Personal Finance for PhDs

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This Grad Student and Her Family Lived on Her Stipend While Banking Her Spouse’s

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In this episode, Emily interviews Dr. Jacqueline Kory-Westlund, who recently completed her PhD in the MIT Media Lab. During their five years in Boston, Jackie and her husband lived on her grad student stipend and saved and invested all of his income. Jackie and Emily discuss the frugal tactics Jackie and her husband used to keep their expenses low, even after having their first child. Saving and investing Jackie’s husband’s income gave them a sizable nest egg by the end of grad school, which they used to purchase a home in cash in a low cost of living area of the country. Jackie and her husband have designed their lifestyle around location-independent work so they can live where they want to while they expand their family, which is now an option for more workers made remote during the pandemic.

Links Mentioned in This Episode 

Teaser

00:00 Jackie: We started out with a generic retirement fund, and then at some point later that year realized we could probably get better returns if we were more selective about what funds we invested in. So then we switched to some market index mutual funds and over the course of the next three years made almost $40K.

Introduction

00:26 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is season eight, episode eight, and today my guest is Dr. Jacqueline Kory-Westlund, who recently completed her PhD in the MIT Media Lab. During their five years in Boston, Jackie and her husband lived on her grad student stipend and saved and invested all of his income. We discussed the frugal tactics Jackie and her husband used to keep their expenses low, even after having their first child. Saving and investing Jackie’s husband’s income gave them a sizeable nest egg by the end of grad school, which they used to purchase a home in cash in a low cost-of-living area of the country. Jackie and her husband have designed their lifestyle around location-independent work, so they can live where they want to while they expand their family.

01:18 Emily: It’s a model that is now an option for many more people whose positions went remote during the pandemic. This interview is a wonderful example of how an early, intense focus on a lofty financial goal can often result in financial freedom within a short time. Financial freedom means something different to everyone, but it could include leaving, or not taking in the first place, jobs that are unsuitable to you, location independence, working part-time, starting a business, staying home with a child, full-time travel, or just living your best life. Even if it is a bit unconventional. Financial freedom means choices. And this freedom can arrive quite a bit earlier than full financial independence, which is when you never have to earn an income again. We’ve had many stories on the podcast of guests working on or accomplishing a financial goal that seems outlandish for their career stage.

02:10 Emily: Some examples, which are linked from the show notes include Dr. Jenni Rinker paying off over $60,000 of student loan debt during grad school, Beth Moser clawing her way out of financial ruin during the great recession, Jonathan Sun and Dr. Matt Hotze house hacking during grad school, Courtney Danyel growing her freelancing writing business to over $100,000 per year, and Dr. Rachel Blackburn investing for retirement, despite her $1,000 per month grad student stipend. There are even more examples than that in the archives. Even my and my husband’s own story of increasing our net worth by over $100,000 during grad school qualifies. I can tell you that I appreciate my past self for being aggressive about frugality and retirement contributions more with every year that goes by. I don’t this to wag my finger at anyone who has not been working on a lofty financial goal. Personal finance is personal, and we all have different things we value. I just say it because I had no idea when I was in grad school and racking my brain for ways to increase our savings rate by another half a percent, how sweet financial freedom would taste just a few years later. If you’re looking for motivation to push yourself with your own finances, dream about what your best unconventional like might look like.

Book Giveaway Contest

03:28 Emily: Now, it’s time for the book giveaway contest. In February, 2021, I’m giving away one copy of The Simple Path to Wealth by JL Collins, which is the Personal Finance for PhDs Community book club selection for April, 2021. Everyone who enters the contest during February will have a chance to win a copy of this book. The Simple Path to Wealth has quickly become the go-to text in the financial independence community to explain passive investing, which is the style of investing that I practice and teach. It sometimes comes as a surprise that the most effective form of investing is both low cost and low maintenance. If you’ve been sitting on the investing sidelines, this book will almost certainly motivate you to get started by showing you how simple successful investing really is. If you would like to enter the giveaway contest, please rate and review this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at [email protected]. I’ll choose a winner at the end of February from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Dr. Jacqueline Kory-Westlund.

Will You Please Introduce Yourself Further?

04:55 Emily: I am welcoming to the podcast Dr. Jackie Kory-Westlund, and she’s a recent graduate of her PhD program. And we are going to discuss her finances during her PhD and how she accomplished a massive financial goal, right upon completing her PhD, which was purchasing a home in cash. When Jackie emailed me about this prompt, I literally misread it because I could not believe that anybody would possibly do that. So this is going to be really exciting to figure out. But Jackie, why don’t you tell the audience a little bit about yourself first?

05:28 Jackie: Hi. Yeah. I did my PhD at MIT in the MIT Media Lab with Dr. Cynthia Breazeal. So I worked on small, cute fluffy robots that helped kids learn stuff. And I, let’s see, I finished in 2019, so I’m currently an independent scholar, writer, artist. I do not have a full-time job because I’m staying home for the most part, hanging out with my kids. My husband is a software guy so he works from home, has his own startups and all of that going on. And we had our first kid during the PhD. So that’s relevant to our finances and our financial goals.

Jackie and her Husband’s Finances at the Start of PhD

06:08 Emily: All right, let’s dive into it. This is such an exciting story. Okay. So please give me a snapshot of your finances when you started the PhD. If your husband was in the picture at the time, include him, too.

06:20 Jackie: Right. So when I started the PhD, this was back in 2012. I was one year out of undergrad. So I’d spent one year kind of doing a research internship thing. So I hadn’t made a lot of money at that point. My husband and I, we were not married yet at the time, but we both moved to Boston for MIT at the same time. I had a used car that was probably worth $2,000. We had a couple thousand in our bank accounts that we used for our first month of rent in the rental deposit and the realtor fee and a couple of thousand in student loans. And that’s about it.

06:56 Emily: Alright. Yeah. Almost zero, close to zero. It sounds like. And then what was your stipend?

07:04 Jackie: My stipend was about $30K a year. And MIT paid for healthcare for me, not for my husband. We had to add him to the plan later, once he couldn’t be on his parents’ plan anymore, you know, hitting 25 years old there. And that stipend increased slightly year to year because MIT made cost of living adjustments. And it also went up slightly when I switched from the master’s program to the PhD program, but it was never more than like 32K or so.

07:33 Emily: Okay. So from 30K, in 2012, when you started to about 32K, when you finished, you said 2019, right?

07:39 Jackie: Yeah. Though, actually for the PhD. So we actually moved and got the house the year before I finished. I finished up the last bit remotely.

07:49 Emily: Okay. Okay.

07:51 Jackie: Because I was just writing at that point, so we actually moved in the middle of 2018.

07:55 Emily: Okay, great.

07:56 Jackie: And at that point I stopped getting the stipend because I wasn’t on campus.

08:01 Emily: Oh. So you, you left the stipend behind in 2018 and finished self-funded after the last month or up to a year. And how about your husband’s income during that period?

08:11 Jackie: So initially, for the first couple of years in 2012 through about 2015 or so, he was working on a couple of startups and as a contractor, primarily working on his self-funded software startup. So was not making a huge salary, probably around $50K a year in the last couple of years. And throughout the entire time I was in grad school, our combined income never went over about $80K on our tax returns.

Strategies to Decrease Expenses During PhD

08:39 Emily: Okay. So that gives us a range to think about over that period. So pretty low at the start a little bit better by the end, but again, we’re talking about Boston, so yeah, pretty high cost of living area. So $30K is a pretty decent grad student stipend, but in a high cost of living area, it’s still really challenging. Okay. So that’s your finances when you started the PhD. So as you’re going through the PhD, I’d love to talk about, you know, both sort of frugality, like how do you keep a lid on your expenses? And also did you increase your income in any way? You just told us what the total was, but were there any, you know, methods that you used to increase it? So let’s start on the decreasing expenses side. What, you know, what were your strategies? What were the things that worked out best for you in terms of controlling those expenses?

09:21 Jackie: The biggest thing is we both just kind of by default are fairly frugal people. Neither of us like tend to eat out much. You know, we don’t usually buy that much stuff. We ate a lot of rice and beans. Probably were in the range of only about $250 a month on food. Probably the entire time we were there. I’m the one who started the trend in my lab of people packing their own lunches to bring to the lab.

09:46 Emily: Great influence.

09:49 Jackie: So we primarily lived on my stipend of about a $30K a year. And two thirds of that was rent. And our vehicle expenses tended to be pretty low because like we did have the car, but we didn’t use it that much. I took public transit and walked to MIT and that was half subsidized by MIT. And the other big thing was we had an awesome landlady who did not increase our rent.

Housing and Rent

10:13 Emily: Wow. Okay. Well, you just hit kind of the big three expenses right there. You hit housing, which at $20,000 per year is yeah. It’s a bit expensive on that grad student stipend. Really admirable, by the way of structuring your budget so that you would live just off the one income and save, presumably, the higher income. That’s really, really impressive. So you hit housing. Now was it luck that you found someone who was not going to increase rent, or was there any strategy involved in finding that place?

10:42 Jackie: That was entirely luck. When we were moving up to Boston, we spent about a week there prior to moving looking at places. And we talked to a realtor who was like, Hey, I’ve got this landlady who just needs someone. We just got lucky that she just had this policy on her own where she just didn’t like increasing rent too much. And she’s a nice old lady, lives downstairs, you know?

11:04 Emily: Yeah. I mean, actually that’s, you know, it could be luck for you, but it might be strategy for someone else. I wonder if there is something there around being neighbors with your landlord and like cultivating a positive relationship, because I think it’s definitely harder to raise rent on someone whose face you see like multiple times per week, rather than some, you know, unknown number or whatever in some system. So, yeah. So it sounds like you were living in a duplex kind of situation?

11:28 Jackie: Yeah. It was one of those three-story, three-family homes.

11:32 Emily: Triplex.

11:32 Jackie: Yeah. Triplex, that’s the word I’m looking for. Yeah. And my husband and our landlady, they both went to the same church, so that maybe was a relevant factor there, you know.

11:43 Emily: Yeah, any kind of connection you can make.

11:45 Jackie: Yeah. Yeah.

11:46 Emily: That’s awesome. Okay. So, you know, housing expense is clearly number one, but managing to get a place, you know, by luck probably that didn’t increase the rent is an incredible advantage because that, you know, the rate that rent often rises at is higher than, you know, what you’re getting in your salary increases for cost of living. So you hit housing, number one. You also mentioned transportation. You know, it’s a city life kind of thing. Like you don’t have as much need for like the car usage. And did you have one car or two?

 Sharing a Car, Reducing Food Costs

12:14 Jackie: Just the one.

12:15 Emily: Just one. Okay. So sharing a car as well, another great strategy. And you mentioned, you know, the food expenses. So not eating out very often and also, I mean, $250 per month in food is like really keeping a lid on things. You mentioned rice and beans. Presumably you’re cooking a lot. Do you have any other like, tips in that area around like managing the grocery? Both the budget and like the time that goes into cooking and meal prep?

12:40 Jackie: Well, I kind of have a hobby of cooking, so we did a lot of the crock pot full of a big dinner on Sunday, and then eat leftovers all week to reduce time cooking. Buying things in bulk, instead of popping out to the store every couple of days. We tended to go for beans over meat, which decreases expenses. You look for what’s on sale, you know. That kind of stuff.

13:05 Emily: Yeah. Do you have any like Boston specific tips, like a grocer that you really liked for good deals or something?

Roberto’s Produce (in Boston)

13:11 Jackie: Ooh, let’s see. Actually, we lived about half a mile from a produce store that had way cheaper produce prices than the main grocery store that we drove to.

13:22 Emily: And what was the name of it?

13:23 Jackie: That was, let’s see, what was it called? It was Roberto’s. Roberto’s produce. Cute little place. Just, just produce.

Financial Goals with Savings

13:30 Emily: Yeah. We actually frequented a little shop like that in Seattle as well and had great prices. You mentioned earlier that you actually bought your home prior to finishing your graduate program and that you had been, I think, saving your husband’s salary during that whole period. What were your financial goals during that time, aside from you said, living on just your income, what were you doing with your husband’s salary?

13:56 Jackie: So, in about, I think 2015 was when we realized that we had some money in the bank, we should probably do something with it, which was about my third year of grad school, I think. So we took all of our extra money and put it, invested it primarily in the stock market using Vanguard. We started out with a generic retirement fund, and then at some point later that year realized we could probably get better returns if we were more selective about what funds we invested in. So then we switched to some market index mutual funds, and over the course of the next three years made almost $40K just from having money invested, which is like free money! It’s just so cool. It was like, when we first started doing that, we were like, wait, we just get money from having our money sitting here? Like it’s pretty cool when you figure out how that works.

14:49 Emily: It doesn’t always work out like that over the short-term.

14:53 Jackie: It’s true, we got lucky with which, which years we were investing there.

14:57 Emily: Yeah. I felt that way too. I started investing basically in 2009, like at the nadir of the market and just the last decade has been incredible with, you know, a few hiccups along the way, but overall, obviously really, really strong. And was that in like retirement type accounts or was it more just taxable accounts that are accessible to you?

15:17 Jackie: We had a little bit in some IRAs and the rest of it was just like a generic account that we could move money around whenever we wanted.

Having a Child Motivated the Goal of Home Ownership

15:27 Emily: Okay. So you’re basically living on your stipend, investing your husband’s salary or whatever income he has during that period. At what point did the goal of home ownership materialize?

15:38 Jackie: About the same time we had a kid. So it was in my fourth year of the PhD. That’s when I started thinking, Hey, you know, we’ve got a baby now, at some point I’m going to finish this PhD and where are we going to go? What are we going to do? So that’s when we started doing a lot more life planning and getting a house with a yard somewhere for kids to play. And that’s when that started being like really on our radar.

16:01 Emily: Yeah. We glossed over the whole having a kid during grad school thing. How did that work out with like, did insurance cover pretty much everything? Like, how did the finances of the having a child work?

Health Insurance and Parental Leave

16:13 Jackie: MIT’s healthcare program like yeah. Insurance covered pretty much everything. We paid probably $200 total to have a baby.

16:19 Emily: Amazing. And did you get any leave?

16:22 Jackie: Yes. MIT was good about that as well. And the Media Lab gave me an extra month. So MIT had a policy of two months paid leave for any parents. And then the Media Lab gave me an additional month and that was all paid leave.

16:35 Emily: Amazing.

16:35 Jackie: So I had three months off and then last thing on that was my advisor was awesome. And my lab was awesome in that they’re all very supportive of this and I could work remotely a lot more and was at a point in the program where I didn’t have to go into class anymore because I was just able to just research stuff. So a lot of, a lot of things went into that being, not that bad, like being like a reasonably doable thing. I know it’s not for a lot of women. It can be difficult.

Did You Also Pay for Childcare?

17:06 Emily: So I think about three big expenses when it comes to having a child. We just covered two of them, health insurance and the leave. And then the third one is childcare. You just mentioned working from home, but did you also pay for childcare?

17:18 Jackie: We did not, actually. My husband and I split that.

17:21 Emily: So interesting.

17:22 Jackie: And just managed to work that into our work schedules. That was part of why he was doing such flexible work at the time. And then my lab was flexible. So we just squished childcare and somehow, you know, did lots of work when the baby was napping kind of thing.

17:36 Emily: Yes. I remember those days very well. I have two kids as well, and I’ve actually done one other interview on the podcast from season one. So if newer listeners haven’t seen this one yet, but you’re interested in having a child during graduate school, check it out because I interviewed another graduate student mother married to another PhD father who also did the same thing. I think for the first six months after their first child was born, they completely split childcare and I did not pay for any outside services in that regard. And yeah, she talks about how she managed to you know, complete her dissertation and get a TT job and have the baby. And it’s kind of a really crazy year for her. But it’s incredible that, you know, you took that on and then were able to accomplish it. Was that motivated by finances? Was it motivated by, we just wanted to spend time with our child a lot of time or, you know, what was the reasoning behind that?

18:29 Jackie: All of the above. So, childcare in Boston is ridiculously expensive. But also a lot of you want to spend time with this baby. Like, why would you have a kid if you don’t want to spend time with it? And there are some philosophical things around how we wanted to approach raising our kids and actually being around a lot of the time. I was homeschooled actually growing up. So that’s probably very influential in how I’m thinking about how to raise my kids.

18:57 Emily: Yeah, so a familiar model for you.

18:58 Jackie: Yeah.

How Did You Choose Where You Wanted to Live?

19:00 Emily: Gotcha. Okay. So got the baby, but we’re not paying for childcare or the other associated expenses. MIT did a good job providing you with the appropriate benefits. Okay. So then you said that home ownership became a goal. Once you had the child and you were like, we want to get out of the city life, how did you choose where you wanted to live?

19:19 Jackie: So we decided based on kind of two factors. One, we were not tied to any particular location first. So we could kind of pick anywhere because of the kind of flexible job situation that we’re setting up for ourselves. And then we wanted to move nearer to some of our family. We were like, we’re having kids. We’d love to have some grandparents around. We’d love to live near some family finally, because it’s been a long time since we’d done that. It was really nice. So my husband’s family is in North Carolina. Mine, a lot of them were in Idaho, North Idaho. So between the two of those, we were looking at the different areas and ended up picking Idaho for a variety of reasons. I mean, both places had a lower cost of living. It’s hard to get a higher cost of living than Boston, New York, or San Francisco. Lots of nice, pretty lakes and mountains up here.

Commercial

20:15 Emily: Emily here, for a brief interlude. Taxes are weirdly unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available at pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which you can find links to from P F F O R P H D S.com/T A X. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now, back to our interview.

Location Independence

21:21 Emily: Sounds like you know, you have intentionally chosen a route that not many PhDs do. You know, a lot of PhDs feel that they have to be geographically flexible to have the type of job that they want. And you’ve gone another direction and said, my primary goal here is to be in certain locations in the country and the job is going to be, it sounds like the job is going to be secondary to that in that you want to work in a way that is flexible to live wherever you want. You want to be location-independent. Is that right?

21:52 Jackie: Yep.

21:53 Emily: And that’s what you’ve done and your husband has done.

21:55 Jackie: Yes. Yeah. That’s one of the main reasons he was working on his smaller software startup was so that he would be able to work from anywhere and not be tied to someone else’s you have to work in this location. And I was not looking at the end of grad school to get an academic job, necessarily. I mean, there’s a university here, but I’m not looking for an academic job or a full-time job currently because I wanted to be able to spend time with my kids and also work on some part-time things.

22:25 Emily: Yeah. I see actually, a lot of similarities between your story and mine actually. I mentioned to you when we started the call that my husband and I recently became location-independent. He still has a job job, but it’s just remote now. And I would imagine a lot of people are in that situation and going forward, a lot of people are not going to be going back into offices and labs and all of that. So depending on the nature of the work that you do, a lot, I think more people in my audience are going to have location independence in their future.

22:54 Emily: And it’s really, it’s exciting, I was telling you too, but it’s also a little bit intimidating to figure out where exactly do I want to live.

23:01 Jackie: We made spreadsheets, we made spreadsheets.

23:05 Emily: You went the direction of going to a lower cost of living area, which is known as geographic arbitrage in the financial world. We are actually choosing to live in a very high cost of living area because we love it and want to be there, but have to make the finances, you know, work out to have balance in that area too. So, in different ends of that spectrum. Okay, so you chose based on, you know, more personal factors where you wanted to live and then comes this, you know, huge accomplishment of buying this home in cash. And I think we’ve already heard how you saved up for it, right?

23:39 Jackie: Yeah, pretty much.

How Much Money Did You Have for Home Buying?

23:40 Emily: So do you want to share like the numbers around that? Like how much money you had to work with by the time you did buy?

23:46 Jackie: Yeah. So when we decided to move, we had about $150K from our non-retirement accounts. We also emptied our IRAs for the most part which was about $25K. So we had around $200K to work with when we were buying a house up here. And relevantly because I no longer had the stipend from MIT when we were moving and my husband’s startup had, like no long-term proven history of income, we wouldn’t have been able to get a loan. So that was also relevant in us deciding to get a home in cash. So we had about $200K to work with and the market up here was moving very quickly at that time. So we came out to Idaho for about two weeks that summer with the plan of when we leave, we will have a house.

24:39 Emily: That’s an incredible story. You say, now you couldn’t have gotten a loan or it would have been, Oh my gosh. So, so difficult, so much paperwork or something. Did you know that that would be the case, like looking forward when you started that taxable savings, savings and investment, or was it just more about having flexibility at that point?

24:59 Jackie: Well, when we first started saving money, we had no idea what we were going to do with all of it. And then we were like, Hey, we should buy a house when we move out of here. And then when we started looking into, how do you buy a house? How do you get a loan? How, how much money do you have to put down on a house? How expensive are houses in the different areas that we’re looking at? As I said, we, we did spreadsheets for a lot of things and calculations about how much money might we have and how much money would we need for this kind of house in this area. And having provable income for getting a loan from just about any bank seemed to be pretty relevant. And because my husband’s business was not quite off the ground yet, it kind of got off the ground a lot more in the year right after we moved, there was relatively little income that we could prove at that point in time, which was, you know, fine for how we lived, because we didn’t need much income to live off of.

