housing

Our $100,000+ Net Worth Increase During Graduate School

July 9, 2018 by Emily

I share my personal money story, which is how my husband and I increased our net worth by over $100,000 while we were in graduate school. We carefully budgeted our two PhD student stipends to consistently add money to our investments and pay for both our regular monthly expenses and irregular expenses such as travel. Over our seven years as graduate students, we accumulated approximately $75,000 in retirement savings, $20,000 in cash, and enough money to pay off my student loans plus an additional $5,000. I detail the five strategies we used that made the largest positive impact on our cash flow, which enabled us to increase our savings percentage over time.

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Timestamped Show Notes

0:00 Introduction and Outline

1:45 Background Information and Income

When we graduated from Harvey Mudd College, I had $17k in student loan debt and no savings, and Kyle had zero student loan debt and approximately $5,000 in savings. Kyle went straight into a PhD program at Duke University in Computational Biology and Bioinformatics. I spent one year in the National Institutes of Health’s postbac program before starting a PhD program at Duke University in Biomedical Engineering.

Our $100k+ increase in combined net worth occurred between 2007 and 2014 when we earned two graduate student stipends. My NIH stipend was $24k/year, and my Duke stipend went from $24k/year when I started to $28k/year when I finished. Kyle’s Duke stipend went from $25k/year when he started to $29k/year when he finished.

In the first three years, Kyle and I were dating and kept separate finances. We got married in 2010, so for the last four years of the seven-year period we kept joint finances.

4:00 How We Increased Our Net Worth

Saving and investing consistently throughout the whole period.
Budgeting intensively to keep a lid on expenses and funnel more money into savings.
Investment growth due to the bull stock market that started in 2009.

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4:51 High-Level Strategies to Increase Net Worth

Our programs paid us above the local living wage, and Durham, NC is also a medium cost-of-living city.
We identified our values, which included financial security and family/community. This meant that saving, including for retirement, was a top priority, as well as travel to visit family and friends. We reduced our spending on everyday expenses so that we could funnel more money to our top priorities.
We employed percentage-based budgeting. Right off the top, we paid our taxes, tithed (10% of gross income to our church), and saved for retirement and near-term expenses.
Any extra income we received, such as gifts, side income, and credit card rewards, went toward our financial goals instead of general spending.

7:38 Net Worth Breakdown

8:07 IRAs ($0 to $75k)

I started saving 10% of my gross income into my Roth IRA as soon as I started receiving a stipend and maintained that savings rate for 3 years. Kyle didn’t intentionally start saving right away, but allowed money to build up in his checking account. He opened and maxed out a Roth IRA in 2009, and maxed out a Roth IRA every year following.

Further Reading: My Biggest Financial Mistake and Why I’m Glad I Made It

Once we got married, we made a game of trying to max out two Roth IRAs each year. We never quite achieved our goal, but we did increase our savings rate from 10 to 17%.

What exactly we were invested in doesn’t matter as much as our savings rate, though I am happy to share my investment choice.

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12:11 Cash Savings ($5k to $20k)

Initially, I didn’t focus on cash savings. In 2007, I paid off a $1k unsubsidized student loan. When I started grad school, I bought a car with a $3,500 car loan. Later that fall, my parents gave me $10,000, which I used as a general savings account/emergency fund. I paid off my car loan, then repaid my “car payment” to myself to rebuild my savings. Kyle naturally lived below his means, and he continued to accumulate savings in his checking account.

The year we got married, 2010, was a financial reset point. From our cash savings, we paid approximately $10k in wedding expenses. When we joined finances, we assessed our combined balance sheet.

We each had money in our IRAs, and we also had $17k in cash. We set $16k aside to pay off my student loan balance and set up a $1k emergency fund. However, that left us with no savings for near-term expenses, just whatever we could cash flow.

