um, however, I’m at 21% effort with neurology. So essentially what it boiled down to is, um, if I had taken the financial wellness position for this coming year, I would be at 46%, which is significantly different. Um, and, and then, so, so I wouldn’t be able to take that position. Um, and I would still be able to continue it theoretically, um, if I was willing to, to decrease my neurology appointment. So essentially I would be paid less for the same work. ’cause I’m really working, um, for neurology no matter what.

Emily (13:59): Yeah, the PhD has to get finished.

Elle (14:01): Yeah, exactly. I’m like, well, I have no other choice. Um, but so that was, so that became the question to me is, uh, am I willing to essentially not get paid anymore to keep this position? Um, and because I had to make sacrifices in my life that cost more, um, I wasn’t able to, I decided against, um, against maintaining and keeping that position. Um, and so, um, I I’m so excited, like financial, well, they’re right across the street from my, my lab. Um, I told them I will be at their events. I’m still in touch with, uh, coaches in that office and with the director. Um, but, uh, in terms of can I do 10 hours a week for the next year, um, without additional pay? Um, the, the answer to that was no.

Emily (14:44): Yeah. And so I’m wondering, you know, you mentioned your Reddit usage came back <laugh> once the, uh, once the position ended. Have you made any other shifts to like sort of scratch this itch in the personal areas of your life? Like, are you back to chatting with your peers more like what’s changed?

Elle (14:59): Absolutely. Um, yes. So, um, I think my peers are tired of listening to me. Um, I do post a lot on our Slack. Um, we have a, I I created financial, uh, channel on our slack. So if there’s something that I discover, um, for instance, you can pay taxes with PayPal, um, <laugh>. And, um, uh, so, so that’s one way I scratched the, the, the NSID or the neuroscience and PhD specific itch. Um, I also started volunteering for junior achievement in SoCal, and so that’s more focused on educating, um, young people, so middle schoolers and high school students. And so that’s been incredibly rewarding. And I just started this summer, um, because I knew I, this, there is an itch to scratch and their headquarters are fortunately really close to where I live. Um, and so, uh, and so just doing a lot of like, work in the community, um, and, and talking to individuals and sort of just always being open. I like if I’m introducing myself, um, not necessarily the first thing I say, but also it’s always, it’s a huge part of my identity in that like, I have a passion for personal finances. And so, um, and so I just have friends who aren’t associated with the university at all, who are then open to budgeting. I have friends who do a lot of like freelance work in the entertainment industry, and so I talk about YNAB with them. Um, and so I think just sort of putting myself out there, I I, there are things that I don’t need to share. I don’t need to share what, what banks I bank with or my net worth or anything to have a, have a good discussion in that like, oh, I love my budget budgeting software, or, oh, I have so many thoughts about student loan repayments, um, and things like that. So yeah, just putting myself out there and, and doing more work in the community, but on a more flexible schedule and timeline.

Commercial

Emily (16:46): Emily here for a brief interlude! I’m hard at work behind the scenes updating my suite of tax return preparation workshops for tax year 2024. These educational workshops explain how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. For the 2024 tax season starting in January 2025, I’m offering live and pre-recorded workshops for US citizen/resident graduate students and postdocs and non-resident graduate students and postdocs. Would you please reach out to your graduate school, graduate student government, postdoc office, international house, fellowship coordinator, etc. to request that they host one or more of these workshops for you and your peers? I’d love to receive a warm introduction to a potential sponsor this fall so we can hit the ground running in January serving those early bird filers. You can find more information about hosting these workshops at P F f o r P h D s dot com slash tax dash workshops. Please pass that page on to the potential sponsor. Now back to our interview.

Writing a Book About Lessons Learned During Financial Coaching Sessions

Emily (18:02): So I see a lot of, um, parallels with my situation when I was in graduate school, um, engaging in many of the same activities. Um, what I was doing at the time was blogging about personal finance, because blogging was a thing back then, um, 10 plus years ago. So I think because I had this blog and it wasn’t like anonymous, like I would, you know, link to it, you know, on like my personal, like social media page or something like, and I would talk about it with my peers too. I was open, it was clear to other people that I was open to talking about this stuff because I talked about it on the internet. Um, now fast forward, you know, we’re in 2024, blogging is not so much of a thing now, but, uh, creating social content is, so you’ve talked a lot about creating actual in-person face-to-face connections, you know, with your peers and with the, the people you’ve met through the financial wellness office, and that’s amazing. I’m wondering if you do any content creation or if you’re interested in that, um, sort of for the wider internet.

Elle (18:55): Ah, great question. I am actually writing a book, um, which is nowhere near, uh, being ready for a manuscript or anything. Um, but something that came up as, uh, a QuestBridge scholar and a PhD student is that a lot of people just need to know where to start. Um, and I, I think a lot of people, and probably a lot of listeners know like, okay, I know I need to invest. I know I need to save, I know I need to pay off debt. Um, but it’s really hard to know what order to do things in, um, and to feel comfortable in whatever you pick. And so, um, I’m sort of putting together lessons that I’ve learned for, from those coaching appointments, um, into a book that will hopefully be available for very, very cheap or free, um, and, and sort of putting that together in a more synthesized, very thoughtful way. Um, I do avoid social media, um, just for my own like mental health and benefit. Um, Reddit is really as far as I go, Reddit and LinkedIn. Um, but I’ve never really like posted on LinkedIn, um, except for like one review article that I wrote. And so, um, but yeah, so I, I do want to have like a choose your own adventure book. Um, hopefully physical, but maybe just published, um, as an ebook as well. Um, and that’s sort of the brainchild of conversations I’ve had with, with fellow QuestBridge students and with the founder of QuestBridge as well. So they’ve been hugely supportive even after I’ve long graduated from undergrad in, in helping alumni try to figure out where, where to go from here. Like, okay, great, you have, you started your new job, um, now what? And, and I think it’s, that’s not, that’s not a unique situation for people to be in. I think that’s very widespread. So, um, yes, uh, that, that will eventually come out. Um,

Emily (20:37): I’m so glad to hear that my question was not a suggestion, honestly, <laugh>, because social media can be, as you already know, because you’re not really using many forms of it, um, such an incredible, uh, time suck. And it also doesn’t necessarily, some people can blow up from it and, you know, make it their whole thing or their whole business or whatever. But I think because you have this other career <laugh> that you’re pursuing, um, a book is an amazing like, place to put all of your like thoughts and knowledge and, and observations and what you would guide other people to do. And it’s such a, I I’m a reader, like I love consuming books. And so I just think it’s a wonderful format, like for teaching, and you can obviously have a great teaching experience through a book and not have it take over your entire life <laugh> the way that social media can. So I actually really love like the balance of your striking, and you obviously need to strike that balance because we’ve talked about the time management, like you can’t be on socials like all day long because you have so much to do. Um, so I’m, I’m really, I’m really glad to hear that and I would love to, you know, when it’s finished, like I’ll help promote it, like let me know, you know, podcast listeners I’m sure would be interested in, in seeing it as well. So that’s amazing. I’m really glad you’re working on that project.

Elle (21:42): Thank you. Yeah. Um, I’m very, I’m very excited about it and I think I, I, in terms of content creation, I do do it like I do investing. I set it, forget it. Like I don’t want to have to maintain something, um, because I know that it’ll just always be omnipresent. Um, and, and so I would like to focus on, on my research, um, but I absolutely want to to sort of, uh, compile everything that I’ve learned and, and put it out there because I’m gonna do it anyway. Um, may as well be something that’s accessible.

Supporting Financial Institutional Knowledge at Your University

Emily (22:12): Yes. I’m so glad to hear that. Maybe there are some other listeners to the podcast who, like you listening for a long time, you know, got really excited about personal finances, wanted to, you know, read the books. Consume other <inaudible> Learn a lot and they have a lot of insight into how things work at their university in particular, and all the idiosyncrasies that go along with their, their own experience as a graduate student at their university. Um, do you have any suggestions for listeners on how they might do some of the things that you’ve done or similar things, just how to help their peers because they have so much of institutional knowledge and how can they pass that on?

Elle (22:47): Yes. Institutional knowledge is the first phrase that popped into my mind. So, um, do whatever is sustainable and if there’s one particular person who’s driving this, um, or one particular person, for instance, like a student affairs officer who will be at the university for a long time or even a professor, um, if they are okay with just like owning a Google Drive, that’s really what my resources are. They’re just all in a Google Drive. I can share it with anyone, it’s publicly available. Um, people can share the links to it. I don’t care if anyone from outside of UCLA sees it, it’s great. Um, but sort of just, I think whether it’s an individual effort or a group effort, just start. Um, so if you give a presentation, um, even if it’s 15 minutes of how to sign up for direct deposit or how to enroll in your university’s retirement plan, et cetera, um, just write it and just put it somewhere. And I think once you have somewhere to put it, then it makes writing it even easier. And a lot of the content I’ve created and a lot of the resources I created took me maybe an hour, sometimes less, sometimes a little bit more, but just having a place to stick it where it could be organized. Um, and then I can create copies of, for instance, I create copies of my managing finances presentation for orientation every year and I edit it. Um, but it always just gives me a launching point. And so, um, finding a place to stick that institutional knowledge and then just, just doing it or hosting a conversation, um, creating an outline of, um, of what you might wanna talk about with your peers. Maybe there’s a question you don’t know the answer to that, um, that maybe just a discussion with a few people who are older or have been in the program longer, um, that they can answer, I think is, is huge. Um, so few people know exactly what they’re doing, <laugh>. Um, and so I think the more we talk about it, especially with people in similar situations with us as us, um, are are is incredibly useful just to have those conversations and then, you know, someone can just take notes and then stick it in whatever Google drive or box account, um, that they have. But, you know, it’s, it’s surprising how quickly those resources build up once you just dedicate yourself to, okay, every time I have a discussion that’s a little bit more structured, every time I have a presentation that’s a little bit structured, um, this is where I’m going to put it, um, I think is useful. Even if that’s like a, something that’s pinned on a Slack channel, which is currently what mine is. <laugh>. Yeah,

Emily (25:13): I think that makes so much sense. Um, especially the part about like where you started, which is to find like a sponsor who’s going to, whose tenure at the institution is gonna last longer than any one individual graduate students. Um, I love the idea of asking a staff member or a faculty member to house that, um, so they can for, you know, years and so to speak, generations of students to come can keep pointing to it. Another suggestion to throw in there is to maybe involve a student organization, like your graduate student organization in your school or your university or even at the departmental level, if that’s where you went to start, like that’s where you started. Those institutions, although the people change, the group itself stays on for, you know, decades. And so that could be another place too, how these kinds of resources, and I love that the way you phrased it as like, um, sort of a collaborative effort. Like yeah, you might be creating some resources or having some conversations, but also if you make it known that this is the place where these sorts of things go, other people can create them too. Anything they learn can go in there. So our episode from season 18, episode three with Dr. Carolina Mendoza Cavazos, she talked about, again, this institutional knowledge, um, and how it built up with her over time, very similar to the story that you’ve told as well, like some of those weird things about pay schedules and, you know, tax withholding and all this stuff. Um, so, so practically useful and yet until you’ve lived through it, you don’t know that it’s coming. So like, yeah, just a place to house these resources so that people can get prepared for that month or two where they’re not gonna have paycheck, which is so scary. Or like with, which I talked about with Carolina, like lapses in benefits if you don’t handle like a transition between funding sources properly, like just giving people a heads up that stuff is coming is so, so important. So I love this idea. Thank you so much for suggesting it. Um, anything else on that topic of like how people can help their peers if they’re excited about this topic?

Elle (26:56): Um, I think if you don’t have a financial wellness, uh, program or office at your university already, I think talking with administration, whether that’s, um, of your program or even higher, um, the, the way financial wellness at UCLA was started is like 10 years ago. Um, student feedback was, please give us a resource that where we can learn about things like credit, like credit cards, we’re getting this great education, but also there’s things in our daily lives that we need to know that we currently don’t have a great way of learning, at least through the university. So, um, if your financial, well, if a financial wellness office exists already at your institution, I think just going and seeing what resources they have. Um, I didn’t know that financial wellness created all these workshop presentations that are publicly available, um, to anyone even outside of UCLA. And, uh, so just seeing, seeing what resources they have, um, getting involved, if it’s also a passion of yours, um, which I’m sure a lot of listeners of this podcast it might be. Um, but if it doesn’t exist, if that office doesn’t exist and that resource doesn’t exist yet, make it known that you want it and, um, you’re definitely not alone in that. Um, I think just having a lot of names on a letter could at least get the ball rolling for those future generations of students because it worked at UCLA. Um, and I think it’s sort of, uh, continuing across the country as more and more financial wellness offices and programs pop up and, and start really helping students in a way that really matters.

Emily (28:25): Yeah, so I’m part of this, um, community, I guess called the Higher Education Financial Wellness Alliance, and it’s, it brings together financial wellness professionals from universities and colleges across the country. So when I attend like their conference, it seems to me like everybody has a financial wellness office. Maybe that’s not the case, but I will tell you that a lot of universities have financial wellness offices. It’s just that they might be focused on the undergraduate population. Now at UCLA, it sounds like they had like a position for like a graduate student, you know, two, two graduate student peers, um, peer counselors at a time, which is amazing. I’ll tell you that that’s not common. But the more and more graduate students who go to their financial wellness offices and say, we want these resources, and by the way, we want them tailored to our specific situation because it is different than an undergraduate situation. Um, the more and more they hear those requests, they will try to meet them, um, eventually <laugh>, but I think right now a lot of these offices don’t see graduate students ever. And so they don’t, it’s like the two popula-, they’re just not talking to each other, right? It’s not that graduate students don’t need this information, it’s just that they’re not going to that specific source and asking for it, but they should. So yes, I agree.

Elle (29:33): Amazing. Yeah, I think if you, if you never speak up right then, then um, it’s great to have, yeah, one Google Drive folder housed by like a professor, but, um, think about how great it would be to yeah, expand, uh, a university’s financial wellness program to include or be more inclusive of, um, graduate students. I think there’s always going to be work to be done, but um, I think it needs to start with, with a voice.

Best Financial Advice for Another Early-Career PhD

Emily (29:55): Awesome. Okay, well let’s end with the question that I ask all of my guests, which is, what is your best financial advice for another early career PhD? And that could be something that we’ve already touched on in the interview, or it could be something completely new.