25:51 Jackie: But for the purposes of buying a house would have made getting a very expensive house difficult or getting one with a smaller down payment more difficult. And maybe, maybe there was a bank that if you talked to the guy and explained all your situation in lots of detail, lots of paperwork, maybe, maybe they could work something out. But the other factor, I guess, that I should probably talk about was our goal of being debt-free when we moved as well, because we only had a couple of thousand in student loans and we paid that off before we went for the house. So as soon as I was done with grad school I was like, all right, pay off student loans, get rid of any other debt that we have.

Challenges of Mortgages for Fellowship Recipients

26:31 Emily: Gotcha. I probably know a little bit more than I should about getting a loan at this point because my husband and I are anticipating buying a house soon. My brother is a mortgage loan officer, so he sells mortgages. So I’ve talked with him quite a lot about this process. And thirdly, he’s actually helped me quite a bit. We’ll link in the show notes to some episodes I’ve done before on how people receiving fellowships during grad school or a post-doc can or cannot ultimately get a mortgage because a lot of times they’ll be just flat, turned down right away. There is sometimes a way to get a mortgage, but it’s really tricky. So we’ve done all that in these other episodes, but to your point, self-employment income is another really kind of dodgy form of income. I know because that’s what I have that is going to be looked at a lot more carefully and you have to prove a lot more than, you know, you would for like a W2 type of situation.

27:24 Emily: So, yeah. It sounds like, you know, you, you started the savings investing for whatever, you know, because you were in a position to be living on just the one salary and saving the other, and it turns out that it helped you accomplish this like major goal. So now, you know, sounds like you have little housing expense, it would just be like insurance taxes, this kind of stuff, very minor relative to what a mortgage would be, correct?

27:51 Jackie: Correct. Yeah.

What Are Your Future Financial Goals?

27:52 Emily: Yeah. And so what are you thinking now about your finances? Like your, you know, your living expenses must be quite, quite low. So what are you working on next?

28:03 Jackie: So for what’s next we like the idea of having a bigger house with acreage around it. Because up here, we have, you know, the small neighborhood house on, you know, maybe a quarter acre, you know, enough space for a garden, a lawn. But we really liked the idea of having some more acreage out here because this is a great area for that. And then be able to keep this house and rent it out as side income. We would like to keep increasing our income enough that we can increase charitable giving, investing in the local economy and community, that kind of thing. Relevantly, we got our house for about $210K and it’s now worth over probably over $300K, just in the last two years because of the increased, this area is growing a lot. So we liked the idea of maybe being able to get something else soon and then maybe get into more real estate in this area. It seems to be growing a lot.

29:01 Emily: So what would be the plan for the next house? Would you try to take out a mortgage given the change in your husband’s income or in whatever you have going on or is it saving up more cash?

29:12 Jackie: That’s still up for debate. Kind of depends on what kind of house we want to have. Yeah we still have been talking. So that’s been actually a fairly recent conversation. We’re like, okay, we’ve been here for a couple of years now. Like jobs are working out better, you know, one is increasing, income’s increasing, like what are we doing next? So that’s something we’ve actually just been talking about a lot recently is like, what kind of house would we want next? And would we want to do that in cash again, or not? Because now we could deal with a mortgage payment, you know, we could do that now, but not sure.

Best Financial Advice for Another Early-Career PhD

29:46 Emily: Yeah. So still under development. Well it sounds, I don’t know, really lovely. It sounds like a real, you know, you’ve really done lifestyle design, I guess is the way that, you know, it’s kind of put in like the entrepreneurship community of figuring out how you want to make money, where you want to make money, where you want to live getting your expenses down very, very low, if you want them to be. And then maybe even turning this house into an income producing asset, ultimately. Wow. Like what a story. As we wrap up this interview, is there, what’s your best financial advice for another early-career PhD?

30:21 Jackie: Probably to actually have long-term financial goals. Because having something you’ve got your sights on helps a lot when you’re coming up with like, if you’re, if you’re trying to stop spending money or trying to budget and keep to a budget or whatever it is, having something in mind that you’re going for helps a lot. Because we got a lot more conscious about what we were doing with money when we were like, Oh, we have a baby and we want to move and we want to get a house. We started paying a lot more attention to what we were doing with our money. As the second thing, don’t actually be afraid of investing money in the stock market or mutual funds because in a good year, that can actually make you quite a lot.

31:01 Emily: Yes. We also made some investments in a taxable account that has grown quite a bit in the last decade, I guess. It’s actually part of our house down payment of money. Now it’s been allocated in that direction. I of course like need to say like past performance is no indication of future return. So like this was a great, you know, three or so year period where you got to do this, it’s been a great time for me investing, but you know, this ride is not going to continue forever. And so I think what you were just saying, like if you have a specific goal for your money, like think about the timing and think about how much risk you want to take with it. And if you’re flexible about it, like the house was not necessarily quite, you know, a goal on your horizon yet, it makes sense that you would, you know, invest at that time. But once you have the goal in mind, like really think about, okay, do I need the money, do I need to take it out of the market now, do I need to, you know, go a little bit more conservative in the investments because you can hit a bumpy period and then not have the time you need to write it out. But if you’re flexible, keep the money invested, then you know, you can go for the higher return over time.

32:03 Jackie: Yeah, we actually lost about $10K right before we bought the house because Trump started a trade war with China. We were like yeah so I guess we should pull this out of the stock market.

32:13 Emily: It’s really, really hard to time the market. Yes. Well, great lessons here and thank you so much for sharing, you know, again, the lifestyle design, the frugal living, the goals. I think it’s, you know, a wonderful story and well illustrated for my audience. So it’s really been a pleasure talking with you Jackie.

32:29 Jackie: Thanks. Thanks for having me on.

Listener Q&A: Tax Claims

32:36 Emily: Now, on to the listener question and answer segment. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this spring. So it is anonymous. Here’s the question. Quote, how do I do my taxes? What can I claim on my taxes? Can I claim a laptop that I needed for school as an expense? End quote. So this is a really big question. Obviously not one I can answer in a few minutes on this podcast. So the best place to go for further resources about your taxes, especially as a funded graduate student, is my website pfforphds.com/tax. That’s my tax center from which I’ve linked all of my relevant podcast episodes and articles and videos and so forth. This answer is even too big for a set of articles. So I have created an entire tax workshop to help answer this question. The workshop comprises 11 videos, two worksheets, and one Q&A call per month throughout tax season. So if you’re interested in getting into the workshop and having a full exploration of this question, please go to pfforphds.com/taxworkshop.

33:55 Emily: Okay. The part of the question I do want to tackle on this episode is the last part. Can I claim a laptop that I needed for school as an expense? There are four higher education tax benefits. However, one of them is virtually always used by funded graduate students. This benefit is called tax-free scholarships and fellowships. I’ll tell you whether or not you can use a laptop or a personal computer as a qualified education expense for the purposes of making scholarship and fellowship income tax-free. I won’t comment during this episode on whether or not you could do it through one of the other three benefits. So how tax-free scholarships and fellowships generally works is that you have some income as a graduate student, for example, the scholarship or waiver that pays your tuition. If me mentioning scholarships as income shocks you, please go check out my further resources.

34:59 Emily: On the other side of the ledger, you also have some higher education expenses such as tuition. Now, tuition is always is considered a qualified education expense for the purposes of making scholarship and fellowship income tax-free as long as you are enrolled in a degree program at an eligible educational institution. So in the case of tuition for a fully-funded graduate student, how this usually works is that the tuition charge and the tuition scholarship or waiver exactly equal one another. And so basically use the qualified education expense to make the scholarship tax-free. So they cancel each other out. The income, the scholarship, has no net effect on your taxable income. You’ve made it tax-free. And furthermore, you can’t use that tuition charge to take any of the other higher education tax benefits because you’ve already used it for this one. Okay. So that’s generally how the benefit works.

36:00 Emily: The question that I’m drilling down to is, is a laptop or a personal computer considered a qualified education expense for the purpose of making scholarship and fellowship income tax-free? Now, please note, to get down to the question of whether your laptop or personal computer is a qualified education expense, you have to have some scholarship and fellowship income to cancel against it. If you’ve already canceled all of your scholarship and fellowship income against other qualified education expenses, like tuition and required fees, then you would not have any additional scholarship and fellowship income to try to cancel against a laptop. So this benefit wouldn’t apply in that situation. However, there are lots and lots of funded graduate students who have scholarship and fellowship income that exceed the tuition and required fees and so forth. So this question would apply to them. So is a laptop or a personal computer, a qualified education expense for the purpose of making scholarship and fellowship income tax-free?

37:04 Emily: I’m pulling up IRS publication 970 because I’m going to read the definition of a qualified education expense. Quote, for the purposes of tax-free scholarships and fellowship grants, these are expenses for tuition fees required to enroll at, or attend an eligible educational institution and course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. These items must be required of all students in your course of instruction. End quote. The definition goes on to specify some types of expenses that are not qualified education expenses, laptops and personal computers were not included in that list. So we go back to the second half of this definition of qualified education expenses regarding supplies and equipment that are required for the courses at the eligible educational institution. They must be required of all students in your course of instruction. So the question is, does a laptop or personal computer fall under that definition? Here’s my opinion on the matter, this is not tax advice, by the way. If you can prove, if you can show in writing that a laptop or personal computer is required of every student in your course of instruction, that could be an individual course that you’re taking.

38:27 Emily: That could be the degree program that you’re enrolled in. That could be everybody in the graduate school. At whatever level, if a laptop or computer is required of all the students, then it can be considered a qualified education expense. I know that we both know that pretty much a laptop or a personal computer is required of every PhD student, especially in the time of COVID. However, you and I knowing that it’s a tacit requirement is not the same as it being an official requirement that the IRS would accept. The theory is that you, as a graduate student can go to the computer labs provided on campus and do all your work there, I guess, which obviously is ridiculous. But in my opinion, for this to work as a qualified education expense, it needs to be down in black and white somewhere that having your own computer was required.

39:29 Emily: Now I went searching to see if I could find some of these in-writing requirements. So I did a few different Google searches. Does X university require students to own their own computers? Obviously, you would do the search for just your own university. I found a really clear example at Iowa State University, page titled Computer Requirement, quote, beginning in fall, 2020, all students at Iowa State University will be required to own or obtain a laptop computer or other device appropriate to their discipline. End quote. The page goes on explaining why this requirement is in place, but having this page, you would be able to show to the IRS, Yes, I am required as a student at Iowa State University to have my own laptop or computer. It is a qualified education expenses for the purpose of making scholarship and fellowship income tax-free. Super clear. However, you will not find this kind of requirement or clear language everywhere.

40:25 Emily: For example, on the computing and information technology page on Brown’s website, it says, quote: Brown does not require students to own a computer. End quote. Of course, there’s more text on that page, but there it is, you’re not required to own a computer as a student at Brown. So unless you can find maybe something more specific to your course or your graduate degree that says something else, this would probably apply. So you would not be able to say that your laptop or personal computer is a qualified education expense. Now, as I said earlier, you know, there could be a university-level requirement. It could be a graduate school level requirement that could be, you know, for your individual department or program, even for an individual course, you know, you might find a requirement, any one of these levels. So please do look at all of those levels to see if you can find in black and white, this kind of requirement.

41:13 Emily: So for example, I searched out Georgia Tech, and I found their page titled, Required Computer Ownership, quote, all undergraduate students, entering Georgia Tech are required to own or lease a computer. End quote. So I could find that requirement for the undergraduates, you would have to search and see if they had a similar requirement for the graduate school or, you know, your degree program. I couldn’t find that. So I think that’s what it comes down to. Can you find in black and white that a laptop or a personal computer is required for you at some level by your university? If you can, it’s a qualified education expense, and you can use it to make some of your scholarship and fellowship income tax-free that was not already made tax-free by other qualified education expenses. This question showcases really well why you can’t rely solely on your 1098T to provide you with information about your qualified education expenses.

42:06 Emily: A laptop that you purchase from a retailer that’s not your university would not be reflected on your 1098T, yet, as we’ve seen under certain circumstances, it can be a qualified education expense for the purposes of making scholarship and fellowship income tax-free. There are other examples like this of qualified education expenses that don’t show up on your 1098T. So you cannot trust your 1098T alone. You have to really think holistically about what your higher education expenses were for the year, and then figure out whether they can be considered qualified education expenses. So I know that was a lot to follow, especially if you’re new to my tax material and you’ve never heard me talk about how your fellowship scholarships are part of your potentially taxable income. Again, if you want more resources, pfforphds.com/tax is the best place to go for articles and podcast episodes and so forth. But you’re going to find the really in-depth information in my tax workshop. Again, pfforphds.com/taxworkshop. I answer questions like this one once per month during our Q&A calls. The next Q&A call is coming up on Sunday, March 14th, 2021. Thank you so much to Anonymous for submitting this question. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions. So please submit yours.

Outtro

43:34 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast, and instructions for entering the book giveaway contest and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

Negotiating Your Grad School Stipend and Benefits: Five Success Stories

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In this episode, Emily presents five stories from anonymous guests of successful stipend negotiations between prospective or current graduate students and their PhD programs. The episode is primarily for prospective grad students going through admission season right now and secondarily for current graduate students. Emily summarizes her key take-away points from these stories and her conversations with graduate students about this issue over the past few years. The goal of this episode is to convince you that stipend negotiation does happen, at least on occasion, and perhaps even to give it a shot yourself to improve not only your own bottom line but potentially that of your peers as well. Most of all, Emily wants this episode to get PhD students talking about their pay—how much, when, from whom, in exchange for what. To that end, please share this episode and enter your stipend into PhDStipends.com.

Links Mentioned in this Episode

Teaser

00:00 Guest 1: Overall, I would say that there’s definitely no harm in asking and negotiating a graduate school offer. If I didn’t ask the answer would have automatically been no. And at first, I was scared to ask and really only did because my advisor, whom I admire, encouraged me to do so, but now that I did, I am very grateful and definitely realized the benefits of asking nicely for a better graduate package.

Introduction

00:28 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode seven, and I’m joined today by several anonymous guests. This is a compilation episode, all about negotiating your grad student stipend. It’s primarily for prospective graduate students going through admission season right now, and secondarily for current graduate students. I have collected five stories of successful stipend negotiations between prospective or current graduate students and their PhD programs. I’ll also share my observations from talking with graduate students about this issue over the past few years. My goal is to convince you that stipend negotiation does happen, at least on occasion, and perhaps even to give it a shot yourself to improve not only your own bottom line, but potentially that of your peers as well. Most of all, I want this episode to get PhD students talking about their pay — how much when, from whom, in exchange for what?

01:33 Emily: There are two specific action steps that I’d like you to take to further the cause of pay transparency and increasing stipends for everyone, whether you are a prospective, current, or former PhD student. One, share this episode. I hope it will serve as a conversation starter. Two, enter your stipend into PhDStipends.com. I recently gave the website and database a facelift, so you’ll find an updated and more detailed survey along with the over 9,000 previously acquired entries. After you enter your stipend, share that site too. I’ve been contacted by numerous graduate students and faculty members who have used the data to advocate for higher graduate student stipends in their departments.

02:16 Emily: This is such a thrilling time of year for prospective PhD students. I know most of us want graduate school to be better for the PhDs that come behind us than it was for us. I hope the negotiation, examples and best practices that you hear in this episode contribute in a small way to that goal.

02:34 Emily: Now it’s time for the book giveaway contest. In February, 2021 I’m giving away one copy of the simple path to wealth by JL Collins, which is the Personal Finance for PhDs Community book club selection for April, 2021. Everyone who enters the contest during February will have a chance to win a copy of this book. If you would like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review and email it to me [email protected]. I’ll choose a winner at the end of February, from all the entries you can find full instructions pfforphds.com/podcast.

03:15 Emily: The podcast received a review this week titled a masterclass in personal finance for grad students. The review reads quote: “I tell everyone I know about this podcast. Every episode is not only packed with value from others, lived experiences, but also actionable info from Dr. Emily Roberts. My favorite eps are always about side hustling and house hacking”

03:36 Emily: Thank you so much to BKT for this incredible review! I’m really glad to know which subjects are the most relevant for listeners. Without further ado, here’s the compilation episode on negotiating your grad student stipend.

03:53 Emily: I have five anonymous stories for you today regarding negotiating a grad student stipend and/or benefits. I solicited these stories from my mailing list and on Twitter, and they all occurred in 2019 or 2020. I wanted to keep the examples of recent, but just know that several more people volunteered their negotiation stories from earlier years.

04:14 Emily: By the way, I don’t get a lot of pushback on Twitter when I talk about financial matters, which I’m happy about, but soliciting these negotiation stories was another matter. Multiple people responded that they believed it was impossible to negotiate a grad student funding package or that it was unethical to do so because it would create pay disparities among a cohort, as if that didn’t already exist. Anyway, I thought it was interesting that the subject seemed to get some people’s hackles up, even though salary and benefit negotiation is an expected step prior to accepting any other type of job. That is just confirmation for me, that this topic warrants even more sunlight.

04:53 Emily: I’ve covered or touched on negotiation and academia, both at the grad student stage and leader in multiple previous podcast episodes, which you can find links to in the show notes. My intentions with publishing this episode are to: one, bring awareness to the fact that negotiation is at least theoretically possible for graduate students, particularly during admission season. This could be considered part of the hidden curriculum. I want to bring it into the open so that all graduate students benefit from this knowledge. Two, share the stories of grad students who have negotiated successfully, wo that prospective graduate students in 2021 in later years can learn from their examples. Three, raise grad student stipends and improve benefits, generally, not just for the occasional individual.

05:41 Emily: One way to do this is by collective action, such as unionization, which I’ve covered in several other podcast episodes. Another is for prospective PhD students to say to the people who hold the purse strings that livable or dare I say comfortable funding packages are important to them as people and vital to their academic and career success in graduate school. Prospective, graduate students have relatively more power than current graduate students to get this message across.

06:11 Emily: Okay, I’ll get off my soapbox now and play for you the five stories I received. Four of these negotiations occurred during admission season, before the person formerly committed to the PhD program in question. One of the negotiations occurred after the person was already enrolled in a program. So don’t think that negotiation is out of the question just because you are past the admissions stage.

Guest One

06:37 Guest 1: Hello. I want to thank Emily Roberts for having me on this podcast. I’m going to be talking about how I successfully negotiated my graduate student stipend offer. For some background information on me, I recently graduated from my undergrad and I did a double major in psychology and biology. And this last year I applied to graduate school for a PhD in neuroscience. When I heard back from all of the schools that I interviewed at, I was accepted into a few different programs and I managed to narrow down my decision to two programs that I really, really liked. Since I really liked both of these programs, I was really stuck at that point, and I was kind of struggling on which one to decide where I would attend graduate school.

07:39 Guest 1: However, there were a few differences between these two schools. One of them was offering me an additional scholarship on top of the stipend and the other one wasn’t. I was actually leaning more towards the one that was not offering me the scholarship. So I thought that I could even just get a little more money from them then that would completely solidify my decision to attend that school. I figured if one of the schools was offering me more money than other programs like the other one, I was debating between probably do the same thing. I was lucky enough to know someone else that also interviewed at the school that I was deciding on and they told me that they were offered an additional $2,500 for the first year. So I was like, okay, I know the school could provide me at least $2,500 more. So I talked to one of my advisors and I told her the entire story and she encouraged me to negotiate for more money. She is a very powerful woman in the STEM field and I look up to her tremendously, so I trusted her and wanted to follow her.

08:56 Guest 1: After that, I wrote a very kind email to the program coordinator asking if there was any possible way that the school could provide me additional support as it would aid in my decision to ultimately attend that school. My email to her included that, I told her I was very seriously considering accepting the offer to attend that school because I really enjoyed the program, the campus, the location was incredible, and it perfectly aligned with my criteria in selecting a graduate school. However, I told her that while I’m excited for the opportunity to attend the school, another school who I’m also considering for graduate school is offering me an additional scholarship on top of the stipend to attend their program, so I was wondering if there was any possible way that this program could offer me any additional support to attend. I told her if, so I’m certain I will choose the school to complete my graduate studies. And of course, I thanked her for her time and her consideration. After I sent that kind email, the program corner coordinator replied back and told me that they could offer me the $2,500. Obviously after that, I was very thankful to them and I decided to attend their program.

10:16 Guest 1: I would like to note that this $2,500 still did not match the scholarship that the other school was offering me. They were offering me about $17,000 spread out over three years. So although the offer made to me by the other school was not nearly as much, I figured that if they were willing to at least give me no whatever they had, and that I was leaning more towards that program anyway, that I would do well there and that I was thankful to them for giving me additional support.

11:01 Guest 1: Overall I would say that there’s definitely no harm in asking and negotiating a graduate school offer. If I didn’t ask the answer would have automatically been no. At first I was scared to ask and really only did because my advisor who I admire encouraged me to do so, but now that I did, I am very grateful and definitely realize the benefits of asking nicely for a better graduate package. I hope all of that helps anyone that is trying to negotiate their student offers and know that it is possible. Thank you, Emily again for having me. Bye.