We built up $20k in savings between 2010 and 2014 using targeted savings accounts. We were inspired to start using targeted savings accounts by several large irregular expenses that hit right around the same time and were difficult to cash flow: an expensive wedding season, two university parking permits, and season tickets to the Duke men’s basketball games and Broadway theater series.

Further Reading:

We decided to start preparing in advance for anticipated expenses over the next year. We started out with savings accounts for Cars, Entertainment, Travel. We set up budget for each account by anticipating when we would need or want to spend money and calculating a savings rate. Targeted savings accounts turn large, irregular expenses into small, fixed expenses that are easy to write into a budget.

By 2014, we had more savings accounts: Travel, Cars, Entertainment, Appearance, Electronics, Medical, Charitable Giving, CSA, Taxes, and Camera in addition to our checking and emergency fund accounts. We used Ally Bank, which did not charge us any fees or require minimum balances, etc.

We set up automatic savings rates into the targeted savings accounts, then manually pulled money back for each expense when it occurred.

We built up the savings in these accounts because we over-estimated what we would need in various areas, which caused us to over-save.

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20:43 Student Loan Payoff Money ($0k to $16k in cash savings, then $16k to $21k in investments)

By 2010, we had the money to pay off $16k in student loans. Instead of paying it off, we chose to conservatively invest they money to earn a small return. It was difficult to choose how to invest the mid-term money, and we wanted to be conservative so as not to lose it.

We decided to conduct an experiment on ourselves to find out what kind of investors we were. In 2011, we put a large fraction of the money in a CD, a small fraction in aggressive stock mutual funds, and a large fraction in conservative mutual funds (stocks and bonds).

We learned that we are committed to passive investing.

Further reading:

23:57 Our Best (Pain-Free) Money-Saving Moves

I started blogging at Evolving Personal Finance in 2011; learned a ton from my fellow personal finance bloggers and developed my own ideas about how I should manage my money. I published a post near the end of grad school on the best things we did to increase our available cash flow for saving and investing. This list largely explains how we increased our retirement savings rate from 10% to 17% savings and built up $20k in cash savings.

25:24 1. Moved to decrease rent twice (savings $2,340/year).

Initially, we lived in a great apartment, but one year the rent jumped up so we moved to a townhouse, decreasing our rent by $110/mo (what it would have increased to over the new rent). The next year, we moved again and decreased our rent by an additional $25/mo (previous year’s rent to new rent).

Through those two moves, we maintained our home size (1,200 sq. ft., 2 BR, 2+ BA). With the latter two townhouses, we actually reduced our commute to Duke, so the saving was even deeper than just the rent decrease. We did give up some amenities we had through the apartment complex, but that was acceptable.

Further Reading:

27:48 2. Cancelled cable TV (Savings: $1,208.16/year)

We cancelled our cable TV in favor of paying for internet only. We bought an antenna so we could still watch broadcast TV.

Further reading: How to Cancel Cable When You’re Addicted to a Show

28:47 3. Signed up for rewards credit cards (Income: $991.18/year)

We signed up for cash back rewards credit cards, both for good ongoing rewards and good sign-up bonuses. We looked for minimum spends that we could actually meet and timed application so that we could put our large irregular expenses on the new cards to help meet the minimum spend.

Further reading: Perfect Use of a Credit Card

30:00 4. Became a One-Car Family (Savings: $972.03/year)

After we got married, we started commuting to Duke together. Around that time, my car needed some expensive repairs, so we stopped using it. Our reduced expenses came from lower car insurance, dropping one parking permit, less gas used, half as much maintenance required, and less need to keep money on hand for repairs. We had to work out our schedules to be able to share the car and ended up spending a lot more time together, which was wonderful!

Further Reading: The Financial Implications of Dropping One Car

32:19 5. Switched to an MVNO (Savings: $544.34/year)

I started using Republic Wireless, paying approximately $25/mo for service. (Kyle has since switched to Google’s Project Fi.)