Elle (30:09): Yes. Um, I thought a lot about this, um, because I knew the question was coming. Um, but I think, you know, there’s, there’s of course the, the starting a Roth IRA and budgeting, but I think the main advice I would give is to make time. Um, I think it’s so easy to put off something because this is sometimes scary for a lot of people. If you’ve never invested before, if you’ve never even heard of something, um, just make time, set a schedule maybe for me, I set aside two hours every week where I focus only on, or sorry, two hours every two weeks to focus on only my finances. So I pay off my credit cards, I check my credit report sometimes. Um, and, um, I, I look at, I update my net worth tracker, I look into if there’s a credit card that might have a good bonus. Um, I sort of see where I am in terms of my budget and my, my goals. Um, and then I also look at like potential investing opportunities. My, my investing is strategy is pretty set, um, and that I don’t want to really touch it, but, um, but when I was first starting, I think just making myself make time for it and then dedicating only those like two hours of just educating myself, figuring out what an index fund is, um, what, what I wanted to do, uh, in, in terms of like tax strategy, all that stuff, paying taxes, et cetera. Um, I think make, it starts with, with making time to do it, um, and not putting it off.

Emily (31:39): I love that piece of advice. Some people call this a money date, um, a recurring money date that you have by yourself or with your partner or whatever your applicable situation is. Um, I would also add in there like, I mean, all the things that you listed are things that, um, you can do either every time you have the money date or maybe they’re sort of seasonal or occasional. Um, but I would also add in, uh, consuming content. So like maybe that’s okay, I have two hours set aside every two weeks and it took me 75 minutes to do my tasks and I have another 45 and I’m gonna read a book, or I’m gonna listen to this certain podcast, whatever, just to like further that. And I, I love that, you know, keeping that space on the calendar, you obviously, um, do block scheduling with your calendar time block planning. Um, so that’s like an amazing way to do things and just to have that protected time because then if something does come up in your financial life, like I had something come up recently, which is that, um, my 401k provider is no longer my 401k provider. They ended the program for everyone. So like, I had a lot of administrative things to do to like, get this 401k moved elsewhere. And so just having that protected time on your calendar is great when something like that comes up because you can sit, you don’t have to steal time from, you know, some other aspect of your life. It’s already recurring there. So I really love that suggestion. Um, Elle, thank you so much for coming on the podcast, spending this time with us. I hope the listeners really enjoyed this episode, got a ton out of it and are inspired like I am to continue the work. So thank you again.

Elle (32:58): Thank you so much. Yeah, it’s, I’ve, I’ve been hoping to come on this podcast for so long and I was just always like, maybe I’m not ready, but, um, I hope, yeah, I hope this is useful to your listeners and thank you so much for having me. I, I really had fun.

Emily (33:09): Awesome. And a note to the listeners. Yes. So Elle and I happen to meet each other in person and I said, why do you not come on the podcast? Like, let’s make that happen. And as she just said, she’d been waiting and waiting, waiting to volunteer and yeah, there’s never gonna seem like a perfect time. Your story is done and whatever. Just go ahead and volunteer pfforphds.com/podcastvolunteer. That’s the form you can go and fill out and uh, I would love to have you and have another wonderful conversation like the one we just said. So yeah, I hope uh, more people volunteer and more people will take up the mantle for what you’re doing as well.

Elle (33:38): Absolutely. Thank you so much.

Outtro

Emily (33:50): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

This Grad Student Channeled Her Financial Exuberance into Teaching and Coaching Her Peers (Part 1)

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In this episode, Emily interviews Elle Rathbun, a 5th-year PhD candidate at UCLA. Elle shares her financial origin story of growing up in a low-income family, becoming a QuestBridge scholar during undergrad, and working for two years before matriculating at UCLA. During those years, Elle developed her financial acuity and prepared financially for grad school, including investing for retirement and saving up cash. This energy carried forward into grad school, where within her department Elle started a group to chat about money and created resources to help her peers navigate the financial aspects of their fellowship and UCLA’s bureaucracy. Tune in to the next episode for part two of the conversation!

Links mentioned in the Episode

This Grad Student Channeled Her Financial Exuberance into Teaching and Coaching Her Peers

Teaser

Elle (00:00): I think a lot of undergraduates and techs and PhD students are like, oh, I’m not making money yet, um, to any real degree. Like, I’ll just wait. Um, and I think that’s one of the worst things you can do is to wait. Um, and I think even if you have five extra dollars to put into a Roth IRA, I think that is worth doing.

Introduction

Emily (00:25): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (00:54): This is Season 19, Episode 5, and today my guest is Elle Rathbun, a 5th-year PhD candidate at UCLA. Elle shares her financial origin story of growing up in a low-income family, becoming a QuestBridge scholar during undergrad, and working for two years before matriculating at UCLA. During those years, Elle developed her financial acuity and prepared financially for grad school, including investing for retirement and saving up cash. This energy carried forward into grad school, where within her department Elle started a group to chat about money and created resources to help her peers navigate the financial aspects of their fellowship and UCLA’s bureaucracy. Tune in to the next episode for part two of the conversation!

Emily (01:41): This fall, I’m opening my calendar for 15-minute introductory calls! This is a chance for you and me to meet one-on-one. I want to hear your current financial questions and challenges. If I can provide some quick value by answering a question or pointing you to a resource I absolutely will. These calls are a way for me to keep a pulse on what’s going on financially in our community so that I can address whatever comes up through my seminars for universities and the free content I create. I would love to meet you, so please sign up today at PFforPhDs.com/intro/. You can find the show notes for this episode at PFforPhDs.com/s19e5/. Without further ado, here’s part 1 of my interview with Elle Rathbun.

Will You Please Introduce Yourself Further?

Emily (02:40): I am delighted to have joining me on the podcast today, Elle Rathbun, who is a, an entering fifth year PhD candidate at UCLA and Elle and I actually met last spring when I was giving an in-person seminar at UCLA, and she was there because she was part of the financial wellness office, so she was there with a booth so the students in attendance could get some extra resources after my presentation was done. And she came up to me after the presentation introduced herself, which I love it when people do that. So podcast listeners, if you ever have the opportunity, please, please introduce yourself. We had an amazing conversation right then and there, and I immediately invited her on the podcast. So we’re gonna have a really good time today learning about Elle’s story, how she came to work for the financial wellness office, everything she’s done in her personal finances, in between. So Elle, I’m absolutely delighted to have you on the podcast today, and would you please introduce yourself a little bit further for the listeners?

Elle (03:30): Absolutely. Thank you so much, Emily. I am so excited to be here. First of all, I am a long time listener, even before I started graduate school. This is really something that, um, this podcast kicked off my, my interest in personal finance as a PhD student. Um, and so yes, I was, uh, raised in Durango, Colorado, so a very small rural mountain town. Um, and my parents always sort of, um, struggled to keep things afloat in terms of, in terms of finances. Um, and so I was able to get the QuestBridge Match scholarship to the University of Chicago for my undergraduate degree. So that meant that I got a full ride, uh, uh, to to University of Chicago where I majored in neuroscience and biological sciences. Um, and I was really, really grateful for, for that opportunity. Then I stayed at the university, uh, for two years in a biophysics lab. So I was a tech there. Um, and that sort of is really when, uh, things started coming together for me in terms of what I wanted to do academically, but also when it came to personal finances. And, um, and then I ended up at UCLA’s graduate program in neuroscience. Um, and that’s where I am now.

QuestBridge

Emily (04:39): Okay, fantastic. Now I wanna talk more about your, um, interest in personal finance, your passion for the subject. And you mentioned this QuestBridge program, so maybe we should start there. Can you tell us more about that program?

Elle (04:51): Absolutely. I’m happy to. So QuestBridge is a phenomenal nationwide program that basically helps match high achieving low income students with some phenomenal, uh, undergraduate universities. So I think at the time I applied, I, we had 35 partner colleges and now we’re way above that. Um, and essentially what it is, is it’s an application on its own. You apply as a high school senior before in the fall, um, and then the people at QuestBridge look through those applications, figure out who qualifies, uh, both financially and academically, and then helps match those students to a partner college. And it’s a phenomenal program. You rank which colleges you would want to go to, and the deal is whichever one you rank the highest that accepts you, you have to go there, but you get a full ride. And so for me, that also included a stipend for housing and included money for books and for travel, um, and for food and board. And so it was just, it was a phenomenal experience. Um, and it allows me to not have the burden of student loans, which I have come to learn more about. Um, and it’s, there are thou- now thousands of, of QuestBridge alumni, um, and I’m continuing to work with them, uh, in terms of guide, sort of guiding Questees for, um, preparing for graduate school, whether that’s law school or medical school or PhD programs, um, and sort of things that people from, especially from low income backgrounds, don’t necessarily know or not are not, uh, privy to, especially since so many of them are children of immigrants, first generation students, college students, um, et cetera.

Emily (06:27): What an incredible program. I had no idea that it was both, you know, the, the tuition and fees and everything and all that plus the stipend and your living expenses. I mean, it’s a very analogous situation to, um, being in a funded graduate program, really. And so that’s a very interesting kind of like, um, twist on this in that you had some experience prior to starting graduate school with managing that kind of budget, right? The stipend kind of budget. Um, it’s just incredible that you had that opportunity and that you’re giving back now to like, you know, help shepherd, you know, other people interested in the path that you’ve taken, uh, along that same route. Okay, awesome. So college, no student loan debt. Um, great. And talk to us a little bit about that, um, interim time period before you started graduate school and like what was going on with your finances, and it sounds like you started listening to this podcast, maybe looking at other resources too during that time. Tell us that story.

Financial Journey From Childhood To Grad School

Elle (07:12): Um, I started working when I was very young. I started, uh, selling rocks by the train, uh, in Silverton, Colorado. So if you’ve ever visited Silverton, um, or took the drain from Durango to Silverton and saw kids selling rocks, I used to be one of those kids. Um, and so it was very sort of my personal finance story started very young. I I always thought about money, not necessarily always with a negative connotation or a positive connotation. It was just a reality. Um, and I knew how many rocks I had to sell in order to buy the grilled cheese sandwich that I needed, that I wanted at the end of the day. And so, um, when I entered college, I had some savings from the rocks, from working in multiple restaurants, um, in my parents’ shop, et cetera. Um, and so you’re Yeah, exactly right. That was sort of my emergency fund going into undergrad where a lot of things were paid for, but I had some flexibility and I knew I had to be very careful with that stipend. So coming out of undergrad, I was able to, I had about, I was, my net worth was about the same as going into undergrad. Um, and then I realized, okay, I need to start saving money. One of my reasons for staying in Chicago, um, for those two years before my PhD was because I knew the lay of the land. I knew that it was affordable. I knew I could get cheaper housing here than I could in LA for instance, or New York or Boston. And so, but I knew that in order to be stable and to feel, uh, like I had flexibility, um, and to be able to help my family if they needed it, I needed to really get my stuff together, um, and, and understand where I was, where I wanted to go, and how I could get there. Um, especially before starting, uh, graduate school. And so I started listening to this podcast. Um, I think this is the main podcast that I’ve just continued listening to. Um, and I think I fangirled out when I met you <laugh>, um, just because I’ve listened to like almost every episode. Um, and, uh, but I also start, I listened a little bit to Dave Ramsey, uh, which I think is fine for people with credit card debt, but that wasn’t necessarily my case. Um, the Dough Roller Money podcast Money Girl, um, I read Beth Kobliner, uh, Get a Financial Life, um, in your twenties and thirties, um, and then sort of just hodgepodged a lot of podcasts, resources, pamphlets, booklets, webinars, um, and, and try to figure out, okay, what do I need to prioritize? What do I need to do? And when can I apply to graduate school? Because applying to graduate school isn’t necessarily cheap. Um, and so, so that was sort of what, what came to be over those, over those two years.

Emily (09:48): So it sounds like you, um, knew that you were probably headed to graduate school at the, even coming out of undergrad, right? But you wanted to take some time to get your feet under you, figure out where you wanna do that. Exactly. I have the same story for my, you know, between undergrad and grad school kind of time period. Um, were you intentionally then working on like building up savings to have maybe a more robust emergency fund? Were you working on investing because maybe you knew that would be more difficult, you know, once you started graduate school? Like what, what sort of goals did you set during that time period?

Elle (10:16): At first, I was just like, okay, just figure out where I am, like, figure out how many credit cards I have, figure out how much I have in savings, figure out what those savings are for, um, how much I feel a need for a comfortable emergency fund. Um, so the first goal was just to understand where I was. And then the second goal was me looking at my benefits and being like, what is a 403B? I have never heard of that. I’ve heard of a 401k. Um, and that’s sort of it. And so it became pretty apparent that I needed to educate myself further because I knew, okay, if this is taking a good sum of my paycheck, I wanna know what that’s going into. Um, and also in my junior year, senior year, one of my, uh, older friends who worked at the university told me, just open a Roth IRA, just trust me. You won’t regret it, just open it, throw a couple dollars in, um, and, and then educate yourself on it. And so I had done that as well. And, but I had, I had put it in there, um, but didn’t invest it, uh, just was sort of sitting in that, in that cash account. And so that was my, my second goal. So after I understood where I sort of was coming from and what I had, um, I wanted to learn more about invest investing. Um, and so a lot of my youth was, uh, I was told, don’t invest. That’s fake money. Like the stock market isn’t real money. Um, and so I sort of had to reeducate myself, um, in, uh, sort of the risks, but also the benefits of investing in the stock market and the bond market, um, and what a retirement account was, why it existed, um, advantages of, of those and, and tax laws and things like that. And so, um, so that was my next step was to just sort of understand and start investing.

Resources For Learning How To Invest

Emily (11:58): You’ve already listed a few different resources, like podcasts that you listen to. Was there anything that you found, well, is there anything you would recommend to the listeners who are at a similar stage and wanna learn what investing is and how to do it and what a Roth IRA is and what a 403B is and all of that? Any books or, or any resource that you enjoyed?

Elle (12:15): Yeah, I think that Get a Financial Life book was a game changer for me in reading that. Um, and also this podcast and Money Girl, I think, um, oh, I forget the host’s name currently, but, um, the, the host does a phenomenal job breaking down everything. Um, and also, uh, if you can by Bill Bernstein, um, just sort of it, because that especially takes, really takes into account like not everyone can do this, um, but a lot of people can do at least a little bit. And that’s where to start. It’s so important to start building that habit. So once you can contribute more to a retirement account, you already know what that is and how to do it. Um, and also just your local hr,

Emily (12:55): I’m really glad to hear these resources, some of which are new to me, like the Bill Bernstein book that you just mentioned. Um, I’m gonna check those out because I found that a lot of the maybe most popular personal finance, or maybe now it’s financial independence material is much more geared for high income earners who have a different set of financial things to deal with than lower income earners. Um, I’m not at all surprised that you mentioned Dave Ramsey because even though his philosophy is maybe at odds with mine or other people’s at certain points, he does try to speak to people who are lower income at times. And so yeah, I’m just, I’m really glad to hear these resources and, and yeah, to have you speak to this because it’s a different set of things that you need to handle when you’re not quite in graduate school yet or, or in graduate school than you would, you know, later in your career.