Guest Two

11:41 Guest 2: Thanks for covering this topic of negotiation. And I’m excited to be telling you a bit about my experience with this. This past season, the admission season starting in 2019, I applied to PhD programs mainly in biological and biomedical sciences with a couple of neuroscience programs mixed in there as well, and I ended up getting a decent number of offers. I think I had five acceptances by the end, which was great.

12:10 Guest 2: I was mainly deciding between two schools. So there was one on the East coast and one on the West coast. The East coast school was a very well-respected and highly ranked program. They had a lot of really great research that I was interested in, and they also had a pretty decent stipend. It was about $34,000 for I’d say a moderate cost of living area. It wasn’t low cost of living, but you could certainly live very comfortably with that stipend in that local area. That was also with, you know, health insurance covered and tuition and fees all paid for all that good stuff.

12:46 Guest 2: The thing I didn’t like about the East coast school was the location. I really didn’t like the city all that much. It also wasn’t the best area for having a good job market for my husband. I wasn’t against it, but I was still kind of shopping around and then the other school, which was actually the last program that I interviewed at, was on the West coast and this program basically checked off all my boxes for me. It had great research, it had a pretty strong reputation and I loved the city. I loved the weather. I liked the vibe of it. It really strong job market for my husband’s field. The only downside was the cost of living. This school actually had the exact same stipend as the East coast schools, about $34,000 with the same benefits and tuition coverage and all that, but it was quite a bit more expensive. And so the quality of life you could have on that stipend would just end up being a little bit lower. You would have to budget a little more carefully. And in particular, the main difference was housing. Housing in that area, if we wanted my husband and I to get like a one bedroom apartment, especially one that was fairly close to campus, it would have been at least $2,000 a month, which would be pretty hard to swing on a $34,000 stipend. And I didn’t want to count on my husband’s income just because we hadn’t moved there yet, we didn’t know how long it was going to take him to get a job and all that. That made me a little bit nervous.

14:13 Guest 2: What I did is I went to the West coast school after I was accepted and I basically laid out everything I told you — that I really liked their program. It was exactly what I was looking for in graduate school. The only issue was that the cost of living made it really hard to live there, and I mentioned that I had this other offer that checked off all the other boxes, other than location. As I went in, I knew vaguely that they had some kind of a priority housing system. At the school, the way graduate housing normally exists, they have subsidized graduate student housing, but you can only live in it for up to two years. And I had heard vague rumors without much detail that there was some way that they would allow you to live there for your entire PhD, not just two years. And the subsidized housing is literally about half the cost of what would normally be. You can get a one bedroom for about a thousand dollars a month. So I just asked them directly, can you nominate me for whatever program that is? And if you do, I will commit to the school immediately. I sent this to the admissions coordinator basically. He emailed me back. He said, I have to check with some people and I have to confirm how many spots they have for this program. So I said, sure. And then a week later they emailed me back and said, Hey, we’re nominating you for this program, congratulations, and I accepted right away.

15:31 Guest 2: I’m really happy with how this negotiation turned out. I think it’s going to make our living situation much more comfortable with not having to pay basically twice as much for our housing. And also not having to stress about like moving and trying to find an apartment before I moved to that city because I don’t live in the area currently. I think it all worked out really well and I would definitely encourage other students to try to negotiate their PhD offers as well, and especially be open to not just negotiating the base stipend, but also those other benefits. Hope this is helpful for other people who are in the same situation.

Guest Three

16:05 Guest 3: Hi. I am currently a first year PhD student in neuroscience at an R01 university and when I was trying to decide which program to attend, I did negotiate my offer a little bit. I’m not sure if I would super consider it a negotiation, but basically what I did do was I had several offers, and one of them was financially a lot more attractive than the other, as well as being from a very fancy name school. Not that the school I ended up with wasn’t a great university, but the other one I had an offer from that was financially a little bit better was one of the top three universities for my area of study. What I did was I emailed the program director and said that a few days before the deadline was to decide and basically phrased it as I know this is a bit of an awkward question, but I was wondering if the graduate fellowship package, which was about $31,500 a year for six years, was something that was potentially negotiable.

17:13 Guest 3: I basically told them that I was accepted to another program, mentioned the name of the university and mentioned that it was a special fellowship offer for underrepresented minority applicants, because I did fit into that category and that because it was such a difference, it made it hard to ignore this other factor that because I was more excited about the university I ended up at, that I was wondering if there was anything they could do to make the offer a little bit better, if there was any possibility for getting additional fellowship because I know the university does give out a few, or if there’s any wiggle room, another area of the offer.

17:53 Guest 3: My email was very casual and very sincere. I was a little bit overly apologetic, I think, but considering my request, I thought that was appropriate. I let him know that if there’s any more information I could provide them with that I could definitely do that. I think for me, what was important was like something that I think certain people wouldn’t mention is that I did fit into this underrepresented minority category in case that was something that might increase my eligibility for certain offers. I did get a reply from the professor that was the director of graduates studies for this program saying that all the offers are out and they weren’t able to negotiate an increase in actual stipend, but they would include an additional incentive called some sort of award. I’m not going mention the name, that they discussed with the director of the institute. It would be $1,500 a year for the first three years of graduate study to be used on educational or training expenses, such as like a new laptop, travel, anything like that, that would help me in the early stages of my graduate career. And that would compound for the first three years. So I can use it for pretty much anything that could potentially contribute to my education.

19:15 Guest 3: This was something that they were adding, in addition. I realized that they couldn’t actually add something to my offer, but this was something that was possible to add on top. It obviously isn’t that big of a difference, but it was something that showed me they did care a little bit more and just made my decision a little bit easier. It did end up, well for me. They also mentioned that they were considering offering it to me, before I emailed them, that’s why I mentioned, I’m not sure how much of a negotiation this truly was, but it seemed to me that it’s pretty common for universities to be able to offer additional money that’s not technically considered part of a stipend, like something like educational costs because a stipend seems like a pretty unchangeable type of offer.

20:07 Guest 3: So that was my situation. The process was easy for me. My decision was easy after that. My phrasing was in my email was very sincere and apologetic. I think it was also important that I mentioned that I really did want to accept an offer from the university I ended up at and that the main thing was that with such a financial difference, it was something I had to consider. So if you are planning on sending an email to someone, I would make sure that they know that you do want to accept their offer. That it’s only financial aspects that are making you hesitate. I wouldn’t ask if you aren’t sure about accepting an offer for that university. Thank you.

Commercial

21:00 Emily: Emily here for a brief interlude. This announcement is for prospective and first year graduate students. My colleague, Dr. Toyin Alli of The Academic Society offers a fantastic course just for you called Grad School Prep. The course teaches you Toyin’s four step Grad Boss method, which is to uncover grad school secrets, transform your mindset, up-level your productivity, and master time management. I contributed a very comprehensive webinar to the course titled “Set yourself up for financial success in graduate school”. It explores the financial norms of grad school and the financial secrets of grad school. I also give you a plan for what to focus on in your finances each season of the year that you apply to and into your first year of grad school. If this all sounds great to you, please register theacademicsociety.com/Emily for Toyin’s free masterclass on what to expect in your first semester of grad school and the three big mistakes that keep grad students stuck in a cycle of anxiety, overwhelm, and procrastination. You’ll also learn more about how to join grad school prep, if you’d like to go a step further again, that’s theacademicsociety.com/Emily for my affiliate link for the course. Now back to our interview.

Guest Four

22:28 Guest 4: I am an international student from a lower middle income country, and I’m studying at a large public flagship university in the US located in a college town that’s within a significant metro area. I’m in a social sciences PhD program and my department is ranked quite highly, I think in the top 10. Here, there are different funding sources, but the most basic and common that’s guaranteed for everyone comes from the department itself. It pays $20,000 over nine months with no annual increase. Starting in 2020 first year, students get $5,000 for the first summer, but otherwise there is no guaranteed summer funding.

23:10 Guest 4: The stipend is service-based, which means students receiving this must work as TAs for every semester for about 12 hours a week. That’s what’s written on our contract, but in reality, it fluctuates quite a bit. This funding package means that the department covers your tuition, all your fees, like printing, student health, recreation, or fitness, et cetera, and also covers your health insurance, including for your dependents. There’s no other deductions except for taxes. Living wage here is $26,000. So that $20,000 we get is below the living wage. And if you can believe it, many other social sciences departments here have even smaller stipends. But the reality is if you’re single and can budget, well, you can survive. You can live quite decently with the $20,000, but it is below the living wage and there’s no way around it.

24:04 Guest 4: As for negotiating, I wasn’t even aware that you could do it, at first. I did my undergrad outside of the US so I had no idea about funding models here. And also, I guess I just didn’t have the cultural capital, so to say, to know about this process, but luckily at the first open house that I went to, another visiting student told me about it and gave me pointers. He told me to say something during the one-on-one meetings with some professors along the lines of an important factor about going to graduate school includes financial considerations for me, making sure I can live decently while studying, without having to worry about being able to pay for emergencies, blah, blah, blah.

24:50 Guest 4: At that point I prepared my spiel before I started my one-on-one meetings. I was really torn between two universities, both paid the same, same living cost as well, so I didn’t really have full leverage, but both paid below living wage, so that was my first argument. My second argument that I prepared was about the extra constraints I had as an international student, financially speaking. And my third argument was that I received a traineeship from a research center in both universities, which was great. It had certain requirements and usually pay extra, but I found out then that I wasn’t eligible for the funding because of my international student status. I brought up this last point towards the end of the meeting as a way to steer the conversation towards the topic of money. I subtly hinted that I was quite surprised by that and then I just shot straight and brought up my other two arguments. I ended up getting a very validating response, but also as you expect diplomatic. It’s like, we’ll see what we can do, we’ll get back to you. Later that day, I heard other visiting students talking to the director of graduate studies about this, about negotiating during social events or downtimes, so I decided to do the same thing, of course.

26:11 Guest 4: A week after the visits, I emailed the director of graduate studies, again, in both places, just echoing the same points and offering to provide any extra information if they need anything. But that email was mostly just a guise to make sure that this was still on their radar. About a week before the deadline, one school told me that they don’t have news yet it’s still pending. But by then, the other school had promised me an extra $6,000 for the first to work as a research assistant paid for by the professor’s research funds and an award that gave me an extra $5,000 from the research center, so I ended up going with this school. That is when I learned that different professors have different pots of money, of different sizes, sometimes very considerably different. And if you talk to upper year students, they’re likely to be very open about this.

27:09 Guest 4: A few other lessons that I learned from this process, if you have concerns about money, you can be transparent and open about it. You can talk to other visiting students or upper year students because it’s likely on their minds too, or it has been in the past and the conversations may yield interesting insights. If you want to do it, do it. And when you’re talking about money, of course, you need to be polite, and if you’re uncomfortable, I learned that saying something explicit about your discomfort can help the conversation go better. Like, “Oh, I don’t love talking about money,” something like that.

27:48 Guest 4: When you’re doing the ask itself, maybe keep it vague because the prof already usually know what you mean and they know how the department stipend compares to similarly ranked programs, so you don’t have to be too pushy or give a concrete number or anything. I personally think that talking about money with them and reason to your professors should not be a turn off, especially because you will have to talk to them again about money once you’re in the program, and again, when you go into the job market and you’re negotiating or learning what the salaries are like. I think this is good training for you and for me, and part of the hidden curriculum of academia that people talk about. Also, I think expecting your profs to be validating of your concerns when you explain it to them is a very important thing, especially when you’re going to work with them for the next four to six years. In a way this negotiation process can be a method for you to gauge whether or not that professor can be that validating kind of support system for you once you’re in the program. And the worst that can happen is that you realize that they’re not that person and that might be a deal breaker, or that might not be.

29:05 Guest 4: I also realized that international students can be somewhat in a double bind. We are more financially vulnerable, but also we’re not always aware of the system here. Again, this is the hidden curriculum and cultural capital problem. We don’t know that the system here in the US is maybe more flexible than in other countries when it comes to giving accommodations for people. And also we might not be culturally comfortable or adept at negotiating in the American way and advocating for ourselves. I think talking with other international students about this is really important as I learned when I was going through the open house visits as well.

29:49 Guest 4: And lastly, I think the negotiation does not and should not end after you’ve accepted your offer. Negotiation is actually not always an equitable solution to what is ultimately not really an individual problem. It might actually lead to more unequal outcomes when one student is able to get more out of their negotiations than others, just because they have that privileged background to know how to negotiate well and all of these things. I think some ways to address this is to ask upper year students about what advocacy efforts are happening in the department to support graduate students in general, or maybe support international students specifically, if that’s your demographic, especially early in their careers, when they’re more vulnerable and have less resources. To give you kind of an example of the power of advocacy, in our department, we managed to get a promise from our department to fund summers for all first year students after, you know, working with the department to make sure that they know that this is a concern that was important for us students.

Guest Five

30:59 Guest 5: Thank you, Dr. Roberts, for having me on this episode of your podcast. I would say you are doing the Lord’s work. Importantly, this work of yours is sure to prepare one or two howto ask for what they already deserve. Here’s my story in fall 2018 I got an offer, actually two offeres from two universities in the US that I applied to, to come study insect science. Both offers were juicy, or so I thought since I was living in a third world country at a time. Interestingly, I went with the least offer, which was about $5,000 less than the next offer. And by offer, I’m talking about the annual stipend which was $17,000 at a time. So money was never the motivation for me.

31:51 Guest 5: One year in, in the PhD program and I was about $2,200 in credit card debts. Besides my health insurance was so basic that it couldn’t cover for my high insurance. I had to live miserly to be able to get my glasses and whatnot. This began to bother me a lot. This is because I live very simply. I do not eat out. I always cook from home and if I cannot eat in the morning, I bring food along with me to the school. I do not use any fancy gadgets. In fact, 80% of the things that I own were donated to me by graduate students or churches, or I brother was kind enough to lend a brother a helping hand.

32:39 Guest 5: Importantly, I was in debt because my annual stipend was below my standards of living. For emphasis sake, my average monthly expenses, my rent was $595. I pay on average $75 on electricity bill per month. The university bill, which is about $1600 every semester. Now keep in mind, this bill covers the health insurance, international students fee, or what have you. So that means to be able to pay for the $1,600 bill, which is every semester I had to save about three $20 from my monthly stipend. My phone bill is $55 and I pay $65 on my car insurance. I spend about $300 on food. Now, if you had add all of these figures together, you get $1,410. And my monthly take home pay was $1,416.67. And this is the figure before tax. In other words, I get just about $6.67 cents above what my monthly bill is. Again, this figure $1416.67 cents is what I get before tax. Now, if you make the federal tax deduction and the state deduction from my fee, you get way less. I know my federal tax is about $200, but I do not know what the state tax is right now. I’ll probably need to check my pay stub to be able to know what the figure is, but the federal tax is about $200.

34:26 Guest 5: Now, given I’m an international student, I was super nervous about asking for a rise. I went to meet other grad students and post docs whose opinion I value very much on how to navigate this murky water. They all said the same thing: I should never ask for a raise as it might come back to haunt me. So I wasn’t just scared, I was terrified to ask for a raise. But on a certain day, I was reading the book “Self-reliance” by Ralph Emerson in which I saw the quote “Who so would be a man, must be a nonconformist.” And I was all pumped.

35:08 Guest 5: The next day I got to school and I approached one of my advisors. I was more comfortable approaching my male advisor because the atmosphere around him is much more relaxing. I explained how I struggled to meet up with my daily needs, given my monthly stipend. As I anticipated, he was so kind and I listened attentively. He reassured me that I had done the right thing and appreciated me for speaking up because he said he would never have known that I was struggling to make a living had I not approach him. What he did after that was even more amazing. He called me on my way out of his office and he said, “we never had this discussion.” So that way, nothing comes back to me. Later I got an email notifying me of an increase in my annual stipend by $2,500. What is even more interesting is that after six months I got another email notify me of another $2,500 increase in my annual stipend, bringing my current stipends to $25,000, as we speak. And that is my story on how I approached and asked for a raise from my advisors. Thank you.

Key Takeaways

36:34 Emily: Thank you very, very much to the five people who contributed these stories and the others who volunteered. Here are my key takeaways from these stories. One, only negotiate with a program if you are seriously considered enrolling in it. I agree with the approach in these stories of narrowing down to a couple final programs and negotiating with just your top choice or two. Don’t waste, everyone’s time by negotiating with a program that you aren’t seriously considering.

37:01 Emily: Two, there are many different levers that programs can pull to improve your financial situation. The examples we heard in these stories are giving a supplemental scholarship for professional development, giving a general supplemental award, guaranteeing a spot in subsidized housing, increasing an annual stipend and increasing a summer stipend. I’m sure that the constellation of options is unique to each program, which is why your request should be rather general.

37:30 Emily: Three, if you already know who your advisor would be, go ask that person for direction. They may be able to negotiate on your behalf or point you to a next step to do on your own. They are the person most invested in having you complete graduate school successfully. If you don’t yet have an advisor assigned, you’ll likely negotiate with the director of graduate studies or similar.

37:53 Emily: Four, during your negotiation conversation, you should be very polite and express gratitude for the offer of admission, acknowledge that you’re bringing up an awkward subject and express the specific reasons that you want to join their program.

38:07 Emily: Five, while I don’t think you must have a specific reason to be asking for more in your funding package, it doesn’t hurt to have one. Leverage can be in the form of a competing offer, a comparison to the local living wage or personal data regarding the cost of living. I’ve spoken with other graduate students who negotiated after winning outside funding.

38:28 Emily: Six, several of the students in these stories mentioned that of course money was a factor in their decision, but it wasn’t the end all be all. A program being willing to negotiate shows that they are supportive of you. Even if your attempt at negotiation is unsuccessful, there is a world of difference between a program that listens to you, acknowledges your concerns, and cast around for additional opportunities on your behalf, and one that dismisses you out of hand.

38:55 Emily: Seven, several of these students said they only knew that negotiation was possible because other students had tipped them off. I encourage you to talk about the subject openly with your peers and older students. You can use this episode or PhDStipends.com as a conversation starter. You may learn of a financial resource that you can tap. However, as in our last story, don’t be discouraged by people who tell you not to negotiate, if they never tried it themselves. The absence of successful negotiation stories in your circle is not proof that successful negotiations cannot occur.

39:31 Emily: Speaking of unsuccessful negotiations, I did not solicit these kinds of stories, but I have heard a few. Don’t take it personally, if your negotiation is unsuccessful. Like I said earlier, programs have different levers they can pull and some might be super limited. However, if you were attempting to negotiate out of financial need, you should really think about whether you can afford to get your PhD from a program that is unable or unwilling to sufficiently support you financially. Financial stress will curtail your ability to perform academically as well as magnify the financial opportunity cost of getting a PhD.

40:10 Emily: Here are your action steps after listening through this episode. For prospective graduate students: consider negotiating one or two of the offers you have received or will receive this spring. This signals to PhD programs that finance has matter, and that it is a field upon which they can compete for students. For current graduate students: don’t count yourself out on the negotiation front. If you want to be paid more approach your advisor, like the person in our last story did. They should be able to brainstorm with you about methods for accomplishing that and even advocate on your behalf. Speak with your peers and prospective grad students openly about your income and even encourage them to negotiate. The worst case scenario is that nothing changes for you. And the best case scenario is that the department realizes the stipend is an issue and raises it for everyone. For everyone: please share this episode with prospective and current graduate students and enter your current or former stipend and stipend offers into PhDStipends.com. If you can’t already tell, I really want to bring more attention to this issue and sharing this episode will go a long way, so thank you in advance for doing so. If you are a prospective grad student who wants a private space, where we can have more of this type of conversation and even access a training video on how to decipher your offer letters, visit PFforPhDs.com/decipher and join the Personal Finance for PhDs Community.

Listener Q&A: Investing Savings Rate

Question

41:37 Emily: Now onto the listener question and answer segment today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall, so it is anonymous. Here’s the question: “What percent of income should be used for investment?”

Answer

41:54 Emily: If you’ve been consuming personal finance material for a little while, you’ve probably already heard a few different benchmark answers this question, at least with respect to investing for the goal of retirement. One benchmark that I heard a lot, pre-financial crisis was 10%. 10% of your gross income toward your retirement accounts. If you are a Dave Ramsey follower, he tells you 15%. If you are a FIRE Walker and want to retire early 50% is a common benchmark in that community.

42:29 Emily: So you can see these benchmarks are kind of all over the map, although certainly above zero. Now, since this question comes from a graduate student, I want to emphasize that it is not appropriate, or possible, or necessary for all graduate students to be saving for retirement from their grad student stipends. Some graduate students are simply paid way too little for investing for retirement to even be a possibility. For those of you who were closely following that negotiation conversation from earlier in the podcast, this is something that you should take into consideration when you are planning your negotiation:will you be able to save for retirement from your grad student stipend? So if you have more pressing financial needs than investing for retirement, the answer to this question might be 0%.