The best thing about these pain-free money-saving moves is that they don’t require any ongoing effort/willpower. Typically, we just had to carry out one-time decisions.

34:41 How Our Accomplishment Led into PF for PhDs

I had been blogging about personal finance for 3.5 years by the time finished grad school, and I also volunteered with Personal Finance @ Duke. After I defended, I decided to give my own seminar on personal finance for graduate students. I had the best time making and delivering the seminar and answering questions from my peers. I asked myself, how can I teach my peers about personal finance as my job?

The initial phase of my business was as public speaker; I gave seminars at universities all over the country. That first seminar I created is now titled “The Graduate Student and Postdoc’s Guide to Personal Finance,” and I have others on taxes, investing, budgeting, and starting grad school on the right financial foot. If you’d like to (figure out how to) bring me to your university for a seminar or workshop, please email me at emily at PFforPhDs.com.

In addition to speaking, I’ve added other aspects of my business, ebooks and online courses. I have two new initiatives launching later this year, an investing webinar series and a membership community.

38:31 Conclusion

How Much of Your Stipend Should You Spend on Rent?

May 9, 2017 by Emily

A version of this article first appeared on GradHacker.

There are a few different versions of the “rule of thumb” regarding how much of your income to spend on housing. No more than 25-30% of your take-home pay seems to be the consensus, with a few outliers. But as a graduate student receiving a stipend, does this guideline apply to you? How should you figure out how much to spend on housing? Clearly, whether your university is in a high cost-of-living or a low cost-of-living area will have an enormous impact on how much you need to spend.

For some graduate students, this rule of thumb is unfortunately useless and discouraging. In certain high cost-of-living areas, rent can be 50% or more of a stipend. But even in pricey markets, it’s worthwhile to take a hard look at yourself and your surroundings to make the best choice you can among your limited options.

But, other graduate students are in an area that offers them a degree of choice in how much of their stipend to spend on rent. They have the opportunity to evaluate the range of reasonable choices and decide what is best for them, given their values and other financial goals.
Whether you are moving to a new city to start grad school or are several years into your program already, you should evaluate your housing costs to make sure you are spending the right amount of money and getting the right amount of value for you. To do so, you have to evaluate both yourself and your environment and, ultimately, balance your budget.

Evaluate Yourself

Since housing is the biggest component of most Americans’ budgets, you should use a mini-financial planning process to help you determine where housing falls on your priorities list. Start by determining your top life values (family, freedom, creativity, health, achievement, etc.). Then, set goals for your finances that help you fulfill those values. Once that high-level picture starts to come into focus, you can figure out where housing falls on your priorities list. What aspects of housing—space, location, safety, privacy, amenities—help you fulfill your values or are otherwise very important to you? What attributes are non-negotiable and what are you willing to let go of in favor of a lower price? This process can bring a lot of clarity because it helps you directly compare differences in the price of housing with your other financial goals.

One of the first and biggest decisions you will make is whether or not to have a roommate/housemate. Some graduate students are so tired of living with other people that they won’t consider it no matter how much cheaper it would be, while others may be excited about how a roommate would benefit their lives as well as bottom lines. If you’re on the fence, price out both options and ask yourself if having $X more per month to put toward other areas of your finances is worth the (reasonable) potential downsides such as noise/distractions, differing standards for common areas, reduced privacy, or personality clash. Living with another grad student in your same year or area of study who understands the demands of your program could be a great option.

Evaluate Your Environment

Your best resource for finding appropriate housing options is other graduate students. I have found that grad students are quite willing to divulge what they pay in rent, and widely polling can give you a great idea of the market. If you haven’t yet moved to your city, start by emailing students you met during your visit weekend, students in your (prospective) lab/group, or students in departmental leadership positions. But you don’t have to keep thinking “inside the box,” either, if it seems that grad students flock to the few most popular options. Where in your city do other young professionals or people with an income similar to yours live?