Financial Goals Before Applying to Grad School

Elle (13:42): Yeah, absolutely. And I think, um, that, that’s something to, to keep in mind as well for, for listeners, for people who I coached, which we’ll get into later. Um, but in terms of just building the habit, um, right, I think a lot of undergraduates and techs and PhD students are like, oh, I’m not making money yet, um, to any real degree, like, I’ll just wait. Um, and I think that’s one of the worst things you can do is to wait. Um, and I think even if you have five extra dollars to put into a Roth IRA, I think that is worth doing. Um, just to, to figure out what it is. I had, I think I had $500 sitting, sitting in my Roth IRA for like two years before I figured out what that actually was. Um, and, and then as soon as I realized, oh, okay, I need to invest this, um, that sort of just took off flying. And so that was, that then became my main goal because I didn’t know when I was going to start a PhD program. I didn’t even know, even know what PhD program I was going to apply to. Um, I was deciding between, uh, neuroscience or biological sciences or even biochemistry. Um, and so while figuring out all my academic stuff, um, I decided, okay, I will apply to graduate school when I am comfortable, uh, with the idea of maxing out my Roth IRA for five years. Um, and so I didn’t necessarily need to have all of that money in cash right away, but I needed to have a plan to max out my Roth IRA for five years. Um, and that’s, that was sort of my, my threshold for, for applying to graduate school.

Emily (15:13): Hmm. That’s a really interesting goal. I mean, I definitely see the merits of it, of course. Um, now I’m wondering when you were applying to graduate school, how much you had the stipend and the cost of living, um, in mind since it had been such a focus for you over the past couple of years?

Elle (15:26): Very much in mind, um, the first, the first job was to get into graduate school. And so, um, so I sort of, I, when I applied, I didn’t consider it. I think I had looked at what graduate housing options were in all of those areas, but, um, I knew I didn’t necessarily have to go, uh, even if I applied. And then once it came time to decide, um, I was basically, it, it, it got narrowed down eventually to just two options. One was UCLA, which is, um, in a very high cost of living area, um, but it would be new to me. And they offered me basically a recruitment, um, scholarship, which was a large enough sum of money to make me feel comfortable matriculating in this program. But the other option was to stay at UChicago. Um, and there I had cheap slash uh, cheap housing essentially. Um, I was living in a house where I would be taking care of the dogs and I didn’t necessarily have to pay rent. Um, and so, but I, so that would mean that I could essentially keep the majority of my stipend and continue saving. And so in that regard, I decided that UCLA was the better career move, um, and even the overall better financial move, I could make more connections. I would have more opportunities, and I would be studying precisely what I wanted to study. Whereas UChicago, which just wasn’t as good of an academic fit.

Emily (16:47): I think that’s the ideal position to be in when you are, um, applying to graduate school and you are keeping an eye on the personal finance side of things is just the decision is not gonna be completely determined by the finances, but you least need to set some kind of bar of, like, anything above this bar I’m gonna be able to say yes to, and I can decide based on the academics or whatever other factors are important to you. But you just know that anything below that bar is, is really just not a viable option. And a lot of times you don’t really, even though it’s great to check out what the stipends are, what the, you know, what the base stipends are, what the cost of living is, et cetera, in advance, a lot of times you don’t know until you get into admission season exactly what they’re going to offer you. Because like you said, with UCLA, they could come up with an extra scholarship or fellowship that you weren’t aware that they were going to offer you. And that can completely change the calculus of the situation.

Elle (17:32): Oh, absolutely. I had, I had my mock budgets of whether I stayed or at U Chicago, whether I continued living in that house or whether I came to UCLA and lived in graduate housing versus with, without roommates. I had all the mock budgets just because, um, it’s, it’s a commitment. It’s like a five plus year commitment, um, for, especially for the biological sciences. Um, and so I knew that like, okay, this is a financial decision as much as it is a educational and, uh, career decision.

Current Housing Situation

Emily (18:03): And I’m really glad to hear that you had those different like scenarios modeled out too, because sometimes, okay, so I don’t know. So are you living in graduate housing now?

Elle (18:12): No, I, I started, uh, because I matriculated in 2020 and then, um, and so I lived my first year here in graduate housing and then I moved to a, a private rental.

Emily (18:23): Okay. Was that the plan all along or was there a possibility that you could have stayed in graduate housing?

Elle (18:28): UCLA offers three years of graduate housing. Um, and then after that it’s really hard to stay in it unless you move to family housing. And so, um, I think my plan was always like, okay, start in, uh, graduate housing, um, and then maybe go live with friends, sort of get a lay of the land <laugh> after Covid is over and, and then, um, move somewhere cheaper because graduate housing is in West la. Um, but that’s not necessarily where I needed to stay. So currently I live in Studio City, in the Valley.

Current Financial Goals

Emily (18:56): Okay. So we’ve talked about kind of the lead up, you know, your decision to go to UCLA now that you’ve been in graduate school for four years. Um, what kinds of goals have you been working on? You mentioned the Roth IRA earlier. Have you been able to do that? Anything else? Just let us know how your finances have been going

Elle (19:11): In graduate school. Yes, I’ve been keeping up with the, the Roth IRA, I’ve been learning more about different retirement, um, options. Um, and I’ve sort of stuck with the same strategy, just index funds, putting extra savings into, uh, different account types and, um, keeping up with my budget, I budget with YNAB or you need a budget, which is a phenomenal budgeting service. Um, and just sort of making sure that my finances and how I spend my money align with my goals and my priorities. So that absolutely includes, uh, investing for retirement, but also, um, I am also investing in, uh, a taxable account just for an eventual down payment on a home. And, um, making sure to spend, spend, uh, enough money on, on funds, so things like travel and seeing different sites in la. Um, and then I also, on the non-money side of things, um, sort of just created a lot of resources for myself and for others where I could sort of track my net worth because that is very motivating to me just to be able to see progress over time. Um, but also getting things in order. Like I, uh, I signed up for life insurance term life insurance, uh, when I was a first year graduate student, just because I am sort of my family’s overall retirement plan. And so if anything were to happen to me, I would want to make sure that they, um, are at least somewhat stable financially. And so, um, so sort of putting that into place, getting a feel for, um, what’s su- what is sustainable in terms of credit cards. I’m big on credit card bonuses and rewards. Um, and so that’s something else that I’ve sort of made sure that I was good to go, um, and, and to sign up for more credit cards, um, while still maintaining a good, uh, credit score and, but being, being able to take advantage of, of that, that as well.

Emily (21:10): So exciting. I love all of those. Um, I love that there’s a variety of goals in different areas, right? It’s not just about increasing the net worth, it’s also about increasing your own financial, um, education you could say, or just your, um, acuity and also like some budgeting stuff. I love that you mentioned Y-, uh, YNAB you need a budget and you know, the credit card stuff. I’m curious, um, about how your spending is overall. ’cause you mentioned that you, you wanna spend on fun things on discretionary items. You may have heard me mention on the podcast before, like the balanced money formula. It’s probably something you’re familiar with. Um, I’m curious how your overall budget conforms or doesn’t conform with the balanced money formula, because it can be so challenging to achieve that on a grad student stipend in a high cost of living area. So go ahead and have you made that comparison before?

Current Budgeting Process

Elle (22:00): Not explicitly. So I think the sort of, the way I approach things, especially in YNAB is the, I still stick with the whole pay yourself first thing. So, um, I, um, have a specific set amount that I put aside for the Roth IRA that’s just determined by the federal maximum, um, every month. And then, and I always, I save up throughout the year and then deposit it right at the beginning of the year. So I try to get it in there as, as soon as possible just so I can forget about it, um, and not have to like, keep such an eye on it or figure out when I want to, to invest it or not. And so, so that’s my strategy for that. And then I also have specific amounts for, um, a home down payment and a car down payment. Those aren’t necessarily massive funds, but they are goals of mine. And so I just make sure that every month I put in, um, that set amount. And um, and then after that I figure out, okay, like how, how am I doing, uh, and where are my finances? And then I go ahead and distribute throughout the rest of the categories, starting with, with needs. So of course, like rent, utilities, groceries, uh, gas, those are basically my big ones. Um, and I, I have a monthly goal of how much to budget, so not necessarily how much to spend, um, but how much do I wanna allocate to each category? Um, and usually I don’t really know how much I spend in a month because that varies all the time. And also if I go get car maintenance and it costs $1,500, that kind of offsets my monthly spending, but it has almost no impact on my monthly budgeting, um, because I save for that, I know I eventually need car maintenance. I know I’ve eventually want to buy an expensive plane ticket. And so, um, so my, I don’t focus too much on the spending. Um, I just make sure that I spend whatever I have available in my budget and if I don’t, I sort of just reallocate, um, when I’ve called it rolling with the punches. Um, and so, um, and then after I reach sort of that amount that I am comfortable with budgeting, if I have any leftover, then I just start putting it in next month’s categories. Um, and then if I get more than two months out ahead, um, then I just, everything else just goes straight to, um, my home down payment fund.

Emily (24:15): So I’m not a YNAB user, but I’m a longtime wine nab admirer. Does the software en enable you and, and sort of teach you how to do all the things you just mentioned? And I’m specifically wondering if the software makes any suggestions on where you house these different pools of money? Like does the software think it’s okay to all stay in your checking account? Does the software want you to have like a single separate savings account? Like sort of mechanically? How do you communicate between the software and like how you structure your accounts?

Elle (24:42): Uh, great question. Um, I love YNAB because it is so flexible, it doesn’t necessarily give information as to whether it’s something should be checking or savings, um, or a cd. Um, that’s sort of for you to completely decide. Um, and so, and then I just write it in the account name. So I have like an ally cd and that’s where I house my emergency fund because if I need, if in case of emergency, um, break glass, I don’t really care about the interest that I might lose, um, if it’s like fairly short term. Um, but they do separate things into budgeting versus tracking accounts. So basically anything that looks that is within budgeting is for spending. And if you move something from budgeting to a tracking account, it looks, it comes up in your spending reports. So I love this feature because it allows me to make saving look like spending. So if I pull up my spending reports, um, and I don’t filter out anything, it, I see exactly how much I put aside for my home down payment for my car down payment, um, and for retirement, and I can always filter those out to get my actual spending. Um, but it sort of removes it mentally and within the software of, okay, <laugh> no touching, this is for these goals only. Um, of course in reality, if I really needed those funds, I can, I can pull from them, but I also would have to go through the hassle of adding them back into my budget where it would look like income. And so, um, in terms of, of checking and savings, it doesn’t really matter. So I think you’ve talked about ally buckets before, um, and I love those. And so for me, my ally buckets are listed as different accounts within YNAB even though in reality they are one actual account with one account number one routing number. Um, and so there’s a huge amount of flexibility in that. Um, and YNAB has like several, like four main rules, um, that, uh, really just help you figure out how to approach things. Um, and yeah, it’s a great software. Highly recommend it

Emily (26:40): Since you’re highly recommending it. Um, I, if I remember correctly, it’s free for one year for students, but then after that you pay for it. Um, can you tell people where to find this, how to sign up <laugh>?

Elle (26:53): Absolutely. Um, and so this is actually one of the many resources in, uh, a folder that I share with, um, UCLA students and my friends. Um, but yes, you can actually get 13 months for free. So YNAB offers all users a 34 day trial. So what I recommend to, especially students, unless you’re about to graduate, is sign up for the 34 day trial, then you just email them saying, hi, like, I did a 34 day trial, um, I’m still really interested, but I am a student, um, and I would like to sign up or I would like to get the year, uh, free that you offer students. Um, and, and then they say, no problem. They just need a proof of enrollment or acceptance. So I started mine even the summer before I matriculated, but at that point I had already had on my paperwork from U-C-U-C-L-A, so they accept that as well. So if you’re like a tech or about to reenter school, you can still, um, get away with that as long as you can have proof of being a student or about to be a student.

Emily (27:50): Oh, perfect. Thank you so much for the detail on that. Sometimes people really need like a what exactly when exactly,

Commercial

Emily (27:58): Emily here for a brief interlude! I’m hard at work behind the scenes updating my suite of tax return preparation workshops for tax year 2024. These educational workshops explain how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. For the 2024 tax season starting in January 2025, I’m offering live and pre-recorded workshops for US citizen/resident graduate students and postdocs and non-resident graduate students and postdocs. Would you please reach out to your graduate school, graduate student government, postdoc office, international house, fellowship coordinator, etc. to request that they host one or more of these workshops for you and your peers? I’d love to receive a warm introduction to a potential sponsor this fall so we can hit the ground running in January serving those early bird filers. You can find more information about hosting these workshops at P F f o r P h D s dot com slash tax dash workshops. Please pass that page on to the potential sponsor. Now back to our interview.

Talking to Peers About Money

Emily (29:15): You obviously have, you know, a great deal of passion, a great deal of knowledge about the subject area. You’re working on your own finances. I understand that you then started talking to your peers and started having more sort of interpersonal interactions around money. So can you tell us how that got started and, and what you were talking about with your peers?

Elle (29:33): Absolutely. So I, as soon as I started educating myself, um, about finances and personal finances and sort of really building up that confidence, um, and then starting graduate school, um, I wouldn’t really shut up about money. And so I would have, um, I would host these discussions just among my cohort about, um, finances. And everyone was coming in from different places. You know, some people were coming in straight through undergrad, um, and then some were married, some had been already been in the workforce for the better part of a decade. Um, and so it was really nice just to be able to see, um, how’s everyone doing? Um, right, how are we figuring out stipend housing? Um, how are we saving for retirement? Um, is anyone doing any side hustles gig work? Um, TA ships and, and sort of just opening the floor for those conversations. Um, and so that was really useful. And we also have to take a presentation class, um, as a first year and, but we can pick anything. So, um, I talked about finances, um, and, uh, and I think that really made me realize how much I loved educating people and just having a discussion and being educated. Um, I don’t necessarily, it’s not a one-way conversation most of the time. I learn a lot from everyone I talk with. Um, and so before graduate school, I, I started realizing this about myself and I was familiar that, um, or I knew that UCLA has a financial wellness program. So actually before I started graduate school, um, I reached out to financial wellness and talked with the, uh, then and still current director, um, Sara Potter-Gittelson. And she just sort of reaffirmed what I was doing. She said, she told me my options in graduate school. Um, we just sort of talked about retirement investing and, and aspects of being a student at UCLA, um, and how it impacts my finances and my financial wellness.

Emily (31:22): What are the specific kinds of like issues or questions that came up during like these money talks, money groups, conversations with your peers? Um, because I understand eventually you started creating some resources. So there, there must have been, you know, certain topics that came up over and over against certain questions or certain issues.