43:20 Emily: Now, for those of you who are able and inclined to save for retirement, I will refer back to the financial framework that I talked about in the last episode. In my financial framework, which I developed specifically for our grad students and early career PhDs, investing for retirement comes at step four. So assuming you’ve taken care of steps one through three, and you’re on step four, my answer depends on your age. If you are starting to invest for retirement in your twenties, my answer is 10%, for the moment. If you’re starting in your thirties, my answer is 15%. If you are starting in your forties or later, my answer is 20%. This is a percentage of gross income, by the way, pre-tax income.

44:03 Emily: Now, when you first arrive at step four, it’s not a given that you will have that 10 or 15 or 20% of your income available for retirement investing. So step four is your process of increasing your income and, or decreasing your expenses to the point that you can get to that benchmark. After that you move on to steps five through eight while maintaining that retirement savings percentage in step seven of my framework, we come back around to investing and that’s where I encourage everyone who was saving at 10% from step four, to increase to 15% at a minimum. The logic here is just that most people, most of the time, saving 15% of their income will allow you to retire at approximately what your pre-retirement salary was at age 65 or so. It’s perfectly okay if that savings rate seems lofty to you right now. It’s something that you can work up to over time and of course you have a better shot at achieving it post-graduate school.

45:03 Emily: For my own personal choices in this matter, when I started graduate school, my goal was to save 10% of my gross income toward retirement. I gradually increased that over the course of graduate school so by the time I finished, I was saving about 17% of my gross income into retirement accounts. Fairly shortly after that, my husband and I increased that rate to 20% and it has stayed there for approximately the last five years, as we have been saving for a house down payment. I’m really happy with that savings rate for us right now. After the house purchase, the retirement savings rate might have to come down a bit so we can actually make our mortgage payment, but I’m hoping over the long term to increase it above that 20% benchmark as we do pursue early-ish financial independence.

45:52 Emily: So that’s my answer. And there’s a few different stages, a few different nuances to it, but I hope it gives the listener some clarity. It’s okay if you aren’t able to save anything, especially during graduate school. It’s a really financially difficult time of life, but if you can get to that 10%, 15%, 20% figure you’ll be doing really well. And above that, the question is simply how soon do you want to become financially independent? The higher savings rate, the sooner that date arrives. If you would like to submit a question to be answered in a future episode, please go to PFforPhDs.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours!

Outtro

46:35 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.

 

How to Cultivate a Personal Brand to Land Your Next Job or Launch Your Business

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In this episode, Emily interviews Dr. Gertrude ‘Gee’ Nonterah on why and how PhDs and even graduate students should develop a personal brand. Strategically using LinkedIn and Twitter can play a big role in attracting opportunities, including catching the eyes of job recruiters. Gee developed a personal brand that helped her transition from her postdoc position into freelance writing and teaching at a community college. Gee and Emily discuss time management when you are getting a side business off the ground and Gee’s upcoming pivot in her business.

Links Mentioned in This Episode

Teaser

00:00 Gee: You know, in marketing, going back to marketing, they are power words, right? And so, you know, throwing one power word into your value proposition is helpful because like you said, it creates some kind of intrigue and like, Oh, I want to, I want to know more about that. So for me, that power word was sizzling because when you get sizzling, it’s kinda like, Ooh, something really like delicious, or I don’t know, but you usually think about that. So definitely you know, coming up with a power word within that value proposition, within that tagline can be helpful as well.

Introduction

00:38 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is season eight, episode six, and my guest today is Dr. Gertrude “Gee” Nonterah on why and how PhDs, and even graduate students, should develop a personal brand. Gee explains how strategically using LinkedIn and Twitter can play a big role in attracting opportunities, including catching the eyes of job recruiters. Gee developed a personal brand that helped her transition from her post-doc position into freelance writing and teaching at a community college. We discuss time management when you’re getting a side business off the ground and Gee’s upcoming pivot in her business. I have an exciting personal update for you before we dive into this week’s episode. My husband and I submitted our very first offer to buy a home. It felt like a really rushed decision because we were not at all logistically ready to make an offer.

01:39 Emily: We had no agent, no financing, nothing. We saw a unicorn home pop up in our safe search on Friday morning. By Friday night, we had a Redfin real estate agent and were pre-approved for a mortgage. On Saturday, we saw the house. It was booked up with appointments every half an hour all day. So other people definitely recognized its charms. On Sunday, we worked with our agent to submit an offer. Like many other PhDs and millennials, generally, we have put off homeownership for a long time. We are now 35 and have two kids. Basically, we are trying to make our first home our forever home. So there’s a lot of pressure on the process. One of the reasons I’ve been talking so much lately on the podcast about buying a first home during grad school or in one of those earlier career phases is because I wish that I had gotten this first home purchase out of the way before now.

02:33 Emily: So I’d have more experience and insight by the time I reached this forever home purchase. Anyway, I’m recording this on Monday morning. So we don’t yet know if our offer will be accepted or if we’ll do this all over again the next time a unicorn goes on the market. At least we’ll be better set up the next time to make an offer with more of the logistics in place and having been through it once. Thanks for indulging me in that update. I’ll keep you posted periodically regarding this new adventure.

03:01 Emily: This coming Saturday, February 13th, is the next live Q&A call for the workshop, How to Complete Your Grad Student Tax Return (And Understand It, Too!). If you are a funded grad student in the U.S. and a U.S. citizen or resident for tax purposes, this workshop is for you. The IRS will begin processing tax returns on February 12th. So this is an ideal week to get that return ready to submit if you want to get your refund ASAP.

03:28 Emily: Go to pfforphds.com/taxworkshop to join the workshop and plan to attend the live Q&A call on Saturday to clear up any remaining questions that you have. Saturday, February 13th is also the deadline to join the winter 2021 session of The Wealthy PhD. This is a perfect time of year to work on a big financial goal, especially if you decided that 2021 was your year to get on top of your finances or are anticipating a career transition in the coming months. I hope you will consider joining the session if you want to gain financial inspiration, accountability, and actionable knowledge. You can find out more at pfforphds.com/wealthyPhD.

Book Giveaway Contest

04:14 Emily: Now it’s time for the book giveaway contest. In February, 2021, I’m giving away one copy of The Simple Path to Wealth by JL Collins, which is the Personal Finance for PhDs Community book club selection for April, 2021. Everyone who enters the contest during February will have a chance to win a copy of this book. I’m super excited to read The Simple Path to Wealth in the book club because, confession time, I have not read it before. I’ve recommended the book on many occasions on the strength of the author’s blog and its reputation, but this will be my first time through. I’m looking forward to learning alongside you. If you would like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review, and email it to me at [email protected]. I’ll choose a winner at the end of February from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Dr. Gertrude Nonterah.

Would You Please Introduce Yourself Further?

05:24 Emily: I am delighted to have joining me on the podcast today, Dr. Gertrude Nonterah, we’ll call her Gee during the interview. And we are going to discuss something that I don’t think I’ve covered before on the podcast, which is personal branding for academics, as well as Gee’s side hustle as a writer. And so I’m really excited about both these topics, and Gee will you please introduce yourself a little bit further for the audience?

05:47 Gee: Yes. Thank you, Emily so much for having me on your show. I’m really excited to be here. So, as Emily said, my name is Dr. Gertrude Nonterah. I got my PhD in microbiology and immunology from Temple University School of Medicine back in 2015. And ever since then, I’ve been living in San Diego, California. I started out as a post-doc, worked as a post-doc for about two years and 11 months, and ever since have essentially been running my business. I also do teach at a community college, I have been doing that since the beginning of 2020. But yeah, I’m super excited to be here and to talk about personal branding and leveraging that as an academic.

Defining Personal Branding

06:32 Emily: Okay. So let’s start with a little bit of a definition, because it’s not a term that’s necessarily familiar to everyone. What is personal branding?

06:39 Gee: Right. And I think, you know, there is no one strict definition for personal branding except to say your personal brand is how you want people to perceive you or how you want to be known. And that’s the simplest way I can describe it because we could go into all the technical definitions of branding and all that. But the easiest example that comes to mind is every time you drive into a city and you see those two yellow golden arches that signify McDonald’s, you know it’s McDonald’s. Nobody needs to tell you that a McDonald’s exists there. You just know from seeing that big yellow M that there’s a McDonald’s close by, right? And that’s because over the years McDonald’s has done a great job of branding who they are, what their symbols are, and so on and so forth. And so bringing that to a more personal side, right, where you’re saying, okay, here I am. Here are my qualifications, here are my degrees, here’s my personality. And this is what I would like to be known for and to be hired for potentially if you plan on working in the corporate world. And even if you plan on building a business online or having a side hustle, it is important to build that personal brand, I believe, because it is a foundation that opens the door for many things. And as we go along in this discussion, hopefully I’ll be able to share some stories myself that will be helpful.

Personal Branding in Academia and Beyond

08:07 Emily: Yes, please do. So I think it’s pretty maybe obvious why someone who’s starting their own business would want to cultivate a personal brand. But what about for someone who is a scientist or another kind of academic who wants to either stay in academia or get another kind of employee job, you know, doing what they were trained to do for their PhD? Why is personal branding relevant for that person?

08:27 Gee: Yes. And I realized that this is such a newer concept in the world of academia, right? But I think it’s become important for a few reasons. The reason its become important is because there are a lot of people just like you, even though, you know, those of us that have PhDs only make up about 2% of the population worldwide, right. There is an increasing and growing number of people who are graduating with the same degrees as you. People who have the same qualifications, who have the same educational background, and so on. Right? So, it’s all the same. So I see personal branding as a way for PhDs and academics to stand out from the crowd, right? Because these days when recruiters receive resumes, all they receive is a piece of paper that rattles off your qualifications, right? But then here’s the thing. A lot of recruiters go on places like LinkedIn to check you out before they even give you a call.

09:26 Gee: Right? And imagine being that recruiter, put yourself in the shoes of the recruiter going on, you have 10 resumes, you go onto LinkedIn, and then you find that there’s this one person that’s super active in the topic that, you know, they’re looking for employment in. They’re sharing articles, they’re making very intelligent comments, they’re engaging in conversation. And then the other nine are nowhere to be found, even though they may have a LinkedIn profile, they’re nowhere to be found, right? Just put yourself in the shoes of that recruiter. Which one of these people would you tend to go with? Especially if all their resumes, everything being equal, what makes one of these individuals, I don’t know, of course there’s the interviewing process, which helps, but to be honest, at the very beginning, people are skimming through resumes. People are skimming through your LinkedIn profile or any other online profile you have and personal branding can really help you set yourself apart. Even if you think you’re working in a super boring topic and nobody would be interested in, I really do think that by building that personal brand and building that brand, that people begin to recognize in your field, you can set yourself apart and set yourself up for success as an academic slash PhD, whether you want to stay in academia or not.

Personal Branding Will Make You Memorable, Online or In-Person

10:50 Emily: What I’m taking from that description is that personal branding will at minimum help you be memorable to anyone who comes across your, well, hopefully resume as well, but definitely LinkedIn profile. Or even like in-person networking, maybe when that happens again, or Zoom networking, we’re recording this in December, 2020. Even with in-person networking, I’m sure there’s a way to express your personal brand, even, you know, verbally or with your business card, do people use still use business cards? I’m not sure, but in the way that you interact with someone at like in a networking like capacity, you know, people talk about having like an elevator pitch ready for, you know, what you do, like a one-sentence and you know, a one minute and so forth, that probably also all plays into personal branding. Right?

11:35 Gee: Absolutely. Absolutely, Emily. So like you said, you know, when, as we’re recording this, we’re in the middle of the COVID-19 pandemic and nobody is going anywhere, right? We’re not going to do any networking meetings anywhere. And so we don’t even have that opportunity right now. And so I think that this is actually the perfect time for you to start building that strong online brand, because now you don’t have that opportunity. So, you know, in a way, building that run online is your way of networking until we can get back to in-person networking, but yeah, absolutely. A personal brand doesn’t necessarily have to be online. You know, online tools are just easier to access these days in general. But yes, for sure, even as a person that you meet, you know, as somebody that goes in-person networking, you can absolutely establish that personal brand with in-person meetings. Yes.

How Do You Start Developing a Personal Brand?

12:32 Emily: So I really love the idea of using this, you know, COVID-19, the stay at home order period to cultivate specifically your online, personal brand. And then once other opportunities are available to you, you know, take what you’ve developed there and figure out how to express it, you know, in other ways, once in-person, you know, stuff is available again. So would you say that’s the first and like kind of most accessible way to start developing a personal brand is, you know, your website, your LinkedIn profile, and so forth?

13:01 Gee: Well, I think, I think that there’s a step before that. And the step before that is really figuring out what you want your personal brand to be. Now, I believe in building an authentic personal brand, but you know what I mean by what do you want to be known for? What do you, you know, determining what your personal brand is going to be is really thinking about the topics for instance, that you want to establish yourself in. So let’s say that you’re working on lung disease at a major, you know, medical research center, right? And you are on your way out about to get that PhD. What other, have you published papers on the topic? What did you find, you know, as long as your PIs is willing to share after you publish, after you publish, you absolutely share. Right? I know PIs are very protective of research ideas when it hasn’t been published yet.

Think About Your Personality

13:52 Gee: Right? So but if you really want to stay in that lung research lane, then that’s one thing that you can write down. I want to, I want people to associate me with lung research, for instance. Also another thing that I like to think about is your personality, right? Are you an extrovert? Are you an introvert? Are you somewhere in between? Right? It’s good to let that shine through. I know that as academics were really trained to kind of hold back on the personal part of our lives and not share that, but if there are causes you care, you know, you want to, you want to show that. And then if there are causes you care about, you know, you want to share that as well. So, you know, before you even jump into a website, before you even jump onto LinkedIn, sit down and actually write down, what do I want my personal brand to represent?

14:44 Gee: Do you know, there are people that have built a whole brand, not necessarily in academia, a whole brand around very brash talkers, right? And then there are people that have a more softer approach. There are people in between. So which one are you, and is that actually true to who you are? So once you sit down and determine what you would like to be known for so that you can leverage that to getting that dream rule and to getting those interviews and getting, you know, building those relationships with key people in your industry. You really want to sit down and think, what do I want to represent online? Right? And then once you determine that, you can craft everything else around that.

Create a Tagline or Value Proposition for Yourself

15:31 Emily: So I’m thinking, as you’re, as you’re speaking about this, tell me if I am going in the right direction here, I’m thinking of a person almost identifying like a tagline for themselves. Maybe you can give a couple of examples of that, but like I’m Dr. Emily Roberts. I, so for me, I guess my personal brand with Personal Finance for PhDs is I help early-career PhDs make the most of their money. So something really short and simple, easy to remember. Is that kind of what you’re thinking? Like, maybe give a couple examples of that, but then everything else can kind of support that tagline that you’ve identified for yourself.

16:07 Gee: Yes, yes, yes, absolutely. So it’s, you know, you’re calling it a tagline and I like to think of it in business terms as a value proposition. Like, what do you, what value do you bring to the world, right? And so, I like to say that I write sizzling content for million-dollar health brands. Like that’s my little tagline that I have, because that’s what I do. I write, I write content for million-dollar health brands. Right. And so you know, whatever it is, you could have a tagline that says, you know, award-winning lung research, or upcoming excited, enthusiastic lung researcher or something. So yes, absolutely. You can choose a tagline for yourself, but it shouldn’t be a tagline that we have to like sit down and have to figure out it should, it should clearly communicate what value you bring to people, right?

17:01 Gee: So in my case, like in your case, you, you talk about Personal Finance for PhDs. It’s absolutely clear what it is that Emily talks about. So if I wanted to find a podcast or resources that help me as an academic with my personal finances, and especially knowing that academics tend to be not paid very well, you know I would go find Emily’s podcast, right? So you want to, you don’t want to be what’s the word you don’t want to be fancy about it. You want to be clear, you can make it a little cute, but make it clear as to what people can expect from your brand and what problems that you potentially solve.

The Power of Power Words

17:41 Emily: Yeah. And I think also going along with that, and this is something, I guess I’ve learned a little bit from like marketing is to give like some kind of intrigue or like a little bit of an open loop or something within that initial one second, you know, face that you’re presenting to the world. Right? Like you said, the word sizzling. Ooh, what does that mean? What does it mean to sizzle? I want to find out more about that, right? So does that like play into it as well? Like enticing people into engaging with you further.

18:09 Gee: You know, in marketing, going back to marketing, they are power words, right? And so, you know, throwing one power word into your value proposition is helpful because like you said, it creates some kind of intrigue and like, Oh, I want to, I want to know more about that. So for me, that power word was sizzling because when you get sizzling, it’s kinda like, Ooh, something really like delicious, or I don’t know, but you usually think about that. So definitely you know, coming up with a power word within that value proposition, within that tagline can be helpful as well. But not always necessary, though.

Don’t Wait Until You Have Your PhD, Start Now!

18:45 Emily: Okay. I feel like you’ve given us a lot to chew on already with this, with this topic of personal branding. Was there anything else you wanted to add onto that?

18:54 Gee: Yes. I wanted to add onto that, that you know, don’t wait. I see, because I teach at a community college. I get to interact with a lot of up and coming, brilliant students. And I recently actually did a presentation on essentially starting to build your personal brand as a student on LinkedIn. And I was amazed at how shocked they were that they could do that as students. And so this is something that a lot of students don’t know, whether they are undergraduate students, PhD, students, even people who have finished their PhDs don’t know about this. And I’m going to kind of plug in LinkedIn here. That LinkedIn is a really powerful place for you to start building your personal brand. It’s, it’s moved on past the days where LinkedIn was sort of like a place you went to dump your resume, and you hope that a recruiter would find you.

19:44 Gee: It is now a place where you can create content, for instance. You can share ideas. You can comment on other people’s blog posts. Twitter is another great place. That’s how me and Emily met. And you know, there’s Academic Twitter and stuff like that. And so getting involved in these niche communities that are discussing topics that you’re interested in and you’re researching can really begin to get you noticed. So don’t wait until, you know, you have your PhD. Start right now. There’s a lot of conversation happening and you should jump into those conversations right now.

Opportunities Once You Develop a Personal Brand

20:21 Emily: And just to kind of add onto that. Once you kind of develop a personal brand and are starting to be known in some niche area, what kinds of opportunities might come your way? You know, maybe you can give an example of how that’s worked for you when you developed your personal brand.

20:38 Gee: So, so good. So once I developed, I’m still developing my personal brand, but once people begin to know you and begin to know that you talk about, you love to talk about certain things. They essentially file you in their heads as that thing. Which is why, again, I talked about the McDonald’s double arches, that the moment you see that, you know, it’s a McDonald’s. So people file that away in their minds. And so when, for instance, an opportunity comes for you to be interviewed on a podcast that is relevant in your niche. People begin to recommend you, right? If there’s an opportunity to speak on a subject, and that opportunity is a paid speaking engagement, people are going to refer you and say, Oh, I know a great person that talks about personal finance, specifically for PhDs. I’d love to refer you to her, right?

Recruiters Pay Attention to Your Social Media

21:27 Gee: When you begin to build those networks and you begin to get known for a specific topic, people file you away in their minds. And when opportunities come, they will refer you without you even asking, without you even knowing that somebody referred you, you know, or somebody mentioned you. So those are some opportunities. Also, as far as jobs go, when you begin to build your personal brand and begin to establish yourself in the minds of people, recruiters do take notice of this. You know, don’t believe the hype that nobody’s watching your social media. People are constantly watching it. And especially on a place like LinkedIn where there may be recruiters looking for people like you to fill positions.

22:11 Gee: And so once you begin to speak on a specific subject or to be a thought leader. I don’t like to use that word very much, but become part of the conversation, I would say, in a particular niche, the recruiters in that niche begin to take notice, because as you begin to build networks online networks with other people, those people can also refer you. All those recruiters can discover you as somebody that is super active, because when people go on LinkedIn to search and LinkedIn has a search algorithm, for instance, and it pulls up people that are maybe relevant to who they are looking for. The more active you are on a platform like LinkedIn, the more likely you’ll show up in the first few search results. So if they’re looking for somebody like you to fill a position, guess what? You get first dibs because you showed up earlier up in the search. So those are just a few of the opportunities that can come. I definitely got some speaking opportunities, opportunities to be on podcasts, even job opportunities have come to me because of the personal brand. So it’s really powerful.

23:17 Emily: Yeah. And I would say, I, I have never done a lot with my like branding, but I think as you said, because the branding, the name of my business is so clear already as to what it is. There’s no ambiguity there. And because I’ve been working in this space for several years, I have also seen all the same things that you just mentioned of, you know, networks, my network, working for me to, you know, bring more opportunities my way, which is incredible. And I’m really thankful for that. So I can see that this, you know, this advice is wonderful for a job seeker, but it’s something that has to start much, much earlier than that. As you were saying, you know, while you’re a student, not too early, go ahead and start cultivating this. Now, maybe you don’t have to be like the most active on LinkedIn.

Pivoting to Something Adjacent

23:59 Emily: Like, you’re just saying, if you, if your goal is not at the moment to show up at the top of searches, but once you’re starting to think in that direction that you need to step it up, right? You need to, you know, become even more active in these ways to show up so that people can find your profile and so forth. But yeah, I can definitely see how this, start cultivating it immediately, basically. And I also have a sense that it’s okay to pivot this a little bit, you know, if your goals change or if you need to, you know, adjust what you’re looking for or what you want to be known for. I think that’s okay, actually. Like people might still have you filed away in their mind as one thing, but going to something adjacent is not too big of a switch, I think.