In addition to asking around, check your university’s website to see 1) if housing is offered to graduate students (and at what price and priority) and 2) if your university makes off-campus housing recommendations or maintains a housing database of its own. Searching on Craigslist is usually a good way to find housing and/or roommates, and you can also check listings on Trulia, PadMapper, apartments.com, etc. Which database is best to use to search for housing will vary somewhat by city.

Be sure to consider various types of housing. In Durham’s housing market, my observation is that the least expensive option is renting (or buying) a single-family home with several other people and the most expensive option is renting a luxury apartment near campus. In some cities, on-campus housing may be the least expensive option, and by talking with your peers you may discover the best practices for getting your foot in the door.

Balance Your Budget

Ultimately, when reconciling your own priorities with the realities of the housing market, your expenses need to be less than your income. If you are simply locked into high housing costs no matter how low a priority it is for you, the rest of your budget is going to be affected. But one additional factor to consider is how housing cost might play against other needs like transportation and utilities costs. Perhaps a higher base housing cost can become more palatable if it means you can live car-free or have low utility bills. For example, are you able to keep your total needs spending to 50% of your net income (recommended in All Your Worth: The Ultimate Lifetime Money Plan*), or at least minimize the whole category?

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

If you live in a city where you have good housing options across a reasonable range of prices, this is the situation where the rule of thumb might come in handy. Calculate what 25-30% of your household take-home pay is and look at what that will get you. If you are tempted to spend more than 30% of your income on housing and don’t have to, ask yourself if it’s really that important and if you are going to be able to meet your other financial goals. Certainly, you can spend less than 25% if you are so inclined!

Revisit the Question

If you are renting, you aren’t locked into the housing decision you made at the start of grad school. In fact, you’re likely to make a better decision about housing after you have gotten to know your city and have seen where other grad students live. Your priorities and income may also change with time. It is valuable to periodically re-run this analysis on yourself and your environment to determine if moving is warranted.

I have personally benefitted from re-evaluating the cost of my housing during graduate school. My husband lived in the same apartment for his first five years of grad school and really loved it. But the city changed during those five years, and the area he was renting in no longer seemed like the only option. When the apartment complex tried to raise our rent 6% year-over-year (the rent increases in the previous 5 years had summed to about 10%), we took it as an opportunity to shop around. We ended up moving to a townhouse with the same square footage closer to our university (reducing our commuting costs) for an 11% decrease in rent. The only downgrade was that our new community didn’t have a clubhouse gym, but that wasn’t much of a sacrifice, as we had access to our university’s gym. I count that move as one of the best financial decisions we made to reduce our spending during grad school.

For your stipend, is housing in your city expensive, reasonable, or inexpensive? Where does housing fall on your priorities list? Have you been able to find a good deal in your city?

Your Most Important Budget Line Item in Graduate School and Why You Need to Re-Evaluate It

March 15, 2017 by Emily

The largest line item in nearly every graduate student’s budget is housing. Whether you own your home or rent, whether you live on campus or off, whether you live in an apartment/condo, townhouse, or single family home, unless someone is subsidizing it, you are almost certainly spending the biggest chunk of your income on your abode.

If your rent is $400 per month and you spend five years pursuing your PhD, over the course of your studies you will spend $24,000 on rent. If your rent is $1,000 per month and you spend six years pursuing your PhD, you will spend $72,000. These are staggering numbers, especially when you compare them to your annual stipend. Your decision of where and with whom to live is almost certainly the most financially impactful budget decision you will make during graduate school.

Housing is a very tricky expense category to budget. There is no argument that you need somewhere to lay your head. A certain fraction of your housing spending is simply a baseline that covers a necessity. (That is, unless you can get really creative, such as by living in a van.) But you can’t write off your entire housing expense as a “need,” especially if you then let yourself off the hook from evaluating its cost carefully. A fraction of your housing spending is “want” as well. Perhaps you are paying a bit more for a desirable location, an amenity, extra square footage, updated features, a parking spot, or solitude. There’s nothing wrong with wanting to upgrade from a Spartan home, but you must be honest with yourself about what aspects of your housing you could dispense with if push came to shove.