Elle (31:38): A lot of it was based on your podcast. And so one massive thing was taxes. Like how do we pay quarterly taxes? Do we have to pay quarterly taxes? Um, what, what’s the step by step for doing that? How, how well do they need to be calculated, et cetera. So, um, taxes were a big thing. Uh, payment schedule thing, scheduling was another. Um, and so just because UCLA, they, they’ve restructured the whole system, they just restructured it again. But when I started, we got paid pre-work. So our, um, our September stipend would disperse mid August, um, which was really nice. But once you join a lab and start being employed by your PI’s department, then it goes post work and it becomes a W2 income. And so just making sure everyone was sort of understanding what, um, that situation is. Um, making sure that if sometimes issues would arise with, uh, with how we got paid. So with our stipend, which also is how we paid our housing. So, um, if we got, if we got underpaid with our stipend and then housing just took that back up, we now have no disposable income and have to use like something like credit cards or loans if we don’t, um, have an emergency fund. And so, so those are things that I think came up a lot. Um, some people were, uh, uh, thinking about tutoring. Um, so a lot of like gig work. How do we manage that? Um, is it possible to do, um, and, and sort of all the implications that come with that. Um, and yeah, yeah, I think that’s the, the majority of it. And then of course I was just saying like everyone should open a Roth IRA and I got multiple people in my cohort, uh, to open a Roth IRA, um, which I am very, very happy about <laugh>.

Emily (33:24): Uh, honestly, I mean this is something that I get to hear through my work from time to time, but I, if they haven’t already said it to you, like, that literally changes people’s lives like five years from now, 10 years from now. Like if they haven’t said it already, like they’re going to think back on that and like, really, really appreciate that they ran into you that they were, you know, had the good fortune of just being in your circles and, and hearing that. ’cause they probably wouldn’t have gotten it, you know, from many other sources at that time. So, um, that’s amazing. So tell us more about the resources. Were they about taxes? Were they about these crazy bureaucratic pay schedule things like, um, I love how specific this gets to be, right? UCLA certain fellowships your program, like, let’s talk about that.

Financial Resources for Grad Students

Elle (34:01): Um, the resources, it’s just a, it’s just a folder where I’ve put everything that I’ve created. And so, um, I think one of the, the main things that I have the pleasure and privilege of doing is the orientation finance presentation, um, just to the program, just to the first year cohort, um, sort of orienting them on, okay, this is how we get paid, um, taxes are a thing, but also, um, I have a couple slides on credit and credit cards just to make sure that everyone’s sort of on the same page and we can have a discussion about that. And if you’ve never really considered credit or if you’ve never checked your credit report, I am available to go through it with you just because I think that is so incredibly important. Um, and I also just give, I cannot give tax advice. I am by no means qualified to do that, but I do provide links. Like this is exactly where you go to get your 1098T this is exactly our site ID that you enter. Um, here are the links to the California Franchise Chat tax board that is create an account, make your tax payments. These are the dates. Um, so just sort of links to things that are kind of hard to find sometimes. Um, and that’s even when you know you need to find it. And, and I think the major case with graduate school is that, especially at a place as big as UCLA is that it’s really easy for communication to sort of, um, be looked over, right? Like we get so many emails, we’re just inundated with all this information, especially while starting a graduate program, um, that I sort of try to synthesize the main key points of information, um, and, and, uh, communicate it to the incoming cohort. I also go through pay schedules. So I say, okay, this is our stipend, but also if we’re getting paid in May for June work and then we get paid in August 1st for July work, that means you have no more income coming in between May 20th and August 1st. Um, so sign up for direct deposit to make sure that your check gets, or that your, uh, uh, income gets to you in time. Otherwise they will mail you a check and you won’t get it till August 5th. And if you rent is due August 1st, you need that money. Um, so sort of just going over things to, so that people can either approach me about it if they have any questions later. Um, right. Roth IRAs and investing are a multiple day long conversation. Um, but uh, just sort of putting things on people’s radar. Um, I tell them, uh, oh, just put it in your calendar right now, um, or set aside money or this is where to go get a loan if your, uh, payment doesn’t come through, um, et cetera. Just so they have like a go-to uh, person and also a go-to presentation that. And then I give them the link to the presentation, um, that is just full of notes and links <laugh>. So, um, those, that’s the main, uh, resource that I, uh, created. And then every year the, the presentation changes, just depending on how long the presentation is and, and what changes the university has undergone.

Emily (37:04): Your program is so lucky to have you honestly <laugh>, um, because a lot of the things you just listed, um, I actually have, I I even use the same like phrasing that you do, but I created a new workshop this year called Your Financial Orientation to Graduate School. Um, and so it’s got a lot of, it has credit, like I never talk about credit, but I decided to put it in there because I was like, this is the best time, like right at the start of graduate school to be, you know, reassessing, rethinking, um, starting to build credit if you haven’t before. Uh, but my main point though is that like, even when I’m brought in by a client to give this presentation for like a specific university, and I do look into some policies, like I try to figure out, um, about their tax policies and I try to figure out about their pay schedules and, and all that stuff, but it’s not honestly not the same as having the lived experience of and knowing all those details.

Emily (37:49): And so I honestly can’t get to that level right without working through across many different clients. So your program, UCLA more generally is very lucky to have you have put this together because these resources are needed and they are really hard to find. And until you have, um, walked through it, it’s, it’s hard to know everything that you need to know, right? Until you’ve been through it. So they’re lucky this is not happening at other places. Although by the end of this interview we’ll get to how can this be happening at more places. Um, but that is just awesome and amazing. So next phase of this is, you already mentioned that you would approach the financial wellness office, you know, sort of as a, as a, as a client. Um, but then at some point you started working with them. So can you tell us why you took that step?

Working For the Financial Wellness Office at UCLA

Elle (38:33): Definitely. So, um, at the end of my third, third year of graduate school, I had applied to an NRSA an F31 diversity. Um, and so it’s just a, a grant. Um, and I had completed my qualification exams, um, and I was sort of just looking for more whether that was, um, volunteering and I, and I signed up for some volunteer opportunities. Um, and then in the fall, um, one of the two financial graduate consult financial wellness graduate consultants, um, was no longer able to maintain the position. And so they put out like a mid-year, like hire, um, job posting. And so I said, great, I already know that this is a great office. I’ve already met with Sara, um, and I wanna be a part of this because I’m already doing so much of this work and I’m spending so much time on Reddit giving people financial advice, um, or to, uh, redirecting them to, to resources. And so, um, so I sort of wrote out a whole thing to my, to my PI saying, this is not a zero sum game. Like, this is how I will make sure that I maintain my hours in lab, because that still is my priority, but also this is a huge passion of mine and I feel like I can absolutely really help people to an even greater extent. Um, and so it was really nice just because that was all in like October of, of 2023, um, and I got my PI’s approval, which I, uh, needed, um, on a practical and moral level. Um, and, uh, so I applied the interview was, was great. And when I was, uh, being onboarded, um, things went really smoothly and they had me sort of just go through a lot of their, their training that they typically do with consultants over the summer. Um, but we were sort of working on a, on a condensed timeline. Um, but fortunately I had been able to educate myself a lot, um, in regards to personal finances and, uh, so a lot of the stuff I was just able to like reaffirm, um, and I think it was mostly like student loans that was, uh, I was mostly unfamiliar with just because I don’t have personal experience with those. Um, but then we just dove right in. Um, so after a few weeks of, of training, um, I was signing up for, for workshops and for appointments. And so those are the main aspects of my job is giving, uh, workshops and the slides were already created to undergraduate students and graduate students. Um, so clubs or organizations within UCLA could ask us to come and talk to them. So these were like resident assistants, um, who wanted us to talk about credit to their, uh, to their residents, um, in the residence halls or, uh, more specific like biology PhD students who wanted me to talk about, um, graduate school and investing. And so, um, they could request that we go and talk to the group, um, and, and just be, be available as a resource and really just tell them like, Hey, if you want to dive more into your personal situation, you can make an appointment with us. So that was the other aspect of my job was one-on-one coaching, um, just sort of helping people figure out what resources were available to them, um, just to, you know, and it kind of motivated them to put a little thing together, just say, this is where I am, this is where I wanna go, help me get there. Um, and so, um, that was a phenomenal opportunity and I got to speak to, um, not just PhD students in the Biosciences, but also PhD students, um, in, you know, the humanities and in education and also, uh, law students, medical students, um, master’s students who are about to enter, uh, some really high paying jobs, but they didn’t know what to look for in their offer letters or, um, how to talk about like, uh, restricted stock units. And so I, I really was able to get, um, a whole breadth of, of people to talk to and I was able to educate myself. So we would have the coaching appointment, um, and, and then I would follow up with, with actual links and sort of an outline of what we talked about, an action item list if we created one together. Um, and, and I think with almost every single followup email, um, I think I included one specific, uh, uh, uh, episode from your podcast, like Emily talks about it here. And so, um, especially for, for uh, students who were expecting parents or who had just had a baby, um, or living in family housing, I think those episodes were incredibly useful. Um, and so yeah, so that was sort of my experience with financial wellness.

Emily (43:13): So exciting. Again, what a credit you are to this office, <laugh>, um, coming in with a great deal of like knowledge and, and, um, experience talking with your peers and so forth.

Outtro

Emily (43:32): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

Your Side Hustle Really Is a Business and Other Tax Insights with Hannah Cole of Sunlight Tax

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In this episode, Emily interviews Hannah Cole, an artist and the founder of Sunlight Tax. Sunlight Tax primarily serves artists and creatives in their business tax needs, but there are many overlaps between artists and the academic community. Hannah and Emily discuss the best practices and insights that graduate students, postdocs, and PhDs with side businesses need to stay on the IRS’s good side. Hannah clarifies exactly when a business starts, the first step you must take with your finances, and how to calculate and pay your additional tax liability.

Links mentioned in the Episode

Your Side Hustle Really Is a Business and Other Tax Insights with Hannah Cole of Sunlight Tax

Teaser

Hannah (00:00): You know, we have a whole tax industry out there trying to, you know, its marketing is based around making us all hate and fear our taxes and actually kind of implicitly training us not to even look at it, to just feel so fearful. And so, like, hands off that we don’t even look at it. And I’m just here to say I hate that. I disagree with it.

Introduction

Emily (00:29): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (00:58): This is Season 19, Episode 3, and today my guest is Hannah Cole, an artist and the founder of Sunlight Tax. Sunlight Tax primarily serves artists and creatives in their business tax needs, but there are many overlaps between artists and the academic community. Hannah and I discuss the best practices and insights that graduate students, postdocs, and PhDs with side businesses need to stay on the IRS’s good side. Hannah clarifies exactly when a business starts, the first step you must take with your finances, and how to calculate and pay your additional tax liability. This whole episode is devoted to business taxes, but before we get started I want to ask you if you or your peers need help figuring out taxes on your academic income, your graduate student stipend or postdoc salary and the attendant benefits. Now is actually the best time to start the conversation with your graduate school, postdoc office, graduate student association, etc. about bringing my tax content to your university in the upcoming tax season—so that they have time to plan their budgets. In this upcoming tax season I’m offering live workshops that I will tailor to your university and state and also pre-recorded workshops that are widely applicable. I would be very grateful if you would issue a recommendation to a potentially appropriate host at your university. You can find links to more information from PFforPhDs.com/financial-education/. Thank you! You can find the show notes for this episode at PFforPhDs.com/s19e3/. Without further ado, here’s my interview with Hannah Cole of Sunlight Tax.

Will You Please Introduce Yourself Further?

Emily (02:56): I have a really special guest on the podcast today, Hannah Cole of Sunlight Tax. I have been listening to Hannah’s podcast, Sunlight, the Sunlight podcast for, I don’t know, definitely more than a year now, maybe closer to two. And she is an amazing, uh, podcaster and practitioner in her field because she teaches about taxes to her community. I’m gonna have her introduce her community to you, but I see a lot of overlap between Hannah’s community and our community of academics and PhDs and graduate students and so forth. So Hannah is really gonna be able to bring her insight into taxes and specifically self-employment taxes to our conversation today. Um, which is going to focus on self-employment situations that grad students and postdocs are typically in, which is like a self-employment side hustle. So Hannah, thank you so much for agreeing to come on the podcast. I’m really excited. Will you please introduce yourself a little bit further for our audience.

Hannah (03:48): Sure. Um, thank you so much, Emily. I appreciate it. Um, yeah, so I am an artist first. I, I went and got my MFA in painting. Um, and I have a degree in art history and, uh, started my life as a professional artist and was so upset at how I was treated by the world of accounting <laugh> by my dad’s accountant that eventually I, you know, went out to get the information on my own. I went all the way back to school for accounting and studied taxes. Um, ’cause I live with a, you know, artists are solitary creatures. You know, you, when you’re a painter like me, you’re in the studio for long, long hours alone. And the only way to build your career is through a network. So, you know, we are like, uh, super networkers and my community of artists was deeply in need of the same information that I was. And I, I like, knew there was a need out there, and I was like, I’m so upset by the way that this has been delivered to me, if at all. Um, there’s, there’s a market here. Um, so I started my business Sunlight Tax. Um, and that’s my mission is to, it’s much, it’s much bigger of an audience than just creative people, but it is really kind of for people who maybe where money is not the sole interest that they have when they do the thing they do. Right. And I think as academics, you can probably relate to that because most people who go into academics have a passion for their field. Right. They’re trying to do some research, and that probably is a little bit primary over money. And so, you know, that’s very similar to artists that’s very similar to sort of mission-driven people. So it’s kind of a big group of people where money is not the only thing, but these people need to do their taxes too.

Similarities Between Academics and Creatives

Emily (05:37): Yes. I see so much of an overlap between how you described your journey to what you do today, uh, in the tax world, at any rate, and what I do with, uh, as being a financial educator. Yeah. Um, I love you sort of got started comparing the community that you come from the artist community with the academic community. I totally agree about those, um, overlaps. Are there any, would you like to elaborate on that in any way? Specifically? I’m thinking of are there like mindsets or like skills that you’ve observed or perhaps lack of skills among your community, um, perhaps that overlap with ours that either are, um, helpful or not so helpful when it comes to running a business, which some academics end up doing.

Hannah (06:16): Yeah. Well, I’m, the, the world of academia is not foreign to me. I mean, I taught, I was a professor, uh, at Boston University for a brief moment, <laugh> before I realized that I, I, uh, the, the strictures of academia were not, not for me. I think for people like us, when you’re, when your identity is formed around a passion for a thing, um, money can become the enemy by accident. Not really on purpose usually. But I think, um, I see a parallel between people in creative fields where, you know, there’s no artist in the world who’s gonna tell you that they do anything except make the best possible art they can. Right. And I think the same is true in academia. You’re gonna do the best, highest quality research you possibly can. You’re gonna, you know, whether that’s the most innovative or, you know, you’ve got the best ideas, the best protocols, whatever, however you’re doing it. And I think when that’s the case, you can kind of lose, you know, what you focus on is what does well, and if your focus comes off of money, too much money can get, uh, it can atrophy, right? Your skills in it can atrophy. Um, when your attention is not there, you just, uh, it can kind of get away from you. Right? And so I think that that is a sort of similar issue that, um, people in academia have to people in the creative world. Um, and I think just, you know, we’re busy, right? We’re busy doing the thing, we’re doing <laugh>, and this is one of the reasons I didn’t wanna be in academia ’cause of how busy you get <laugh>. Like, I was like, I, I’m never gonna be in the studio again if I do this. Um, and, and you just, it’s hard to check like, you know, self-employment, you know, when you’re talking about like grant income or the types of income that, that we’re talking about here, like track doing, doing, setting up bookkeeping, paying estimated quarterly taxes, like things like that. You know, they are a little bit complex and they do require some ongoing attention. So that’s, that’s a challenge.

