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Campus Resources to Improve Your Finances

July 28, 2025 by Jill Hoffman Leave a Comment

In this episode, Emily shares the microinterviews she recorded at three conferences this year. The conference attendees, all of whom either work at universities or have PhDs themselves, responded to this prompt: “What resource on your campus could graduate students and postdocs access to benefit their finances?” You’ll hear the responses in order from the attendees of the National Postdoctoral Association Annual Conference, the Graduate Career Consortium Annual Meeting, and the Higher Education Financial Wellness Summit. You should be able to detect the transitions among the conferences as there are strong themes within each set. As a bonus, listen for a two-time contributor! While these are all real examples from individual universities, you can search for, inquire about, or request similar resources on your campus.

Links mentioned in the Episode

  • National Postdoctoral Association Annual Conference
  • Graduate Career Consortium Annual Meeting
  • Higher Education Financial Wellness Summit
  • University of Texas at Arlington Graduate School Website
  • Host a PF for PhDs Seminar at Your Institution
  • Emily’s E-mail Address
  • UNC Charlotte Niner Finances
  • PF for PhDs Subscribe to Mailing List
  • PF for PhDs Podcast Hub
Campus Resources to Improve Your Finances

Teaser

Tharangi F (00:00): Our Gamecock Community Shop, which is our basic needs school supply closet. It does food meals, it does clothing, um, basic needs of any type, like hygiene, and I think that really does help our graduate student population and they’re actively using it.

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 21, Episode 5, and today I’m sharing the microinterviews I recorded at three conferences this year. The conference attendees, all of whom either work at universities or have PhDs themselves, responded to this prompt: “What resource on your campus could graduate students and postdocs access to benefit their finances?” You’ll hear the responses in order from the attendees of the National Postdoctoral Association Annual Conference, the Graduate Career Consortium Annual Meeting, and the Higher Education Financial Wellness Summit. I think you’ll be able to detect the transitions among the conferences as there are strong themes within each set. As a bonus, listen for a two-time contributor! While these are all real examples from individual universities, you can search for, inquire about, or request similar resources on your campus.

Emily (01:52): At the start of every academic year, fellowship recipients need to know that if they are not having income tax withheld from their paychecks, they should start self-withholding and possibly make a payment by September 15th. Otherwise, they are in for a nasty surprise when they file their tax returns next spring. If your university is not providing adequate messaging and resources regarding estimated tax, would you please recommend me as a workshop facilitator? I offer both live and asynchronous versions of a workshop that guides US citizens and residents in filling out the Estimated Tax Worksheet in IRS Form 1040-ES and managing their money to seamlessly meet their tax obligations. These workshops are typically considered professional development or personal wellness. I would very much appreciate you cc’ing me when you recommend me so I can follow up with additional information for the potential host. Thank you very much! You can find the show notes for this episode at PFforPhDs.com/s21e5/. Without further ado, here’s my compilation episode on financially beneficial resources for graduate students and postdocs.

Harvard Medical School: Credit Union, Financial Advising, & EAP

Jim G (03:22): I am Jim Gould, director for Postdoc Affairs at Harvard Medical School, and a resource our postdocs could use to help with their finances are, are a couple that we have a, a credit union at Harvard that they could use for banking and, and credit cards and savings, as well as, uh, a retirement benefits like TIAA CREF offers financial advising. We also have an employee assistance program that our postdocs and many of our, um, employees could actually use for finances and many other things.

Oklahoma Medical Research Foundation: EAP

Joel S (03:48): My name is Joel Solís. I’m with the Oklahoma Medical Research Foundation with our HR team as an HR associate. And I think one of the resources that is highly beneficial to everyone at our foundation is our employee assistance program. Where basically the employee has the ability to contact, um, uh, free, uh, assistance when it comes to health, uh, uh, mental health or even financial, um, awareness or legal assistance. Um, it’s basically six free counseling sessions that occur every year, and it’s not only open to them, but also to their families. Um, and like I said, it’s something that renews every year.

George Washington University: 401K/403B Retirement Match & TIAA CREF/Fidelity Partnerships

Ruchi G (04:26): My name is Ruchi Gupta and I work with George Washington University, and I think we have the benefit of having the 401k and 40- 403B, um, with my university and the university matches 1.5 times of that. So that’s a good benefit. Uh, and the university invests have the partnership with the fidelity and the TIAA, and you can either choose or they choose on your behalf. They help you with that. Uh, and not many people are aware of that, and they kind of lose on that benefit. So I think it’s a good idea to be aware and take advantage of the resources available to you.

Penn State: TIAA CREF Consultant

Jennifer N (05:03): Jennifer Nicholas, director of Postdoctoral Affairs at Penn State, and my answer is the TIAA CREF consultant because postdocs could benefit from more mindful planning of how they would save for retirement at this stage of life, and they can often use those services for free, um, because those services are available to those who work at Penn State.

University of Michigan: TIAA CREF/Fidelity Wealth Managers

Mark M (05:27): Hi, I’m Mark Moldwin, the director of the Office of Postdoc Affairs at University of Michigan. And the resource I would recommend is that they would contact, uh, either TIAA, CREF or Fidelity, the two financial service providers for their 403B. Uh, so they would have a, uh, wealth manager help set up, uh, their goals for investing in retirement and get them thinking about, um, how valuable it is to start early.

Massachusetts Institute of Technology: Communication Lab & Teaching + Learning Lab

Alex Y (06:01): My name is Alex Yen. My pronouns are she, her, hers. I am the program director for postdoc Career Advising and Professional Development at MIT, so Massachusetts Institute of Technology. So in terms of resources on my campus that I always encourage my postdocs to know more about and use are services outside of my own office that really emphasize written and verbal communication, which are skills that they can take with them even after they leave MIT. For us, that’s the communication lab. That’s their writing and communication center. That’s the Teaching + Learning Lab. And I encourage postdocs to go and see where can I learn how to improve that grant application I’m putting in? How do I refine the data and the graphs that I’m putting on slides? Is there some type of teaching certificate that postdocs can, um, can get? So that’s what I encourage. Go find those other resources beyond just your career resource center and also your office of Postdoc Services.

University of Michigan Medical School: Therapists

Michele S (07:05): Hi, Michele Swanson, director of Postdoc Office at University of Michigan Medical School. I’m very proud that our Office of Graduate Postdoctoral Studies now has two licensed therapists, counselors, um, who are available to meet with our pred docs and our postdocs for up to six sessions at no cost confidential to describe any kind of personal or work related challenge. And then they can introduce them to resources in the community if they, if longer term, uh, relationship is important.

University of Michigan: Centralized Shared Services

Kaylee S (07:35): My name is Kaylee Steen. I work at the University of Michigan. I’m the Associate Director of Professional Development and Trainee Support, and I would say one of our resources on campus is our centralized shared services. So if you have expenses and you need reimbursement, it’s all a one stop shop to submit a ticket to make sure you get all your money back.

Massachusetts Institute of Technology: Welcome Session

Bettina (07:54): I’m Bettina, I’m a postdoc at MIT, at the Brain and Cognitive Sciences Department, and, um, I happen to be a current president of the PDA and, um, resources on campus. I think looking back into three years of being in a postdoc at MIT I think the resources are there. It’s just that the point in time when you have the bandwidth to access them is way too late because we have the community at MIT is incredibly international, and when you change countries, con- continents, social spheres in starting a postdoc, it’s just too much to adjust to to spend. Any thoughts on your 401k and now looking back? I wish I had the bandwidth back then because I, I’m aware now at I lost money, but also I’m aware now that I’m out in a year, so it’s not even worth putting in the effort anymore, which is unfortunate. What I’m recommending everyone I meet now being a new postdoc is take the welcome session when you, when you arrive, and then take them again six months in because the info out there, it’s just a matter of how much you can digest at a time.

Massachusetts Institute of Technology: 401K and Reimbursement Resources

Expery O (09:04): My name is Expery Omollo. I’m a postdoc fellow at MIT. There are a few things that, uh, a few resources on campus that can benefit postdocs at MIT. One of them is the benefits, uh, and to be specific, the 401k, I feel like it’s very useful for postdocs to be educated on the power of compounding interest. Um, I feel like most people tend to wait until they get a real job before they start investing, and in that time, they’re wasting five years is enough to, let’s say, make a few thousand dollars that they didn’t know about. Um, so that’ll be one thing. Another thing is, um, there are other aspects of saving money when it comes to transit. For example, MIT has a free, uh, transit across Boston to use the public transit system. Uh, if you use your bike to go to campus every day, you can get reimbursed. Um, if you, the MIT health, if you go to the gym, you can apply to get reimbursement from the health provider as well. And most people don’t know this, but this is a free 150 to $300. Um, and another thing is they do have a pension. But it’s very hidden and there’s a lot of, uh, it’s so hard to find that information. But MIT offers it. I think there’s a, you have to be at MIT for limited for some time before you can apply for it. But it’s somewhere there. I saw it recently. And, um, maybe as Bettina was saying, having all of this information during orientation may be the solution and maybe reiterating it over time through email or, you know, in other postdoc meetings, just mentioning it so that people can know about all of it.

Medical University of South Carolina: Library Rental System

Lyndsay Y (11:04): Hi, I’m Lyndsay Young. I’m a postdoctoral fellow at the Medical University of South Carolina. And I think a resource that, um, our postdocs need to know about is actually our library rental system. So you can rent laptops, speakers, uh, projectors, screens, anything technology-wise from our library that for a certain amount of time it’s for free and you can utilize that for your own personal benefit, for your events, for anything really that is that you wanna do. So I think it’s a really underutilized resource that our people should be more knowledgeable about.

Argonne National Lab: HR Resources

Evelyna W (11:38): Hi, uh, my name is Evelyna Wang . I’m a postdoc at Argonne National Lab, and our HR department actually provides a lot of good resources about personal financing and benefits that are available to postdocs. However, I think postdocs need to access and attend some of these seminars and really gain the information that’s being shared with them.

Salk Institute for Biological Studies: Financial Advisors

B. Bea R (12:01): Morning, my name is B. Bea Rajsombath from the Salk Institute for Biological Studies, and I think our postdocs need to take advantage of the onsite financial advisors to schedule one-on-one appointments, so they have access to, to that in understanding how to invest their portfolio.

Massachusetts Institute of Technology: 401K App

Alex Y (12:19): Hello everyone. My name is Alex Yen pronouns, she, her and I am the Career Advising and Professional Development Program Director at MIT Massachusetts Institute of Technology. So the resource that I really like, and I do think this is a resource many, many postdocs I work with postdocs have, is if you have a, if you have a 401k with your university, you should download whatever app that is associated with. So for MIT, that’s fidelity, and there you can actually plan out and do projections of what would it look like, say if you put aside the certain amount of money and they can project, what will that look like to get to your retirement goal? So look at that. It’s nice graphs, it’s nice numbers and data, and I really, really like this resource for helping you understand why it might be helpful for you to put money into a 401k

Fidelity Student Programs

Emily (13:19): Emily here. Adding on Fidelity actually has amazing financial education resources around investing. They have a special program for college students, but it’s rolled out at certain campuses, and I’m guessing it’s also available to graduate students. Not sure about the postdoc side of things, but please check that out if you have access to it.

Villanova: Lifelong Career Resources and Services

Casey H (13:37): Hi, my name’s Casey Hilferty. I’m Associate Director for Career Management at Villanova University. Um, one thing that we would love to remind our grad students of is that we offer lifelong career resources and services, um, including lifelong career appointments. So they don’t need to contract a career coach. If they ever need one, they can always return back to Villanova.

University of Texas at Arlington: Fellowships, Grants, and I-Engage Mentoring Program

Leah C (14:01): My name’s Leah Collum. I’m the program manager for graduate student Academic and professional development at the University of Texas at Arlington. And on our campus, we have several resources that graduate students should be aware of. We have, uh, dissertation fellowships, we have travel grants, we have writing group grants. We have the I-Engage mentoring program, which offers a stipend and all kinds of other internal funding opportunities, um, that graduate students should be aware of, and they can find them all on our website, which is uta.edu/gradschool.

UNC Chapel Hill: Impact Internship Program

Patrick B (14:36): My name’s Patrick Brandt, and I’m the director of Career Development and Science Outreach at UNC Chapel Hill. So one of the programs that I run is called the Impact Internship Program, and it’s a short term internship, uh, local to the RTP or to the triangle area of North Carolina. And it gives the UNC grad students a chance to be able to do an internship and gain some, um, some hands-on skill, uh, development so that they can be more competitive as a candidate, uh, for whatever career they’re interested in.

Georgia Tech: Campus Closet

Megan E (15:09): My name’s Megan Elrath and I’m a online Career Services manager at Georgia Tech. And a resource on our campus that grad students or postdocs should know about that would help their finances is our campus closet, where students can access professional attire for interviewing, um, presentations, maybe even to defend their dissertations or proposals so that they can have that professional look and feel confident when they go into those high pressure settings.

Commercial

Emily (15:35): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2025-2026 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, medical school, postdoc office, or postdoc association? My workshops are usually slated as professional development or personal wellness. Orientations, postdoc appreciation week, or close to the start of the academic year would be a perfect time for tax education or general personal finance content. 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 institutions 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.

George Washington University: Alumni Network

Autumn A (17:12): My name is Autumn Anthony and I serve as the Assistant Director of Graduate Postdoc Affairs at George Washington University. And one way that we’ve been investing in financial success and career development for our students is within the presidential fellowship, um, which I have the privilege of directing, and it’s a small group, so hopefully in the future we can expand this out to more students. But we’ve been tapping into our alumni network and finding those individuals who have established careers, um, in managing your financial portfolio. And we’ve been able to set up some really great, um, mini seminars and workshops where these folks will come and, and present on how to make the most of your finances and set yourself up for success. And it’s been low cost so far. So that’s something that, um, I would recommend people tapping into their alumni network.

UT Southwestern: Internships

Leah B (18:06): My name is Leah Banks and I’m the director of Graduate career, uh, development at UT Southwestern in Dallas, Texas. Uh, and a resource that I feel would be really helpful for grad students and post-docs, um, is, um, having the opportunity to do internships. And so we recently were able to change the policy in which would allow for them to do research internships. Um, before that they were only able to do consulting venture capital type internships, but this allows for them to really build out their toolkit to tap into those resources outside of UT Southwestern to, um, be more exposed to, um, technical type internships that could really help them to be more, um, marketable when they, you know, leave grad school and their postdocs.