What makes housing even more special in terms of your budget is that it is a fixed expense. Once you settle on where you’ll live, your housing costs are locked in for the term of your contract. It’s difficult to change your housing costs because that involves moving or adding/subtracting a roommate. That means that you can lock in a high rate – or a low rate. Fixed expenses represent excellent opportunities for cost reduction. If you are looking for a simple, long-lasting way to reduce your spending, target a fixed expense. You have to make the decision to reduce it and put in the effort one time to carry out your decision, but after that you have the lower rate set every single month in perpetuity. And what better fixed expense to target for reduction than your largest one, housing?

The most remarkable aspect of your housing decision is that you typically have to make its first iteration before matriculating into your graduate program. If you are moving to a new city, you have to search for and secure your housing with next to no knowledge of the rental market, possibly sight unseen or after one scouting trip. Therefore, your first dwelling in graduate school may not be the most optimal for you financially. Although you should ask for advice from older graduate students when you make that initial housing decision, nothing is as informative as actually living in your city for a few months or a year.

If you haven’t yet moved once within your grad school city, take the opportunity right now to re-evaluate your current living situation. You likely have a totally new perspective on the decision compared to the last time you made it. Even if you have moved once with an intimate knowledge of the local housing market, your financial goals and budget evolve with time; perhaps you are different now and you require a new housing arrangement. It takes some patience and commitment to decide to move and then wait several months to follow through, but a significant enough reduction in housing expense makes the process worthwhile.

[The decision to purchase a home while in graduate school has an enormous financial impact. There is a great amount of financial risk associated with buying a home (both upside and downside). Buying a home is more expensive in the short term while renting is more expensive in the long term. The problem is that no one can predict whether your time in graduate school is short-term or long-term. The housing market could boom or bust during your tenure at your university. You might end up with a home that needs a lot of costly repairs. You could arrange for renters who essentially pay your mortgage for you, or end up with a landlord’s nightmare. You have to make careful calculations and considerations, but there is always a gamble involved. If you are already a homeowner, there are still a few ways for you to reduce your housing costs, such as selling and moving, taking on a roommate, or refinancing your mortgage.]

Have you re-evaluated your housing costs since you moved to graduate school? If you were able to reduce your spending on housing, what would you do with your extra cash flow?

Buying a Home

May 29, 2015 by Emily

Some graduate students may have the option of buying a home instead of renting. A graduate student in this position must weigh all the typical factors that any prospective homeowner would, plus additional considerations due to her student status.

All prospective homeowners must assess how long they plan to stay in the home, whether the property is intended for living or for investment, and whether they can afford the down payment, mortgage, and maintenance.

Further reading: Can You Afford to Buy a House Right Now?

On top of the typical concerns of someone considering buying a home, graduate students must ask themselves an additional set of questions because of their unique life circumstances.

Not many graduate students are logistically and financially prepared to become homeowners without outside help due to their low income, typical lack of liquid savings, and plans to leave their cities within a few years. However, some graduate students are capable of buying homes on their own, and others will receive mortgage payment or down payment assistance from a family member (spouse, parent).

For those students who can buy in a financially responsible manner and are a bit lucky, their homes could be great financial boons by the end of grad school if they have built equity or at least kept ahead of renting costs. In particular, graduate students who rent to roommates may have quite low ongoing housing costs, though they will have capital tied up in the property and must keep a large emergency fund for maintenance and vacancy.

Further reading: 5 Reasons Why Home Ownership Can Be a Financial Disaster

Should I Buy a Home During Grad School?