Emily (08:23): Totally agree with everything you just said. Underline that. Um, in addition, I wonder if you could speak to, because I think another commonality between these communities is a percep- a perception among ourselves that our work is undervalued by other people and then we end up undervaluing ourselves in some cases, um, which is really dangerous when it comes to business ownership

Hannah (08:45): Very much. Yeah. And I think it’s, it, it’s easy to get into a mindset like that, especially if people around you in your daily life have a mindset like that. You tend to absorb the attitudes of the people you are with all day. Um, and so yeah, if you have people around you who feel like, uh, you know, the good ideas are over here and the money is over here and they’re in opposite directions, you’re gonna start getting outta balance where with, where money is in your life, like, I, I like to think of it this way, that money is neutral, right? Money is a tool. It’s like a hammer. You can do good things with it. You can do bad things with it, right? Like it’s amplifying the power of the person who has it. So if you’re doing good work, if you’re an ethical person, you can do amazing things and you can do more of them when you have more money. I don’t know. Think, um, think Oprah, think, um, Dolly Parton, you know, these are people who have great amounts of wealth and who do truly world changing wonderful things with their money, right? Uh, we could also probably think of quite a few examples of people who do not so great things with their money <laugh>. But I think the problem is when you go from thinking of money as neutral, right? Money as just being an amplifier of your agency to being negative, that that’s where you start getting problems. You start getting in a sort of stuck space around it. Because if you think of money as negative, or if you think that somehow your motives or ethics will be corrupted, if you simply have money more of this tool, you won’t advocate for yourself properly, right? Um, you cannot walk into a job interview and really nail it, um, nail the salary negotiation part of it specifically. Um, you’re not gonna advocate the way with the fierceness in that interview that you would if you believed that money was good, right? Or, or money in your hands was a good thing. If you fundamentally think, you know, having a fully funded retirement is makes you kind of a yucky person, you’re not gonna ever fund your retirement. You know, these things are related.

How Do You Know When You’ve Actually Started a Business?

Emily (10:55): Mm-Hmm. That is so interesting. I’m really, I really like the way you put that. I haven’t thought about it quite that way before. So thank you so much. Um, okay. I wanna narrow down to talking about like business ownership for, again, my community, which has many similarities with yours. Uh, they’re gonna be doing this as a, we’re gonna say a side income though, right? They have their primary thing as being a graduate student or being a postdoc, and they’re pursuing that, but they have a self-employment side hustle as well. Oftentimes what I see is people acting as like consultants, for example. Um, or maybe they’re a writer or an editor in, in this kind of world. So these, these kinds of side hustles, whether maybe, or data science. They’re employing some skills perhaps that they have developed as an academic, but outside of that academic context as a business owner. So, and I love that you’ve talked about this extensively on your podcast, but the question to you is how does someone know when they’ve actually started a business? Because especially when it’s something on the side, it may be a little vague at first.

Hannah (11:50): Yeah. This gets really confusing if you start thinking of the other organizations that think of your business start time as different. Um, and I, I do have a whole podcast episode about specifically when each one thinks you start. Um, so if you want me to, you know, link to that in your show notes, I would be happy to send that link. Um, but, you know, that’s on the Sunlight podcast. So to the IRS and this, you know, I’m a tax person, so I’m orienting towards that. When it comes to when you report the income, when you report the expenses, um, to the IRS, your, your business begins the moment you advertise. And that actually makes a lot of sense if you understand what makes you a business. The IRS says that you’re a business versus being a hobby. Um, so your side hustle is a business and not a hobby. If you have a profit motive, if you are trying to make money with it, right? It doesn’t mean that money has to be, you know, you worship at the altar of money and there’s nothing else in your life and you throw all your ethics and your, you know, value and, and your amazing work out the window. Not that, but it has to be in there, has to be in the mix, and it has to be, you know, strong. Um, and so if you think about that, having an intent to make a profit, which is the IRS definition of you being a business that happens before you make a profit, that happens before you make money. And I think this is where people get confused. They think, I I, I, I only get to report it once I’m making money, but actually no, because you start that business with expenses, right? You have expenses first. Then once you’ve built something, um, let’s use an example of like a pizzeria. ’cause it’s very tangible and we’ve all been to one. Um, you don’t start generating income from that pizzeria day one, right? The pizzeria has to exist first. Like, you can’t sell a slice of pizza if you don’t have an oven <laugh>. You have to install the oven, you have to have a bakery, you have to have flour, right? So you’re gonna have a lot of expenses before you ever can even bring a dollar in the door. And I think it’s really important to get your head around that concept. You are not broken because that’s how your business is working. That’s actually normal, right? And we have in business school, they teach this concept called the break even point. Well, what is that? The break even point is the magical moment when you go from negative income, AKA, AKA spending <laugh> and, and, um, it’s that magical moment when you go from negative income to zero, right? And then over the zero, then the number starts getting positive. That’s the moment you become profitable, right? When your, when your income rises above the amount of your expenses for the first time, and you know what, there is no guarantee or promise that that will ever happen or that it will happen on a certain timeline. That’s all within your control and your profit motive should be driving that bus. But, uh, it’s, it’s good to know that it’s normal to have expenses first. And in fact, you’re entitled to file a Schedule C that is where you put this stuff on your tax return. You’re entitled to file one before you have a profit. So the title of the Schedule C is profit or loss from business. So one, you have to be a business, it’s in the title, but also you don’t have to have a profit that’s also in the title. So that’s kind of a good baseline. So remember, the moment you advertise, and if you think about it is, is the moment that you start that your business starts. And if you think about it, that makes sense. ’cause advertising says hello world, hello clients, I’m open, I have this thing available. If you’re the right person, if this will work for you, come and get it. Right? But also, you know, to somebody who is, let’s say, doing some freelance editing on the side, advertising is not gonna look the way it does for Coca-Cola, right? Advertising for you is probably gonna be an email to a couple of friends and family. You’re still advertising. You probably aren’t thinking of that as advertising, but whatever you do that’s signaling, Hey, hey, I do this thing, are you interested? So maybe that’s an Instagram post. Maybe it’s an email to friends and family. Um, maybe it’s a website going live. Those are all your moment when you started advertising.

Emily (16:14): I’m so glad you gave that example because as I said earlier, I see a lot of like service-based businesses as side hustles, um, for this community. And so just when you were describing that, I was like, yeah, if you put something up on LinkedIn, if you put your services out there on, um, whatever the current version of Upwork is, um, or like you said, an email to a friend putting up a website, Hey, it costs money to host a website. So like, you’re probably having your first expense when you do that. Um, or maybe you’re starting to pay for software to like get client scheduling set up or whatever it might be. Um, I think part of the confusion when people are asking this question is they think somehow it’s like a, a bad or like an onerous thing to be considered a business and have the attendant tax filing, uh, requirements along with it.

Emily (16:57): But what I really learned from your podcast and your attitude around it is no, this is a great thing to be considered a business, especially as you were just saying, when it takes some time to get to that turning point where you actually have profit. So like, if you have a whole year when you have some, some loss, even though you’ve started advertising, maybe you have some expenses, the income isn’t there yet. Um, you can use that to reduce your tax liability, actually. And so it’s not, it’s not a bad thing to be considered a business earlier. It does have some complications, but it’s, it’s, it’s actually a very positive thing to realize that you have a business

Hannah (17:29): Very much. I mean, and it, it tangibly lowers your taxes. <laugh>. I mean, we in this country are supporting business not out of a charitable purpose, but because it’s good for the u- US economy, right? Like when we support us small businesses and, and we count, you and me, Emily, we count <laugh>. Um, when you support a small business, you are, you are helping the US GDP grow, right? That’s in the interest of the nation we live in. Um, ultimately, you know, you’re gonna spend a lot of money, you get business deduction, you get business expenses, they are deductible on your tax return. That’s a incredible benefit given to you by Uncle Sam. I mean, I, I don’t think we all appreciate that quite as much as we should. Um, but that’s, that’s huge. Um, and yeah, and so you’re, you’re getting this subsidy <laugh> and it’s nice to take advantage of. It’s nice to know what your rights are and take advantage of it. Um, and of course, if you weren’t a business, if you were operating as a hobby, instead you wouldn’t get those deductions. So there’s a real difference.

Emily (18:38): Yeah. Thank you.

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Emily (18:41): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, budgeting, investing, and goal-setting, each tailored specifically for graduate students and postdocs? I offer workshops on these topics and more in a variety of formats, and I’m now booking for the 2024-2025 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutes enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

Best Financial Practices for Early Career Academics With Businesses

Emily (19:59): Okay. So I’m thinking still about this grad student or postdoc or early career PhD who’s, has this business now they know they’re starting it on the side. What are some best practices that they should implement in their finances from day one to make things easier or like totally above board going forward?

Hannah (20:16): Sure. Um, the first is to open a separate bank account. Um, you wanna keep your business income and expenses separated from your personal bank account and personal expenses. Um, there’s many reasons why this is a good idea. All of it is a good idea. <laugh>, there is no negative, um, except that you have to go through the effort of opening an account. Um, but the magic that that separation does is now when you have that business bank account and you deposit all the money you earn from that freelance side hustle, you know, that gig, whatever it is, now you are creating a record of everything into and out of your business. That record becomes the backbone of your bookkeeping. So now from there, setting up bookkeeping, setting up tracking becomes far simpler. Um, Emily, when I started out as a professional artist, before I knew to do all this stuff, I was printing out bank statements going through, you know, like three days before tax time, going through my bank statement, line by line with a highlighter, trying to, trying to recall if that trip I made back in February last year to Lowe’s was for business or for my home, right? <laugh>, Like we don’t want that <laugh>. If you have a dedicated business account and you keep a mindset of I only spend this money on business expenses, then everything in there is deductible. You just have to sort out what category of deduction it goes into. So man, it makes your life simple. And then, you know, once your business grows, this is a thing that grows with you. Um, you can automate that bank feed into bookkeeping software. That’s a next step thing. You don’t have to do that day one, but it gives you the, you know, the easy option. Um, also if you one day create an LLC for liability protection, your LLC will be instantly invalidated if you don’t have a separate business bank account, you, when you have a liability, uh, limited liability corporation, the whole thing you’ve done legally is to separate your business and personal selves. And if you then don’t actually do it in the background, a court of law can say you don’t have an LLC, you don’t have any liability protection, and basically your LLC is thrown out, you’ve wasted all that money. Um, so <laugh>, there’s no downside, in other words, to a business bank account. PS it doesn’t actually have to be technically a business account according to your bank’s rules. It can just be a personal account. That’s another separate account. It’s the separation that’s important. So it can be, you know, technically a personal account according to the bank. That’s fine. Just use it like it’s your business account.

Emily (23:05): Thank you so much for that. Um, that clarification, and actually you threw out a couple of terms there. So I just want to, this is partially some things I’ve learned from you, clarify for the listener. Um, this, this term LLC, the limited liability company, this is a legal status and it’s not, it doesn’t necessarily confer a specific tax status. So when you’re first starting out out, when you’re first starting out with a, a side business or something, you’re likely gonna be operating as a sole proprietor. Then maybe for the entire lifetime of the business, you’ll be a sole proprietor. Whether or not you open an LLC as well, your tax status will stay a sole proprietor. That is, unless you decide that you want to grow your business to the point where becoming a different kind of tax status would make sense, like an S selection, et cetera. But for people who keep businesses on the side, I would imagine many of them continue to operate as sole proprietors indefinitely.

Hannah (23:55): Yep. I would say that’s probably true. Yeah.

Preparing for Tax Season as a Business Owner

Emily (23:58): So you just mentioned this core first step, which is to open a separate bank account, and I totally agree with it. You know, when I first started out my very first side hustle, I didn’t have that, but I knew by the time I started this business that it was important. So that was the first thing that I did when I started this, um, this business, even though I’ve been a sole proprietor the whole time as we were just talking about. So is there anything else that someone should do, um, like at this point in the year, you know, we’re sitting in September when we’re recording this. Is there anyone, anything that, uh, business owners should do outside of their actions during tax season to set themselves up to, you know, prepare a tax to return easily to minimize their tax liability beyond this core, as you said, the backbone of having a separate account?

Hannah (24:39): I mean, there’s a whole world of year-end tax planning. I would say independent of year-end tax planning, which is coming up, we are coming upon that time of year. But independent of that, I would say from your separate business bank account, just setting up some basic bookkeeping is a good idea. Having the separate bank account isn’t bookkeeping itself, though. It forms a basis for it. So if you don’t love the idea of like sitting with your bank statements and pulling everything into a category, you know, before tax time, doing that in advance is quite nice and quite helpful. <laugh>. And I actually think if it’s at the level of a gig or a side hustle, I actually think you don’t need bookkeeping software at all. I think bookkeeping software, if I’m just being totally honest with you, it’s very easy to make very expensive mistakes that compound and, uh, that you can only get undone with very expensive accounting help. Um, so I actually don’t really think people with very, very small like side hustle level businesses maybe even should have software for bookkeeping at all. Um, but that doesn’t mean you do bookkeeping. You can just do it on a spreadsheet. So have a spreadsheet, lay out your expense categories, track your income, and just do the tallies. Um, because knowing if that will help, you know, in an ongoing way if you’re profitable or not, which is a, a big deal, it’s also what your taxes are based on. So, um, paying estimated quarterly taxes, for example, if you need to, is only going to be possible when you know what the number is, <laugh>. Um, so you wanna be able to know what your profit was for the quarter. So you can do a little calculation about what percentage of that you need to pay to the IRS and to your state for taxes.

Side Hustles and Estimated Tax

Emily (26:29): This is a little bit nuanced. Um, what I’d like to specifically talk about is how to like sort of add the estimated tax process on top of an existing salary, right? Because this is a side hustle business, so. What would you tell someone who’s, uh, who has that situation, how they should handle their estimated tax?