University of Michigan: Career Services and Clothes Closet

Maggie G (18:59): My name is Maggie Gardner. I’m the Senior program manager for STEM Professional Development in the Rackham Graduate School at the University of Michigan. Generally speaking, resources that I believe grad students and postdocs should take advantage of while they’re at Michigan that would help them financially are broadly our career services, but more specifically taking advantage of cv, resume, cover letter review, interview preparation, negotiation workshops. All of these are available to them free of charge while they’re at the University of Michigan. And these are services that they’ll have to pay for, um, if they choose to, to seek them out outside of the university. Um, so these are long-term very beneficial to their financial wellbeing. Um, we also have a clothes closet at the University Career Center that graduate students can take advantage of. Uh, they’re allowed to pick out, I think, two items per semester for interviews or networking events, whatever it is that need, they need professional attire for. Uh, we also have a, um, a food pantry that students are eligible or able to take advantage of. Um, they can stop by every day, every week, whatever it is they need, you know, when they need just a little bit of extra help to, to get by and to, to sustain themselves.

University of Buffalo: Internship Equity Fund

Gina B (20:25): Hi, this is Gina Bellavia, graduate career design consultant at the University of Buffalo. And one thing that would help graduate students improve their finances that we offer is our internship equity fund. So if you were to get an internship that was unpaid, uh, and with either a government agency or a nonprofit organization, you could apply to be paid through through this fund. And usually we have it available each semester and then in the summer as well.

Vanderbilt: Beyond the Lab Podcast

Aubrie S (20:53): Hi, my name is Aubrie Stricker. I am a part of the Vanderbilt Biomedical Career Development Office. And the resource that I think our campus provides for our students is the Beyond the Lab podcast, where it provides informational interviews to give our trainees insights as to how the, uh, alumni got to the positions that they’re in and along the way, they share their career advice, including the financial advice they may have to help the trainees get to where they want to be.

University of Illinois Urbana-Champaign: Campus Web Store

Derek A (21:19): I’m Derek Attig, Assistant Dean for Career and Professional Development in the graduate college at the University of Illinois, Urbana Champaign. And a resource on our campus that I, I think grad students and postdocs could take advantage of that could improve their finances is the campus web store, which has a wide variety of free or, uh, reduce costs software, uh, to, you know, support your work, help you develop new skills, right? And often people don’t know it’s there.

Boston University: PF for PhDs Podcast and Campus Workshops

Béné (21:50): Hi everyone. My name is Béné. I am the Director of Professional Development at Boston University in the Graduate School of Medical Sciences. And I think a resource that has been very inspiring for me is your podcast, Emily, because you’ve been able to actually meet with postdocs who having the same financial constraints as what I had as a postdoc were still able to really think their finances through, we’re able to decide, okay, this is how much I want to invest, this is how much I want to learn about investing. Um, and they’ve stuck with our goals and they were able to actually achieve things that they wouldn’t have without having done so. So I’m looking forward to having you on my campus to talk with our students and helping them really take a step back and make set important financial and budgeting goals.

University of Minnesota: Student Legal Services

Amelia C (22:34): Hi, my name’s Amelia Casas. I’m a one-stop counselor at the University of Minnesota. And one resource to look for on your campus is student Legal Services for help with any sort of renters disputes, immigration, things like that. It’s like having a personal lawyer on retainer for the cost of your tuition and fees.

UC Berkeley: Center for Financial Wellness

Anne X (22:59): Hi, my name is Anne Xiong. I manage the Center for Financial Wellness at UC Berkeley. Um, so the resources I want to introduce to our grad students are actually the Center for Financial Wellness. I encourage all grad students at uc, Berkeley to advantage of this free service. Go to our website, we have online resources, and then we have our peer coaching and workshops.

UNC Chapel Hill: Carolina Cupboard and Bus Passes

Sara L (23:23): My name is Sara Lorenzen. I’m the Assistant Director of Financial Wellbeing at the University of North Carolina at Chapel Hill. Um, and a resource on our campus, um, that I think a lot of students don’t know about is we have a food pantry network, um, called the Carolina Cupboard, um, which is four food pantries on campus that are available, but also, um, UNC students get and employees get a free bus pass through our bus system. And the Chapel Hill Bus system is free to everyone in Chapel Hill. So I think people don’t utilize that nearly enough to save money.

University of South Carolina: Gamecock Community Shop

Tharangi F (23:59): Hi, my name is Tharangi Fernando. I’m the peer consultant manager for the Student Success Center at the University of South Carolina. Our Gamecock community shop, which is our basic needs, um, like school supply closet, it does food meals, it does clothing, um, basic needs of any type like hygiene, and I think that really does help our graduate student population and they’re actively using it.

University of Chicago: Webinars

Emmy (24:21): I’m Emmy, I’m the Communications Manager at the Office of Bursar at the University of Chicago. Our main resource that would definitely be a benefit to our grad students and postdocs would be our webinars. Um, we offer a webinar series for new students, including grad students, and over the course of the year, we offer a ton of webinars that educate on financial wellness in general, but also just the services that our office provides.

University of Utah: International Student and Scholar Services

Katie D (24:46): Hi, my name is Katie DeSau. I am the case manager for the International Student and Scholar Services on the University of Utah campus. Um, my job is to connect students to campus services and the resources that we have for grad students and postdocs, especially international students, would be the International Student and Scholar Services or the IS office. And you can come talk to me about any problem that you have, uh, financial or otherwise, and I can help coordinate contact with, uh, campus resources, especially Financial Wellness Center, where they have options for credit counseling, one-on-one counseling, budgeting, and also finding other financial resources for you. Um, you can also come to me to get connected to the basic needs, uh, collective. Um, they’re all about basic needs. We also have a Feed you pantry. Um, so there are resources that you’re already paying for in your student fees, so please come see us and get help.

New York University: Stern Graduate Financial Aid Office Website

Tina B (25:45): Tina Bird, I’m the Assistant Director of the Stern Graduate Financial Aid Office at NYU. Um, and, uh, some of the great resources that we have is our website. Um, we have a lot of information on our website about, uh, external scholarship sources, um, teaching our graduate fellowships, um, and, you know, veteran assistance. Uh, so yeah, our, our website is specifically designed to help out our students.

University of Missouri: VITA Program

Alex E (26:11): My name is Alex Embree and I’m the interim manager at the Office for Financial Success at the University of Missouri in many communities and on many campuses, uh, there will be a VITA IRS tax resource where students can receive free tax preparation in addition to some tax education, so they can learn about how their, uh, assistantships or how their other funding sources are taxed and can make more, um, knowledgeable decisions about how they’re preparing for their tax burden, um, or how they’re saving for that, how they’re, um, establishing their financial security around their funding sources. And I’ll just add these VITA clinics are for both citizens, residents, and non-residents, depending on the certifications of the people involved. So don’t think it’s not for you if you’re an international student.

UNC Charlotte: Niner Finances

Nicole B (26:57): Hi, I am Nicole Benford. I’m the director of Niner Finances at UNC Charlotte. And to answer the question, what resource on your campus could grad students or postdocs access to improve their finances? I would say that’s my office. Uh, we offer workshops, presentations, and one-on-one coaching, and we also have self-study material on our website at NinerFinances.charlotte.edu. Um, but we are happy to help.

Oregon State University: Student Legal Services

Rebekah H (27:23): Hi, uh, I’m Rebekah Hahn and I’m a graduate assistant at the Oregon State University Basic Needs Center. We have a student legal services team, um, and they’re able to provide free legal services on a variety of issues. Um, I actually completed my divorce, transferred a house, and, uh, made new advanced directives with them all at no cost. And legal services are extremely expensive, so I think that all schools should have something like this.

University of Tennessee Knoxville: Financial Wellness Coaches

Philippa S (27:53): Hi, I’m Philippa Satterwhite. I am the coordinator, uh, for the Center of Financial Wellness at the University of Tennessee. Knoxville. And my answer to be, to make an appointment with, uh, our financial wellness coaches, a one-on-one appointment. Every student can make one. It’s free where we can sit down and help you think of through like your cost, but balancing of budget, thinking about life after grad school, thinking about, uh, you know, the job search. So all those things that we do at a one-on-one counseling, you can make as many appointments as you want. As many if few or as many, um, you’re there to help.

Washington University in St. Louis: Emergency Assistance Fund, Grad School Prep Funds, and iGrad

Andrea S-D (28:24): Hi there, I’m Andrea Stewart-Douglas, director of Financial Wellbeing at Washington University in St. Louis. The resources on my campus to help graduate students, um, we actually have a fund that provides emergency assistance to graduate students. Um, we also have funding available to undergraduate students who are looking to go on to graduate school. So we support their studies for things like the mcat, the lsat, the GRE. We will provide funding to help them purchase their study materials, to cover their test exams, to even cover their fees, um, as they’re applying. We’re also supporting them by providing them with funding. If they do a visit, if they are interviewing at the school and need to travel to that college or university will provide the funding to purchase their plane ticket, cover their hotel fees. We also, um, have a online platform called iGrad, and that’s available to not only graduate undergraduate students, but our graduate students as well. And so we’re encouraging all graduate students to check that platform out. It has tons of great information, uh, for budgeting, uh, planning for retirement, if they’re interested in buying a home. Um, there’s great information on that. So it’s a really, really, uh, robust resource, uh, articles, um, courses, videos, um, pretty much every way of uh, or mode of, um, learning is available on that platform. So, um, we’re also available in our office to provide one-on-one support if students want to come in and just talk about their situation, maybe sit down with us to do a little goal setting. And we’re gonna do our best to provide whatever support we can. And if we can’t do this internally, we have places people that we can connect them to outside of the university as well.

UNC Chapel Hill: Carolina Financial Wellbeing Center

Gilbert R (30:23): My name is Gilbert Rogers. I’m the Director of Financial Wellbeing at UNC Chapel Hill. One resource that I’ll highlight is the Carolina Financial Wellbeing Center. We are a fairly new resource to campus where graduate and professional students, uh, can come and ask questions about personal finance. We can get them connected to outside of the community resources that can help them increase their overall financial knowledge or, uh, get help with, uh, specific situations that graduate students need support with.

University of Oregon: Financial Literacy Workshops

Tennille W (30:52): So my name’s Tennille Wait. I’m the assistant director at the Financial Wellness Center at the University of Oregon. Um, the resources that we have for grad students, uh, recently what we’ve had happen is one of our grad students reached out, uh, to find financial literacy information. So they got hooked up with me. Um, from that we have put together a whole series, or I should say a three part series of workshops for specifically for grad students, um, kind of based around financial literacy, budgeting, um, learning how to make, what their financial aid they’re receiving work for what they’re doing. Um, there’s gonna be a tax component on making sure that they understand any tax implications with the funding that they’re receiving. Um, and then we are also working with, um, you know, other, other campus partners to just make sure that, uh, if they have travel expenses and things like that, how to make sure that all of those things, um, how they impact their financial aid, but then also how to budget for those and make sure that it’s fitting into their financial plan.

Outro

Emily (32:09): 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 me and show notes creation by Dr. Jill Hoffman.

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

October 21, 2024 by Jill Hoffman Leave a Comment

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

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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.

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

September 9, 2024 by Jill Hoffman

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

  • PF for PhDs Quarterly Estimated Tax Workshop
  • Host a PF for PhDs Seminar at Your Institution
  • Emily’s E-mail Address
  • PF for PhDs Subscribe to Mailing List
  • PF for PhDs Podcast Hub
  • Maggie Canady’s Website
  • Maggie Canady’s Twitter
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.

Investing 101 for Your Post-PhD Job

August 26, 2024 by Jill Hoffman 2 Comments

In this episode, Emily interviews Dr. Scott Grissom, a full professor of computer science at Grand Valley State University and Certified Financial Planner with Socrates Financial Planning. Scott and Emily talk through the health insurance and retirement benefits options that may be available to PhDs in their first post-PhD jobs. Scott explains the tax benefits of investing via an HSA and/or a 401(k) or 403(b) and the factors that affect the choice of a Roth or traditional option. He also helps the listener overcome potential analysis paralysis by detailing the benefits of a target date retirement account.

Links mentioned in the Episode

  • Join the GRADBOSS community to attend Emily’s workshop Your Financial Orientation to Graduate School on 8/27/2024
  • Host a PF for PhDs Seminar at Your Institution
  • Emily’s E-mail Address
  • Dr. Scott Grissom’s Website: Socrates Financial Planning 
  • PF for PhDs Subscribe to Mailing List 
  • PF for PhDs Podcast Hub
Investing 101 for Your Post-PhD Job

Teaser

Scott (00:00): From day one. Let’s get that match and figure everything else around that. ‘Cause otherwise, as we know, we’re gonna be, have some inertia put in place and we say, I’ll do it later. I’ll do it next year. You probably won’t. So day one, do whatever you can to get that match would be what I recommend.

Introduction

Emily (00:27): 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 1, and today my guest is Dr. Scott Grissom, a full professor of computer science at Grand Valley State University and Certified Financial Planner with Socrates Financial Planning. Scott and I talk through the health insurance and retirement benefits options that may be available to PhDs in their first post-PhD jobs. Scott explains the tax benefits of investing via an HSA and/or a 401(k) or 403(b) and the factors that affect the choice of a Roth or traditional option. He will also help you overcome potential analysis paralysis by detailing the benefits of a target date retirement account.

Emily (01:37): My colleague, Dr. Toyin Alli, recently launched a new community called GRADBOSS. Toyin is an expert teacher of grad school productivity and time management through The Academic Society in addition to being a lecturer at an R1 university, so she knows of which she speaks! I’m honored that Toyin has invited me to facilitate a workshop within the community this month! Join the GRADBOSS community to attend my workshop Your Financial Orientation to Graduate School on Tuesday, August 27, 2024 at 4 PM PT as well as access all the other incredible resources! Go to theacademicsociety.com/gradboss/ to learn more and join the community. I hope to see you tomorrow at the workshop! You can find the show notes for this episode at PFforPhDs.com/s19e1/. Without further ado, here’s my interview with Dr. Scott Grissom of Socrates Financial Planning.