May 29, 2015 by Emily

While it may seem outlandish to some people, in certain college towns a graduate student stipend is sufficient income to purchase a home, particularly if combined with a second person’s income. However, should PhD students buy homes while they are still in graduate school? Graduate school is a somewhat unique life situation, so graduate students must ask themselves a number of questions beyond what is typical for the average person considering buying a home.

Further listening: How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income

How many more years of school do I have? How likely am I to finish the program? Will I stay in the area when I’m done?

The broad rule of thumb is to only buy a home that you plan to stay in for at least 5 years (however, the exact breakeven point will vary with the local market and individual purchase). If you plan to stay in the same city post-grad school, buying is a more viable option. If you plan to leave the city and do not want to become a long-distance landlord, buying near the start of a PhD program is most advantageous.

Keep in mind that the overall PhD completion rate is only somewhat north of 50%; grad students who leave grad school earlier than anticipated may feel saddled with a home at an inopportune time. If you plan to rent the home after you move on from it, whether the property is a good investment must be considered before the time of purchase. Be as realistic as possible and consider the best- and worst-case scenarios with respect to a home purchase.

Further reading: Rent vs. Buy Calculator

Will I live alone, with my family, or with roommates/renters?

With whom one lives certainly will influence the size of the home and the mortgage cost. If living alone is your priority, it is more likely that you will find an affordable rental than home for purchase. If you are open to living with roommates and have enough savings to afford the home on your own if necessary, buying a multi-bedroom home may be a good option. If you want to live only with your family, you will have two incomes to consider when looking for a mortgage and need to seek an appropriately-sized home.

Will my housing needs change in the next few years?

Graduate school often corresponds with a period of life with many transitions, such as family formation. Will the home purchased at the start of graduate school as a single person serve a married couple and/or a child just as well in a few years? What if you tire of living with roommates?

Do I qualify for a mortgage (income type, job history, credit)?

Whether or not a graduate student can qualify for a mortgage is much more of a question mark than a person with a typical job with the same income. Of course, a graduate student’s income is low, so a co-borrower may be necessary in some markets. The way some graduate students are paid (namely, fellowships) may not qualify for a mortgage with some lenders who don’t understand fellowship income. However, if you shop around for a mortgage thoroughly you should be able to find a lender that is willing to scrutinize your situation and determine that you are a good risk if you can demonstrate that your income will be steady.

Do I have sufficient savings to cover a down payment, fees, repairs, and vacancy?

Buying a home is very expensive in the short-term, and some homeowners are unlucky to live in a home in just the period when it needs a lot of care.

First, there is the down payment and cost of purchase. Depending on the permissibility of the lending environment, it may be possible to get a home loan with little to no money down, but that is almost never a good idea. Assembling a larger down payment (10 or 20% of the price) gives instant equity in the home, proves to yourself and the lender that you are capable of saving money, garners better loan terms, and avoids paying Private Mortgage Insurance (PMI) (> 20%). Closing costs are 2-5% of the home’s value ($3,700 on average) and are typically paid by the buyer (source), while realtor fees are typically paid by the seller.

Second, a home requires ongoing maintenance. A rule of thumb is that you should expect to pay on average 1% of the home’s value per year in repairs. However, as that is only an average and an estimate, a homeowner’s emergency fund should be sufficient to cover several ‘years’’ worth of maintenance at once. If you are renting to roommates, the responsibility to keep a sufficient emergency fund is even greater for more immediate repairs and to cover vacancy.

Further reading: How Much Does It Cost to Maintain a House?

Am I prepared to care for a home?

This is a lifestyle question. Some people are very excited to maintain their own homes, while others lack the knowledge, skill, or time to do so. If you are a first-time homeowner, you need to consider what the home will require of you and whether you can provide it.

Can I afford to furnish the home?

Unfortunately, owning your own home is sometimes accompanied by the pressure to upgrade. Suddenly, the secondhand furniture from Craigslist doesn’t mesh with your new home, and you have additional rooms and a backyard to furnish. Whether or not you choose to buy additional or newer furniture is up to you, but just be aware that if you can’t afford to you may have to overcome some temptation and perhaps social pressure.