Hannah (26:50): Yeah, I might tell them to avoid it altogether. Um, honestly, because human behavior being what it is, estimated taxes are manual. You have to do the calculation, you have to make the payment. And we just know from data, you know, from behavioral science that people don’t do things like the, they do the default more often than not. So if you can default your taxes, that’s what you wanna do. So if you’re in the side hustle zone, the thing you wanna understand is that your taxes are holistic. They are all of your income lumped together and your spouses lumped all together and put onto one tax return with one number of what you owe, or you know, what you got a refund for if you overpaid. So if three quarters of your income comes from a job, you know, where you’re an employee and you have payroll withholding your taxes throughout the year, and one quarter of your income is coming from this gig or side hustle, you have enough proportionally money that you could take out of your W2 to never have to pay quarterly taxes. But what you need to do, the action you do need to take is to file a new W four with your employer to adjust your withholding at your day job to over withhold. In other words, you don’t wanna withhold only enough taxes to cover the tax obligation formed by the employment. You wanna overdo it and go into taking enough taxes to account for your self-employment. Um, your gig, your side hustle income that is considered self-employment income. FYI, um, and the taxes on that are always higher than you think because self-employment tax applies to self-employed income. So your employer is paying one half of that amount. It’s one of your wonderful benefits as an employee. You pay both halves when you’re self-employed because you legit are the boss <laugh>. You pay the employee and the boss half of Medicare and social security. And we call that self-employment tax. So my tip there is pull a W 4 off the internet, go to irs.gov, grab yourself a W 4, fill it out. You might need some old pay stubs. You might want last year’s tax return. If you have any bookkeeping from your business year to date, that’s great. Um, or just last year’s tax return. Um, hopefully if that gig was going already last year. And then you just wanna fill out the little, um, paycheck checkup tool on the IRS website that will help you, um, adjust your withholding to essentially give you, you know, the refund level that you wanna have. Um, I recommend zero <laugh>

Emily (29:34): I, it’s the same way I would approach things. That’s how I also teach. Um, anyone, anyone who has a fellowship income, which does not have withholding on it, but who also has W2 income, their spouse or them, that’s the same thing. I say, make this easier on yourself, just fill out a new W 4. But let’s add the added wrinkle of they don’t have the W2 position. Let’s say they’re receiving a fellowship, it already doesn’t have tax withholding on it. Maybe they’re already doing estimated tax because they have that fellowship. Um mm-Hmm. How should they incorporate the self, the self-employed income and, and the income and the self-employment tax from that, um, in with their ongoing like fellowship type income, uh, calculations?

Hannah (30:12): Yeah, well they’re gonna, you’re gonna need to do some degree of bookkeeping or else it’s gonna be a very stressful moment before the tax deadline. Um, and you will, you know, you’ll need to pay quarterly taxes every single quarter that that’s your legal obligation. So under US tax law, if on last year’s tax return you owed more than a thousand dollars, then you have to pay quarterly taxes this year or else you’ll get penalties and interest. Um, and you can pull out last year’s tax return and you can check if you’re in this category. So line 37 of your 1040 personal income tax return is gonna tell you what you owed last year. And if you see a number on there and it’s greater than a thousand, you gotta be paying quarterly taxes this year. Um, PS line 38, the line just below that is your estimated tax penalty <laugh>. So you can look at that line to see if you’re already being punished for not doing this. Um, I think that people, you know, we have a whole tax industry out there trying to, you know, its marketing is based around making us all hate and fear our taxes and actually kind of implicitly training us not to even look at it to just feel so fearful. And so, like hands off that we don’t even look at it. And I’m just here to say, I hate that I disagree with it. Your taxes are yours. Your 1040 is your information and you can, you know, the first two pages of it summarize every single thing that is in that big tax packet. And if you just look at every line on the first two pages, you have massive power. You know what’s happening. Um, and I just told you two lines, the power in those two lines, line 37 and line 38 and that, you know, that will, that will help you kind of get your head around <laugh> whether you have to pay quarterly or not. If you do, um, you know, if you think about what line 37 tax, you know, what you owe, like owing something at tax time is not supposed to happen, right? It does happen. It’s okay. It’s a reconciliation document where we reconcile the actual amount paid versus the expected amount, um, and we settle up the difference. But essentially owing anything means you underpaid your taxes throughout the year. ’cause we live in a pay as you go tax system. You’re supposed to pay your taxes as you go through the year, not all on April 15th.

Emily (32:40): I think what I would say, in addition to what you just said, um, the, the form form 1040, ES, the estimated tax worksheet is a very helpful document in calculating your estimated tax due. Um, people in the audience listening may already be familiar with this for their fellowship income, but you just have to add in a few more lines relevant to the business income and so forth. But if they don’t wanna do more calculations, I think I would tell them just to kind of, as a rule of thumb, set aside an additional 15.3% of their business profit. If there is a profit for that self-employment tax pay, that plus whatever their marginal tax rate is, let’s say it’s 12% usually for graduate students, maybe 22% for some postdocs. Um, if they’re single and just doing that much, if you don’t wanna do like a full calculation is gonna get you, that’s an 80 20 <laugh> on that is to add mm-hmm, that additional amount of money in with either your W 4 or your estimated tax payments if you’re doing it on your fellowship already. Um, but doing the detailed calculation is always gonna be the most, uh, thorough and the most accurate way to go. But Hannah, uh, when you were.

Hannah (33:46): Sure, although keep in, keep in mind ’cause it’s stressful for people. I think like especially if you’re coming to this and you’ve not learned about how estimated quarterly taxes work, um, it’s really important to remember the first word. It is an estimate and you’re not gonna know, like fundamentally you can look at your tax rate from last year, but last year’s tax rate does not guarantee this year’s tax rate, right? So even if you do it in good faith and you did the best possible job, you could, you can still be wrong. And so really, I just encourage you like 80 20 is a good attitude on this because it is called an estimate because you don’t have a crystal ball, like the law cannot compel you to accurately predict a future. So we can all just breathe a sigh of relief and just estimate and that’s okay.

Emily (34:35): The other good thing about paying those quarterly taxes, um, as you go, as you were saying is that, um, there’s never gonna be such a huge balance built up. Like something that often happens in our community with fellowship income is that people get to tax season and they realize they owe three, four, $5,000 because they never paid estimated tax or had tax withholding during the year. And that is a huge shock on like this level of income that we’re talking about. And it can happen with business income too, um, especially if you’re taking distributions from your business and then you’re spending that money. Um, so either keep the money in your business account and don’t take the distributions or as you take the distributions, make sure you’re putting aside something for either your quarterly or your annual tax bill so it doesn’t, doesn’t get away from you <laugh>.

Hannah (35:17): Absolutely. Yeah.

Sunlight Tax and the Sunlight Podcast

Emily (35:19): So just a few minutes ago when you were talking about how, um, you know, our, our system, mostly the tax industry that’s built up around our regulations, they want you to feel a certain way about taxes and in fact you should be empowered about this, et cetera, et cetera. This is a taste of what people can get on your podcast. So I would love you to take a minute and just tell everybody where they can find you, what you put out there, what you do in your business, and if they want to learn more from you or work with you in some way, how they can do that.

Hannah (35:46): Sure. Thanks Emily. Um, well, so my business is Sunlight Tax. If you go to sunlighttax.com, you’ll find everything there. So if you miss something, sunlighttax.com, I have my podcast, which comes out every Tuesday, Sunlight, um, you can find that on my website, sunlighttax.com. Um, I also have a bunch of free resources like, uh, deductions guide, a visual Guide to Tax Deductions, which you can also find on my website. Um, I offer a lot of free courses, including a recent one about, um, LLCs. If you go to sunlighttax.com/llc, if you happen to have formed an LLC for your side hustle or your business, um, there’s a mandatory, a mandatory new report required, um, from the US Treasury <laugh>. Um, but also I have a program called Money Bootcamp where I teach, um, people how to set up very simple systems to track your taxes, um, pay your estimates and fund your retirement using tax advantage accounts. So, um, all of that you can find @ sunlighttax.com and,

Emily (36:51): Excellent.

Hannah (36:51): Yeah.

Best Financial Advice for Another Early-Career PhD

Emily (36:52): Yes, and I will definitely personally vouch for the podcast because I am a listener every single week and I learn something new every week and I think it’s great. Um, okay, Hannah, I’m gonna end by asking you the question that I ask all my guests, which is, what is your best financial advice for an early career PhD? A grad student, a postdoc, someone recently out of their PhD training? Um, and that can be something that we’ve touched on already that’s related to tax, or it could be something completely aside from what we’ve discussed.

Hannah (37:19): Sure. Um, I’ll say this, it’s a bit of my personal religion, but, um, if you have never played with a compound interest calculator and seeing what the power of your money is when it is invested, um, please do yourself that favor, <laugh>. Um, and I would say do not just write yourself off. Say, I am broke right now. I will wait to put money in an IRA I really highly encourage you, if you do nothing else, maintaining an annual habit of maxing out your IRA will put you in a better position. Um, it, it will, you know, you invest the money inside the IRA so it will grow with compound interest and tax sheltered. So it’s really a wonderful thing that works when you start young <laugh>. You don’t wanna miss five years of compounding because you’re in grad school. Um, if you can, you know, just make it your religion to do it every single year without skipping, I think that is my best piece of advice. And believe you as a 45-year-old woman, woman, <laugh> talking to you, I, I wish for everyone here that we could all have started at the age that you are now. Um, and the age you are now is only it, you know, the best time to start this investments your investments was 20 years ago, but the second best time is now.

Emily (38:41): Love that advice. You touched on my two favorite topics today, taxes and investing. So it’s amazing. <laugh>. I will also just say, I mean, I love the goal of maxing out an IRA, but that’s not gonna be possible for many people. So even if it’s just, um, $50 a month, a hundred, 200, whatever you can do, be in the habit of it. And do as much as you can. And then absolutely, once you get that higher income from your lovely post-PhD job, then you can really ramp it up and use your 401k and use everything else. But having that habit of doing it from earlier and having sort of developing the identity of I am an investor and understanding things like compound interest that is gonna serve you so well later on, um, not just the dollars and the numbers, but all that psychology that comes along with it.

Hannah (39:24): Absolutely. Yeah. They, they show that even very, very poor people who have a savings account save more because just having it there helps you do it. So if you haven’t opened an IRA yet, I encourage you to do it this year. Even if it, even if you put 10 bucks in <laugh>, like open it. The fact that it’s there is setting up the infrastructure to make it easier to do that, you know, thing. And really saving, savings and investing is a muscle. So think of it as like a muscle that you have to get in some reps to get good at.

Emily (39:55): I love it. Hannah, thank you so much for joining me today. It’s been a wonderful episode and thanks again.

Hannah (40:02): Thanks so much, Emily. I really loved joining you today.

Outtro

Emily (40:15): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

This Grad Student Puts Half Her Stipend Paycheck into High-Yield Savings

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In this episode, Emily interviews Maggie Canady, a rising second-year grad student at the University of California at Irvine, on her budget breakdown. Maggie gives us a peek into her life via her top five expenses each month, which are rent, car insurance, groceries, utilities, and travel. Despite taking a pay cut when she started grad school, Maggie maintains close to a 50% savings rate on her stipend. Maggie and Emily end their conversation by discussing how Maggie can get started with passive investing.

Links mentioned in the Episode

This Grad Student Puts Half Her Stipend Paycheck into High-Yield Savings

Teaser

Maggie (00:00): I live in a, uh, beautiful, like two story craftsman house here in LA and I have three other roommates. One of them is my boyfriend. Our house is, uh, $4,500 like total, and there’s four roommates total, and we split it four ways evenly. So we each pay, um, 1100. My boyfriend and I share, um, the like master bedroom, the larger bedroom. Yeah, I’ve lived in this house for two years now. It’s been great. I love my place and that’s also why I’m kind of doing the commute from LA to Irvine because I really love the community I’ve built out here.

Introduction

Emily (00:44): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (01:13): This is Season 19, Episode 2, and today my guest is Maggie Canady, a rising second-year grad student at the University of California, Irvine, and we break down her budget. Maggie gives us a peek into her life via her top five expenses each month, which are rent, car insurance, groceries, utilities, and travel. Despite taking a pay cut when she started grad school, Maggie maintains close to a 50% savings rate on her stipend. Maggie and I end our conversation by discussing how Maggie can get started with passive investing.

Emily (01:47): Let’s talk fellowship taxes for a minute here. These action items are for you if you recently switched or will soon switch onto non-W-2 fellowship income as a grad student, postdoc, or postbac; you are a US citizen, resident, or resident for tax purposes; and you are not having income tax withheld from your stipend or salary. Action item #1: Fill out the Estimated Tax Worksheet on page 8 of IRS Form 1040-ES. This worksheet will estimate how much income tax you will owe in 2024 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 16, 2024. Action item #2: Whether you are required to make estimated tax payments or pay a lump sum at time tax, open a separate, named savings account for your future tax payments. Calculate the fraction of each paycheck that will ultimately go toward tax and set up an automated recurring transfer from your checking account to your tax savings account to prepare for that bill. This is what I call a system of self-withholding, and I suggest putting it in place starting with your very first fellowship paycheck so that you don’t get into a financial bind when the payment deadline arrives.

Emily (03:07): If you need some help with the Estimated Tax Worksheet or want to ask me a question, please consider joining my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers the common questions that PhD trainees have about estimated tax. The workshop includes 1.75 hours of video content, a spreadsheet, and invitations to at least one live Q&A call each quarter this tax year. The next Q&A call is this coming Friday, September 13, 2024. If you want to purchase this workshop as an individual, go to PF fsor PhDs dot com slash Q E tax. You can find the show notes for this episode at PFforPhDs.com/s19e2/. Without further ado, here’s my interview with Maggie Canady.

Will You Please Introduce Yourself Further?

Emily (04:14): I am delighted to have joining me on the podcast today, Maggie Canady. She is a current graduate student at UC Irvine, and today we’re doing a budget breakdown and we haven’t done one of those in a really long time, so I’m very excited about it. So Maggie, would you please introduce yourself to the audience a little bit further?

Maggie (04:30): Yes. Hi, everyone and Hi, Dr. Emily Roberts. That’s so, I’m so happy to be here. Um, my name is Maggie Canady. I am a rising second year clinical psych PhD student at UC Irvine. I’m originally from Dallas, Texas. I received my bachelor’s degree from Harvard in 2020 where I majored in psychology and minored in dance. Um, really broadly, my research interests, interests include understanding the risk and resilience factors around trauma exposure, as well as, um, learning about culturally responsive trauma interventions.

Emily (05:07): Okay, fascinating. And actually now that I know that you had a little bit of a gap between finishing undergrad and starting graduate school, let us know what you were doing during that period.

Maggie (05:17): Yeah, so my first year after I graduated and obviously graduated during the pandemic, I received a traveling fellowship from Harvard and I was supposed to be in Southeast Asia for a year. Um, that obviously couldn’t happen, so they said, okay, we’ll still give you the money, um, but you have to choose and create a project that stays in one state. So for my first year I was interviewing and photographing mixed race individuals and doing a, um, kind of like ethnographic project, um, about mixed race identity. And then after that I worked full time as a research assistant at the University of Southern California.