Will You Please Introduce Yourself Further?

Emily (02:48): I am delighted have joining me on the podcast today, Dr. Scott Grissom, who is at a really interesting point in his career where he has two jobs right now. He’s a full professor at Grand Valley State University and also a CFP with Socrates Financial Planning, his financial planning firm. So we’re gonna talk all things investing today, which is really exciting. So Scott, thank you so much for volunteering to come on the podcast, and would you please introduce yourself a little bit further?

Scott (03:11): Sure. Excited to be here. Um, so Scott Grissom, a little academic background for the PhD folks, if that’s okay. So, for my whole life, I wanted to be an architect. So I went to college at Texas a and m University, all set to be an architect and be the next Frank Lloyd Wright. And by the junior year or so, I had, uh, discovered two things. One is that I didn’t like architecture as much as I thought I did, and two is I discovered these new things at the time called computers. So I got enamored with computers and one of the professors that I admired a lot, I had taken several courses from him. I still remember where I was standing at the time. He says, Scott, have you ever considered graduate school? I’ve seen the way that you work with your fellow students and you tutor them and you help them, I think you’d be really good as a professor. Well, I had not considered that at all until that moment, but the light switch went off, changed my career path, went to graduate school for computer science with the sole purpose of getting a job as a professor. And 32 years later, I am still a professor. So it, it’s been a great choice. Highly recommend being a professor for the rest of your life, if, if that’s an option for you.

Emily (04:25): And yet you’ve decided to embark on an, an encore career. And so can you tell us how personal finance, how money became a passion for you alongside of your career as a, as a professor in computer science?

Scott (04:41): Yeah, so as long as I can remember, I’ve been interested in my own personal finances, whether it be investing and reading books. When I was in college myself, uh, I used to get this thing called a magazine in the mail each month on this physical piece of Paper magazine, uh, called Kiplinger’s. And I would read the, I would be so excited every month waiting to see what information they would have about saving and investing and all sorts of stuff. And one, one week there was this article about this designation called the Certified Financial Planner Planner, CFP. Ooh, that would be fun, at least for my own self education. I would like to take those two years of courses and see where that leads. So that was around 2005. And after taking classes for two years and then passing a pretty exhaustive exam, uh, I earned the CFP designation mainly as a hobby. Didn’t really, really know where that would go, but then I started helping friends and family with their financial questions and then started to work occasionally with some small financial planning firms. But, and that passion sort of peaked and valleyed through my, my 25 year career as a professor. And now I’m to the point where I’m ready to move on. I’ve enjoyed being a professor, but for the next x years of my life, I’m ready to transition to probably just part-time, uh, helping, educating others much like you do in terms of, of their finances and especially as they get close to retirement, uh, what changes do they need to make? What adjustments, what questions do they have? So I’ve got another year as a professor, and then I’ll be transitioning to this firm that I just created about, uh, six months ago called Socrates Financial Planning, Socrates building on the way that I like to teach in the classroom using the Socratic method. So I thought that was a fun, playful, uh, name for me.

Finance Related Employee Benefits

Emily (06:31): Yes, very eye-catching as well. I love it. Um, so we have a real, um, treat today, which is to employ your teaching skills in the subject of investing. And even though you just said that, you know, your typical financial planning client would be closer to retirement, you know, when we were prepping for this episode, we talked about how, um, the typical listener for this podcast is gonna be very early on in their career, maybe currently in graduate school, currently a postdoc, uh, maybe in in their first job post PhD. And so we were thinking it would be really great for them to have some insight into how to set up those initial investments with their new employer when they finally get that 401k or the 4 0 3 B or similar type of retirement account, um, access. So let’s go into it. So very good for that newly hired employee. Looking at the benefits package for the first time, it can be overwhelming. What are they probably looking at in terms of potential benefits related to their finances?

Scott (07:26): Yeah, so probably the, the biggest benefit most people have to struggle with initially is the health insurance. Now that applies to us because if they have an option for what’s called a high deductible plan, which mostly they do nowadays, uh, that will have an important financial option available for you called a health savings account. So maybe we’ll come back to that a moment. And then the second one is what kind of retirement account do you have? And in the private workplace, that’s generally called a 401k, uh, in the public space, whether it’s hospitals or my case a, a university, they’re called 4 0 3 Bs, pretty interchangeable. Uh, and then just personally you might have a thing called an IRA. So all three of these retirement accounts are virtually the same. They’re a place for you to invest for the future, and there are generally some tax advantages to each of those, depending on what choices you’re trying to make.

High Deductible Health Insurance Plans

Emily (08:19): Okay, let’s dive into that a little bit more. Let’s start with the health insurance component of it. Who is a good candidate for choosing a high deductible health plan versus like a PPO is probably gonna be their other option, I would imagine. Um, and, and for also using that HSA if it can come with that H-H-D-H-P

Scott (08:38): <laugh>. Yeah. So hard to de- describe o- over, over this broadcast on, on what makes the best choice. Uh, just recognize with a high deductible plan, depending on whether you’re single or a part of a family, you’re agreeing to pay the first $2,000 of your medical care, maybe the first 4,000 thousand that’s called the deductible. So you need to have, uh, an emergency fund I guess, or enough, uh, fees also depends on your, um, your health. So if you’re somebody that’s pretty healthy and don’t anticipate seeing the doctor much, therefore you don’t need to worry about paying that deductible, that might be a good rationale, justification for getting the high deductible plan. Uh, and then it also just depends on locally and you, if you’re moving to a new city, you may not know, but picking what, uh, doctor option doctor networks that you have sometimes make a difference. So there, I would say talk with your, uh, human resources department or a colleague that you’re about to work with or a supervisor to see what choices they’ve made and why.

Emily (09:38): Yeah. So the trade off there for those who don’t know is gonna be a, a premium difference. So the monthly premium that you pay for like a PPO plan, for example, is gonna be higher or at least let’s say the overall portion. We don’t know, uh, how much the employer is paying versus the employee in, in, you know, general. But that overall premium is gonna be higher for like a PPO. It’s gonna be lower for that high deductible health plan. But like you said, you have to be prepared to pay out of pocket for a higher deductible, $2,000, $4,000 versus maybe the PPO is 500 or a thousand, something lower than that. Um, and so you have to have some savings available to, uh, to do that in your own finances, should you need to access medical care. And that’s kind of where the idea of the HSA comes in. It, it sort of, um, nudges you in the direction of, oh, you have that high deductible health plan, well you better be saving in this HSA. But tell us more about how the HSA works.

Scott (10:26): Yeah, so it’s, it’s one of, it’s a very unique, um, savings plan in terms of what the federal government allows for you. So it allows you to save money going into the account, uh, tax free going in, but it’s also tax free coming out, which is highly unusual. So that doesn’t apply to the 4 0 1 Ks and the IRAs or even the Roths. So I really like the HSAs, the potential advantage, advantage that you have to save on your taxes from day one in your career. And so what that means is for every dollar that you put into this account, and it’s earmarked to be used for medical, so for healthcare to be spent this year or next year or 10 years from now, but all of that money is tax deductible off of your current income. And as we know, every dollar that you can shave off of your current income is gonna reduce your taxes. So that’s great for now, which is the way a lot of the retirement accounts work. But then later on, when you start to pull money out to pay for those qualified medical expenses, it’s not taxed there either. And that’s what’s different about the HSA. So HSA saves you now, it saves you later. It’s just a, a win win win when it comes to taxes at least. And as you said, there is this sort of incentive to put that money into this account because you know you’re going to have to spend it at some point this year, next year, five years from now on those deductible expenses. And so that’s why the federal government requires you to tie together. You first have to have this high deductible plan and then that allows you, it’s optional, but I would strongly encourage it to create this health savings account.

Emily (12:02): I’ve not had the, uh, reasonable option of signing up for a high deductible health plan with an HSA ever. So I’m, I’m sort of excited about this in a theoretical way. But, uh, my understanding is that if this comes through your employer, um, you actually save, not only on income tax going in, but also your, your FICA taxes, your payroll taxes, which is like, there’s like almost no other way you can reduce your payroll taxes. So that’s like really exciting as well. Um, in terms of more money in your pocket, more money in that account.

Scott (12:29): Yep. Once again. And you’re saving now and never taxed again on it, assuming you pull it out for medical expenses and it rolls over each year. So there, there’s another kind of a medical account called a flexible savings or flexible spending account that you might have options for. They’re probably a little antiquated now, but the potential concern with them used to be you had to spend it or lose it at the end of the year. So back in, in December then people started getting dental care and eye care and so forth to try to, to spend that money. But the HSA, you can literally, it let it run for 30 years. And so that’s why some financial advisors think of this as sort of a third retirement plan. ’cause we’re always going to have healthcare expenses. And so the longer you can invest it and let that build tax free, the more money in your pocket.

Emily (13:20): Yeah, I wanna kind of underline that point that you just made about the potential for the money inside the health savings account being invested for the long term, because that’s not something that I think people really did maybe 10 years ago with those flexible spending accounts that wasn’t an option. This is unique to the HSA, um, and so elaborate on that a little bit more, the power of of that option.

Scott (13:40): Yeah, and it’s something that I suspect a lot of people don’t take advantage of. So generally by default, you’re gonna put this into an HSA and it’s gonna be treated like a savings account or a checking account and probably not pay you much at all if, if even 1% and for money that you’re gonna spend three months from now, that makes perfect sense. You wouldn’t want to invest it because with investing, and let’s just generally talk about investing in stocks, there’s the concern that that money’s gonna go down in the short term. So, but if you are investing for the longer term, 4, 5, 8 years down the road, you’re convinced that you don’t really need that money out of the HSA that you can pay for these, these medical expenses out of pocket, then the longer horizon that you have, the more options it gives you. And then you can now invest in stocks and mutual funds in your HSA, just like you would in these other accounts such as the 4 0 3 B and 401k.

Emily (14:40): Yeah, it’s really like, I think you mentioned this earlier, like a supercharged form of an IRA, like an even better form of an IRA. But you have to be prepared to pay for those medical expenses and save it to the HSA on top of that. So it’s really a personal finance and budgeting kind of challenge, but a very, very powerful tool if you can harness it,

Scott (15:00): Right? So at the very least you would want to contribute enough for your deductible each year. So even if you don’t wanna invest in the future and your little leery of building a large account of 15, 20, $30,000 in this HSA, if nothing else, remember that very first dollar that you save is saving you permanently on taxes. So if you’ve got a, a deductible of $2,000 and you’re pretty predictable that you’re probably gonna spend about $2,000 this year on healthcare, then at least put that much into your HSA and if it hovers above and around close to zero because you’re putting money in it and taking money out, you’re still getting a great tax advantage from that.

Traditional Retirement Savings Vehicles: 401Ks and 403Bs

Emily (15:41): Yeah, I love it. Well let’s talk about those more traditional retirement savings vehicles, the 401k, the 4 0 3 B. Can you tell us generally like what’s the advantage of investing for your retirement through your employer? And then we’ll talk a little more about traditional versus Roth.

Scott (15:57): Okay. Uh, so as I said, 4 0 1 Ks are just the names generally for private companies and 4 0 3 Bs for public companies slash universities and healthcare. Uh, historically they’ve been what we call pre-tax. So I put money in and I get to remove that from my salary this year, which is gonna save on taxes this particular year. So let’s suppose I’m in the 20% tax bracket and I put in a thousand dollars. Well that’s gonna save me $200 this year on taxes, but eventually I’m gonna take that money out presumably during retirement and then it will be taxed then. So that’s one of the, the advantages is the tax advantage is that we’re going to have a tax advantage this year. It’s gonna build tax deferred and then eventually we pay our taxes. But one of the new features that these companies now are allowed to provide somewhat new is a Roth component to this 401k. And now we have the option of do we pay taxes now and put that into what’s called a Roth account or a 401k Roth, but it’s never taxed again, much like the HSA, so you can let that ride for the next 30 years and hopefully make lots and lots of money off of your investments and then they come out tax free. So that’s one of the choices you’re just gonna have to make is if I have a Roth option for my 401k, do I put my money in there now or do I use the more traditional approach? The second key I think, um, question is, is your employer providing a match or not? And they often do, uh, and it’s often tied to how much you put in. So they might say, we’re gonna match the first 2%. If you put in 2%, we’ll put in 2% or we’ll put in 50% of how much ever you put in of the first 6,000. So either way, whether you’re gonna put 2000 in on your behalf or 3000 or 8,000, you really wanna take advantage of that ’cause that’s in the business we call that free money. And then you’re going to invest that going forward. You’re not paying taxes on it now. Um, the employer’s putting the money in so it’s not coming outta your paycheck. So if your employer does provide a match, be aware of, put as much money as you can in that affects that match.

Emily (18:17): I have also noticed sometimes with these employer provided plans that have a match or maybe not even a match, but a baseline amount that they’ll put in for you. Sometimes universities do that sort of thing. Um, they’ll have like a vesting schedule. Can you explain how people should understand the vesting schedule?

Scott (18:33): Yeah, so normally what that means and, and it’s case of as you said, it’s the employer putting money in on your behalf less so of the money that you put in. And they’re going to as a way to try to keep you employed there as long as possible. Say we’re gonna put $10,000 in each year for you, but you can’t pull all that money out if you were to leave employment. So over the next four or five, six years, uh, on a sort of degrading uh, feature, we’re gonna decide how much of that money do you get. So you’ll have employers say, this year I’m vested. Well that means that this year if I were to leave or get fired or whatnot, then I would at least get all the money that’s in my account. Up until that point it might look like I’ve got $50,000, but 20,000 of that might not leave with me if I choose to leave. And general, as you said, it’s generally the what, the money that the employer puts in any money that you put in is generally what we would say 100% vested immediately.

Should You Ever Pass Up On The Employer Match?

Emily (19:34): Okay. And so I’m thinking about a person who is just starting out and they’re looking at this benefits package and they see that they have a match available to them, so exciting. Um, but maybe their personal finances are not totally in great shape yet. When should they pass up that free money and work on other areas of their finances? Is there ever a situation where that, where you would advise that?