How strong is the market historically, both for selling and renting?

It’s not possible to predict which way a housing market will move; you should be financially and emotionally prepared for your new home to dramatically drop in value right after you purchase it. However, you can look at the history of the housing market in your city to see how the patterns of boom and bust have played out locally – some areas are more stable or tend to recover more quickly than others. College towns, generally, have a stable demand for housing, if you plan to rent your home while you live in it or after.

Whether or not you will be able to buy a home as a grad student depends both on the local housing market and the resources available to you (a second income, savings). While not many graduate students are homeowners, those that are have a great opportunity to grow their wealth through (possible) equity and/or rental income, at least in comparison to what is spent on rent.

Choice of Home and Housemates

March 21, 2015 by Emily

For most people, housing is their largest single monthly expense. A judicious choice in where and with whom to live during grad school can really help you balance your money. Moving isn’t easy, but if you find that you are spending too much on your living quarters, you can make a one-time decision to change that situation for the better.

Making housing decisions is likely to be most difficult in your first year before you are familiar with the local market. Through the course of your first year, take careful note of where your peers live and ask them how much they pay in rent. Then, when your lease is up, you can make a more optimal housing decision than your initial choice. Even if you live in the same place for many years and like living there, research your other options; cities change, and a better housing fit for you or a better price may have become available.

Further reading: Apartment Hunting

Rent vs. Buy

The default choice for grad students is to rent. Typically, grad students desire flexibility and are not financially prepared to be homeowners. Because buying a home is so expensive up front and there is the possibility of housing prices dropping, it only makes financial sense to buy if you have a reasonably long time horizon for living in the home. (The rule of thumb is five years, but this can vary quite a bit with the local housing market.) Therefore, renting a home is the more frugal choice in the short term, but buying a home can be more frugal in the long term. If you rent out one or more rooms in your home to roommates, your home can even become a source of extra income and a form of investment.

Resource: New York Times Rent vs. Buy Calculator

Alone vs. with Others

It is virtually always less expensive to share your living space with others, whether that is with your family or roommates. You can split not only your rent but also utilities and save time by trading off common-area chores. Although many single grad students prefer to live alone, they should calculate exactly how much they are paying for that premium and consider if they would value spending that money elsewhere more. Your university may have a database similar to craigslist where you can find roommates who are also students or university employees, which is a great initial screening tool.

Further reading: Find a Roommate and Financial Freedom

On-Campus vs. Off-Campus

Universities often offer on-campus graduate housing to international and sometimes domestic students. In some high cost-of-living cities, the on-campus housing is subsidized and therefore highly desirable and competitive. You should ask older students already living in on-campus housing for tips on how to gain entry. At other universities, on-campus housing is a convenient but more expensive option in comparison with off-campus housing. However, paying more for rent may be a frugal choice if it sufficiently reduces your living cost in other areas such as transportation. If you are living in on-campus housing and desire to move off-campus, start looking for housing options a few months in advance of the end of your current lease.

Further reading: Our House Is a Very, Very, Very Cheap House

Location, Location, Location

While location is tantamount when buying a home, it is also of importance when renting. The proximity to your university and other factors about the neighborhood you live in will greatly influence the price of your rental. Renting closer to work or on a more convenient route will cut your commuting costs and time and may even facilitate your ability to work in the evenings or on weekends. If you are investigating living car-free, the location of your home becomes even more important for its proximity to public transit, work, and retailers.

Size and Amenities

How many square feet you can get for your housing dollar will vary greatly depending on the city you live in, and you may have to adjust your expectations of personal space if you are moving up in cost of living. Carefully consider the amenities that your housing may offer you – a gym, pool, clubhouse, parking – and whether you would use them before committing to a higher rent.