24:37 Gee: At all, you know, and, and I’ve been, you know, I’m both, you know, in the corporate world, as well as I have a side business. I’m writing and, you know, even creating eBooks and online courses. And I’ve made micro pivots all along that path, right? So I wouldn’t, I wouldn’t even think it’s such a big deal. I’ve even seen people switch completely, switch topics completely. And that’s fine. As long as you don’t switch up on us every six months, right? You know, stick with something for long enough for us to file you away in our minds. But yes, if your goals change, if let’s say, you know, you were working in biotech industry and now you want to go work, you know, as a lawyer. And so you’re pursuing a law degree, that’s fine. You know, it’s like you said, I love the word you use adjacent. Adjacent, but slightly different. It’s fine. It’s absolutely fine to change directions. And over time, people begin to fall in love, not just with your topic, but with you, too. And so they’ll follow along for the journey as well, even if it’s no longer relevant to them.

Commercial

25:45 Emily: Emily here, for a brief interlude. If you know that you want support in accomplishing a big financial goal this spring, I recommend my group coaching program, The Wealthy PhD. You and I will meet one-on-one to identify and plot a course toward your big financial goal. Past participants have opened IRAs, set up systems of targeted savings, started budgeting, systematically implemented frugal tactics, and more. Every week for eight weeks, you’ll participate in a small accountability group that I facilitate. The group will help keep you on track to meet small weekly goals that add up to your big goal. Prospective grad students, this would be a perfect cycle to join as I and the other participants can give you a ton of support and financial insight as you interview and ultimately choose your PhD program. The deadline for registration for The Wealthy PhD is Saturday, February 13th, 2021. Visit pfforphds.com/wealthyPhD to learn more and register today. Now, back to our interview.

Gee’s Side Hustle: Writing

26:56 Emily: I’d love to pivot to talking more about your writing business and you enticed us earlier. So of course, we want to learn more about it. You know, when did you start doing that as a side hustle? How did it become, you know, one of your main things that you do now?

27:09 Gee: Yeah, yeah, yeah. So I told you in 2015, I graduated from my PhD and we moved to San Diego, California from Philadelphia PA. And for those of you that don’t know the geography of the United States, Philly and San Diego are on two completely different ends of the U.S. Okay. And they’re also different in terms of the economics. And so when we moved here, we realized really quickly how everything was three or four times more expensive. So even the salary I was going to be getting as a post-doc, I was like, wow, I don’t think this is going to be enough. So, and it wasn’t, to be honest. And so I wanted to find a way to make some extra money. So, because I had been blogging for about a year at that point, I decided to, to somehow, you know, become a freelancer of some sort.

28:04 Gee: So the first thing I did was actually sell social media services. If you’ve listened to me talking on this interview so far, you can tell I’m quite the enthusiast when it comes to social media. I think it’s a powerful tool to build brands. I think it’s a powerful tool to sell your services and products, whatnots. You know, it’s a powerful marketing tool. Anyway, so I began to sell social media marketing services, and I was helping local businesses who are not even in the sciences. They were just local mom and pop businesses that I was helping to build a social media presence. I did that for about two years and then pivoted to freelance writing in 2017. So in 2017, I pivoted to freelance writing and I began to write content for actually personal finance. I wrote content for healthcare companies. I wrote content for e-commerce stores. And so anything I could get my hands on to write, I would write and I would get paid for it. And that became a great side business that allowed us to take care of the financial deficits we were facing with how expensive San Diego was. And, you know, the meager pay I was getting, I was grateful for the pay, but it was meager compared to the living standards here in San Diego. So that’s how I got started.

Wearing Many Hats as a Postdoc: Time Management

29:25 Emily: Yeah. I think that story will probably be familiar to a lot of people in my audience. It is, of course, something I cover quite a bit is in these transitions, how do you figure out is that pay going to be sufficient? Or what am I going to have to do to, you know, make ends meet in a city I’ve never lived in before? That’s a really difficult, you know, kind of nut to crack. And so I think you mentioned, you know, when you introduced yourself that you are, you’re teaching at a community college, you have this freelance writing business, did you wear any other hats, remind me?

29:55 Gee: Oh man, I’m a mom, I’m a wife, you’re all these, and those are full-time jobs. So, so yeah, absolutely. I did wear other hats. And I think maybe this kind of segues into talking about time management.

30:09 Emily: Yeah, please.

30:10 Gee: As far as side hustles and your job are concerned. Yeah. So I don’t think it’s fair to be working on your employer’s time. I think you should carve out time on your own time to do your side hustle. And by and large, I stuck with that. And so usually what would happen would be because I’m mom, because I’m post-doc, because I’m writer and wife, I would allow my, at that time, my son was younger, so he tended to go to bed early. And so by nine, he was in bed. And so between nine and about 11:00 PM or 12 midnight, I’d be working on on writing projects. I’d go to sleep, wake up around six or seven the following day, get ready to go to my postdoc job and then go do that, you know, shindig and then come back and then do the whole thing again.

31:00 Gee: So in those early years it was a lot of, it was, I didn’t have any free time. I hardly had free time. I was using every bit of time I could to to build up some side income so that we could, you know, keep up with the bills. Now, I will say that over time. Yes, it gets tiring, but it’s not going to be like that forever, you know, some motivational speech here, but it’s certainly not always going to be like that where you have to work around the clock. But I do believe that there are seasons of life where you have to make some sacrifices. And for sure, that was a season of life where I made some sacrifices so that, you know, that the bills and everything could get paid at home. So that’s how I manage my time, is I find, I usually worked at night on my side business whilst I worked my regular job during the day.

Time Management in the Present

31:54 Emily: Yeah, I think that is a function of the postdoc position is a full-time job, and it’s not paying you that well. So, you know, for your particular goals of living in a high cost-of-living area, you know, you had to put in the hours. And of course, when you were just beginning with your, you know, the social media stuff and then the freelance writing, you know, I’m sure you’ve increased your rates since then. So your pay was, you know, the lowest for the side for the side income at that point, since you were just starting, and you had the not very well-paid post-doc position. I imagine things look a little bit more rosy now for your time management. Can you tell us a little bit about that?

32:27 Gee: Yes. So right now, because we are, you know, with stay at home orders and, you know, having to social distance because of the pandemic, I’m mostly working from home. So now that dynamic is definitely different. I still work really hard. And I think even a little harder because you have to homeschool as well, right? but I am finding that it’s hard with time management, especially when you’re starting, but nowadays it’s not so hard. Because when I wake up in the morning, I know, like today I know I have this podcast. I know I have to upload certain documents because I have a book bundle sale coming up, you know? So, I do intentionally sit down and plan my days, because I realize if I don’t have anything on a, if I don’t put it on a calendar, it does not exist in my mind. It really doesn’t. So, I use my Google calendar religiously. You know, I also have a bullet journal that I use very diligently and I write down like top three things I want to do in a day. Do I always get everything done? No, but at least having it written down reminds me that it needs to get done. And even if it has to be a day late, I’ll get it done. But being organized in that sense, having Google calendar and then having my bullet journal has been life-changing to say the least. Yeah.

33:47 Emily: Yeah. I would also say for me, my time management skills have leveled up during the pandemic with the kids being at home. And yeah, I find the same thing that I need to assign myself tasks to do certain, you know, block scheduling, right. Like block out time for different things, because it does help keep me on track.

Future Plans for Gee’s Writing Business

34:05 Emily: So, Gee, what are your future plans for your writing business?

34:12 Gee: Yeah, absolutely. So actually this is so interesting because recently I recorded an episode where I was talking, a podcast episode where I was talking about pivoting away from freelance writing in 2021. So I am pivoting away from it because, first things first, I did get a new position with a company writing content still. So I’m still going to be doing that, still be writing content, just not in a freelance capacity anymore. But, I still have the personal brand that I built online. I still have my YouTube channel. I still have my podcast. There are people that are very tuned into that and very avid listeners and watchers of my content. So I’m going to keep doing that, producing my content. But one of the things that, you know, producing podcasts and creating YouTube videos or any kind of content online does for you is when you build this audience, usually at the point they want to buy things from you. So I do have e-books and digital products currently, and also, I, you know, they do ask for coaching and they like, okay, Gee, you’ve been doing this and I want you to coach me too. So I’m moving more into just selling digital products and doing coaching in the time that I do have where I’m not writing for the company that I’m going to be working with. But I am pivoting away from freelance writing, but not away from writing itself. And I’m excited for those new opportunities. Yeah.

Where Can People Find You?

35:40 Emily: Yeah. Congratulations on the new position. I mean there are definitely advantages to freelancing, but the stability is nice as well to know where your paychecks are going to be coming from. Will you please let people know where they can find you if they’ve really, you know, loved this interview?

35:55 Gee: Absolutely. So if you want to find me, I actually, the first place you can find me is I have a free newsletter that I send out every week. You can go to GeeNonterah.com/newsletter and you can download a free checklist of how to, if you’re interested in becoming a freelance writer, even if you’re not, you can sign up still. But one of the freebies I give away is this checklist whereby you can get your first paying client. I’m also very active on LinkedIn. So if you just type in my name, Gertrude Nonterah PhD, you’ll find me and also on Instagram. So @GeeNonterah you’ll find me there.

Best Financial Advice for Another Early-Career PhD?

36:34 Emily: Perfect. And Gee, I conclude all of my interviews with asking my guests, what is your best personal finance advice for another early-career PhD?

36:45 Gee: Oh man. I wish. So this is such a great question. It’s going to be slightly different from everything I just talked about, but I wish I knew more about investing when I was an early-career PhD. I wish I did. And so ask about your 401(k)’s ask about, you know, find out about IRAs, read about it, you know, listen to Emily’s podcasts, but investing is such a great way to make money that I feel like it’s the best hidden secret that is out in the open, you know? And so, don’t sleep on that. Even as, you know, your paycheck from your job is great, but really looking, and then your 401(k) is also good, but look into even investing for yourself and learning the ropes of investing because those can pay huge rewards. So that’s one thing I wish I knew and something I’m currently doing and something that I’m always telling people to, to look into, especially for those of us that are PhDs and you know, in our early careers as academics.

37:48 Emily: Yeah. Thank you so much for that. Obviously investing is one of my favorite topics to talk about. So I love that you brought it up. I’ll actually tell people who are interested in the crossover between what we’ve talked about today. If you are a side hustler, if you are a business owner, if you are self-employed and you were interested in investing for retirement and your IRA is not sufficient, and maybe you don’t have a, you know, 403(b) or 401(k) through your workplace, please check out my Community, Personal Finance for PhDs Community, because I have a course in there on retirement investing vehicles for self-employed people. So if you’ve maxed out your IRA because you have this fantastic side income going on, but you want to do more, I discuss the different options available to you as a business owner for retirement investing. So pfforphds.community, if you want to check that out.

38:35 Emily: Gee, this has been a fantastic interview. Thank you so much for giving it. I’m so glad we found each other on Twitter. Yes. Thank you so much for coming on.

38:43 Gee: Thank you so much, Emily.

Listener Q&A: Paying Off Debt vs. Investing

38:44 Emily: Now, onto the listener question and answer segment. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall. So it is anonymous. Here is the question. What is the balance between paying off debt now and investing some money elsewhere? I love these questions that are like, what is the most optimal financial step for me to take? It’s definitely a good sign that the questioner has some cashflow available to do one of these two things, investing or paying off debt. To answer these kinds of questions, I refer to the financial framework that I developed for early-career PhDs. So I’ll tell you what the framework has to say about this question, but just so you know, when I do work one-on-one with individuals, the framework is only a guideline and we do often find a more individualized solution. So this question presupposes that the thing to do with the money right now is paying off debt or investing.

39:48 Emily: However, my framework has three types of steps: debt, repayment, investing, and saving up cash. So the first thing for this questioner to do is to assess all these different areas of finances. How much cash do you have on hand right now, and what is it for? What are the different types of debt you have, including the interest rate and the payoff balance? And do you already have some investments going for you, or is this something you’re starting for the first time? The very first step in my financial framework is to put in place a starter emergency fund. That’s the fund that’s going to help you pay for life’s minor emergencies that happen on, you know, maybe like a yearly basis. Basically, it’s the fund that’s going to keep you from racking up credit card debt. So that amount of savings should be somewhere between $1,000 and two months of expenses, depending on how large your financial footprint is and your risk tolerance.

40:42 Emily: Step two in the framework is to pay off all of your high-priority debt. In my book, high-priority debt is credit card debt, even if it’s at a 0% promotional balance, IRS debt, and any debt that is above somewhere between six to 8% in interest rate. Where you fall in that six to 8% is up to you and your risk tolerance. Now, if your debt includes student loans that are currently in deferment, I would not put those in step two. I’d push them off to a later debt repayment step. So if the person asking this question has any kind of debt that is high priority, the answer to the question is pay off that high-priority debt completely. As soon as you can. Now, let’s say that person doesn’t have that type of debt or has already taken care of it. Step three, in the financial framework is to save up for near-term irregular expenses.

41:35 Emily: This would likely include setting up a system of targeted savings, which I talked about in season seven, episode 15. Once you have that cash savings in place, we’re ready for step four. Step four is to start to invest for retirement or to resume investing for retirement if that was on pause during those first three steps. Now, in most of the steps in my financial framework, you have to do a discreet thing, save up X amount of money, pay off XYZ debts. Step four is different because in step four, you’re going to get your savings rate up to a certain percentage, and then you can move on to step five, but you’re going to keep saving that percentage into your retirement accounts going forward. So let’s say that the questioner has paid off or never had any high-priority debt, and they’re investing up to a minimum level in step four.

42:25 Emily: Once they’ve done those two things, it’s time to move on to step five, which is another kind of debt repayment step. And as I said, there are eight steps overall in the framework. But most people I work with do tend to fall somewhere in those steps one to four range. So I hope this answer provided you with some insight into my process of deciding on which financial goal is optimal at any given time. You can find an ebook that I wrote all revolving around this financial framework called The Wealthy PhD inside the Personal Finance for PhDs Community. You can find the Community at pfforphds.community. So if you join there, you can read the ebook, The Wealthy PhD, and read all about this framework and how to use it. And if you want to go even further, we’re enrolling for my group coaching program, The Wealthy PhD, and the deadline to enroll is February 13th.

43:17 Emily: I do use this framework when I help everyone in the program decide on what their big financial goal should be during the program. Although, as I said earlier, when it comes down to working with an individual, we often, you know, tweak this framework for their personal preferences. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

43:45 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs Podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing, debt repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This Two-Time International Graduate Student Gives Excellent Advice to Her Prospective Peers

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In this episode, Emily interviews Josephine Shikongo-Asino, a second-year PhD student at Oklahoma State University from Namibia. This is Josephine’s second stint as an international graduate student in the US, having completed a Fulbright fellowship about ten years ago. She has great advice for prospective and rising international graduate students in the US about the financial transition into graduate school. Josephine and Emily discuss funding models, the importance of saving and debt reduction prior to matriculating, researching cost of living, visa restrictions on working, credit and debt, budgeting, remittances, and more. Josephine’s excellent advice nearly always applies to prospective and rising domestic graduate students as well; this episode is for everyone!

Links Mentioned in this Episode

international grad student

Teaser

00:00 Josephine: If anyone is considering to come, I would say before you hand in that resignation letter, really do an inventory analysis in terms of your financial needs and maybe also pay off any loans, if you can. If you have any loans, you can pay them off. If you have a car, sell it, you weren’t needed at least for a year. So yeah, that’s really doing a financial inventory to make sure that you are in the right place.

Introduction

00:34 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts.

00:42 Emily: This is Season 8, Episode 5, and my guest today is Josephine Shikongo-Asino, a second-year PhD student at Oklahoma State University from Namibia. This is Josephine’s second stint as an international graduate student in the US, having completed a Fulbright fellowship about ten years ago. She has great advice for prospective and rising international graduate students in the US about the financial transition into graduate school. We discuss funding models, the importance of saving and debt reduction prior to matriculating, researching cost of living, visa restrictions on working, credit and debt, budgeting, remittances, and more. Josephine’s excellent advice nearly always applies to prospective and rising domestic graduate students as well; this episode is for everyone!

01:32 Emily: It’s always a pleasure for me to create content for international graduate students, postdocs, and PhDs with Real Jobs, and I’m really grateful to Josephine and everyone who has donated their time to help me and my audience learn more about how to navigate finances while in the US on a visa.

01:48 Emily: Some other episodes in which I’ve covered this topic are S4E17 Can and Should an International Student, Scholar, or Worker Invest in the US?, S2E6 Making Ends Meet on a Graduate Student Stipend in Los Angeles, and S6E3 The Financial Hurdles of Moving to the US as a Postdoc.

02:08 Emily: I’m actually working on some tax content specifically for international graduate students this spring, so if you aren’t already on my mailing list, please join to hear more! You can do so at PFforPhDs.com/subscribe/.

Giveaway

02:21 Emily: Now it’s time for the book giveaway contest! In February 2021, I’m giving away one copy of The Simple Path to Wealth by J L Collins, which is the Personal Finance for PhDs Community Book Club selection for April 2021. Everyone who enters the contest during February will have a chance to win a copy of this book.

02:42 Emily: If you would like to enter the giveaway contest, please rate AND REVIEW this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at [email protected]. I’ll choose a winner at the end of February from all the entries. You can find full instructions at PFforPhDs.com/podcast/.

03:03 Emily: The podcast received a review this week titled “Crucial knowledge for a first year PhD student”. The review reads: “I started listening to this podcast a couple months ago, and the tricks I have learned have increased my confidence in personal finance has tremendously. As an international student. Not all advice work for me, but I especially enjoyed episode two in season eight, when Laura was sharing her experience as an international student. In general, this podcast have taught me to manage my new monthly stipend the best way. I now know that it’s okay not to prioritize paying down my student loans, I’m not crazy to be checking my bank account on a daily basis, in fact, it’s encouraged, and I’m now putting together a 50/30/20 budget. My goal is to one day be managing my personal finances in a way that I could be a guest on Dr. Robert’s podcast”.

03:51 Emily: Thank you for this a wonderful review and I can’t wait to have you on the podcast without further ado. Here’s my interview with Josephine Shikongo-Asino.

Will You Please Introduce Yourself Further

04:02 Emily: I am delighted to have joining me on the podcast today. Josephine Shikongo-Asino. She is a second year graduate student at Oklahoma State University. And she’s here to talk with us about international students and their transition to the US, particularly the financial aspects of their transition. This is a subject I’m highly interested in. I hope you are as well. I’m interested in for all types of graduate students, both domestic in the US and international, but I’m really, really happy to have the focus on international students on the podcast today, because it’s a group that is highly in need of more information about this. So Josephine, I’m really pleased that you suggested this topic and that you’re joining me on the podcast today. Will you please tell the audience a little bit about yourself?

04:42 Josephine: Thank you, Emily. Thank you for having me. I’m Joseph Shikongo-Asino. I am originally from Namibia, which is in Southern Africa. We are just above South Africa. I’m sure many people know where that is. My background — I’m a certified accountant. I have a master’s in strategy as well, which I did here in the US. And then I’ve spent about 10 years working in the financial sector, including financial services, banking, and investments. But currently I’m a second year PhD student at Oklahoma State University with my research interests, really more on higher-ed finance and policy.

05:20 Emily: Wow. What a great fit for this podcast. I’m so glad you’re joining us. And between your master’s and starting your PhD, did you stay in the US that whole time, or did you live back in Namibia, or elsewhere?

05:31 Josephine: No. I had to go back home because with my master’s, I was sponsored by the Fulbright program. They require you to work two years at home once you finish your program so that you can give back, which is the purpose of the Fulbright program. I had to serve two years in my country and then come back to proceed with my PhD.

05:49 Emily: Gotcha. So you really have the perspective of having transitioned into the US twice?

05:54 Josephine: Yes.

Similarities and Differences Between Finances in Home Country and the US

05:54 Emily: Perfect. So tell us a little bit about, maybe before that first time that you came to the US, a little bit more about the finances in your home country, and how they are similar or dissimilar to the US.

06:07 Josephine: Namibia is classified as an upper middle income country by the World Bank. So it is actually, one of the better performing economies on the continent. And even when I came here, I realized that there’s not much of a difference in terms of salaries back home and being in the US, other than currency exchange, obviously. But, because I had to quit my job, I did not have a backup, I did not have any cushion, that could keep me in case something happens. In case I have an emergency, I did not have, um, any backup. And also because I’m coming from a low income family, I did not have any other backing, other than the sponsorship, which I go through the Fulbright program. I really had to do to survive on my own. I took a decision to leave my job because I thought that I would come to a better situation, which will give me better opportunities afterwards. Looking back, maybe I would have made a different decision after the two years were over. I don’t know if I would have necessarily quit my job had I known what I was signing up.