Scott (19:57): I wouldn’t think so. I mean, so let’s suppose you’ve gotta put in 4% of your brand new paycheck that you’re excited to get and that’s going to entitle you to matching and you’re leery to say, but could I use that 4% for something else paying off student loans or paying off credit card debt? Well that might be an appropriate use of it, but I would be more inclined from the psychological perspective is let’s just commit to that 4% and then learn how to carve out additional savings from our new paycheck to pay for that other debt. I mean, debt would be the only reason. I could see why you wouldn’t want to get that initial match. And even then I would really encourage you to, from day one, let’s get that match and figure everything else around that. ’cause otherwise, as we know we’re gonna be have some inertia put in place and we say, I’ll do it later, I’ll do it next year, you probably won’t. So day one, do whatever you can to get that match would be what I recommend.

Emily (20:52): Yeah, I really like that advice. A great point about the inertia, like when are you really going to make that change if you don’t make it right from day one? Um, and if you are really excited about getting that match and you’re really hating, let’s say the credit card debt that you’re in, maybe because of your move to your new job or whatever the case is, um, just use all those, uh, well, they’re probably negative feelings, but use them to energize you <laugh> to get that debt paid off while you’re still contributing to that retirement account and getting the match. And hey, then once the debt is paid off, you can increase that retirement contribution rate above the match level, let’s say

Scott (21:26): After celebrating and going out to dinner or, or something that you paid off your debt. So

Roth Vs. Traditional Retirement Accounts

Emily (21:31): Yeah, that’s awesome. Okay, still thinking about that new post PhD employee, um, let’s say they have a Roth option and a traditional option within their retirement accounts, what are the factors that go into making that decision? Which way to go?

Scott (21:46): So it generally comes down to taxes. And so as we said that traditional, um, contributions to 401k are tax, um, deducted this year. So you save on taxes this year, let’s suppose 20%, whereas the Roth contribution, you don’t save on taxes this year, but it goes in and you never pay taxes again. So the question becomes do I wanna save on taxes this year, maybe saving 20% depending on where my income is or at the, when I start to retire and I pull money out, do I want to pay taxes then do I have any insight 30 years from now that I’m gonna be paying less or more tax rates than I am now? And we don’t have a crystal ball, so we don’t know that for sure. But the general understanding is that the lower your tax rate is now probably a pretty good chances 30 years from now when you start pulling money out, your tax rate’s gonna be higher. So that puts you in favor of using a Roth. Now, uh, it’s less like, it’s less helpful to you to save 15% on taxes now, which is the Roth scenario, rather than to wait 30 years from now and pay 2020 5% coming out, which is the 401k option or the traditional 401k option. So I would say, what’s the general recommendation when you’re starting off, that’s generally the best time to do a Roth because you’re generally making less income than you will in the future. And it also give you a much longer runway the next 30, 40 years to invest that money and have it accrue, uh, tax free, which is a, a really great option.

Commercial

Emily (23:24): 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.

Roth Vs. Traditional Retirement Accounts

Emily (24:42): Let’s project forward a few years, maybe 10 years. So this person is no longer a fresh new PhD graduate in their first job, but they have increased their income somewhat over time. Is there a tipping point that you would say or is it just for every individual? Where do you see your income potential going?

Scott (24:58): Yeah, that’s a much trickier. Um, but let, let’s play that, that scenario. So some, some of my colleagues will say, um, if collectively, because we’re talking about, I’ve been saying federal tax rates, but it also applies to state income tax, if that’s indeed, um, it, it, uh, applies to your state. So in my state of Michigan I pay about 4% and if I’m in the 24% tax right rate for a federal plus the four is 28% combined. That’s where I’m wondering am I gonna pay more or less than that when I retire 20 years now or 30 years from now? And so I hear people talk about this magic, not magic number, but just sort of rule of thumb about 30%, anything less than 30% taxes. Now it’s probably a pretty good bet that when you’re pulling money out later, you’re gonna end up paying more than that. So somewhere in that range, 25 to 30% is, is sort of this borderline category. Anything more than 30%. So if you’re very high income earner right now, you probably want to take advantage of saving taxes now because you might be in the, the 34% tax bracket or even higher and you’ll likely be taxed less than that 30 years from now. But we don’t know for sure. So all these choices, it just sort of depends. You make the best decision you can at the time and then don’t look back, don’t worry, you made your decision, it’s over and what happens, happens.

Emily (26:22): Yeah, definitely don’t use the uncertainty around where will my tax rate be in retirement as a reason to not get started, right? Like just jump in with whatever option you think is best at the moment. That’s okay, keep going at that. And my philosophy around it is kind of to want to get to retirement with a mix of Roth and traditional so that I can do some tax optimization on the backend. So as long as I have big pools of money in both of those types of accounts, by that point I’ll be pretty happy. I’ll add in one other anecdote, um, sort of about how I made this decision earlier on in my career when I could see, um, where my tax rates were going. So I post PhD was living in the state of Washington, which has no state income tax, but I knew that I aspired to move to California, which has could be a high state income tax rate. And so I used that view into my own personal aspirations in my future to say, okay, when I’m living in Washington, that’s a great time to use the Roth. And when I move to California, that’s a great time to switch to traditional assuming no other changes in my, you know, overall income.

Scott (27:22): Very good, good idea. Now let’s talk about those, that bucket that you mentioned. So when people retire, it’s nice to have options and so there’s considered, there’s sometimes considered three buckets of Roth, which has already been taxed, 4 0 1 Ks which have not yet been taxed. And then there’s a third category that we haven’t talked about. We call that a taxable account. And that’s just where you’re doing extra savings. So out aside from these retirement accounts, and if you have sizable amounts in all three of these buckets, they’re probably not gonna be equal and nor should you necessarily aspire to that. But if, if you’ve got some money in each of those, as you start to pull money out during retirement, as you said, that gives you some flexibility, uh, to control your tax rates so you can start pulling some money out of a Roth because it’s not gonna be taxed at all, some money out of your 401k ’cause it is gonna be taxed and then have some money in your taxable. So how do you manage that? How do you end up with three buckets? Well, we’ve talked about early on maybe you start with a Roth for retirement and then throughout your career maybe you start to transition it, there’s gonna be perhaps some tipping point, maybe not, maybe you just wanna do Roth all in and that’s perfectly fine as well. But in that mid category, that 15 years that we were talking about, you could get to the point where you put half in Roth and half in a 401k, so there is no right or wrong or it’s not a binary decision. And that would allow you to con uh, to continue to build in all three of those buckets.

What Exactly Should I Invest In?

Emily (28:49): Perfect. Let’s talk about another decision that has to be made when you’re contributing to that 401k or 4 0 3 B, which is what should I actually be invested in <laugh>? Because the 401k or the 4 0 3 B is not synonymous with the investments that could be inside of it, there’s gonna be some choice about what exactly you wanna be invested in. So help that you know, fresh PhD with that first job, help them think through that choice of what exactly should they be invested in.

Scott (29:17): Uh, well still first and foremost when we come to talk about investing, uh, the golden rule is called, um, diversification. So we don’t wanna put all of our eggs in one basket. So although it’d be really tempting to, to buy as much apple stock as you possibly could or as much Nvidia stock as you possibly could, uh, because that’s currently what’s hot, you want the risk of losing a lot as well. So how do we do diversification is we mainly, or most of us buy things called mutual funds, which are collections hundreds if not thousands of individual stocks for different companies. So that provides you that diversification and that’s what you will generally be given as an option. So for your 401k, normally you’re given a limited collection of choices for yourself. Those are often gonna be what we call mutual funds. And so you still have to make choices. So maybe it’s a choice outta 10 or it’s a choice out of 50, that can be pretty overwhelming. Uh, so my approach is to pick mutual funds that buy a little bit of everything. So these are called index funds and I know Emily, you’re, you’re a fan of passive investing as well. And so look for, uh, titles of these mutual funds that perhaps include index in the name, probably don’t call it passive, but they might say index. Uh, one of the keys when you’re picking out mutual funds is the expenses that they cost. So most people don’t realize, but you invest money in a mutual fund and each and every year the uh, management company takes a little bit out of that. Maybe it’s 1%, which would be super high or maybe it’s 0.1%, which would be pretty low. Sounds like pretty sounds like the same thing to most of us. 0.1% and 1%. What’s the difference? Well, it turns out 30 years from now, those build on themselves a lot. So when we’re given a choice of mutual funds, back to the original question is I wanna look for something that is an index slash called passive investing. And those generally have lower fees, which might be 0.1% or even less, uh, which is more money in your pocket, less money in their pocket, more money in your pocket. And that’s the win-win. So first choice, pick mutual funds that are indexes and then you might have to choose between, uh, do you want to buy stocks or do you wanna buy fixed income, which is, which is often called bonds. That’s probably a whole nother podcast. But, but the quick answer is most of us now have an option called a target date fund. And a target fund. Target date fund is perfect for somebody just getting started ’cause they don’t need to worry about the ins and outs of picking what percentage of stocks and what percentage of bonds someone else is doing that for you generally at a low cost. So if you have an option for a target date fund, they’re gonna have names associated with the year that you plan to retire. Now there’s nothing magical about it and nothing significant about it, but if you’re just getting into your career now and you’ve got at least another 30 years to work, 35 years to work, so adding that to 2025. So 2060 would be the name of a target fund that you might look for. Vanguard has these fidelity, uh, Schwab has all of these and all that tells you is somebody has decided what percentage of stocks and bonds. So I just looked up Vanguard’s 2060 target date fund and 90% is in stocks and 10% is in bonds. The longer that you have to invest the, uh, more volatility or the more ups and downs you might be able to stomach mentally stomach. So if you recognize, yeah, the stock market went down this year, it’s gonna go down. I can guarantee you that. I don’t know if it’s this year, I don’t know if it’s next year, but at some point the stock market’s gonna go down again. And if you’re okay with that, if you’re mentally prepared to say, I knew that was gonna happen, I’m gonna keep letting it ride, then because you have the luxury of going for the next 30 years, then it’s okay to have 90% in stocks. But as you get closer, uh, and this is what those target date funds do for you, is they start to reduce the stocks and increase the fixed income so that as you get closer to closer it might be a 60 40 split. So long-winded answer, sorry my professor is coming out on me, but what are your choices as a new employee? If you’ve got a target date fund, generally pick that.

“Safe” Investing Options

Emily (33:40): So sometimes I get questions when I teach about investing where the questionnaire says I want to start investing and I wanna use something safe. If one of your clients said that to you, I I’m nervous about the stock market, I wanna pick something safe, how, how would you coach them?

Scott (34:01): So safe generally means, um, lower return. So whether you’re buying bonds or treasury bonds, so safe means less likely to lose money, which is something that none of us want to do, but also less likely that you’re going to make much money. So over the next 10, 15, 30 years. Question is, can you afford to be conservative? Maybe you can, but I think there’s a bigger risk, a long term risk that if you’re too conservative, you put all your money. I mean the extreme would be you put all your money in a savings account making 0.1% and that’s gonna make you feel very safe. But 20 years from now, you’re gonna regret that because your money has not even kept up with inflation. So if inflation’s rising, if 3% every year, so it’s really a mental game, I understand that the concern about potentially losing money, but hopefully you overcome that and recognize that over the next 15, 20, 30 years you’re likely not going to lose money and you’re going to stay ahead of the game by investing in more what we would call more aggressive, not completely aggressive, but more aggressive investments as as, um, you pointed out.

Different Fee Structures of Financial Advisors

Emily (35:14): So something that I learned in our prep for this interview, um, is in your financial planning practice, how your fee structure works, which I really appreciated, but I want you to explain it, um, and explain why you think it’s advantageous both for you and for your clients.

Scott (35:30): Okay, well let’s back up and recognize that there are hundreds of thousands of people that call themselves financial advisors in the us. Uh, that’s not a regulated term. And so almost anybody can call themselves a financial advisor and they generally make money from three ways. Now we all need to make money so there’s no harm in that. Uh, one of them is that they make commissions. So they sell you products whether they be what are called annuities or insurance or stock plans and they make a commission off of that, whether that be 2% or 3% or 10%, perfectly fine, assuming that they disclose that to you and they’re recognizing, you know, I’m gonna make 10% off of you buying this $100,000 investment, but I think it’s best for you and that very well may be best for you. Then there’s a category called called fee only advisors. So they wanna avoid commissions with the potential of there being a conflict or at least the perception that there might be a conflict. And they’re generally gonna charge you for ongoing what we call asset management. And so the going rate is generally 1%. Now these are people that already have established accounts, maybe a million dollars. And so they’re going to pay their, um, fee only advisor 1% of that each and every year to manage their money and give them good advice and, and keep them on the straight and narrow. And then there’s a relatively new category that we call flat fee planning where we’re not interested in managing the money for that client, but we want to just give them some objective solid education advice and then the person can go back on their own for the next 2, 3, 5 years and then maybe come back for a refresher and say, how am I doing? What advice do you have me now? So I’m in that category, it’s called flat fee. So for a particular fee I offer a financial plan to clients that says if they’re starting out and or getting close to retirement and says, let’s take a look at all your finances, not just your investments, but let’s take a look at your insurance and your estate planning documents and a variety of other aspects. Let’s take a look at your goals and just do an assessment and objective assessment to see if you’re on track or not. So, so flat fee advising or flat fee expenses is the way I model my business useful for people especially just getting into investing because they don’t have a lot of money yet. And so the fee only advisors that charge 1% probably aren’t going to see you anyways. So that would be an advantage.

Emily (38:06): Hmm, yeah, especially if, um, you may have zero in assets under management to offer if you only have your 401k plan, for example, if you don’t even have an IRA that, that an advisor could even work with. So I really appreciate that flat fee, um, model. It’s actually when I sought out financial advising a few years ago, that’s the model that I went with for the advisor that I chose. So, um, I’m a believer in it now. It’s a little harder to stomach maybe upfront because you have to come up with hundreds or a couple thousand dollars maybe, depending on the advisor and the type of, um, package that you’re getting versus going to someone who makes money off commissions. Well, it seems like it’s free, but it’s really not free. And so just to recognize as you said that everybody in this industry is getting paid in some way or another, as long as you’re upfront about it, fine, then the client can choose how they want to pay for the service that they’re getting and their advantages and disadvantages to each of those models. But I really appreciate the model that you’ve chosen, so it’s great.

Socrates Financial Planning

Emily (39:01): And if someone listening, um, really likes your style, likes how you’ve taught us through this episode, wants to work with you or maybe wants to recommend you to someone else, how would they get in contact with you?