Emily (05:54): Okay. And I’m trying to sort of place some numbers on those kinds of jobs, like did you take a pay decrease when you started graduate school from that assistantship position?

Maggie (06:04): Yes, I did. So, um, at USC I was making about, I think I was making about $48,000 a year, $49,000 a year, and then went to a graduate student, uh, stipend <laugh> after that.

Current Stipend, Additional Income, and Household Size

Emily (06:17): Yeah, go ahead. Tell us what is your stipend right now?

Maggie (06:20): So this past year as a first year, I made a total of $29,125. Um, and that was for nine months of working as a part-time teaching assistant, which is defined as about 20 hours of work a week. Um, I also received a diversity recruitment fellowship of about $5,000 when I first started, and then I also received a merit award to help with summer costs, um, which I received at the beginning of the summer for $3,000. Um, this upcoming year I’ll make about $35,000, and this is due to the 2022 strike, um, that happened all across UC campuses. So starting, um, this, this year, the lowest paid workers will make $34,000. And then based on your level of experience, you make a little bit more incrementally. So this upcoming year I’ll make 35,000, which is great.

Emily (07:14): And that’s again for teaching assistantship, is that right?

Maggie (07:16): Yes, uhhuh.

Emily (07:17): Wow, I’m so glad to hear that. I’m so glad to hear that was the, the effect and also that you had some bridge funding for last year to kind of bring you closer up to that a number that you know, we will get to in this upcoming year. That’s really, really good to hear. Do you have any sources of income outside of your stipend?

Maggie (07:35): I occasionally tutor and babysit, but it’s very like one off and kind of just if my schedule allows, I’m also a dancer and I’ll get paid for gigs occasionally, um, like music video gigs or performance gigs. Um, but that’s more for like my own interest and like personhood as opposed to depending on that as, as like a source of income.

Emily (07:59): I see. Okay. And is there anyone other than you in your household, any living beings?

Maggie (08:05): Living beings? Yes. So I live in a, uh, beautiful, like two story craftsman house here in LA and I have three other roommates. One of them is my boyfriend, um, my boyfriend and I split a lot of the house grocery expenses, but when I pay my taxes at the end of the year, it’s just me.

Emily (08:24): Gotcha. Um, so no dependents, but you do have people, your boyfriend and other roommates that you’re sharing expenses with.

Maggie (08:30): Exactly.

Current Financial Goals and 50% Savings Rate

Emily (08:32): Alright. Are you currently working towards any financial goals?

Maggie (08:36): So I would eventually love to buy a house that feels a little bit, um, kind of like of a, a dream in the far distance right now, just with my stipend and how crazy California is with, um, like yeah. Houses. Um, but it’s definitely in the back of my mind, mind and when I put money into savings, that’s kind of what I’m thinking. I also love to travel, so I feel like I’m always kind of planning a trip or thinking about a trip and having money tucked away for a trip. I feel like when I think about my budget budgeting categories, that’s definitely one of them that I’m always, um, saving money for.

Emily (09:15): Okay. So you are, you do have some kind of savings rate for this like eventual house goal, um, and that could be several years away. Are you keeping that money in, in cash right now in like a savings account or are you investing it in some way?

Maggie (09:29): So I have, uh, Robin Hood and I am investing it, but I also have a high yield savings account. Um, and so I, this is like kind of one of my like tips or things that I learned this year, but, um, my 50% of my direct deposit goes directly to a high yield savings account and that, uh, a, that high-yield savings account is not connected to any of my credit cards or any of the ways that I spend money. So I feel like it’s just like this pot of money that, um, is really growing, which is really awesome. Um, and then I will also invest, um, invest like kind of every other month or so depending on like my schedule.

Emily (10:06): Wow, okay. A 50% savings rate. So once the money goes into the high yield savings account, does it come back out for spending in the present, like for travel, for example, like you just mentioned?

Maggie (10:16): I try not to, I try to really use like my 50% and, and go from there, but I definitely can pull from it and like have in the past, but I really try not to, I try to not touch it.

Emily (10:28): Okay. Wow. So you’re, you’re close to a 50% savings rate then. Yeah. This is something I’ve never heard of from <laugh>, a graduate students, so, okay. Now I’m very interested to hear how you’re managing your expenses to make that happen on the stipend numbers, um, that you mentioned. So that’s incredible. Let’s start talking about that. So we’re gonna go through your top five largest monthly expenses. And tell me first, are we hearing about these top five expenses based on like your average spending over the last year or like what you budget or like just last month or how did you come to this list?

Budget Breakdown: Housing and Car Insurance

Maggie (10:58): Yeah, so a couple of them are set in stone. Like my rent for instance is set in stone, that’s every month. My car insurance, I pay, um, every six months, so I just averaged it out for each month, but I pay it kind of in bulk. Um, and then my groceries, utilities, and, um, like flights that I pay for, um, that’s kind of an average. Um, so yeah, my rent is my biggest expense. Of course, it’s $1,100 a month. Um, so I’m, I immediately automatically budgeting for that.

Emily (11:30): Okay. So $1,100 per month for rent. Are you sharing? Okay. Just tell me more about the house. Like how many bedrooms are there? Yeah, how many people are there? Are you sharing a bedroom with your boyfriend and then you’re splitting it? Like, just tell me how you came to this number and what the house looks like.

Maggie (11:43): Yes, so fair. So, um, our house is, uh, $4,500, um, like total and there’s four roommates total and we split it four ways evenly. So we each pay, um, 1100. Well, we used to pay, we used to pay 1125 each. Um, but we have like a apartment. It’s kind of a long story, but now we each pay 1100, um, and we split it evenly. My boyfriend and I share, um, the like master bedroom, the larger bedroom. Um, and yeah, I’ve lived, uh, in this house for two years now. Um, we’ve lived together for coming up on four years. It’s about like three and a half right now. Um, and we’ve always split the rent evenly. Um, yeah, it’s been great. I love my place and that’s also why I’m kind of doing the commute from LA to Irvine because I really love the community I’ve built out here. Um, so yeah, 1100 and that’s what everyone in the house pays.

Emily (12:40): Gotcha, okay. Yes. ’cause I didn’t realize that you weren’t close to the university. So how long was your commute?

Maggie (12:46): My commute is anywhere <laugh> from 40 minutes to an hour and a half. Um, but I usually take the train and the train is like a clean an hour, 20 door to door, and I’m doing work on the train, et cetera. But if I drive, it varies depending on the traffic.

Emily (13:05): And do you commute every day? Every weekday?

Maggie (13:08): I, so during the school year, I commuted every day for the first two quarters, so about two thirds of the year. And then the last quarter I commuted for, I think it was, I think it was three days a week. Um, it really just depends on the quarter. It, and like these first two years are the most class intensive obviously. Um, so I will be commuting every day. And then the expectation is that as classes lessen more of my research becomes kind of independent. I won’t have to commute as much. And so it was like this real back and forth that I went of like, okay, do I move down to Irvine and like, do I kind of lose this community that I have but I’m closer to school or do I invest in kind of like my personal happiness and then have this balance? Um, and obviously I cho chose to stay in Los Angeles, um, and it’s, it’s been great. Um, occasionally I’ll house sit down in Irvine, which I guess is also, I don’t make money from it, but it is like kind of a relief from the commute. So it is an investment in some sorts but I’ll house, sit, dog sit, uh, closer, closer to campus.

Emily (14:12): I’m curious, um, how you and your roommates found this house,

Maggie (14:17): Craigslist, <laugh>? Yeah, so we were living in, um, echo Park, um, which is different neighborhood in la and we were looking for a new place that was slightly bigger. So we looked for about a year, really, I think eight years, eight months to a year. Um, and then my boyfriend found this place on Craigslist before it was on Zillow in the other, um, rental websites. So we were the first to apply. Um, we had three interviews with the landlords because they wanted to, um, rent to a family. Um, yeah, so they wanted to rent to a family. Um, but we convinced them that, you know, we all have incomes and steady incomes and that we’re reliable. So it’s been great. They’ve been great landlords.

Emily (15:05): Oh, that’s really interesting. I’m glad I asked about that. <laugh>. Um, yeah, ’cause I don’t talk with too many graduate students who live in houses with multiple roommates, but I think it can be a very cost effective, um, situation. So anyway, I’m, I’m just glad to hear all those details about yours.

Maggie (15:19): Oh my gosh. Yeah. I feel like it’s just like such a great perk of Los Angeles, that there’s so many beautiful, like artisanal houses and we have a front in the backyard and laundry and, you know, AC and uh, a fireplace. Like there’s so many, like, I don’t know, homey perks of it. And it is cost effective, which is sick.

Emily (15:37): All right. Number two, expense

Maggie (15:40): Car insurance. Um, so I pay $300 a month for a car insurance, which is definitely on the higher end. Um, I recently got an electric vehicle and it was a more expensive premium because of that. Um, yeah, my car insurance expires in September, so I’m definitely gonna be shopping around for a cheaper premium. So if you have any recommendations, I’ll definitely take them. Um, yeah, so it’s 300 a month.

Emily (16:10): I actually don’t have recommendations because I just found out that our car insurance company is pulling out of California.

Maggie (16:16): Wait, mine too.

Emily (16:16): I was using E-surance.

Maggie (16:18): Yes, same.

Emily (16:19): Okay. So we will both be shopping around.

Maggie (16:21): Okay.

Emily (16:21): For insurance on our electric vehicles. ’cause I also recently got an electric vehicle. Um, tell me, yeah, you too. How did you acquire this car? Because I’m not seeing a car payment on your list of expenses.

Maggie (16:33): Yeah, so I had a little electric car, um, before this one. It was like a little 2015 Nissan. Um, and I bought it on Facebook marketplace. Um, and it just didn’t go the distance. Like I had to charge it constantly, um, and all of that. So I was selling this car, I I put it on Facebook marketplace and then after about three to four months on Facebook marketplace, someone, um, purchased it. So I had, um, like that immediate check. Um, and I had, I’d say about like, so the car was 30, $37,000. I had this like about $10,000, $11,000 check from the car I sold. So then it was $26,000. I had about half of that money that I could, you know, I had allotted to like buy a new car. And then my parents helped me with the last like $12,000. So that’s how I bought the car full out. And then when I got my tax return in April, I got $7,500 back from that that I was able to give back to my parents. Um, so, so I’m, I know that math is kind of hard to like, speak out loud without seeing it. Uh, my parents probably gave about $5,000 to help me just like pay it out in full. And I had the rest in savings, the rest with selling my last car and then the, uh, tax stipend.

Emily (18:02): Yeah. Amazing. Um, I guess you probably had a pretty high savings rate during your last position as well, right? Making more money living in this same place. It sounds like same people.

Maggie (18:13): Mm-Hmm. <affirmative>.

Emily (18:13): So similar rent.

Maggie (18:15): Mm-Hmm. <affirmative>.

Emily (18:15): Um, yeah, so I, I see how that savings account was, was healthy enough to help you with that purchase, so that’s amazing not to have a car payment during graduate school, but, uh, yeah, hopefully we can get that insurance, uh, monthly cost down a little bit. I mean, you and I were probably both with insurance because it was a pretty good bargain <laugh> the last time we looked around, but hopefully there will be another bargain that we can both find. Um,

Maggie (18:36): I hope so. Yeah. <laugh>.

Emily (18:37): Yeah. Anything else you wanna say about that? Car insurance?

Maggie (18:40): Yeah, I guess this is more of like, um, kind of like a bigger thing, but, um, like my, my parents are like huge savers and I feel like I have like a very kind of like conservative background when it comes to money of like, okay, I’m going to like save my money and like, really just like, be aware of like, what’s coming in. And so I feel like I, I’m like always like, like nesting acorns or something, <laugh> with my money, which has been, has really paid off with like these bigger, um, payments. Um, so yeah, I, I think that that’s where it’s coming from of like, ’cause I know it’s like kind of insane to have like 50% of my income going to payments. Uh, sorry, 50% of my like, um, income’s going to savings. Um, but yeah, so I think that that’s where that’s coming from of this like very like, almost like must conserve my resources. Um, yeah.

Emily (19:35): Okay. Well let’s put a pin in that. We’ll come back to it at the end of the interview.

Commercial

Emily (19:41): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, budgeting, investing, and goal-setting, each tailored specifically for graduate students and postdocs? I offer workshops on these topics and more in a variety of formats, and I’m now booking for the 2024-2025 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutes enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

Budget Breakdown: Groceries, Utilities, and Travel

Emily (20:56): Let’s continue with our list. What’s your third largest monthly expense?

Maggie (21:02): Um, my third largest is groceries. And so I split this with my boyfriend. Um, but even after splitting, it’s anywhere between like one 50 to two 50 a month. Um, I love to cook and we’re always kind of cooking meals, so that’s part of it and that’s more cost effective. But groceries are expensive. Like I can see the difference even from being here since 2020. Like it’s just, it’s just crazy.

Emily (21:30): Yeah. But that number actually seems pretty low to me. I mean, I also <laugh> grocery shopping, cook for a family of four, but it’s two little kids, so it’s not that much more than, you know, just two adults and, uh, we spend quite a bit more than that. So you must be doing something right. Tell us about a few of your go-to meals.

Maggie (21:47): So we have, um, a Costco membership. And so like, we’ll get like a rotisserie chicken, like $5 rotisserie chicken from Costco.

Emily (21:54): The loss leader.

Maggie (21:56): Um, Yes, love, um, big fried rice, stir fry kind of people. I just made like a shrimp fried rice, so frozen shrimp and then whatever veggies I have. And, um, we buy like a 20 pound thing of rice, which is awesome. Um, soups, I, not really right now ’cause it’s summer, but I’m a big soup girl <laugh>, and that’ll last, like, that’ll be made in bulk on like a Sunday, and then I’ll use that as like meal prep for the week. Um, and then I eat like, pretty light breakfasts, like I’ll buy like a pack of like a big thing of yogurt and like granola. Um, yeah. Yeah.

Emily (22:36): So eating out does not appear in your top five expenses, but let us know where that falls in the list. Like, are you eating out, how often do you do? So,

Maggie (22:45): Uh, it really depends on my social battery <laugh>, which I feel is like this pendulum swing. And, um, like, so I was in Europe, um, this, um, at the first two weeks of this month, and like my shopping was like through the roof, like my eating out obviously because, you know, we were on vacation and so like when I came back I like shut my doors, like grabbed my groceries and like, have been cooking, like eating in just because like I can’t, like eat out for the whole month. Um, and then when I’m back in LA like it’ll kind of depend on like, oh, okay. I’ll feel like, oh, I have a little bit more free time in my schedule, so I’ll see more of my friends and then we’ll like go like, grab a drink or we’ll go out to eat. Um, and then I’ll like feel like, oh no, I’m way too stressed. I have to like, just can’t see anyone have to stay in and then I’ll just do that. Um, yeah, so it really kind of varies. Um, but when I, I do go out, I try to just like go for coffee or like, um, frozen yogurt or something, like, something that it’s like still I’m, I’m still paying for something, but I’m not paying like 30 bucks for a meal, you know?