Advice for Prospective International Grad Students

07:24 Emily: I see. Okay. So I think we’re going to get a little bit more of those stories as the interview proceeds. First of all, you just mentioned that you quit your job, no savings, no backup before you came here. What’s your advice for another international student planning to come to the US? We’re recording this in December, 2020. I think it will be out sometime in the early spring, so people are receiving decisions about their admission to grad programs, but they still have a bit of time before they actually need to matriculate. What is your advice for that time period?

07:59 Josephine: I think the first question really is can you afford to quit your job. For me, that’s the first question you should ask yourself. Do you have expenses such as maybe dependents at home that depend on you on you solely, financially? Do you have a home loan? Do you have a personal loan, that needs continued financing from you?

08:20 Emily: Okay, so you mentioned paying off debt earlier, but what about generating savings? You know, I imagine a degree of savings is helpful for anyone who is moving, but more so when that move is international. So can you speak to that a little bit?

08:34 Josephine: Yes. I mean, most people plan their international studies way ahead before they happen, because you even go through the process of first researching the institution’s, researching where to go. So when you start thinking about going to study internationally, I think you should start at nest. You should start putting money that you can have in case, even if you don’t get a full tuition waiver, even if you don’t get a full scholarship, to have something that you can either supplement yourself, or you can just supplement your expenses, or you can keep paying off the debt back home with that. It’s very important to definitely start the saving nest the moment you start looking into going to study international, and as you really want to have a cushion to land on

09:22 Emily: One other thing to point out here is in this process of researching where are you going to be moving, I find this the idea very daunting of figuring out what is the cost of living in a country that I’ve never lived in, in a city that I’ve never lived in. The US is obviously very diverse in terms of cost of living, and some places I’m thinking about bringing savings, like to a place where if you’re going to rent somewhere it requires, first month, last month deposit all upfront, that can be thousands of dollars easily, as well as just the actual transit, the transitioning costs. Plus sometimes there are fees to be paid to universities upfront. It depends on how your university structures things, but sometimes there could be over a thousand dollars, multi-hundreds of dollars in fees to pay near the start of the semester, that are not like prorated over time. So all of these things have to go into the research of where you’re going to be living.

10:23 Josephine: Yes, they definitely have to and I always advise people that do not look at the big cities. It’s very tempting to want to go to the big cities, because that’s what you’ve seen on TV all your life. And that’s where maybe some of the most universities that you’ve heard of are, but smaller cities actually have just as good universities, but their cost of living is lower. When you’re in a smaller city, your cost of living could really be low, which could then make it easier for you, but as you do the research, look at programs that offer graduate assistantships, if you can, if they offer full graduate assistantships. And like you said, some of them include fees and others don’t, so if you can get a program that pays for fees, pays for health insurance, and a stipend at least close to the cost of living in the town, because those are available online; you can look up the cost of living. That could make really your life more manageable, if you can get an assistantship that can give you full tuition, including fees, health insurance, and a stipend. Otherwise, fellowships or scholarships, because all of these are really, they’re not just readily available, they are competitive. It’s important to look out. Some of them are not even advertised, so sometimes you might have to just write to people at the university and say, “Hey, I’m looking at coming into your program, can you talk to me about the funding structures of your program?” Because some things are not advertise, and if you don’t ask, you wouldn’t know. So it’s really, it’s an investment into just looking into deciding where to go to ensure that you are not under financial strain while you are in your studies.

12:15 Emily: I totally agree. This is the same process, again, that domestic students need to go through is figuring out what the funding structure is. I would say most primarily in your field, because this is oftentimes very field dependent, like whether funding typically comes from fellowships or training grants, or whether funding typically comes from research assistantships versus teaching assistantships. Versus other fields, maybe the funding is very spotty. Sometimes it’s here. Sometimes it’s not. And all that you need to be going in with your eyes wide open as to what that situation is. I usually suggest a bit of networking and informational interviewing, not necessarily with the faculty, but rather with anyone you have a connection with who’s already at a university in particular, if you have one in mind or even just your field more generally. Like alumni associations, for example, is a great way to reach out to people. You don’t know who they are, but they have some kind of connection with you and maybe they’ll be willing to have a conversation with you because you can really get the best insights, I think from current students. Faculty, sometimes they might paint a little bit too rosy of a picture about the finances in a graduate program, because well, one, they may not be aware of some of the difficulties that students are going through. And two, they may want to recruit you and so they might be a little more optimistic than things really are. So I would say talk to with current students. Of course you do eventually need to connect with faculty members as you’re in the application process, but maybe when you’re just getting more information, just trying to narrow down the field, students are really great resource.

13:46 Josephine: Oh yeah. Students will give you the true picture without needing to paint it any rosey, because they have gone through it and some of them might not have had the same guidance. They will tell you the truth, so the reaching out to current students is definitely a must, I would say.

14:03 Emily: Yeah. And the extra wrinkle there for international graduate students, you can correct me if I’m wrong about this, but the extra wrinkle there is, well, really please do talk with other international students, and even particularly if there are some from your own country that would be especially helpful, because a lot of times programs don’t pay very well, like you just mentioned pay at least equivalent to the cost of living in a certain city. The resource that I really like to point to is the living wage database at MIT, livingwage.mit.edu. That’s an awesome resource for telling you in every county in the US or every metro area, what is the baseline amount of money that this research points to as needing to just get by just necessary expenses.

14:48 Emily: Okay, so speak with other international students, because I know what happens a lot on the domestic side is that if universities are not paying well enough, domestic students will side hustle. They will have outside jobs. And that is, as we discussed earlier, at least for jobs originating in the US, not an option for international students. Also debt is almost completely not an option because you have to have a US guarantor and that’s a whole big hurdle to get over. And so pretty much student loans are not accessible to international students unless you already have connections in the country. The fallbacks that domestic students have — the safety pressure release valves on their finances — are not necessarily available, usually not available to international students. That’s something really important to consider that if a domestic student is telling you, “Oh yeah, it’s okay, but I work 5-10 hours a week tutoring or whatever outside of my primary appointment,” please know that that option is not available to you and you’re going to have to make the finances work another way.

15:48 Josephine: Yeah, absolutely. And I would say that you would also need to just manage the little that you have when you get it. If you manage to get an assistantship, if you have a scholarship, if you somehow have an assistantship, even if it’s outside of your department, in the university, really try to stick to a budget. Draw up a monthly budget, stick to it, your income is fixed, so your expenses should be. Those really include things such as like sharing an apartment, to reduce the rent costs, just keeping your expenses low, using campus resources, such as buses to get around, instead of buying a car. If the university has a good bus system, you can use that to get around, you don’t need to get a car. Medical expenses, try to minimize those. Use the university campus health facilities, because medical expenses can be really high. I’ve had experiences in both times. When I was here the first time, there was a time I had to get an ambulance, and that cost me a lot of money. And this time I also had to go to an ER and that, again, cost me a lot of money that I had to continue to pay off. So try to minimize those. Save every month. If you have a stipend that you receive, even if it’s just $20, just put away something, you never know when you might need it, especially when you’re in a country where you might not have a network at all, not anyone that you can just call up. If you don’t have obligations at home, you will manage somehow. Try to stick to your budget and save every month, if you can.

17:42 Emily: Totally, totally agree with all of that. Especially about not committing yourself to higher fixed living expenses, right away. Yes, definitely find a place that’s on a bus line. I do remember, so I went to graduate school at Duke, so Durham, North Carolina. At the time, it was a very car dependent town, so moving there as a domestic student, I was like, “Oh, I have to buy a car.” I was living actually car-free before that point, but I was like, “Oh, Durham, I have to buy a car there.” But once I moved, I noticed that a lot of the international students who were my peers did not have a car yet because, there’s a process to go through. They had to get a license. They had to be able to get credit, to qualify for a loan. It took six months or 12 months for them to buy cars. So I was realizing, “Oh, well, they’re managing to get around okay. Yeah, they have to bum an occasional ride, but mostly they’re using the buses” and it’s actually pretty manageable. Try to set your life up that way, at least in the first year. You can reevaluate in subsequent years if that’s working for you or not, but really try to get those baseline expenses low until you have kind of your bearings in your new city.

Commercial

18:54 Emily: Emily here for a brief interlude taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the, or have a question for me. Please join one of my tax workshops, which you can find links to from pfforphds.com/tax. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

US Funding Models and How They Impact International Grad Students

20:00 Emily: Was there anything else that you wanted to add about funding models in the US. We mentioned a few of them — assistantships, fellowships and scholarships. I did notice I’ll add here, in my own graduate program, a lot of international students did come with funding from their own home countries. So they were sponsored by their own federal government, so that is an option you can investigate in whatever your home country is, but I noticed that as another possibility.

20:27 Josephine: Yes. There are some countries that would have scholarships within their own funding structures, so if those are available in your country, that’s great. Some companies within the country could also sponsor you, or maybe even your employer, they might be able to sponsor something so that if you have those options, that is great. But the one thing that I also wanted to mention on the funding structure is that as you review an offer for an assistantship, for example, they usually do not include summer. That’s another aspect that you need to look at — what will you be doing in the summer? Will you be able to survive during the summer? Will you have an option to work? Would you be able to get an exception to work, or would you be able to have your assistantship extended to cover the summer? Because most assistantships do not include summer and many international students find themselves over the summer, really stranded and not having any funds. And it can be tragic.

21:32 Emily: Yeah. I would say that goes into the research that you need to be doing into how your field, and then how specifically the programs that you’re looking into are funded. Because as you said, many places do not offer summer funding, or at least the funding might be different. Like maybe you have an assistantship during the year, but then summer it’s on you to go and apply for fellowships and when win of them., so that could be the expectation. Other places do have 12 month, year round funding. It really just depends and so it’s something you have to go in your eyes wide open and aware of. Again, I’ll repeat, the same advice for domestic students read that offer letter really, really carefully, because I’ve read many that just say what your funding is for nine months, then just stop talking about what happens next. You really need to ask those follow-up questions — what’s typical, what’s on the table? If they just say, “Oh, well, yeah, you’re definitely going to be funded, we just don’t know exactly how, we don’t know exactly what the mechanism is, but don’t worry about it, you’re definitely gonna be funded.” That’s a great answer to hear, but if you hear, “Oh, well, right, summer’s on your own, you need to figure that out,” then, okay, you need to know that going in.

Money Management Tips for International Grad Students

22:34 Emily: Now in terms of strategies for money management, you already mentioned budgeting. You mentioned saving even if a small amount. Are there any other strategies that you particularly want to point out for international graduate students?

22:48 Josephine: It’s really more looking at what you can bring in from home and this simple things such as watching…I don’t know, some countries have exchange rates that really fluctuate a lot, so if you have some money at home, for example, and something your currency just suddenly became favorable in comparison to the dollar, you should set up the money transfer from home in that way to say, “Oh, look at my currency — if I transfer right now, I’ll get double the money then I would get some other time.” I mean, obviously it’s something you need to actively do, and maybe it needs a special skill, but it can benefit you if you transfer money at times when your currency is not too weak against the dollar. For me, that’s something you can, you can as well look at. Again, leaving no obligations at home, I think that that can really leave you free and be able to focus on your studies, because if you have a debt back home that keeps needing money from you, it will weigh on you and you will need to accommodate it in your budget here in the US, and that can just kind of set you back up.

24:13 Josephine: Try to find really people that you can share expenses with, like whatever you do, if you’re able to share expenses with people — I loved to travel, when I was here for my masters, because I had the time, unlike now, and I would find friends and we would go to visit a state that we have never seen before. And when we are in a big group, you are able to share that cost without necessarily breaking a bank and you you’re able to kind of also have a good time, so that you’re not just focused on your studies. You have a good time as well on a budget, but when you have friends that you can share with it keeps your expenses down. Phones, again are another thing where if you have a friend who you can share, who can maybe help you put on their family plan, which are cheaper, instead of subscribing for your own phone directly.

25:21 Josephine: Don’t get yourself into things such as getting cable and do what you can stream online. Books for school — there are many used books out there that are cheaper. There are rental options. You can also stick to just maybe borrowing books from the library and really checking which book do you really need to buy in the end, instead of just buying all the books that are required. Books can be really expensive, so I had worked with the library for the most part. At the beginning of the semester, what books do I need? Check the library. Are they available? And then if I see that it’s a book that is really important for my future, then I will actually I’ll actually go and buy it, but otherwise I just borrow, use it and take it back. That way I keep my expenses low.

26:16 Emily: I’ll add a note on the textbooks there. I ended up borrowing textbooks from other students who had taken the course the previous year or whatever. Sometimes there might be an edition change, but sometimes not. And so I found that to be really useful because yeah, some people do invest in books and they want them available to them long-term but yeah, they can part with them for a semester, especially when they know where to find you. So that’s another good resource is just students who took that class last year.

26:41 Josephine: Yeah.

26:43 Emily: I do want to bring up remittances. You mentioned earlier supporting maybe dependence back in your home country, but that could extend not just to your children, but maybe your parents or other family members. So you have any suggestions for people who are expected to help continue to support family members or the like?

27:04 Josephine: Yes. I think there’s many tools online that actually charge really, really low fees to transfer money back home and are easy and fast. If you have a bank account, which for the most part, you would probably have, there’s ways that you can send money through your bank to your country, but that tends to be more on the expensive side, in terms of the international wire fees. There are online tools, financial apps that you can use to send money back home, as long as the person back home is able to receive it, and you can track it, that’s okay. But for me, I found those services cheaper compared to doing it through my bank, because the bank is obviously to involve the process that you have to go through. The money might not be available as soon as you needed, if the people need emergency money. It’s better to use the international wire tools that are available online. I think, I don’t know if I should mention any of them, but there’s WorldRemit, there’s MoneyGram, and the likes. There’s this many of them. One really just has to look and see which one offers the lower cost for sending money to your country, because the cost also varies depending on where you’re sending the money. So check which one has a low cost of sending money to your country and a fast one as well, because often people at home are not going to wait a week if they need the funds. So find the ones that it’s cheaper and faster to send money back home instead of doing it through your bank.

28:55 Emily: Yes. Thank you so much for making those suggestions. That’s something that I hadn’t thought about, like the mechanics. And I know a lot of people hear about building credit in the US when they first move here. Can you make a couple comments about your experience with that, or the best way to do that?

29:11 Josephine: Credit card companies here just give you unsolicited credit offers. And for me, I would say resist them if you can. It’s important to build a credit if obviously you plan to stay here, and maybe eventually get a job. But credit needs discipline. And as a student who might not necessarily have the means to always service your credit, my main advice is to stay away from the credit, but if you find yourself not able to, and you would like to take on some credit, either for credit building, or just really to make up some gaps that you need, then make sure that you do pay it off. Do not take away anything that you are not able to settle within that the month. Or if you really need, if it’s an emergency, then you have to set up a fixed repayment plan to make sure that you pay back because you also don’t want to leave the country with debt. I would advise against getting debt. If you’re going to get a job, just wait until you have a job. But if you want to access the credit that’s available and you have some offers then make sure that you do pay them off.

30:44 Emily: Yeah, I think my perspective on that question is it is helpful to have a credit score, a good credit score, in terms of actually just finding rentals. And this also depends on the housing market that you’re in, so it might be different, you know, cities versus smaller cities. Go ahead and build the credit, but like you said, don’t actually use it by carrying debt or carrying balances or paying interest. Do it in a way that you don’t have to pay any fees, essentially, but you can still build your credit score for the point that you need it. And like you said, maybe you won’t really need a credit score until you need to get a job or take out, like I mentioned car loans earlier. That could be a possibility if you feel you can support the debt. It’s a funny thing because credit scores seem like they should only be useful when you’re taking out debt, but in fact, they creep into other areas of life as well. It’s like a helpful thing, although not maybe like strictly necessary depending on your housing market.

31:43 Josephine: Yeah. I mean, yes, you do get kind of penalized if you don’t have any credit history, like you have never taken out credit, they penalize you on that. But yeah, build as little as you can for what you need, but don’t get into it because you probably come across friends who have used debt to pay off their studies, especially the domestic students, but it’s different. I would say as an international student do not take on any credit that you are not able to service immediately.

31:17 Emily: I totally agree. And we talked about the dangers of having debt earlier, when you’re obligating a portion of your already very small stipend, already completely limited stipend. It’s a tool you have to be really, really careful with because it’s very easy to get in trouble.

32:33 Josephine: Oh yeah, and they just send you, sometimes the moment they have the address, they just send you offers — “you qualify for a hundred thousand”, “you qualify for a credit line and you also get this airline miles” and you’ll still have to pay for them, so just stay away from it.

The Financial Culture Shock for International Grad Students

32:50 Emily: Absolutely. Is there anything that has struck you about the financial culture in the US that you think international students need to know about before arriving?

33:01 Josephine: I think for me, what was shocking is really the 20 hours a week that that is really strict. I think when we come, sometimes we think, ah, I’ll be able to make my way around this. I’ll be able to find a job. I’ll be able to make extra money. You really can’t. So you are only allowed to work 20 hours a week and it’s important to keep that in mind, That that 20 hours a week is the only income you will have. Life is expensive. Just buying bread itself, I was shocked at how much bread cost around here. The culture of eating out for the most part and really not, not cooking at home. So you would have to resist always being out, because obviously you won’t be able to probably fund it, and find ways to really cook at home. For me, the credit card offers were the most shocking, because I’m like, “Do they know how much I earn? Why are they offering me this credit?” Because in my country getting credit is very difficult. You only get credit if you earn a certain salary and you can prove that you have a good credit history of paying off any loan that you have had before. So getting offers from companies to just say, you qualify for credit, without me doing anything, was what was kind of surprising.

34:40 Josephine: Big cities, again, very, very expensive, every little thing costs you money, so it’s better to stay maybe in like a rural town, which is very close to a big city where you can take and one hour train to a big city, for example, that takes off a lot. If you can stay in a smaller town, which has a train that goes into a big city for one hour, that kind of gives you the best of both worlds. But yeah, the financial culture in the US is just, it’s a spending culture. It’s obviously about revolving money in the economy and supporting the businesses. So it is just, we have to keep spending there’s always holidays that have different things that you need to spend on. You really need to be able to manage your spending within such a culture.

35:39 Emily: I agree. I think from what I’ve read about, let’s say permanent immigrants to the US, they come with certain, I’m generalizing, obviously the world is very diverse, but oftentimes the US is more consumeristic and then the countries that they come from. And so, maybe that first-generation keeps some of the mindsets from their home country, original culture, but it gets diluted, and within two, three generations, the descendants of those people are just totally in the thick of the consumerism of the US and completely Americanized in that way. I would imagine it can be quite shocking, and a lot of pressure to spend once you’re here.

36:24 Josephine: I think the other thing is also to pay your taxes. Obviously in many countries, people still pay taxes, especially if you’re in a salary, your employer has an obligation to deduct that, but the deadlines on when to file and all that could be like flexible. But here it’s really, I feel it’s important to keep to the deadlines and ensure that you file the taxes and don’t do anything to feel maybe, “Oh, okay. If I say this, then I can claim more.: Don’t do it. It will ruin your life and it will ruin your chances to ever be in the US, so do pay what is due to the tax man and do not claim anything you are not entitled to.

37:18 Emily: Yeah. So I think what I’m hearing you say between the rules about visas and then the tax stuff is, there’s not flexibility here. The rules are the rules, and you need to follow them. You need to toe the line, because especially as you said, if you eventually want to get a green card and stay in the US, there could be things that come up in your history, your record, that torpedo that application, if you’ve made any missteps early on. So really, really keep to the rules. I have corresponded with international graduate students who have skirted the rules and worked extra or whatever, and they got away with it, I guess, for the time being, but I always say don’t chance it.

38:01 Josephine: No, because then you walk around looking over your shoulder, wondering if someone will come after you at some point. So I think just live, you’re in another country, just live according to their rules.

Financial Advice for Early Career PhDs

38:12 Emily: Okay. Josephine, as we wrap up, what is the best financial advice that you have for another early career? PhD could be an emphasis of something we’ve already talked about today, or it could be something completely different.

38:24 Josephine: I think there’s a few things that I just need to emphasize, which is seek funding. There are options out there. Don’t up on your dream thinking, there’s no way I can study in the US, I don’t have the money. There are options. There are funds out there that sometimes go unclaimed. Talk to as many people as possible that can help you to give you the information on where to find funding, because there are ways for you to be able to fund your PhD dream. Again, avoid debt. Live modestly. The rewards will obviously come later, hopefully.

39:04 Josephine: And then just make sure that you do it for the right reason. As you make your decision to pursue a PhD, it’s not like a master’s program where you do it, you finish maybe within two years or one year, and you can go and get a job. It takes time. So at some point it will get tough. Whether it’s financially or just the coursework, it will get tough. But if you have a clear motivation, if you have a “why” you’re doing it, you will remain on track. Don’t come to do a PhD as a way to just be in the US because when it gets tough, you will find it hard to keep motivating yourself. When the stipend is much less than the salary you used to get back home before you resigned, there will come a day when you are like, why am I even doing this? Why did I have to give up my job to come and do this thing, which is now going to take me four years to finish, but if you have a clear motivation on why you’re doing it, I think it will keep you going., when you can keep going back to your why.