Scott (39:12): Yeah, so the name of the company is Socrates Financial Planning. So Socrates, because that’s the way I always taught in the classroom using the Socratic method. So Socrates financial planning, socratesfp.com is the website address and from there you can get an email or schedule a call with me or, or find more information about me, but socratesfp.com is the place to go.

Best Financial Advice for Another Early-Career PhD

Emily (39:36): Well thank you so much Scott, and I wanna conclude by asking you the question that I ask of all of my guests, which is, what is your best financial advice for an early career PhD? And that could be something that we’ve touched on already in the interview or it could be something completely new.

Scott (39:50): Yeah, I would come back to that notion of day one, start contributing to whatever plan you have, whether it’s the Roth or or the, the traditional plan certainly to, um, achieve that employer match that we talked about. 10% might sound like a lot to start saving right away, but I would recommend you, you strive for that if not higher, set that up from day one so that you just learn to get by on 90% of your salary. And that’s gonna do such wonders for you. 30 years from now, you will be so glad looking back that that was the best decision you ever made.

Emily (40:26): Well, Thank you so much Scott for volunteering to come on the podcast. It’s been a pleasure speaking with you.

Scott (40:31): Very good. Thank you very much.

Outtro

Emily (40:41): 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.

What You Should Know about Money Early in Your PhD Career

July 29, 2024 by Jill Hoffman

In this episode, Emily shares the microinterviews she recorded at two higher education conferences this summer. The conference attendees, virtually all of whom work at universities and most of whom have PhDs themselves, responded to this prompt: “What do you wish you had known about money earlier in your career?” Listen through the episode for insights into the financial steps for which, should you take them now, your future self will thank you.

Links mentioned in the Episode

  • Host a PF for PhDs Seminar at Your Institution 
  • Emily’s E-mail Address
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  • PF for PhDs Podcast Hub
What You Should Know about Money Early in Your PhD Career

Teaser

Lyndsi B (00:00): You don’t have to make one decision and have it be the right decision for the rest of your life. Like you can make changes at any point along the way and you are allowed to fail and like you can recover from failure.

Introduction

Emily (00:20): 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 (00:50): This is Season 18, Episode 5, and today I’m sharing the microinterviews I recorded at two higher education conferences this summer. The conference attendees, virtually all of whom work at universities and most of whom have PhDs themselves, responded to this prompt: “What do you wish you had known about money earlier in your career?” Listen through the episode for insights into the financial steps for which, should you take them now, your future self will thank you.

Emily (01:20): The two conferences I attended were the Graduate Career Consortium Annual Meeting or GCC and the Higher Education Financial Wellness Alliance Summit or HEFWA. GCC is primarily attended by university staff members working with PhD students and postdocs in career and professional development. HEFWA is attended by university staff members working in financial wellness across undergraduate and graduate populations. These two conferences were excellent networking opportunities for me on top of the built-in professional development. However, there are plenty of universities who were not represented at these conferences. Would you please consider recommending my financial education seminars and workshops at your university? My most popularly requested events for the upcoming academic year are Your Financial Orientation to Graduate School, How to Prevent a Large, Unexpected Tax Bill on Your Fellowship Income, Expert-Level Budgeting for Graduate Students and Postdocs, and Demystifying Taxes for Graduate Students. Please direct an appropriate potential host within your graduate school, postdoc office, grad student association, etc. to PFforPhDs.com/financial-education/ where they can learn more. Thank you in advance! You can find the show notes for this episode at PFforPhDs.com/s18e5/. Without further ado, here are the microinterviews recorded at GCC and HEFWA.

What Do You Wish You Had Known About Money Earlier In Your Career?

Amy (03:03): Hi, I am Amy from Princeton and when I was in graduate school I wish I had learned more about investing and saving for retirement and sort of how all that works early in your career to benefit you later.

Sharon F (03:18): Hi, my name is Sharon Fleshman. I’m a senior associate director at Career Services at University of Pennsylvania. I think coming out of undergrad I basically took the salary, I was pitched <laugh> and that was it. So I wish I knew the implications of a starting salary across the years.

Evan W (03:34): My name is Evan Walsh. I’m a career advisor at Harvard Medical School. I really wish I knew that it only takes a little bit each week to put towards something. So every week I put money away into a travel fund. Each week I put money away towards retirement. Each money I put a little bit away towards just miscellaneous fees that I may incur and it’s all within my master budget that I now wish I would’ve known earlier that I like to do and that’s really helped me sort of save for trips and things for my future, things that I wanna prioritize, how I utilize my money. So I wish I knew earlier that your money is yours to spend the way that you want to.

Laura S (04:11): Hi, my name is Laura Stark and I work for Harvard University. I got my PhD many, many years ago and I wish that I had known that I should start saving for retirement even as a graduate student.

Briana M (04:26): I’m Briana Mohan, I am a program manager at MD Anderson Cancer Center. A lot of times we feel, I have felt that money is tied to worth and my value as a professional and there actually is no correlation at all so far as I can see. So I think that decoupling those two things so that then it’s a little bit more feasible to work with money and money questions and speak about them and grapple with them and not have it so tied to how much I’m valued or how much I am worth, I wish I would’ve known that earlier.

Alla M (05:03): So my name is Alla Mirzoyan and I’m from Florida International University and I wish I had known about credit in the United States and not to sign up for credit cards without really understanding the implications. I was an international student so I knew very little about how credit works, but I know better now.

Gina B (05:25): I’m Gina Bellavia from the University at Buffalo and what I wish I’d known about money earlier in my career is, well, particularly because I got a PhD but then I went a non-traditional route. I didn’t go into academia, so I guess it would’ve been good for me to know going that route that I might have to kind of go down in pay to, to then start a new trajectory and then work my way up again, which I guess it makes sense if you think about it, but I didn’t really think about it that way. So it’s taken a little longer to to build up I think by taking that less traditional route, but, but I’ve also had greater career satisfaction.

Manali G (06:03): I’m Manali Ghosh. I’m a senior academic recruiter at St. Jude Children’s Research Hospital and I wish I had known sooner to invest in stocks like s and p 500 earlier in my career.

Ivonne V P (06:16): My name is Ivonne Vidal Pizarro. I’m at the University of Tennessee in Knoxville. I’m the research consultant in the graduate school supporting postdocs and I wish that I’d known that if I could save more money when I was younger, I’d have more in my 401k now.

David C-B (06:30): Hi, David Cota-Buckhout. I am the assistant director of Alumni Engagement and Career Support at the University of Rochester’s Graduate Education Postdoctoral affairs office. I wish I knew that I should have paid off my private student loans earlier so that way the compounded interest wouldn’t have backed me with so much debt. And just recently I was able to get rid of those student loans and then free up over $13,000 of interest that I can now put towards other things.

Katie H (07:07): I’m Katie Homar from University of Pittsburgh and what I wish I knew about money earlier in my career was the importance of researching salaries and negotiation.

Alex Y (07:18): Hi, this is Alex Yen, a second year postdoc at Boston University’s professional development and postdoctoral affairs office. The thing I wish I had known about money earlier in my career, and I think especially in graduate school, is that open a high yield savings account as soon as you can and put just a little bit of money, even if it’s 20 bucks, 30 bucks a month. Just having that and knowing that it can, it’s a long term sort of savings space that will continue to accrue interest, will make you feel less anxious and look forward to a time when you can save more

Dan O-B (07:56): Dan Olson-Bang, Syracuse University. If I had known this, I would’ve been grateful. Uh, don’t take out loans during your PhD.

Ryan U (08:05): My name is Ryan Udan. I’m director of the office for postdocs at UTM, the Anderson Cancer Center. As a long time trainee that did not make a lot of money, who navigated into a career path that I was ultimately happy in, it did take too long of a time to get to that career path that for me, I wish I knew about other career options that I would’ve been happy with earlier that paid better and earlier. So now I have a better understanding of all the other diverse career options that are available to people, not just for people with their PhDs, but for other types of professional degree programs that would’ve gotten me to a space where I was happy with my job and that I was making a lot of money more quickly. For example, I didn’t know about optometry field, I didn’t know about radiological careers and you know, the flexibility you have for, uh, uh, obtaining jobs more easily and, and many different places from small towns to big cities. And again, immediately after you get sometimes an associate’s degree, that stuff for me was a black box when I was training.

Giovanna G-M (09:14): Hi, my name is Giovanna Guerrero-Medina and I’m director of Diversity programs at the Yale School of Medicine and the Wu Tsai Institute. One thing I would’ve liked to know about money earlier in my career has to do with how much life costs and how there are gonna be times in your life when you will need to have extra cash because of health emergencies. Because you have to take care of family members who are sick. You have an emergency trip that you have to plan and so it’s important to have a, a fund or a a some money that is liquid that you can use in an emergency at some point in, in my life after my graduate school, my family had some emergencies and I also had some healthcare costs and it was really important for me to have that extra cash that I had saved and separated.

Bill M (10:15): Bill Mahoney. I’m the Associate Dean of graduate student postdoc affairs at the University of Washington. I’m also faculty in the School of medicine and I wish I understood a little bit better that making career decisions based on the next paycheck, the most money, it’s only part of the decision. You have to make it on what you love doing, the people you’re gonna support. And if you choose to stay in higher ed, you’re probably gonna not make as much money, but you’re gonna have a bigger impact on training the next generation of scientists and students to go on and do bigger and better things in uh, and improve the world.

Meredith O (10:44): Meredith Okenquist, Director of Career Management Villanova University. What I wish I knew more about was retirement planning at the very onset of my career and investing the full maximum percentage for my 401k.

Kirsten R (10:59): My name is Kirsten Ronald. I am the program manager of advanced degree career management at UT Austin. I wish I had known that you don’t need to go back to school to make a massive career change and I also wish someone had talked with me about the ROI of going back to school before I did it.

Colleen G (11:13): My name is Colleen Gleeson and I work at the University of Texas at Austin as an associate director for advanced degree employer integration. One thing I wish I had known about money earlier in my career is thinking about careers and jobs and salary packages and benefits in a way that like evaluates in the total compensation package and how invaluable it is to have employer paid health insurance and to have things like pay time off and something that forces you to invest in a retirement account or a pension to make you think about the future.

Marlene B (11:51): So my name is, uh, Marlene Brito, Dr. Marlene Brito and I’m the associate director of DEI at NYU Career Development Center. And what I wish I had known before I started a PhD was that you self-fund a lot of your activities as a doctorate student, especially if you’re a professional who’s going to school part-time, but sometimes even as a full-time student. So like save money for conferences, save money for research expenses because all of that cost thousands of dollars.

Melissa K (12:21): Melissa King, University of Mississippi, the best advice I ever received about money was when my husband and I married 13 years ago and my mother-in-law told us it doesn’t matter how much money you make if you spend all of it right? So knowing how to spend and how to save is by far the best piece of advice. It doesn’t matter if you make six figures if you’re, you’re spending all of it, right? Mm-Hmm. <affirmative>.

Lee T (12:46): Hi, my name is Lee Tacliad. I’m a manager of alumni and employer engagement at Scripps Research and what I wish I knew about money earlier was the magical effect of compound interest.

MaKenna C (13:00): Hi, I’m MaKenna Cealie. I am a graduate student at the University of Rochester. What do I wish I had known about money earlier in my career. So I had some great advice about learning to save and invest, but I think sometimes I took that too far. So I think it would also be important to kinda spend your money too as sometimes and enjoy your life. I read this great book Die With Zero and I think that was very helpful for me.

Dan E (13:26): Hi there. My name’s Dan Emmans. I am senior coordinator for student development and engagement at Harvard Medical School. Early on, get into the habit of putting 20% away and you’ll never go wrong.

Tamar G-C (13:36): Hi, I am Tamar Gaffin-Cahn. I’m the assistant director for graduate students at the Career Development Center at Emerson College. And one thing I wish I had known about money earlier in my career is put money away. Invest really early on, even if it’s just 20 bucks a month, invest early ’cause it will grow. I would also say to diversify where you’re investing and there are lots of opportunities of how to invest in uh, that’s connected to your values as well. So there are opportunities to invest in green energy, invest in programs that are good for the environment and good technology and things like that so it your money isn’t going to corporations that do harm to this world.

Bryan M (14:12): Hi, my name is Bryan McGrath. I do employer engagement over at Harvard Medical School. What do I wish? I had known about money earlier in my career that credit cards accrue interests and you should be paying more than the minimum each time.

Linda L (14:24): My name is Linda Louie. I work at the Lawrence Berkeley National Lab and I wish that earlier in my career I had known that retirement was a thing you needed to plan for <laugh>.

Jessica R (14:35): My name’s Jessica Roman, I’m the Assistant director of Graduate career Services at Stony Brook University and something I wish I would’ve known about money earlier in my career is how private loans and their interest works because I thought it was like public loans where you have the same principal and then I graduated and I got the bill and it was very shocking and I’m still paying that off, so I wish I would’ve known how that works so I would’ve made payments while in college.

Breanna G (15:06): My name’s Breanna Gallagher and I am a career coordinator at Oklahoma State University and what I wish I would’ve known about money earlier in my career is literally just the lingo of all of the money talk, being able to understand my benefits, being able to understand 401ks and medical insurance and being able to just understand what I was reading and signing, especially in a really tight window when you’re required to do your benefits in like 24 hours.

Aimzhan I (15:39): My name is, Aimzhan Iztayeva. I work as a program associate at the graduate School of the University of Minnesota. What I wish I had known about money earlier in my career is how investment works and also how taxes work with regard to money that you gain through investment.

Natalie C (15:56): My name is Natalie Chernets, I’m director of postdoctoral affairs and professional development at Drexel University. What I wish I knew about money early on is that higher education doesn’t necessarily mean more money in your salary, especially if you are an immigrant coming from another country. There are other barriers you have to think through to earn that salary.

Rowena W (16:14): Hi, I’m Dr. Rowena Winkler. I work for the University of Maryland, Baltimore County or UMBC in their career center as the assistant director for graduate student career development. So what I wish I had known about money earlier in my career is, especially as a graduate student, I, I’m an immigrant child, so my parents came here from the Philippines and I didn’t really know good personal finance and money management practices. I wish I had taken out loans or looked for more scholarships because as a graduate student in particular, I went into a lot of credit card debt just trying to finance my way through school. And so I wish I had known more about personal finance resources or funding options as a graduate student.