Emily (23:56): Mm-Hmm. <affirmative> especially if your purpose is to see people, then it doesn’t really matter how much money you’re spending on the food or whatever, it’s more having this setting to to be together with other people.

Maggie (24:06): Yes, exactly.

Emily (24:07): And how about, um, takeout or, you know, DoorDash, GrubHub? Do you do any of that?

Maggie (24:13): So, no, my mom owns a restaurant. She’s had a restaurant for like 30 years and I worked for her growing up. Um, and then even throughout college whenever I was back. Um, and GrubHub and DoorDash just like are so awful to small business owners. Um, and so kind of seeing like behind the scenes, I was just like, I, I cannot endorse this. So it’s like more of a personal value. Um, but I, I don’t, I don’t, DoorDash, yes, <laugh>. Um, I’d say utilities, they average about $75 a month. Um, it’s $25 for, um, wifi and then like somewhere between like, like 10 to $20 for gas. And then depending on the month, the rest of it is, um, uh, electricity. So anywhere, honestly, probably like closer to 75 to a hundred dollars a month. Like it really just depend, like we’ve had the ac blasting this, you know, this past month, so it’s going, it’s gonna be a lot higher than usual, but then kind of in the fall and spring it’s, it’s very, very little, very minimal.

Emily (25:26): Yeah. And this is one of those areas where having the multiple roommates really, really helps because yes, your utilities go up a little bit more with the higher square footage, but things like internet, like that’s just gonna scale down. Right, exactly.

Maggie (25:38): Yeah. Yeah, yeah. That’s exactly right.

Emily (25:40): Sounds great. And your last expense? The fifth one,

Maggie (25:43): My last one, it’s, uh, most recently been flights. Um, I’ve been trying to buy like my holiday flights early and then, like I said, I was in Europe, so I bought those flights. Um, the most recent flight I bought was for my parents actually to come visit me. Uh, my dad had a coupon and then for my mom’s, uh, ticket was $400 round trip. And so like kind of going back to that, like travel as like a bucket for my budgeting, like it’s, it’s one of those things that I’m like, I will be traveling home for the holidays or like, I want my family to come see me or I wanna go on vacation. So it’s one of those things that I just, I’m like, okay, this is where money is gonna go, you know?

Emily (26:24): Yeah. And with a 50% savings rate, nobody can argue with spending a little bit on travel as well. Um, tell us about your, um, strategies around buying flights, if there are any. Like, are you loyal to any airlines? Do you use any certain credit cards? Like how do you work this?

Travel Credit Cards

Maggie (26:40): So I have a Southwest credit card, which honestly has not been as great as I expected. Um, but I’m from Dallas and uh, Southwest, um, has like love, uh, love Field Airport, which is 10 minutes from my house. So it’s, um, it’s nice to have the Southwest credit card because I am building points on that and I try to use those when I can, but the flights are usually quite expensive still. I also have a, um, I have to look at the exact one, but it’s a Chase, like traveling credit card and that’s been great.

Emily (27:14): The Sapphire Preferred, I’m assuming?

Maggie (27:16): Yes.

Emily (27:16): Okay.

Maggie (27:16): Yes, the Sapphire Preferred. I love that card. I try to do like all of my expenses on that card and that card actually paid for my flight to Europe this past time, like after, like, just spending for the entire year. And I love that. So those are my two. I also have a Amex Blue Preferred, which gives 6% back on groceries. Um, and so I’ll just give that back as like a, um, kind of like cash, like return. Um, so yeah, those are my, my top three.

Emily (27:51): Uh, what airline did you use for your trip to Europe?

Maggie (27:53): Oh, great question. I used, um, I think it was, I’m, I will probably get the name wrong. France Air or like Air France. Mm-Hmm. <affirmative>. Okay. Yeah. Um, because they’re a partner with Chase and so I was able to transfer my points from Chase to Air France.

Emily (28:10): Yeah, I’m, I’m quite familiar with the Chase system because I also was trying to be loyal to Southwest for a little while. Um, it’s a little bit easier actually with the family because we can do the Southwest Companion Pass, which is a really great like, value. Are you familiar with it?

Maggie (28:26): Yes. That’s amazing.

Emily (28:27): Yeah, so like you can always take one for the listeners once you earn the companion pass. You can always take one when, when the primary person books a flight, they can always take a companion with them on any flight, unlike some other airlines where it’s like once per year. Nope, it’s every flight as long as there’s a seat available, um, for free, which is amazing. Uh, but anyway, the Chase points Trav, uh, transfer to Southwest as you probably know. So I was working that system for a little while. And smart. Yeah. Seeing where else the Chase points could go. ’cause we also have the, um, the Sapphire preferred card, but I haven’t gotten into any of the other systems yet. Like I’m not an Amex, you know, so it’s something to explore and see what those partners are. ’cause yeah, I mean, using credit card rewards for travel seems to be the kind of the biggest bang for your buck.

Maggie (29:07): Yes, I totally agree. And I feel like I’m like so sold on Chase as like my credit card because of how many flights and like how many points I get that I can then transfer. I’ve heard that for American Express, like it’ll start paying off once you have like the platinum or whatever, like the highest kind of credit cards are, and I’m just not, I’m just not ready to spend like $600 a year on a credit card. So I haven’t yet, but <laugh> maybe one day.

Emily (29:34): Um, yeah. Well this is really exciting. So you’re spending quite a bit on travel, but you’re also trying to optimize as what, as much as you can with points and so forth. Mm-Hmm. <affirmative>. Um, and it seems like you’re sort of using that, uh, save the high yield savings account that you split your paycheck into as, um, what I would call a, a targeted savings account, at least to a degree. Mm-Hmm. <affirmative> because you can pull from that account when you have these like large flights or whatever coming up, right?

Maggie (29:57): Exactly. Yeah, you’ve got it exactly on the head.

Saving Vs. Investing

Emily (30:01): Okay. Um, so the question I kind of wanted to come back to is why are you saving and not investing given that you have quite a high savings rate and you could be doing some of both?

Maggie (30:12): Yeah, that’s a great question. I honestly feel like it’s from a, like lack of knowledge around investing. Like I know that investing kind of consistently and monthly and like diversifying your assets is the way to go, but I feel like there’s still a bit of fear for me there. And kind of going back to this idea of like where my parents came from of like saving, like my, my mom and I just got into investing in 2020, so it’s kind of this new endeavor for both of us and she’s really gotten into investing, um, in the past few years. Um, and for me, like, it’s just, I haven’t put that like energy into like really knowing what I’m doing. Um, but I feel like that’s potentially like a financial goal I can work on, um, alongside like saving for a house, um, just because there is like so many benefits, um, to it. So if you have any advice for me, I would definitely take it.

Emily (31:14): Yeah, I mean, I, I said a second ago that you weren’t investing, but that’s not quite true, right? Because you are using Robinhood Mm-Hmm. <affirmative> you said sort of inconsistently. Mm-Hmm. <affirmative>. What kind of investing are you doing with Robinhood? Like what are you investing in?

Maggie (31:26): Um, like I’ll invest, you know, I have to honestly go back and like, look, it’s kind of all over the map. Like, like I, it would be like Apple <laugh>,

Emily (31:37): But single stocks is what we’re talking about.

Maggie (31:39): Yes. Yeah, Exactly.

Emily (31:39): Not Like, um, ETFs or something

Maggie (31:41): Like that. No, not ETFs. Yeah. Okay. And see, like I, I feel like I can feel myself like not even really know, like exactly like feel, not feeling super confident in like having a conversation about it because I, it’s just, it’s like a place where there’s a big gap in my financial knowledge. Um, so yeah, I think that that’s definitely like kind of a next step for me. Um, yeah.

Emily (32:04): Yeah. Well I have, I have content recommendations for you, please. Are you more of a reader or more of a podcast listener? Um,

Maggie (32:13): Podcasts, I think for, especially with my drives,

Emily (32:16): So there’s a very, uh, well known person in the, uh, the fire space, the financial independence and early retirement space. His name is JL Collins. Mm-Hmm. <affirmative>. And he has a book, if you are a reader, I would recommend his book. Okay. But since you’re a listener, I would say find his interviews, which he goes on a lot of different podcasts, but he’s been on, for example, the Choose Fi podcast several times. So I, I would go find like the earliest one or two interviews where they’re probably going over the basics of, uh, his book is titled The Simple Path to Wealth. So it’s all about this strategy, which is passive investing, which is investing in, um, index funds and ETFs that are based on indices. And so it’s a very like set it and forget it kind of investing strategy, which I really like. And it’s the kind of strategy that I teach also because it’s the most effective Mm-Hmm. <affirmative>

Emily (33:02): In terms of the money that you’ll have at the end of the decades, like in your pocket because you’re paying very little in fees and you’re not letting your, um, psychology and your human emotions, you know, get in the, in the way, in the way of like your investing strategy. So I would go find some interviews with him, definitely on Choose fi. You can probably just search like your podcast player for Col j Collins and hopefully some interviews will come up. But choose FI for sure, has him. Um, I might also suggest Afford Anything that’s another podcast name. I bet he’s been on that podcast too, although I haven’t listened through all the archives extensively. So yeah, just find, find a few interviews with him and see if you sort of like his argument, his philosophy.

Maggie (33:42): This is so helpful. Thank you so much. And I will definitely check out The Simple Path to Wealth. Um, I have like two free audio book credits for some reason right now, so that’ll be one of ’em. <laugh>.

Emily (33:54): Yeah, I don’t know if it’s an audio book. I certainly heard Hope it is Okay, because it is very popular, so hopefully they have turned it into an audio book. But I’m curious, um, whether he the author is the one who’s reading it or whether they hired someone else. He has a very like deep like gravelly like old man voice, which actually think would be great for an audio book. So, um, yeah, I’m curious if if he’s the one who’s who, uh, read it or not. Um, but yeah, start, start there, I would say.

Maggie (34:19): Okay. I definitely will. And if, like, I’ll definitely take a book recommendation too, especially with the summer. I have like ex like exponentially more free time. Mm-Hmm. So

Emily (34:27): The one After The Simple Path to Wealth that’s also great on investing is Ramit Sethi’s book, I Will Teach You To Be Rich. Mm-Hmm. And that’s on more broad personal finance topics, but he’s, he does have a couple chapters devoted to investing, passive investing. So that would be another good one to read.

Maggie (34:42): Thank you. That’s so helpful.

Emily (34:44): Oh, sure. I mean, you are already, honestly most of the way to winning the game by just having like a very high savings rate on obviously a limited income and really dialing in your expenses. Obviously you’ve thought a lot about what you value, um, in the travel and so forth. So like you’re already doing a ton of stuff really well, and if you decide you want to, you know, devote some of that very high savings rate toward investing, you’ll really be able to grow your money, um, over the next few years. And even, um, this is not like advice, but depending on how far out that potential house purchase is, um, you know, a savings account might not be the most appropriate place for it. Some conservative invest investments might be an appropriate place, but it kinda depends on what your timeline is on, on that front. So it’s just something to think about. Like you could do a split, right? You can do a certain percentage into just straight savings, a certain percentage into investing. Maybe some of it’s for long term, some is for medium term. Mm-Hmm. <affirmative>, um, again with high savings rate you kind of can’t go wrong. Um, yeah. With choosing where you wanna put that money.

Maggie (35:42): Yeah, that’s a great point. Yeah. Okay. This is a great summer project. I am excited to Yeah. Kinda go down this route.

Emily (35:50): Yeah. Um, I hope the listeners enjoyed this because this is a really, you know, unique example of like living in a very high cost of living area. But as we were talking about kind of setting those highest, you know, the, the expenses that are, have the potential be the biggest in the budget, the rent, the transportation, getting those set at the, the best level that you can and sort of letting everything else fall where it may, and, and doing that, um, strategy of paying yourself first by splitting your paycheck. These are really great examples. So I wanna say to the listeners, if anybody else wants to come on and do a budget breakdown, I love doing these kinds of episodes. I wanna hear from people all over the country with all different kinds of stipends, and it’ll be every one single one is gonna be a very different story. Right.

Best Financial Advice for Another Early-Career PhD

Emily (36:29): Um, so Maggie, thank you so much for coming on the podcast. I’d love to ask you the final question that I end all my interviews with, which is, what is your best financial advice for another early career PhD? And it could be something that we’ve touched on already in the interview, or it could be something completely new.

Maggie (36:44): Ooh, okay. Yes. Well, a couple things We’ve already touched on. High-yield savings account. Definitely recommend that. Um, I use SoFi because I had a great offer. Um, so kind of look at whatever has, you know, a great, uh, high interest rate. Um, like I said, the, you know, trying to like immediately put my direct deposit into savings and into that high yield savings account, so I don’t even have to think about it, um, was like kind of a great, like passive like, or, you know, intentional act that now has become like routine. So that was really helpful. Um, I listened to, um, financial Feminists by Tori, uh, Dunlap this, uh, at the beginning of this year. And I feel like it was a really like great, um, like supportive start into thinking about finances, um, because she really breaks things down and you don’t feel like overwhelmed or Yeah, she, it just feels like it comes from like a context in a place in a positionality that I also, uh, subscribe to.

Emily (37:48): And that was the audiobook version, right? Yes. She has a podcast as well. I don’t think it’s called Financial Feminist though.

Maggie (37:53): No, it was the audiobook. Yes. Great distinction. Um, and that’s where I learned about, um, kind of like values and having like when you’re thinking about budgeting, kind of breaking up the budgeting into buckets and like three buckets that you care about. Um, and that was a really helpful framework. And then this is kind of like a small piece of advice. Sorry, I feel like I, I just have my list, so I was like, oh, lemme just say it. Go for it. Um, but institutions have money and like applying for stuff, my first year was really fruitful. Like I was a mentor and received a stipend, you know, like I was a volunteer for a conference and I received a stipend. Um, yeah, just like reading the emails weekly, weekly emails you might get from your institution and just like checking those for additional pockets of money.

Emily (38:42): Great. Great advice. Um, you won’t be needing it as much, right? With a massive pay increase that you’re gonna enjoy this year, but should still be available to you should you want to access those opportunities and amazing. Well, Maggie, thank you so much again for volunteering to come on the podcast and sharing your life with us for the last half hour.

Maggie (38:59): Of course. And thank you so much for having this podcast. It’s so helpful for people like me. So yeah, I really appreciate you.

Emily (39:06): You’re absolutely welcome.

Outtro

Emily (39:16): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.