40:15 Emily: Beautiful, beautiful advice. Thank you so much for adding that. For the international listeners, I will add a few links in the show notes of previous interviews I’ve done, some articles I’ve written specifically for international students. There’s one especially, we didn’t touch on investing in this interview, but if you’re interested in investing as international student, I have an interview on how you can make that happen, so that could be of interest as well. Josephine, thank you so much for joining me on the podcast and giving me this wonderful interview.

40:45 Josephine: Thank you. Thank you, Emily.

Listener Q&A: Credit Cards

Question

40:47 Emily: Now it’s time for the listener question and answer segment! This week’s question is one I ran across on Twitter from Jake Thrasher, who gave me permission to answer it in this segment. Here is Jake’s Tweet: “Does anyone have good credit card recommendations for grad students? I’ve never had a credit card before, and I have no clue what I’m doing.”

Answer

41:08 Emily: Jake got a lot of great answers to this question on Twitter, and I’ll link to it from the show notes.

41:13 Emily: I’m going to answer this question not with respect to what might be the best credit card for a grad student right now, but rather how to find a first credit card no matter when you may want one.

41:23 Emily: First, you should determine what characteristics you’re looking for in a first credit card. It is recommended that you keep your first credit card open indefinitely because having a higher average age of credit boosts your credit score. So even if you open and close other cards later, ideally you would keep this one open for many years. Given that, I recommend that you sign up for a card with no annual fee and also with a creditor who has a reputation for good customer service. Some other features that are nice-to-haves but not must-haves, in my opinion, are ongoing rewards, a sign-up bonus, and waived foreign transaction fees.

42:03 Emily: If you have any inkling in your mind that you might carry a balance on this card in the future, look for a card with the lowest interest rate that you can find. I did this when I signed up for my first credit card because I didn’t 100% trust myself to pay it off completely every statement period. I ended up creating a track record of paying my cards off completely and on time, so now when I open credit cards, I don’t even look at the interest rate. But if you’re just starting out with credit cards, that’s reasonable to take into account.

42:34 Emily: Finally, to avoid applying for cards that you won’t get approved for, you should take into consideration your current credit score. If you’re new to credit you might not have a credit score or it might be not very high yet. You can search for cards that don’t have a credit score requirement in that case. For anyone new to the US, it’s typical to apply for a secured credit card as your first one.

42:57 Emily: Once you have your lists of must-haves and nice-to-haves, it’s time to start searching for current offers. You can definitely Google “best first credit card” or some variation on that and see what you get. I also like to use the sites bankrate.com and Nerdwallet.com. Those sites typically set up categories of cards for you to peruse, such as student cards, no annual fee cards, cards for bad credit, etc. However, please note that probably any credit card review you run across online has an affiliate or commission structure in place. That means that if you click through a review to open one of the cards, the site hosting the review will get paid, and that can bias their reviews. Look across a few sources to see if some cards commonly pop up within the criteria you’re searching for.

43:46 Emily: For example, when I’m doing this exercise in January 2021, I’m seeing that Discover offers a student card that probably fits the bill. Many of the people who responded to Jake’s prompt said they used Discover cards when they were starting out. I read Discover’s policy, and apparently after you are no longer a student they reclassify the card to a non-student card with the same benefits structure, so you keep the longevity of that account going. While I’ve never had a Discover card myself, they are one of the major players in the credit card space and their online reviews seem to be solid, which leads me to believe it will be easy to keep the card open for a long time.

44:22 Emily: Another great suggestion from the Twitter responses is to open your first card at a local credit union because they are likely to be less predatory than a bank. So that’s a great approach as well, provided that you will still be able to use the card with ease if and when you move away from the area that the credit union serves.

44:40 Emily: One final suggestion for Jake since he said he has no clue what he’s doing: Read my article titled Perfect Use of a Credit Card, which is linked from the show notes, and follow its advice to the letter. It’s super, super easy to slip up with a credit card and quickly get in over your head with the high interest rate. I’m very strict about how I use credit cards, which I explain in the article, and I suggest you set up rigid rules for yourself as well, such as treating your credit card exactly like a debit card.

45:11 Emily: Thank you, Jake, for posing this question on Twitter and permitting me to answer it here!

45:16 Emily: If you would like to submit a question to be answered in a future episode, please go to PFforPhDs.com/podcast and follow the instructions you find there. I love answering questions so please submit yours!

Outtro

45:29 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.

Knowing Your Worth in an Environment that Devalues Your Work

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In this episode, Emily interviews Sam McDonald, a fifth-year PhD student in informatics at the University of California at Irvine. Sam received the NSF GRFP, completed a lucrative internship at a tech company, has won multiple smaller grants and fellowships, and taught classes for additional income. Upon observing this, some of her peers questioned why she was still applying for awards. Even more light was shone on this issue when her department compiled a list of all the grad students’ income as part of the Cost of Living Adjustment protests in the University of California system; Sam was the highest-paid grad student. In response, Sam became discouraged and even stopped submitting funding applications until her advisor counseled her about knowing her worth. Sam has now come out the other side of this financial shaming experience and has great advice for anyone else questioning their worth and what they should be paid in academia.

Links Mentioned in this Episode

grad student know your worth

Teaser

00:00 Sam: Sometimes our expertise and our ability to do stuff is so undervalued. And it’s hard to measure how much you’re personally valued because you have all these different discrepancies in how different grad students are getting paid. And you really, I think just have to sit yourself down and look at comparatively, well, if I were to go into industry right now, how much would I be making? So I’d recommend the students to really go out there and see how much is my value in other places versus in grad school, where I think we have this skewed sense because of this limited budgeting construct of how much you’re actually worth.

Introduction

00:33 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode three and my guest today is Sam McDonald, a fifth year PhD student in informatics at the University of California at Irvine. Sam received the NSF GRFP, completed a lucrative internship at a tech company, has won multiple smaller grants and fellowships, and taught classes for additional income. Upon observing this, some of her peers questioned why she was still applying for awards. Even more light was shone on this issue when her department compiled a list of all the grad students income, as part of the cost of living adjustment protests in the University of California system. Sam was the highest paid grad student. In response, Sam became discouraged and even stopped submitting funding applications until her advisor counseled her about knowing her worth. Sam has now come out the other side of this financial shaming experience and has great advice for anyone else questioning their worth and what they should be paid in academia.

01:42 Emily: It wasn’t until Sam brought up this topic to me, that I realized that I had my own story of financial shaming and academia. Additionally, several of my relatively well-paid grad student, friends, acquaintances, and podcast guests have told me their stipends or that they had won a fellowship, but asked me not to repeat that information. I believe this was in fear of the financial shaming they might experience from their peers. I am a big advocate of transparency around stipends and benefits, which is why I started the websites, PhDstipends.com and PostdocSalaries.com. But transparency is hindered by shame. Asking for what you’re worth is hindered by shame. Shaming someone else for their financial success doesn’t put any money in your pocket, it just discourages them and ultimately harms our whole community. I’m so pleased that Sam volunteered to give this interview. I hope her message encourages you to swing for the fences financially and to speak respectfully when discussing sensitive topics like finances. Those are great lessons for me too.

Book Giveaway

02:35 Emily: Let’s turn our focus to the book giveaway contest in January, 2021. I’m giving away one copy of the House Hacking Strategy by Craig Curelop, which is the Personal Finance for PhDs Community book club selection for March, 2021. Everyone who enters the contest during January will have a chance to win a copy of this book. I’m delighted to bring attention to house hacking, which is when you buy a home live in it and rent out part of it, thereby radically reducing or even eliminating your housing expense. It’s a new name for an old tactic that grad students and PhDs have been using for a very long time, but this book puts a highly strategic spin on it. If you’d like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review and email it to me [email protected]. I’ll choose a winner at the end of January, from all the entries you can find full instructions pfforphds.com/podcast. Without further ado, here’s my interview with Sam MacDonald.

Will You Please Introduce Yourself Further?

03:54 Emily: I have joining me on the podcast, Sam MacDonald, who is a graduate student at the University of California at Irvine and she’s here to talk with us today about kind of a touchy subject. It’s financial shaming, and she’s experienced this and I’m really just excited that she’s decided to come forward because I know that her experience is not unique. After she approached me about this topic, I started thinking and I realized I’ve experienced this. I’ve realized I know other peers who have experienced this, so she’s definitely not alone. And we’re going to treat the subject very carefully today. So Sam, thank you so much for your willingness to talk about this. I know it’s not an easy subject matter at all. Would you please tell the audience a little bit more about yourself?

04:37 Sam: Yeah, absolutely. Thank you so much for having me Emily. Like Emily said, my name is Sam McDonald. I am a fifth year PhD candidate at the University of California, Irvine studying informatics. I actually study the United States Congress and their use of constituent communication. So I’ve been back and forth in DC and in California to figure out how members of Congress use technology to communicate with their constituents and how to make it better. I have an undergrad degree from the University of Maryland Baltimore County, where I did a lot of research before going straight from undergrad to my PhD and I got a master’s along the way that I got from UC Irvine.

Funding During Graduate School

05:11 Emily: Thank you so much that overview. Super interesting subject matter, not what we’re getting into today, but thank you so much for the context. So what’s been the funding situation for you during grad school?

05:21 Sam: My funding has been different for different years. My first year I got the GAANN fellowship, which is from the US Department of Education that my department supplied to me, which was really helpful not to TA at first. Then I TAed for two years, and while I was doing that, I applied for the NSF GRFP and luckily I got it to fund my last three years of my PhD. I’ve also spent two quarters teaching as additional funding and have gotten grants from congressional research funding and travel grants. And then also I’ve worked for Facebook for an internship, so I have internship money as well.

05:54 Emily: Can you give us like an idea of much money you were being paid — and I know it might be different year to year — versus, if you’re aware of it, the baseline stipend in your department?

06:05 Sam: Yeah, absolutely. The TA baseline stipend is around $2,200 for teaching us a little bit more. And my GRFP is about $2,800 per month, just to give you a baseline ballpark for how much that is.

06:21 Emily: Okay. And it sounded like in your second year you were being funded only from TA-ships. Is that right?

06:27 Sam: Yes.

06:27 Emily: Okay. So on that year, you lived on that baseline stipend and is it every other year you’ve been above that for one reason or another?

06:34 Sam: Yeah, it’s really fluctuated for different months, depending on if I’m getting travel grants, going to DC during the summer is quite expensive, so getting additional grants for that to be moving around, but still keep my apartment in California. I think my money has fluctuated every single month, being different because of all these different activities that I’m doing in addition to this baseline salary.

06:57 Emily: That is such an interesting budgetary conundrum. One that I would love to explore, but not our subject for today. And this is maybe not super on this subject, but I’m just curious how much the internship at Facebook paid.

07:09 Sam: Let me remember. I think it was around. I could be wrong, I think it was around seven per month,

07:16 Emily: $7,000 per month?

07:18 Sam: Yeah. I think it might be a little bit higher than that. I’d have to go back and double check, but it’s definitely around that ballpark.

How Sam’s Peers Reacted to These Extra Sources of Income

07:24 Emily: Yeah. Sounds great. Well, I am of course, wanting to congratulate you on winning the NSF, gaining these other travel grants, but I understand that’s not necessarily how some of your peers reacted to you having this wonderful CV full of accolades.

07:40 Sam: Yeah, absolutely. The NSF GRFP — I want to particularly point out, I’ve had three advisors, not through my own fault, one retired, one moved, and then one picked me up like a lost puppy and she’s been great, but none of them have had funding for me, so I’ve always had to go out and get my own funding as well, which is why I was so motivated to get a lot of these grants. But I always haven’t had the best reactions to it. After I got the NSF, which is amazing and it’s given me so much more flexibility, I still had to pursue other grants for travel to DC, and then I just kept applying to more grants because it looks good on your CV. A lot of students were really supportive, but one or two would always sort of give me side comments of like, “Oh, you’re applying for this grant, I thought you already had the GRFP. Why do you need this? Why did you win this grant even though you already have these things?” So I’ve had to deal with a little bit of tension and figuring out my own worth in that process.

08:30 Emily: Yeah. How did you feel when you got those snide comments?

08:35 Sam: I felt a little bit guilty. I will say with a caveat that like I am a more privileged person. I’m white. I came from an upper middle class family. I am working in technology, so I get tech internships. I have a really supportive advisor. I live on subsidized housing and I also live cheaply because I love hiking and I bike more than I drive places. Just for context here at the University of California, Irvine it’s so expensive to live in Orange County that even the professors have their own subsidized housing on campus and there’s an entire professor community. I’ve done a lot to really sort of push myself towards getting these grants, and it kind of made me feel bad that I was getting them because I am in such a privileged position. So for a while I was feeling bad about applying to grants and had to talk to my advisor and other peers about it to figure out if I’m in the wrong here of applying for more money, even though I already have a more stable income.

09:28 Emily: So it seems like even though a lot of your peers were supportive of this and they were helping you edit your applications and so forth, a few, a minority, were making these comments. What do you think their kind of motivation was behind that?

09:43 Sam: I think a lot of students — we’ve had protests in California about this — are struggling financially in some ways, or maybe they don’t get the grants that they want, and then they’re feeling like I’m getting a lot of grants and my research is very attractive for the current context with everything going on in Congress and wanting to improve that. I naturally do have an attractive topic and I think some people feel like maybe their topics aren’t reaching that same attractiveness when it comes to advertising your own research. Also it’s hard being a grad student and I’ve worked really, really hard to have really good grants. When I did the GRFP, I went to the writing center on campus at least 12 times and had dozens of friends review it and professors review it, so I really, really take my time with grants where I know some people also can do them last minute because they’re so overwhelmed with everything else. I think it depends on the person, but it’s just the struggle a lot to get grants in the first place, I think.

10:38 Emily: Yeah, definitely. I understand that at some point, this sort of crystallized and it was not only people by happenstance noticing that you won this grant or that grant, even though you already had the GRFP, but at some point it came down in black and white. Can you tell us about that?

10:54 Sam: Earlier this year, our department got together and decided to make a spreadsheet of everyone’s income from the department, because this was part of our consolidarity with the COLA protests. And for those who don’t know, COLA stands for cost of living adjustment. Here in California there’s been a lot of protest from grad students around, the cost of living adjustment, especially at UC Santa Cruz, where a lot of grad students are spending 50 to 70% of their income on just their housing alone, because it’s so expensive to live and they are demanding to have an adjustment to their rent because they are so rent burdened. So UC Irvine and my department in particular, especially one or two students who are really involved in the unions on campus, wanted to make a spreadsheet to show how much did we all make because we needed the data in order to demonstrate how most of us are rent burdened. Even though we have subsidized housing, even though we are a tech department, we found out that 99% of us are still rent burdened just going through this. But did find out in that instance that I do make more money than everyone else in the department. And that was in black and white and that’s on a spreadsheet that’s available to all students in my department to see.

12:03 Emily: I think this is a great process to go through actually and I am very in favor of more transparency around what people make, especially in grad school, not necessarily with your name tied to it, but just what people are making and the range. I’m kind of curious about why you ended up, I guess it was because it was asked of everyone, but what the motivation was for including people who were on fellowship, especially external fellowships like yours, along with people making the baseline stipend from the department. The argument is going to be about increasing the baseline stipend, right? So is it, we want the bottom sector here, that’s just making the baseline to be brought up closer to where you are, closer to where other people who receive outside fellowships are? I’m kind of wondering what the angle is on that.

12:47 Sam: That’s a great question. When this was sent out to students, it was completely optional. You had the option of doing it anonymously. I think most of us just decided to do it publicly and to be able to share how much, and we did put specific notes for each person of like where your funding was coming from — is this the baseline, or is this with an addition to external income? Is this pre-tax, this is post tax?. So we had all those details as well and it is a good question because I think with our department particular, there is an assumption, especially in the summertime that you’re going to go out and get other sorts of funding. And they know that there are a lot of students in our department who have Google and Facebook and Amazon and other sorts of internships because we are a more attractive group for those big tech companies that overcompensate sometimes for this wealth gap and this discrepancy for teaching.

13:34 Sam: I think that was also sort of demonstrating, even if there was a baseline, how much students were maybe feeling like they have to go for these internships in order to supplement their income. And just seeing these different discrepancies of if you were lucky and privileged enough to even get an internship. There’s actually someone in our department who studies this and how to get a tech internship, and she’s really helpful, but also shows the different discrepancies that can happen for who gets it and who doesn’t. So all those details, I think, were just really interesting to sort of demonstrate how broad the ranges and incomes in our department, just for students.

14:06 Emily: Yeah. It’s a super interesting project. I’ve actually recently heard of another, not related to the California specific protest, but another department where students took this on and used it as a negotiation tactic, as in a sense collective bargaining, although they were not in a union. So it can be a really powerful exercise. And what happened with either your peers or with your own feelings about this after the spreadsheet is out there?

14:28 Sam: The spreadsheet was out there during the pandemic, so I haven’t seen much of my peers in person, so there’s less discussion that I can have with them. Definitely for me personally, it did really two main things for me. First, it really sort of solidified this idea that I do make more money than everyone else in the department, and sort of feeling a little bit shameful and a little bit uncomfortable with that, but also at the same time, recognizing that I have a privilege to have these sort of grants and I’ve worked for it, but I’ve also been very lucky with some of these grants. And because of that, I do feel like I have a responsibility to share that and make that transparent and advocate for the people in my department who don’t. So on the one hand, it does make me uncomfortable to come out and say like, “Oh, I make a lot of grant money and I do a lot of other things to supplement that money in different ways, but also I am privileged enough to share this with you to show these discrepancies and make sure that we’re all coming up to a baseline.” And even before I had my tech internships, despite getting all these grants, I was still technically considered rent burdened. It’s kind of funny to show that you make more, but we’re all still in this sort of struggling standpoint, so it doesn’t really help to have as many tensions, in-fighting, I guess, as much as it is to collectively work together.

Continuing to Apply for Additional Grants

15:38 Emily: How did you feel regarding going after more funding?

15:45 Sam: That was a little bit hard for me. I had to talk to my advisor once about this and really figure out what’s the best path, because I did have to tell her once that I felt uncomfortable applying for more because I’ve gotten some of these comments. I was like, “I have enough, I’d be okay.” And she really sat me down and made sure I remembered what my worth is and that grants are really important for CVs if you’re wanting to go into academia, and that you should not stop applying for things just because you have some money.

16:13 Sam: I have a great example of this where actually one of my funders, the democracy fund in DC helped me fund an entire summer in DC and they asked me, “Okay, how much do you need to do your research? And I was like, “okay, well I need this much for housing and this much for food and this much for a plane ride and some Metro and like, that’s it.” And they came back to me and said, “This is great, but you forgot to mention your actual value in terms of the work that you’re doing for this grant, so we’re going to double what you’re asking for.” That just blew my mind because it was the first time that someone came to me and told me you’re worth way more than you’re asking for and you need to make sure that you’re asking for these things at a higher level. I think even now I am getting these grant fundings, it doesn’t necessarily mean that that is my baseline worth just because I get something. And that took me a while from my advisor really encouraged me to keep applying for grants coming to me and telling me that I’m worth more than what I’m asking for.

Commercial

17:06 Emily: Emily here for a brief interlude taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the, or have a question for me. Please join one of my tax workshops, which you can find links to from pfforphds.com/tax. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

Understanding the Value of Your Work

18:12 Emily: I’m really glad that you can share that with our listeners, because some other people in the audience might be feeling the same way — sort of limiting themselves and saying, “well, I shouldn’t go after more. I shouldn’t do this. I shouldn’t do that.” You had these great mentors in a sense in your life to help you push back against that, but maybe someone in the audience doesn’t have that and they’re hearing this line of thought for the first time, which is really wonderful, so I’m really glad you’re sharing that with us now. Is there anything else that you want to say about like understanding your worth? I mean, that is not just in the context of fellowship and grant applications, but just for graduate students more broadly, this is a very tricky topic to value yourself.

18:53 Sam: Yeah, absolutely. I think sometimes our expertise and our ability to do stuff is so undervalued and it’s hard to measure how much you’re personally valued, right? Because you have all these different discrepancies and how different grad students are getting paid. How much you’re worth versus another grad student. You really, I think just have to sit yourself down and look at comparatively, if I were to go into industry right now, how much would I be making? How much is my value in terms of giving to different nonprofits or companies, which was what I was doing. I was technically partially consulting, but mostly had a grant to do my own research. Having those opportunities and making myself step out there and ask other people, “how much am I worth to you?” I think that makes a big difference, so I’d recommend to students to really go out there and see like how much is my value in other places versus in grad school, where I think we have this skewed sense because of this limited budgeting construct, of how much you’re actually worth.

19:46 Emily: I think that’s a really excellent point and I want to underline it that who is paying you, that context, matters a lot in how much you can command for your value. Your value can be the same in the academic context, in the private sector, or in the nonprofit sector. But what you can get paid is vastly different from those different contexts and if you stay stuck in just the academic context, you’re not really going to realize all those different price points, in a sense, for your work.