Mearah Q-B (16:56): My name is Mearah Quinn-Brauner. I work at Northwestern University. I wish I had known that sometimes it’s a good idea to spend money in order to have more money later in your life. When I was in graduate school, my mom tried to convince me to buy a house and I thought that that was insane. It was a crazy idea given how much money I had at the time, but it would’ve been worth figuring out so that I would have a house in Philadelphia now.

Diane S (17:24): Hi, my name is Diane Safer. I’m the director of career and Professional Development at the Albert Einstein College of Medicine where I work with PhDs and postdocs. I wish I would’ve taken the advice that I give to my students and postdocs right now and really negotiated for higher salaries and higher starting salaries right when I got the job because you can never really make it up once you’ve started a job and you’ve lost all your negotiating power once you’re in.

Mallory F-L (17:49): Hi, my name’s Mallory Fix-Lopez. I’m with Language ConnectED. I wish I would’ve known to charge for my work earlier in my career. I’ve done a lot of work for free <laugh>.

Emily S (17:59): So my name is Emily Sferra. I am the coordinator for career and Professional Development at the University of Michigan Medical School. If given the option to contribute to a retirement account you should contribute to a retirement account.

David B (18:19): Hi, I’m David Blancha. I’m a program manager at the OCPD at University of San Francisco. The thing that I wish I had known about money earlier, especially when I was a graduate student, is that when I was doing all of the math on my finances and what I might like need to live while I was in graduate school, all of those numbers would be wrong. Eight years later when I graduated I had no, I, no sense of adjusting for inflation or markets changing or anything like that. So I assumed the math I had done to live in a one bedroom apartment <laugh> in New York in 2015 is what I was going to need in 2022 and that’s absolutely not, not right. <laugh>.

Commercial

Emily (19:09): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and 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. Orientations or very close to the start of the academic year would be a perfect time for tax education or general personal finance content. 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 institutions 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.

What Do You Wish You Had Known About Money Earlier In Your Career?

Alexis B (20:37): My name’s Alexis Boyer. I’m assistant director of Graduate student career services at MIT. And I wish I had known the difference between a 1099 and a W2 and I wish that I had known that the skills that I was developing were worthy of being paid.

RC S (20:54): RC Stabile, uh, Vanderbilt University, director of trainee engagement and wellbeing. I wish I knew about investing, putting money in target date index funds and I wish I knew about high yield savings accounts earlier.

John M (21:10): Hi, my name’s John Miles. I’m the Chief Executive officer of Inkpath, uh, the professional development platform. I wish earlier that I had known that by spending my time working on Shakespeare and taking a very academic direction that I wasn’t counting myself out of decent salaries later on that I should be confident that time will reward you and, uh, you can indulge those academic perspectives, uh, without feeling like you are narrowing down your options for the future.

Zarna P (21:42): Hi, I’m Zarna Pala. I am the assistant director of the Biological Sciences graduate program at the University of Maryland. And I wish I knew, uh, more about investment and investing money in the right direction or any sort of like small investments which I, which I could have started early on, uh, as a graduate student, as a postdoc fellow, that would’ve been really helpful.

Anne-Charlotte M (22:08): Hi, I’m Anne-Charlotte Mecklenburg. I am the postdoctoral associate for academic support at the University of Maryland College Park. And I think something that I wish that I knew about money earlier in my career was just all of the different ways of like saving money and organizing money that I would need later in my career as a graduate student it was kind of like, okay, I have a stipend and it covers all my living expenses and I can’t really do anything else with it, so I just spend it until I don’t have it anymore. And now that I’m sort of moving into more of a mid-career moment, it’s like, oh, I have a retirement account through my university and I don’t really know how that works. All that kind of stuff that I feel like in other careers people kind of learn that kind of stuff closer to right af out of college. It’s something that now feels like a little bit delayed for me and now I feel like I’m a little bit behind. So something I wish I was thinking about before I needed it so that I’d be ready when I did need it.

Amy A (23:00): I’m Amy Aines and I’m with Championing Science. What I would’ve loved to have known more about is how to invest. I think I was conservative and I was okay with a 401k with someone else thinking about it, but it would’ve been nice to know for myself what that was about and how I could take advantage of the opportunity.

Gina D (23:18): Gina Delgado, director of doctoral and post-doctoral life design and what I wish I’d known earlier about money in general is not just knowing about money but not being afraid of being broke because I’m not afraid of being broke.

Beka L (23:32): This is Beka Layton. I am the director of professional development at UNC Chapel Hill and thinking back to when I was a graduate student, I think benefits life insurance 401ks and kind of how to balance life expenses with long-term goals and budgeting. I think that whole like black box of like, I don’t know any of those things was mystifying to me. So things I learned by accident along the way and wish I knew then.

Aurora W (24:02): I’m Aurora Washington. I am currently a postdoctoral research fellow at the University of North Carolina in Chapel Hill. And something that I wish I knew about finance when I was a graduate student is how to budget a little bit better and to manage my expectations because I’m a postdoc, postdoc don’t get paid well and so I wish I knew a little bit more about benefits in negotiating in Texas.

Sam R (24:29): Hi, um, this is Sam Ramosevac, I’m director, um, at the office of Postdoctoral and Mentor trainee program at Emory University. Uh, I wish I actually negotiated my salary and I think it’s really important at least to attempt to negotiate and get more money for the level of experience you have and you know, just at least to try.

Ian K (24:57): I’m Ian Krout. I am a postdoctoral fellow at Emory University. For me, being a postdoc, I went on a training grant and realized that I was losing some benefits that I had gotten as being an employee at the university. And so I actually began to ask questions to both my PI and the postdoctoral office about if this needed to be the case and if there was any way to get benefits and advocating for myself was enough to get those benefits brought back through a workaround at the university, which was really positive for my experience and helped me to still be able to save for retirement and not pay into my health insurance myself.

Jessica T (25:35): My name is Jessica Taylor. I’m a research fellow at ACLS and I wish I had known when I was a graduate student that you’re supposed to tip in hotels.

Natalia (25:44): My name is Natalia, I work for the University of Pittsburgh as a career advisor. Yeah, and I wish I, I had known that money would be able to buy me freedom of choice.

Autumn A (25:55): Well, my name is Autumn Anthony. I manage the office for graduate student assistantships and fellowships at GW. I think it would’ve been really important for me to realize earlier that if you are looking to make more money, then you have to go to the organizations that actually have more money <laugh> and that when you are committed to the work that you’re doing and working hard and looking for opportunities to succeed in your work, just because of your commitment and just because of your hard work doesn’t mean you’re going to make more money. So you have to go where the money is.

Jessica V (26:33): My name is Jessica Vélez. I am the membership engagement and early career programs manager for the Genetic Society of America. And I definitely wish I had known that I do actually make more money than I think I do. And by creating a budget, that’s how I learned that I made more money than I thought I did and I signed up for a budgeting app at some point in my graduate career. Because of that, when I finished my PhD, I wasn’t able to immediately get a job, but I had enough money saved up from the budgeting I had done on a graduate school stipend to survive for two or three months without having to worry about unemployment because you can’t apply for unemployment as a graduate student <laugh>. So that was extremely beneficial and I’m glad that I finally learned that, but I wish I had learned that earlier for sure.

Melissa B (27:20): This is Melissa Bostrom. I’m assistant Dean for Graduate Student Professional Development at Duke University and I wish I would’ve known that investing for retirement didn’t have to be perfect. It didn’t have to be the best. I just had to get started with a small amount on a regular basis.

Chris S (27:35): Okay, my name is Chris Smith. I manage the Office of Postdoc Affairs at Virginia Tech. The importance of investing in special retirement vehicles, whether that be a Roth IRA or traditional IRA that have different benefits in terms of tax purposes, whether you pay them now or later. And it might be real benefit when you’re in your lower paying years to be in investing in or Roth where you’re paying the taxes now and then when you eventually retire, you don’t know taxes on that and all the compounding that happens over those 30 plus years of your career.

Jason H (28:06): I’m Jason Heustis, assistant Dean for Student Development Evaluation at Harvard Medical School. I’d say one of the things that would’ve been helpful to know in graduate school, similar decisions you’d make when you start getting a real paycheck, things like allocations for insurances, the different types of saving options, that type of thing would’ve been helpful for me to know earlier, right? Or to be prepared for those decisions so that I can do as much research at the time. That would’ve been helpful.

Anne X (28:30): Hi, my name is Anne Xiong. I’m from UC Berkeley Center for Financial Wellness. I wish I know that no matter how much money you have, you can start investing early.

Kelli W (28:41): I’m Kelli Wright from Wayne State University. I’m the financial wellness advisor there. I’ve been there since March of 2023. I’m an accounting background, so I’m really excited about this space and what I wish I would’ve known is the importance of saving, creating that healthy habit, of saving even $10 a month just where I would be at financially if I would’ve known that.

Charah C (29:07): Yes, my name is Charah Coleman. I work for University of California Merced, and I am the Financial Wellness Center program manager on that campus. I would say the time value of money. I don’t have any regrets with how I spent my money in my undergrad or even early grad school, but I wish I really would’ve invested earlier and given myself a leg up a lot earlier. Now I definitely have to invest a lot more aggressively and I have to cut a lot more expenses now than when I was starting off in my career. I, I definitely think having that awareness of the time value of money being aggressive at the front end, I think would’ve behoove me a lot better.

Beth H (29:49): Beth Hunsaker, MS. Uh, associate Director, financial Wellness Center, university of Utah. After my graduate work, I did take some time off to have kids and although that was a wonderful chapter of my life, I really wish I would’ve taken time to keep my network strong, to keep working on my skills because when it was time to come back for my career, which has to do with money, it was a little harder for that on ramping. And I think that there is a way to balance and do both, and I wish I would’ve focused a little more on that.

Roland K (30:27): Roland Keller Jr associate director of financial aid at Tulane University in New Orleans, Louisiana. One thing that I wish I would’ve known about a little sooner is the importance of credit. Credit is very important. It literally is life or death. So I would’ve wished I would’ve been more educated about credit

Darrel S (30:45): Darrel Stufflebeam, uh, a doctor in education from KU and I’m the new assistant director for Jayhawk Finances at ku. Uh, I wish I’d have known about the importance of starting early and compound interest and I did not have a financial background and my parents didn’t really have advice. So if I would’ve started a little earlier then I’d be much happier now, but I’m just spreading the word as part of my current job.

Khalilah L (31:12): My name is Dr. Khalilah Lauderdale. I am the Associate Athletic Director for student services at the University of Southern California. And earlier in my career, I wish I had known, um, concerning money more about how to buy a home. I was very green in our process and very reliant on my realtor resources, so that would’ve been helpful.

Nafisah G-B (31:35): My name is Nafisah Graham-Brown. I am a program administrator of a financial coaching program at SUNY WCC, that’s Westchester Community College. What I wish I had known about money earlier in my career was the value of retirement savings. Uh, unfortunately I was in a job where we were discouraged from taking part in the pension and retirement program mainly because the people that were talking to us also didn’t have much information or knowledge. So I guess the value of it wasn’t seen by most of us. And I guess the lesson is make sure you’re getting your information from someone who knows.

Aly B (32:13): My name is Aly Blakeney. I am an instructor of economics at Phillips Academy Andover. What I wish I had known about money earlier was honestly how important it is to talk with any significant other. If you have like a very serious prospect with them to talk with them and be like, Hey, where are we at in terms of money and debt? I think that will cause stress quicker than anything. And setting yourself up for future means also taking care of your financial wellness via your emotional intimacy wellness as well.

Tony F (32:45): My name is Tony Froelich. I am the financial literacy coordinator at the University of Tennessee at Chattanooga. What I wish I’d known earlier in my career about money is the power of investing in yourself. I always thought of saving as taking what was left after the month and that was my savings. So whether that was $10 or negative $50, pulling outta my savings account, but learning the lesson of taking that savings out of my paycheck first and putting that away and then spending the rest has been life changing.

Zach T (33:19): Yes, Zach Taylor, assistant professor at the University of Southern Mississippi, and what I wish I had known about money earlier in my career is saving it earlier in my career would facilitate a lot more time and that as I’ve gotten older, time is money and I’m now realizing how much more time money can buy you. And that has become so important as my parents have aged and as I have continued in my career where I feel like I have enough money now, but I don’t have the time, but if I had more money, I know I would have more time. So I think the relationship between time and money is what I wish I had known earlier in my career.

Lyndsi B (34:04): I am Lyndsi Burcham. I am the financial Wellness Program manager at the University of Pennsylvania. I think what I wish I had known about money earlier in my career isn’t even necessarily about money. It’s the fact that like you don’t have to make one decision and have it be the right decision for the rest of your life. Like you can make changes at any point along the way. And I think a lot of times when we’re having conversations about money with students, they’re so caught up in the fact that they have to do the right thing first. And oftentimes there is no right thing. And even if there is a right thing, it’s gonna change depending on your life circumstances. There’s a lot I could say about tactical information about like what is a credit score versus a credit report and, and knowing those kinds of things, but like the psychological component of it, which is you are allowed to fail and like you can recover from failure. I, I don’t think we talk about that enough and instead we instill fear in students that they have to do things the best way.

Peter B (34:59): Hi, I am Peter Bye. I am a doctor of music student at Indiana University and what I wish I had known about money earlier in my career is that sometimes it works out well and sometimes it doesn’t work out well and you kind of gotta roll with the punches and make adjustments constantly. It’s never something you figure out. You can’t solve it unless you’re like super rich, but you can make changes and slowly affect your, your situation hopefully in a positive way. Uh, so you kind of just have to roll with the punches until you hopefully get to the place you wanna get to.

Outtro

Emily (35:41): 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.

How This International Graduate Student Grew His Career and Social Wealth Alongside His Net Worth

June 17, 2024 by Jill Hoffman

In this episode, Emily interviews Dr. Cyrus Liu, a postdoctoral fellow in computer science at Grinnell College. Cyrus came to the US from China as a graduate student without any knowledge of how the US financial system works. Over the course of his PhD, Cyrus found ways to minimize his expenses and increase his income so that he could meet his goal of investing $500 per month into a Roth IRA and a taxable brokerage account. He also invested in his physical and mental health and grew his career and social wealth in a frugal manner. Cyrus ends the interview with incredible insights into why he was motivated to work on his finances during graduate school and in what ways academics are truly wealthy.

Links mentioned in the Episode

  • Dr. Cyrus Liu’s Twitter
  • Dr. Cyrus Liu’s Website
  • Host a PF for PhDs Seminar at Your Institution
  • Emily’s E-mail Address
  • PF for PhDs Subscribe to Mailing List
  • PF for PhDs Podcast Hub
How This International Graduate Student Grew His Career and Social Wealth Alongside His Net Worth

Teaser

Cyrus (00:00): Don’t underestimate yourself because you are a PhD student and you definitely have the knowledge base and then sharing those knowledge with the community, and you are passing to the knowledge. This is the wealth we possess, right? Normally people think we are poor, but actually, and a wider definition of the wealth here we have this part to share with someone else.

Introduction

Emily (00:33): 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 (01:01): This is Season 18, Episode 2, and today my guest is Dr. Cyrus Liu, a postdoctoral fellow in computer science at Grinnell College. Cyrus came to the US from China as a graduate student without any knowledge of how the US financial system works. Over the course of his PhD, Cyrus found ways to minimize his expenses and increase his income so that he could meet his goal of investing $500 per month into a Roth IRA and a taxable brokerage account. He also invested in his physical and mental health and grew his career and social wealth in a frugal manner. Cyrus ends the interview with incredible insights into why he was motivated to work on his finances during graduate school and in what ways academics are truly wealthy.

Emily (01:45): I’m offering a new slate of workshops for my university clients this fall, and over the summer I’m practicing delivering these workshops for free to a limited number of graduate students and postdocs on the Personal Finance for PhDs mailing list. Last month, we did “Seven Steps to Start Investing as a Graduate Student or Postdoc,” and later in the summer we’ll do “Your Financial Orientation to Graduate School” and “Tax Season Preparation Starts Now for Graduate Students” and possibly more. If you’re not currently on my mailing list but want to receive notice about the upcoming pilot sessions once they are scheduled, please join now! The best way to get on the mailing list as a podcast listener is to sign up through PFforPhDs.com/advice/; you’ll receive a document that summarizes all of my interviewees’ responses regarding their best financial advice. You can find the show notes for this episode at PFforPhDs.com/s18e2/. Without further ado, here’s my interview with Dr. Cyrus Liu.

Will You Please Introduce Yourself Further?

Emily (02:56): I am delighted to have joining me on the podcast today, Dr. Cyrus Liu. He’s currently a postdoctoral fellow in computer science at Grinnell College, and we are going to be talking about his fascinating financial journey, um, as a graduate student and now a postdoc in the US as an international student. And so, Cyrus, I’m so happy that you’ve decided to join me on the podcast today, and will you please introduce yourself a little bit further?

Cyrus (03:19): Yes. Hi, Emily. Thank you for having me here. So I graduated in December, 2022 from computer science degree. Um, after that I landed this, uh, postdoc, um, fellow in computer science. And the current position, I’m do- mostly doing research in the area of programming languages and security.

Money Mindset After Arriving in the US

Emily (03:45): Excellent. So let’s go kind of all the way back to when you first arrived in the US. I assume that was at the start of graduate school, but you can correct me if that’s wrong. Um, tell me like about what your money mindset was at that point and how, if at all, how familiar you were with the US financial system.

Cyrus (04:01): Also, this is my first time before I come to US. It’s actually, I’ve never been to us before my PhD and I’m from China, so I grew up in a poor family, in fact, there. So with that in mind that I’m kind of sort of inherently frugal. But what’s interesting is back then, like I never feel poor in terms of any financials. In general, I have no idea about in credit card scores, uh, credit cards and investing or retirement. And, and that’s later on. I discovered after I entered the US that I do have, uh, a saving and spending mindfully and because how my parents raised me. Right.

Grad School Stipend vs. Local Cost of Living

Emily (04:50): I see. And so when you arrived for, um, graduate school here, can you tell me about, um, what your stipend was and how that struck you, maybe versus like the local cost of living?

Cyrus (05:02): I was living in Hoboken for, um, two years and a half, and also Stevens Institute with the university. I finished my PhD is located in this really beautiful city and it, it is, the local cost is like 60% higher than the national average. I would just say and put in the number that means like I think if you got two bedroom apartments that you might need to spend, um, at least 1700 for one bedroom, that means you need a a roommate. And back then the stipends, uh, I would say it’s like a 28 thousandish and it’s roughly, I remember we got paid like a biweekly, it’s like 2000 a hundred per month after tax.

Increasing Income During Grad School

Emily (05:55): Okay. Well, I really wanna dig into this, uh, with that, you know, relatively expensive cost of living and the relatively low stipend. Um, and the listeners don’t know yet, but this is a financial success story that we’re about to talk about <laugh>. So we’re gonna see how, you know, I wanted to see that starting point and now let’s see how you got to the end point that you got to. Um, so let’s kind of break this down, um, systematically. So during the course of your time in graduate school, how did you, what did you do to increase your income?

Cyrus (06:24): Yeah, so there are a couple things. Um, like I said that before I entering, uh, US, I have, I really have no idea what’s the, uh, um, investment, investment investing or credit cards, and that’s a totally different systems, but I do have a mindset that I need to save, right? And it is how I grew up. Um, but it’s not too much. So most of the case, um, I start to reaching out, um, all the resources I can, I, I think I start with reading the book first and then also I love reading. And then the first book I get to know is basically, uh, it is called I Will Teach Rich by the Ramit. And, and he, he actually kind of introduced me to the whole US financial system from credit card, from the, uh, uh, Roth IRA and then how you would you, uh, increase, uh, your finance and manage your, your spending habits and to how would you invest if you have extra money, even though if you don’t have extra money, just put maybe one, uh, 100 or $50 you can squeeze out. Just experience how things work. Uh, at the beginning it was a little bit overwhelming, but I, I enjoyed read his book. I I think this is also helps me to manage my life, uh, here in a completely, uh, foreign nation. Right?

Emily (08:04): Yeah, that’s a wonderful first book to get started with. I will teach you to be rich by Ramit Sethi. Um, yeah, great, great introduction. He’s very firm about how to tell if someone, someone, you know, an institution is trying to take advantage of you. Like he’s really helping you, like recognize that and push back against it. So I can definitely see how that would be useful when you’re entering a new system, um, entirely. So awesome recommendation, you started there, you read that book,

Cyrus (08:28): And then I start to act <laugh>.

Emily (08:31): Mm-Hmm. <affirmative>.

Cyrus (08:31): And then I open the credit card and then I, I, I take the, the same strategy that I recommended by the, by the book. It, it’s not promotion for the book, but it’s more like, I think around nothing to think of that it is really like you try to minimize all the possible interest, right? Rates I would have and then, or a lot of promotions provided by the credit card and then try to take advantage of that because now we think about that credit cards more like the more you expense and then the more you can potentially save and also they encourage you to spend. So, but I personally very mindful with my expense, but the same times I think they do, credit cards do offer a lot of discounts in terms of purchasing. So that’s the first step.

Emily (09:24): So are you saying that you pursued credit card rewards, like points and cash back and stuff after? Of course, you initially need to establish credit and get started there.

Cyrus (09:32): Yes, exactly.

Emily (09:32): But is that where this led eventually?

Cyrus (09:34): The, the signing bonus and also the cashback reward, that’s also something new to me that I never did, uh, touch before. And then also we do have, uh, I think the first one is the discovery. I think most of international students would get to discovery first because we don’t have any, uh, credit score history here. And so they also have these online stores that will give you 10% or 5% discount. And then when I go out to buy clothes in, or I was living in New York City area, so there’s a lot of department store that can use with this discount opportunities.

Emily (10:16): Mm-Hmm, <affirmative>. Okay. So both increasing income through credit card, um, bonuses and cash back and so forth. Also finding a way to be even more frugal in saving certain percent, percentages on the purchases that you do make.

Cyrus (10:28): After that, um, uh, I started to opening a investment account that was also a little bit struggling because I, first of all, as an international student, I do not know if I was allowed to do that. So I, that’s kind of for research myself. But in the end, after like, um, as long as we are considering as a tax payer resident, and then, so you should have the same opportunity to open all those investment account. And then I, I remembered I started with, uh, uh, 500 ish, um, over the month for the first month. So I just put, I think I, I, I was not expecting to gain anything. I just, uh, put 500 to get to understanding, uh, how the investments work and buying individual stocks. And I think I bought, that was 2018. I bought a Tesla <laugh> because I really like, uh, Elon Musk.

Cyrus (11:30): Um, but that was another story. It was really funny. And so that’s one part. And then, uh, after that, uh, I get to know the, Roth IRA and then the retirement account. Um, it’s also be, uh, I, I get to understand how the tax work here and then the tax deferred account. And I think that’s whether in long term if, uh, I am staying here or not. I, for me, it’s like, I think it’s, uh, uh, beneficial to open this account as soon as possible because I do pay a lot of taxes. I mean, it’s, uh, in terms of graduate students. Uh, so I think, uh, that’s one way you should take benefit of that. And then I did that, but um, although I didn’t have much money to put on that, and then, uh, in the end, I would, my, my goal was, uh, try to save like, uh, 500 and put into other way to the Roth IRA or the personal, um, uh, investment brokerage and yeah. But this all comes with the risk. So with the mind that you, the money you put in, in the investment account, like it’s possible to lose all of them. Right. But I was fine with that.

Contributing to a Retirement Account as an International Student

Emily (12:47): Couple things there, uh, because I get so many questions from international students and postdocs, um, yeah, maybe they know, they, you know, in theory could contribute money to a Roth ira for example. They, they understand the eligibility, but they’re more questioning like, is this a good idea? And it sounds like you came down on Yep. As soon as possible, whether I end up in the US long term or not, this is a good idea. Can you tell us a little bit more about that thought process and how you made that decision?

Cyrus (13:15): Uh, I think that this decision is very personal for me. Um, because that, that’s all really depends, um, where you going to stay, where are you going to retire in, in the future, right? Um, for me, I didn’t really think that too long. Um, I can in, in the long run, I, I prefer this. I might not stay in United States. Uh, but, uh, I, but uh, for me, you, you got to understand what, what, what’s your, uh, long-term goal. Uh, if you are not going to come back to us at all, or even this is the case, but it is still helpful that because, uh, you are kind of tax deferred assuming you grow your money over there, right? Um, and it just take some penalties if you break the, the rules that you’re taking out the money before your retirement age. But if you can stand with that, it is nothing comparing that if you in your future that you might want to settle down in US or you go want you coming back in us in a later life, it, it, it, it can benefit you a lot, but without risk balance you got assessment, what’s your goal, it is. And then for me, I would like to take that even though maybe a few years I have to, uh, uh, leave or, or for, or I have to withdraw the money, but I need to take a 20% or I don’t know exactly number the penalty for that.

Emily (14:53): Mm-Hmm, <affirmative>, yeah, if I’m remembering correctly, it’s, I think it’s only 10% and it’s only on the gains. And if we’re talking about the Roth IRA, right, because you can withdraw the contribution. So it’s, as you said, you know, there’s a, um, a, a risk there in a sense. Okay, well maybe I will need to remove this money early for some reason. Well, this is the penalty. Am I willing to accept that? Do you know, I’m, and the penalty again, is only on the growth. So it’s only if, yeah, if there things have actually gone well with that investment account, um, in the intervening years. So thank you for giving us a little bit more insight there.

Investing as a Graduate Student

Emily (15:24): And then I also wanted to ask about the taxable brokerage account. Um, you mentioned you bought Tesla. Yeah. Were you, um, cashing out, like making trades and actually taking income from this money over the years? Or is it more been like just sitting there for like, for the long term and you’re not taking income from it?

Cyrus (15:40): So for me, it’s more like a, um, a personal habit. Like, um, uh, I do, I don’t, I didn’t, I did not have much money to invest, and I think I was just bought two or three, few five shares of Tesla, but in 2018, and, but after that, Tesla was like a, like a high rocket, and I do, I did sold a couple share, but those number I really like comparing it, it’s not much. And so no, it, it, it’s more like, uh, a habit. That one is a habit. The another one is I, I did not really have much extra money to invest in this account.

Emily (16:24): Yeah. And I, you said the number of $500 earlier, was that your, was it your goal to invest $500 per month or is that over a different period of time?

Cyrus (16:32): Uh, yeah, I was, uh, uh, a month.

Minimizing Expenses as a Graduate Student

Emily (16:34): Let’s talk about keeping a lid on expenses or decreasing expenses then, because we’ve already heard that the cost of living is very challenging on your grad student stipend. So you already mentioned having multiple roommates. I think you said you were sharing a bedroom, right? So like maybe four people in a two bedroom apartment, is that right?

Cyrus (16:49): Um, um, no, that, that was like, uh, we do have five bedrooms in, uh, a big house, but we, we have our own bedroom. But the things like, uh, in that case we did cutting down a lot of expenses. We share everything.

Emily (17:05): Mm-Hmm, <affirmative>. Okay. So kind of the, the frugal tip there is like larger residents, more roommates, more people to split everything among, right?

Cyrus (17:15): Yeah. Not many PhD students actually live in Hoboken. I was lucky to find this place. Uh, but the same times, like I personally, I don’t think roommates are bad. And because I, I get a chance to know different people and, uh, in my case, uh, there’s a, a little, uh, uh, that, but I can stand with because we do sharing, uh, things, uh, and then sometimes can getting busy, but most of the case are fine with that. So we, I have four other roommates, but they are working in a different area. So basically we would have a different schedule. So in this case, uh, it’s doable and especially, uh, given the resources I have, I don’t commute that much. And then I enjoy in the on campus resource, I like to do it to gym. So it’s like a 10 minutes away from my, uh, my, my lab and then also the, to the gym. So the, I spend most of the time in the lab. And then after that, I go to the gym really just, uh, over the night, come back. And then sometimes we have the good parties, you have roommates, and you can have some little party on the weekends and watch a movie together. That was pretty nice.

Emily (18:30): Mm-Hmm. <affirmative>. Yeah. I actually really like the setup of a single family home that’s shared among multiple different, multiple, you know, people at their own bedrooms. I feel like that’s a pretty, in most areas of the country, that’s a pretty economical way to live if that type of housing is available to you as opposed to like the apartments or, you know, the townhouses or whatever. Yeah. Um, yeah. So what other ways did you find to decrease or minimize your expenses?

Cyrus (18:55): So at the same time, um, we, we do have, uh, uh, so I try to, uh, take a break from my research sometimes. And another way is like, um, travel. When, when it comes to travel, um, I prefer to go with my friends or in a group, and in, in generally I do meal prep. I do, uh, regularly do, uh, exercise and eat healthy. Um, the meal prep myself, it’s also cost less. So I think it is a, it is beneficial in two ways. Um, also in long run, I do value work workout regularly and keep your mental health checked. This would’ve, uh, stopped me going to hospital that often. Like I remember when the seasoning transitions during the transition seasonings and you catch flu isn’t sometimes it’s not just going to the hospital suffering. It’s more like you take at least one week to recover and then you get behind with my research and then that kind of padding up. It’s a lot of stress. So I, I, I wouldn’t, so I, I realized that like, and I, the good way is like take, do more exercise and then to, to keep your immune system robust, <laugh> against that. Um, another thing is like, it, it’s very funny, like when we pay in taxes, right? We, we considering as a, a tax resident. And, uh, but at the same time, I really appreciate my student id. I was living in New York City area and then using student id, you got a lot of free, uh, tickets and also discount tickets to the art gallery and museums and, and gardens. So although I, I, I was, uh, frugal, but I didn’t miss out any fun things over there. I, I still go to museums, gardens, and sometimes, uh, uh, uh, meetups and, and, and local, uh, parties. I, I was, was really fun. And it didn’t really cost you much.

Emily (21:10): Mm-Hmm. <affirmative>. So your entertainment was also satisfactory to you, but you found a way to do it in a frugal manner.

Cyrus (21:16): Yeah. Yeah.

Emily (21:18): Anything else on your list of, of expenses that you managed to minimize?

Cyrus (21:22): I don’t drive, right? So it is also, I was living in the city. It’s really, uh, so those expenses not really, uh, a thing for me. I personally, I do not really purchase too much clothing for me. I’m very minimal. Like, uh, as long I have, uh, uh, a clean fit clothing, that’s enough for me. And for shoes, like, uh, I don’t like to switch too much, and also maybe I have two or three, two, uh, three pair of shoes that one for winter and one or two I can switch during the summer or something like that. So, uh, wearing the things like to the, to the most, um, I think this is preco- probably also because the way that I, how I raised that I am fine with that. And I think that’s kind of, uh, one part, uh, that can cut off the cost in my case.

Emily (22:26): Yeah, definitely.

Commercial

Emily (22:29): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and 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. Orientations or very close to the start of the academic year would be a perfect time for tax education or general personal finance content. 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 institutions 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.

Increasing Social Wealth

Emily (23:56): Is there anything else that you would like to add about overall how you increased your net worth during graduate school? We talked about investing in the Roth, IRA and also in the taxable brokerage account. Anything else in that category?

Cyrus (24:09): Uh, I think one thing that is more intangible, the the wealth and the finance that, uh, the, it is kind of the, the social wealth, the, which I, I, I, I was not really proud of that, um, and try to, uh, take advantage of the local resources, right? And then I was lucky to live in New York City area, and then that’s, and also Hoboken locally and is very nice community, but I think no matter where you live, the local community more often, have more resources that you can imagine and you might not be aware, just try to reach out. And for example, I was attending almost like every weekend I go out and then join the meetup and conference, and most of, of the time they provide you these free meals, lunch or dinner, and then it, it, it’s a, it’s a nice way you can social and also you don’t need to cook your meal yourself. So these things are very subtle and the same things happening on campus that, um, in, in your department, uh, no matter which major you are, um, try to join the, uh, the, if you have any habit, right, join the club and then your peers, and those are most likely have this, uh, social events that can help you, uh, to reduce sometimes if you don’t want to cook or for breakfast meal. And then those are all great ways to, to do

Emily (25:59): Classic grad student strategy. Um, but I like that your focus here and kind of your spin on it is both like, yeah, you can get some free meals from time to time, but also you get, you get your entertainment and your social interaction. Um, and so it fills your, your calendar and helps you again with your work life balance and your wellness overall. And I like that you mentioned not just doing this on campus, but in the community too. And the thing is that if people are putting on events and they’re giving food and all those things, they really want you there. They really want people to come. So like you’re also, you know, you’re contributing to their community as well.

Cyrus (26:32): Yeah. Yeah. I, I think, um, one of the things not just about the meals, and another thing is about the, the, the social wealth. I would say it’s all, uh, it’s also the concept I learned from the books that, uh, it’s more how would you connect to the people? And then that was, uh, kind of potentially, and the connection may or may not be lead you to in the future when you are in the job market, you could have used these connections, but, uh, I wouldn’t say put this in more like a transactional way, but you should try genuinely more just enjoying the life. But at the same times, you might not realize by doing that, you kind of gain the social wealth.

Freedom as the Ultimate Goal

Emily (27:20): You were obviously putting in a lot of effort with your finances, right? All the things we went through, ways that you keep your lifestyle to a minimum ways you figured out how to increase your income, you know, self-education, and then that turned into more investing and so forth. Um, why, why weren’t you just satisfied with getting by day to day and saving all of that for after you finish graduate school?

Cyrus (27:45): I, I think that’s awesome. One role of the reason is due to my personality, I guess. Um, I think the, the ultimate goal is the freedom to achieve the freedom and to be confident. W- with the any decisions I’m going to make. So I would like to, we are talking about freedom and confidence. It’s more like in the sense that I was, I can make decisions based on my own personal demand, not really subject to any resources surrounding me, right? Like, like I said, like before I entering us, I never felt I’m, I’m poor <laugh> because I don’t really have, have much need and I was spending most of my life and time with school. And then after you explore the world, I have this dream, and then now the time’s moving on, and then I start to realize that I really, it’s not what you think, like ideas are great, but you have these obstacles that related to this, uh, money topic, and then you actually making decisions based on what the resources are available for you. So the final goal, then I would start to thinking like, yeah, this comes so natural, you save more, but saving is just one of those strategies. So, and then that’s why I end up start to find out the other opportunities and yeah. So I, I would say the ultimate goal is to be freedom.

Emily (29:30): Do you feel like, you know, you are, I don’t know, five, six or so years into this now, um, do you feel like you’ve attained that to a degree? Obviously you’re not, maybe, you know, complete financial independence is still, still some time away, but, um, I guess I’m, I’m wondering about, yeah, like does it feel like you are a percentage ways, like towards that at this point?

Cyrus (29:53): Uh, in terms of the net worth, obvious, No, that is a far away, but I think in terms of mindset and the knowledge, and then I am preparing myself and then I’m being mindful with my personal life. It’s called personal finance, right? And then you, I i, I was now I’m able to figuring out in the big picture and then what’s the come in flow, what’s the outflow? And I’m, I’m very mindful of that. And then in the end, it, it’s really also, it’s another pro- a question for myself. Do I really want to be retired early or not, or, so the, the, the, the freedom for me is in a more, in a wider definition that it’s more about the resource management and the organize myself, and it, it, it, it includes material and, but also my mind. I think this kind of, uh, uh, knowledge and skills over these past five to six years that I develop, it’s very helpful. Um, in the long term. I, I think if I stick to that and then keep this growth mindset and in the future, the net worth is just a number, whether you choose retire 40 at 40 or 50 a a it is, can is this is the freedom that I, I’m talking about. I can decide, doesn’t matter if, if I have to work or not, right?

Emily (31:33): Absolutely. I love that. Thank you much for pointing that out. I similarly, I think I came to this similar kinds of reflections after I had finished graduate school, after I’d been on that path for a few years, like recognizing how, um, having not only some money in terms of the net worth, but also those mindsets and the habits and the skills and everything that it took to start down that path really afforded me more, uh, choices even at that relatively early stage, um, in life. So thank you so much for sharing that. Exactly.

Personal Finance Resources for Grad Students

Emily (32:07): Um, do you have any additional resources that you’d like to recommend, either to specifically the international graduate student population or maybe graduate students and postdocs more widely? I mean, your first recommendation, I will teach you to be rich by Ramit Sethi was an excellent one. Were there any other books or I don’t know, podcasts or YouTube channels or anything else that you, uh, that you felt was really helpful along the way?

Cyrus (32:27): Yeah, I think, um, so I, I think books are really, uh, good to start with. And in terms of which books you should read, uh, um, uh, I would recommend if you use Reddit, and that there’s a personal finance Reddit channel, uh, you can join that one. There’s a lot of resources about personal finance and what books you’re getting started. And if you like a podcast, and I think this one is very nice since, uh, at the beginning I, I couldn’t find much resources. That’s also how I get to know this podcast. And I was very excited that actually someone thanks to you <laugh>, um, so you, you, you can get, keep get informed to make a good decision, right? Um, and this, uh, this, this is, uh, complete within your reach if you want to do that. And then I would suggest you do that.

Cyrus (33:28): And in terms of, uh, um, tangible resources, be mindful for the, uh, reach out to your university resources. Like, um, especially I was using this, uh, psycho, uh, psychological services therapy and be open-minded. And for those like, um, we are PhD students, we are graduate students, and then it’s can definitely be very lonely. And then even you are in a relationship, so, and those resources are really just find somewhere to talk. And this I think is the part that can easily be ignored by the students, especially international students thinking I’m really, because I’m alien here and then I feel constrained. But actually, uh, uh, in us, you can definitely, especially in your university, you have a lot of resources, uh, uh, to help you out. And then when you graduated, and actually the careers, uh, service is also very helpful, but you need to know that and you need to reach out for yourself.

Cyrus (34:41): And in terms of local community, no matter where you live, try to find a city. And what I did is like get engaged with the locals and I like running and then I go to 5K races. So those are, you can, um, reach out without any cost, right? And also you can, uh, remain your, uh, healthy mind, mind, uh, mental health. So yeah, I, I think overall just be open-minded. We are living in this, uh, information liberal age is really, you don’t feel missing out, and then you have the access to other information you can figure out yourself. And what’s, one thing I, I learned is, um, what makes you, uh, anxious is mostly the things that you actually didn’t do right? And then if you act on it, it, it, it doesn’t matter how challenging the, the things itself, and then you will be fine. But sitting there <laugh> doing nothing, that that’s the big problem.

Emily (35:54): Mm-Hmm, <affirmative>, I’ve absolutely seen that in, I mean, it, it applies widely, but certainly in the case of finances, um, it’s better to just face it and engage. Yeah. And try something. Um, yeah, instead of, as you said, kind of avoiding or spending a long time in analysis paralysis, not sure which direction you should go, just try something. And you’ve tried a lot of things and I love that we got through all of that in this interview.

Best Financial Advice for Another Early-Career PhD

Emily (36:16): Let’s wrap up with our last question that I ask all of my guests. 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.

Cyrus (36:28): Yeah, so, um, I think everyone has a very unique experience, uh, in terms of giving. Otherwise, I would just say I wish what I have done or done more to in my PhD. Um, so one thing I think, like I mentioned couple times, um, value social wealth. And that means that, uh, try to, uh, go out and in, in your spare time, sometimes you might think you don’t have time, especially as a PhD student. And, but I tried, I have the similar mindset, uh, at a certain amount of time. But the thing is like you stick in the lab and the home, you might, you become less productive and then it might take more time than comparing that you just go out and do some activities and then come back with, uh, more energy and fresh mind. So this is the thing that I, I think I did, uh, less, uh, whether it, if you are in a relationship or not, it is the similar thing sometimes, like go out with friends and, and to the meetups and or more importantly, um, it’s also more, uh, career wise or professionally. Like we, we as a graduate student, we don’t really have money to give out, but the same, uh, idea applies. The more you give the, the, the, the, the better. So, but as a scholar, that means that volunteer to giving talks in the meetups, workshops, seminars in your neighboring institutions, I think, uh, don’t underestimate yourself because you are a PhD student and you definitely have the knowledge base and then sharing those knowledge with the community, and you are passing to the knowledge. This is the wealth we possess, right? Normally people think we are poor, but actually, um, a wider definition of the wealth here, we have this part to share with someone else. And then the same times you will get rewarding back, right? Because you, you go out and people get your idea, you get a chance to talk about your research, and the same times you build this genuine connections with the community, and in the future, this connections might help you to navigate your, your future career path.

Cyrus (38:58): So this is the thing that I, I think I missed out a lot also because we was in the covid times, and that’s really dark age. Um, on the other side, as I, I would like to share is I think what I did to contribute the success of my PhD is one thing is really be open-minded. I considering myself a very open-minded person, I, I, at the same time, very minimal for me. And then, but I do exercise more and then, and try new things at the beginning. All those investment accounts really scares me because every time I open the account, that’s a whole for legal documents I have to read. And I, as an international, I’m concerned that I fly-, am I breaking the law or something like that. But if, if you are looking into it and it’s really not that scary, right?

Cyrus (39:56): So I think, I think I, I stand with myself and then I, I try all those things. And then the, the, the, the idea is you need to realize that if you don’t do that, and it’s actually you are paying that, you are not doing that, right? Because the inflations and the interest rates, rates all the things that you have to, you kind of, everyone should open their investment account and, and, and do the investment and manage that to beat the, at least the inflation. So another thing I think I value, uh, more is the people itself, whether it be your significant others or friends. I do valuable value those things. Um, uh, that means that if, if there’s a chance I can spend more time with my friends, like, uh, we go out for a nice, a night, a fancy dinner. Sometimes we go out for, to New York, Manhattan to try different restaurants. I, I, I, I really not at that moment, I value more with the time with my friends. And even though the meal is expensive sometimes, I remember one time we spent almost a hundred each of us for one meal <laugh> was like, but I think that was really, uh, um, uh, valuable for me.

Emily (41:15): Yeah, so insightful. Thank you so much for sharing that with us. Thank you for this entire interview Cyrus, for volunteering to come on the podcast. Um, it’s been absolute pleasure to have you.

Cyrus (41:24): Thank you. And thank you for having me and it is great to sharing the stories with everyone. Thank you so much.

Outtro

Emily (41:41): 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.

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