20:16 Sam: Yeah, absolutely. I’ve come across different discrepancies, even internally, because in addition to having the GRFP and doing my research, I was extremely lucky and my department gave me a chance to teach twice, the first time being right at the onset of the pandemic. And me never teaching before and then teaching 140 students online wasn’t the funnest, but it really showed me how much they were also paying. And actually apparently we get paid more as grad student lectures than adjunct faculty do, which is kind of crazy think about because we have a better union. Recognizing the transparency that “wait I’m a grad student, but I make more than an adjunct faculty.” That’s just telling me that the value system inside the university is skewed and I really shouldn’t use that as a metric for my worth and that I really need to go outside the university bubble to understand that metric at least for grad school.

Financial Transparency in Academia

21:10 Emily: I understand we’ve been in COVID times, you haven’t seen much of your peers so I don’t know if you’ve actually, now that you have this new mindset around going after things and valuing yourself, maybe you haven’t had a chance really to speak with your peers and receive a comment and be able to respond or push back against it. Certainly tell us, have you had that opportunity at all?

21:33 Sam: No, I really haven’t just because everything’s remote and most of the stuff is just friendly, get togethers and things like that. There was a little bit of work with COLA still going on, but that’s a little bit hard with everything being remote and kind of put off to the wayside, I think, in a lot of people’s minds.

21:48 Emily: Definitely. I guess maybe in preparation for you once again seeing your peers in some months, maybe — we’re recording this in January, 2021 — is there anything that you think that you’ll say to your peers at that time, or maybe something you wished you could go back and tell them, earlier on in this process when these comments started?

22:09 Sam: Yeah, absolutely. I mean, the biggest takeaway that I’ve really found, especially contributing to this data when it comes to COLA is that we’re really all in this together. And it’s really important to be open to this process, to share it with other grad students and to not really react negatively when other people are potentially making more than you are applying for more grants than you are, because everyone’s so different. Especially even in my department — my first advisor was an anthropologist, my second was a computer scientist, and my third had a business degree a PhD. Even in that, the professors in our department have different scales of finances just because they come from different backgrounds, so it’s all a little bit hodgepodge anyways.

22:46 Sam: But most importantly, I think it’s important to be transparent. I had an occasion where we had new grad students come into the department, like accepted grad students, and they had a panel of current grad students answering questions about what it’s like living in Irvine. What is the rent like? What is it like being a student and what type of classes do you take? And one of the accepted students asked “what is your stipend like, and how much is it to live on campus?” And none of the other students on the panel were directly answering the question. They’re like, “Oh, it’s enough. It’s reasonable.” And I was like, why aren’t you giving people a number and I just straight up said, make this much money. This is how much I pay for rent. And this is for this type of housing. And they’re like, “Oh, thank you. That’s really helpful.” And I think there’s a stigma still even just to share for accepted students, this is how much you’re actually going to make, because there’s some uncomfortableness with this transparency that I think really needs to be broken because it really does help us collectively to have those discussion.

23:46 Emily: Yeah, thank you for that. And of course, I also contribute to and promote this process through my website, PhDstipends.com and PostdocSalaries.com. That’s an anonymous way that you can share what you’re making, what the funding sources and so forth, because that is also super, as you were just saying, important in this context. Are you making a baseline stipend? Do you have supplemental money coming in from XYZ, other sources? Are you taking out student loans to supplement the income because the rent is so high? Whatever the situation is I’m definitely in favor of being more transparent about it. But I certainly understand the discomfort because this is not, of course, something that exists only inside academia, only in our context, but in our entire society. Employers, even if they can’t actually disallow it, certainly discourage employees from sharing their salaries with one another. It’s really an entire society wide situation, so it’s really commendable for you and also for your peers that you are doing more to throw back the curtain and say this is what it is and we want more and using it as like a bargaining tool. It’s really awesome.

24:49 Sam: Yeah, absolutely. And especially, I think now that we’re having more conversations about minority students and getting a leg up for a lot of people who are underprivileged, it helps to know where the line is and what they should be meeting equally. I work a lot with Congress and there are so many debates about congressional staffers, because staffers are woefully underpaid, but there’s no transparency as much. There is some in documentation about knowing people’s worth in that context. So I’ve just been around these discussions and I feel like the more that we can pull back the curtain, the more we can level up people, especially people who are underprivileged in the beginning and even that playing field.

Advice for Other Early Career PhDs

25:22 Emily: Yeah. Thank you so much and thank you for your willingness to come on the podcast and talk about this because it’s a bit of an uncomfortable process. As we wrap up the interview, the question that I like to ask all of my guests is what is your best financial advice for another early career PhD? And that could be something that we’ve touched on in this interview, or it could be something completely different.

35:43 Sam: Yeah, absolutely. Going along with the theme here, apply to everything, even if you think you have enough, because you’re often worth way more than you think that you are, things cost more than you think they’re going to be in the beginning. That’s always something that happens too. So I think that’s really, really important and always being smart with your money. I’m personally a big fan of the FIRE method. I barely eat out. My activates that I love are cheap, so I’m just naturally in that mindset of being more financially savvy than I think a lot of people want to be, but that’s okay, and that’s my position. Not everyone needs that. But I think the more that people understand to apply and to really say “I could have more and I can really utilize this to my own advantage.” Take advantage of it. There’s so many grants out there that barely anyone applies to and those micro grants really can add up. Just applying for anything that you possibly can, I think is really important. And I know sometimes you get tired, especially towards the end of your PhD, like I am now, but it definitely makes a huge effect in the long run, especially you want to talk about compound interest and investments and things like that. Absolutely doing those as much as possible in the beginning.

26:49 Emily: Yeah. Thank you so much for that advice. And I totally agree with that. I want to emphasize two components of that. One is, like you were just mentioning, kind of the only way you can get a raise as a graduate student is to win outside funding. And whether that is outside funding that replaces your stipend at a higher level or supplements a stipend that you’re receiving, maybe like you mentioned earlier, taking on extra teaching work could be another way to do that. But the fellowship and grant applications are really the way to do it without actually adding more work to your life, so it’s kind of the equivalent of getting raised rather than just taking on more hours of work. A lot of paths to higher income are barred for graduate students, but this is one that is available.

27:30 Emily: The second thing that I wanted to emphasize is, you mentioned earlier that your advisors don’t have funding for you, so this was completely your responsibility. I think that’s part of this mindset of you know that you have to provide for yourself, but I just want to emphasize for people who do have funding to fall back on as a research assistant or teaching assistant, whatever it is for their advisors or their departments, the word guarantee might be in there, but what does it actually mean? And the word guarantee you might not be in there and what does that mean? I had a friend for example who had the NSF GRFP and that finished and she still needed another year or something. And because of a situation going on with her advisor not providing funding as he had in the past, she was left unfunded for a year. That was not something she ever anticipated. That was not supposed to happen in the way the funding typically went in this department, but it did happen. She had to negotiate and say, “you know what, I brought in the GRFP, you can give me another year. I brought in three years of funding.” But that wasn’t necessarily guaranteed to work.

28:37 Emily: In a sense, in academia you’re a little bit like an entrepreneur. You have to hustle for your own money. Yes, you’re supposed to be paid by someone, but how secure is that really? It feels to me a little bit more secure to be applying for lots of different things, have a lot of irons in the fire. And if those don’t work out, at least you can say to your department or to your advisor, “I have applied for four grants in the last year. Hey, they didn’t work out, can you give me some bridge funding?” There’s a way to argue about that too. I think there’s a lot of merits and a lot of different directions for applying for as much as you possibly can. I’m really glad you came back around to that position after having these conversations with your advisor and so forth.

29:19 Sam: Yeah, absolutely. And I love what you said about thinking about it as a raise. Especially as you’re getting more and more in your PhD, you are more valuable, but your finances stay exactly the same. I love the idea of thinking about applying as a way to show that your worth increases over time. Thanks for sharing that too. Yeah.

29:35 Emily: Well, thank you so much for joining me today for this interview, Sam, this was really enlightening.

29:39 Sam: Yeah, absolutely. Thank you so much!

Listener Q&A: Investing

Question

29:42 Emily: Now onto another one of our new segments, the listener question and answer. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall, so it is anonymous. Please note that nothing I say in the segment or anywhere else on the podcast is investing advice.

Answer

30:00 Emily: Here’s the question: How do I invest? I don’t have time to monitor the stock market constantly, but I would like to have at least a small amount of money invested.

30:10 Emily: What a wonderful question and I am so on board with the sentiment here. I also do not have time to monitor the stock market constantly. Who does? Honestly, I feel like people who do have the time and inclination to constantly monitor the stock market should just make that their full-time job, like go become a fund manager and get paid millions of dollars to do so instead of just doing it for your own paltry assets.

30:33 Emily: The good news is that spending that kind of time on investing is absolutely not necessary. In fact, in 99+% the cases it’s actually counter-productive to do. Let me introduce a term to you: passive investing, also known as index investing. Passive investing is the most effective least expensive and most time efficient manner of investing.

31:00 Emily: The real quick gist of passive investing is that you buy one or a small number of index funds and you hold those funds in your portfolio long-term in a percent-wise allocation that you have determined in advance. Index funds themselves are collections of, we’ll stick with the stock market, collections of stocks that reflect a broad market sector. So in these funds, the fund manager is not trying to pick the winners and dump the losers. They’re just trying to buy either everything or a representative selection of everything available in that market sector. My go-to example is always the S&P 500 index. When you listen to the stock market news of the day, you’re going to hear how the S&P 500 and the NASDAQ and the Dow Jones did. So those are three indices that represent how the market overall is doing. The S&P 500 has a really clear definition. It’s simply the 500 largest companies that are traded on the US stock exchanges. So if you were to purchase an S&P 500 index fund, you would be a part owner, a very small part owner,of all 500 of those companies. So that represents the market sector of large cap companies, the largest companies. So basically the learning and the research that you need to do is to understand what passive investing is, what index funds are and which index funds you want to purchase and in what allocation. This might take you a few hours of upfront investment of your time, but it’s not something that you need to put time into on a continual basis. Once you’ve decided on your strategy, you basically just let it ride. Another really easy set it and forget it way of accomplishing this is to use what’s called a target date retirement fund, which is in itself a collection of index funds in a percent-wise allocation like I described earlier.

32:53 Emily: So where to go next for resources. I actually have a set of webinars inside the Personal Finance for PhDs Community explaining what passive investing is, what index funds and exchange traded funds are, how to choose them, which brokerage firm to use for your investments, whether you use an Roth or a traditional IRA, all these kinds of questions. So if you would like to view that webinars series, simply join the Personal Finance for PhDs community at pfforphds.community. And that webinars series will be immediately visible to you. I also have inside the community, a challenge that I ran a few months back on opening your first IRA. So you might be interested in following the steps of that challenge, which point to certain webinars to watch in a certain sequence and other steps to take. That might be relevant for you. Or you could do something like read a book such as the Simple Path to Wealth by JL Collins.

33:46 Emily: Now, another element to this question is that you mentioned you want to have a small amount of money invested. You might be tempted to use. What’s called a micro investing platform. Those are brokerages that specialize in helping people with zero capital upfront get started with investing. Some names you may have heard are Acorns, Robinhood, M1, these kinds of platforms. I want you to be really careful when you’re choosing the platform to go with. Ideally, you would only pay the fee associated with the ETF itself that you end up buying. You wouldn’t be paying fees on top of that. For example, some of these platforms charge like $1 per month to be invested with them. I want you to avoid a platform that charges, that kind of fee. Because when you are investing only a small amount of money, a fee of $1 per month actually takes a big, big bite out of that money. So if you go with a micro investing platform, make sure it’s one that doesn’t charge any fees on top of the underlying ETF fees.

34:46 Emily: You also should check whether the platform offers IRAs, individual retirement arrangements. It might not seem important when you’re just starting out with investing, but retirement investing should probably be your top investing goal when you’re starting out, because it is such a large need, even though it’s a long time away. For example, Robinhood fit some of the criteria I mentioned earlier — they don’t charge you fees on trades, you can buy ETFs through that platform, but they don’t offer IRAs, at least as of the time of this recording. It’s very worthwhile to check out what are called the online discount brokerage firms, like Vanguard, Fidelity, and Charles Schwab. Those are kind of my go tos for being able to avoid higher fees that might be charged by other companies. However, the issue is that sometimes they have minimum amounts that you need to invest to get started, like maybe a thousand dollars, which of course is not at all a that you would have that much money. So in my mind, those are the places to get to, eventually maybe when you’re starting out or maybe later on. But if you need to start out in a micro investing platform or a robo-advisor at the beginning, that’s perfectly fine.

35:51 Emily: I think once you really understand the concept of passive investing and how simple it is, how easy in a sense it is to build up wealth over the decades, you’re going to want to have more than a small amount of money invested. You’re going to be really motivated to increase that savings rate and a discount brokerage firm is a great place to be when you’re saving a hundred dollars a month or more, or have a thousand dollars in your account already. Personally, when I first opened my IRA and started investing, I went with Fidelity because at that time they allowed me to open an account with no money up front, as long as I set up a recurring savings rate of at least $50 per month. So I did that for a little bit over a year until I had $3,000 in my IRA. And then I transferred my account over to Vanguard. They had a $3,000 minimum at that time, and I’ve been with Vanguard ever since. So I hope that is a start to answer your question and that you have a place to go for our further resources, either with me or other people who talk about this. And I really want to encourage you at the start of this investing journey, so I do hope you’ll take that next step. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours listeners.

Outtro

37:10 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.

What Happens When Personal Finance Education Becomes Your Hobby

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In this episode, Emily interviews Laura Frater, a first-year PhD student at the University of California at Davis. Laura grew up in a low-income family in Scotland and first came to the US a few years ago for a master’s degree. She went from having “zero financial literacy” at that time to being highly engaged with her finances now, and even considers personal finance education to be her hobby! Laura details the top seven tips for financial success that she has implemented over the last few years, including one just for international students. She continues to discover new strategies and experiment with her finances.

Links Mentioned in this Episode

financial education hobby

Teaser

00:00 Laura: You don’t have to sort of wait to be an adult to do those things. Like you are an adult already in grad school, and you can do other things that adults do with their money for sure.

Introduction

00:14 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode two, and my guest today is Laura Frater, a first-year PhD student at the University of California at Davis. Laura grew up in a low-income family in Scotland and first came to the U.S. a few years ago for a master’s degree. She went from having zero financial literacy at that time to being highly engaged with her finances now and even considers personal finance education to be her hobby. Laura details the top seven tips for financial success that she has implemented over the last few years, including one just for international students. She continues to discover new strategies and experiment with her finances. For season eight of the podcast, I’ve shifted up the format. There are two new short segments, one before, and one after the interview. I hope this new format will encourage more interactions between me and you, the listener.

01:17 Emily: January is always an exciting month for Personal Finance for PhDs. First, it’s a brand new year, so a lot of people have a heightened interest in personal finance at this time. They want to start budgeting, increase their savings, open IRAs, et cetera, and I love that energy. Second, tax season has started. I rarely file my own tax return before April 15th, but I’ve learned that a lot of people file in January to get their tax refunds ASAP. Therefore, I’ve already kicked off my tax support for your 2020 return, which you heard about in last week’s episode. Third, I view January as the start of admissions season for PhD programs. Although, I know some people receive acceptances even earlier. So, it’s a thrilling and hopeful time of year for prospective graduate students, and a perfect time of year for them to connect with my material.

02:10 Emily: If you would like to learn more about personal finance and want a friendly environment in which to ask questions and discuss topics, including all of the ones I just mentioned, please consider joining the Personal Finance for PhDs Community at pfforphds.com/community. If you know that you want support in accomplishing a big financial goal this spring, I recommend my group coaching program, The Wealthy PhD. You and I will meet one-on-one to identify and plot a course toward a big financial goal. Past participants have opened IRAs, set up systems of targeted savings, started budgeting, and systematically implemented frugal tactics. Every week for eight weeks, you will participate in a small accountability group that I facilitate that will keep you on track to meet small weekly goals. The next round of The Wealthy PhD starts in mid-February, and enrollment is open now. Visit pfforphds.com/wealthyPhD to learn more.

Book Giveaway Contest

03:12 Emily: Now, onto one of the two new segments, the book giveaway contest. In January 2021, I’m giving away one copy of The House Hacking Strategy by Craig Curelop, which is the Personal Finance for PhDs Community book club selection for March 2021. Everyone who enters the contest during January will have a chance to win a copy of this book. I’m super enthused for my audience to learn about house hacking, which is when you buy a home, live in it, and rent out part of it, thereby radically reducing or even eliminating your housing expense. In fact, I’m bringing back a special guest from the past to discuss the strategy with me in an episode that will be published at the end of January. We’re going to tell you how even a grad student in certain housing markets can apply the principles explained in this book. And certainly, it’s even more viable if you have post-PhD income. If you’d like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review, and email it to me at [email protected]. I’ll choose a winner at the end of January, from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Laura Frater.

Will You Please Introduce Yourself Further?

04:29 Emily: I am delighted to have joining me on the podcast today Laura Frater. She is a first-year PhD student at UC Davis, and she’s going to be kind of telling us the arc of her financial story, starting as international student, and now, you know, in her PhD. And she has a great story to tell. And she’s going to be specifically telling us a few different strategies that she’s used, seven different strategies she’s used, in the course of this time to kind of get her financial life in order and now going into a PhD program. So Laura, it’s really a pleasure to have you on thank you so much for volunteering. And would you please, you know, tell the audience a little bit more about yourself?

05:10 Laura: Yeah, sure. So, my name is Laura and I just turned 29. I am originally from Scotland. I was born and raised in Glasgow and I moved to the U.S. when I was 25. So, it’s been about four years. I originally came to do my Master’s in English in New York city. And after four years of being there for very long years, I moved to Oakland, California with my husband about three months ago. So yeah, I’m still settling in and learning how to finally manage my money properly with my brand new graduate stipend, which is exciting.

Funding Journey Over the Past Four Years

05:43 Emily: Great. And so just to get a little bit more detail there, was your master’s funded? Were you paying for yourself? What were the financials during that period?

05:51 Laura: Yeah. Good question. So, I was there as an international student but it was a private school, so I had a full scholarship. I had all my tuition paid for, and then I had a fairly modest bi-weekly stipend over the course of two years. So, obviously it wasn’t a lot of money, but it kind of paid for things like travel. And my now-husband was a rock star and he took care of things like rent. So, I was definitely in a very fortunate situation overall.

06:21 Emily: And did you finish your master’s within those two funded years? And what did you do for the next two years? We’re talking about a four-year period, right?

06:28 Laura: Yeah. Four years. So the first two years, yeah, I started 2016, finished 2018. And then I went onto what’s called the OPT visa, which is like a temporary work visa for international students. So I spent about a year working on that visa, and long story cut short, I got married and applied for my green card and became a permanent resident last year.

06:53 Emily: Okay, gotcha. So, I wanted to give the listeners as well, a flavor of like your current financials. So, you came to the U.S. What was your financial life at that time, and what are you doing now? Like sort of where are you now? And then we’ll talk about, you know, how did you get from point A to point B? So, you know, what was point A, what’s point B like?

07:11 Laura: Yeah, well, point A was just a total lack of awareness with money. So, I really, I didn’t really grow up with any financial literacy, and I grew up in a very, just like a low-income household, basically. So, money was just always associated with stress and limitations. So, I didn’t have any knowledge about managing it effectively. So I would, I tended to, you know, pay for everything I needed to pay for. And then I would try and like hoard all my money and save everything, but that’s just not realistic. So, it was kind of a mess. And when I was not able to work last year waiting for my green card, I just made a huge point to learn about finances and become as aware as possible about every dollar and where it was going. So, today it’s just much more about engagement and seeing it as a way to feel more free, basically. As free as you can be in graduate school.

Financial Strategy #1: 50-30-20 Rule

08:08 Emily: Okay. So, it’s really been a lot of like sort of mindset evolution then during that period of time. And it sounds like you went about it also very intentionally, at least for a period last year. So, let’s dive into the strategies then. You have six strategies that will be sort of applicable to hopefully anybody and then one that’s particular for international students. So, we’ll talk through each one of these. So, first strategy, what is it?

08:31 Laura: Okay, so this is something I definitely picked up listening to your podcast. So, knowing exactly where your money’s going and what the goal of those segments of money actually is. Again, this is something I learned from you was just the 50, 30, 20 rule. So, 50% goes towards everything you need to pay every month, like rent and utilities, and then 30% is for your wants–things that you want to spend money on–and then 20% towards your savings goals. So, just having those goals clearly outlined has been the biggest thing.

09:04 Emily: Yeah. I definitely like that touch point, which is why you’ve heard it from me before, but I’m curious how it struck you living in New York and now living in California. Because sometimes it’s really hard to hear that living in a high cost-of-living area.

09:17 Laura: Yeah, it’s definitely challenging. And I should definitely preface this by saying that, you know, being married, I share my expenses with somebody, so I have a benefit in that sense, for sure. We talk about our money really openly and we both stay within that 50, 30, 20 limit. So, we really talked about the kind of lifestyle that we could number one afford, and then, okay. So, were we willing to make certain sacrifices to live where we ideally wanted to live? So yeah, we probably spent about a month deciding on, you know, where we wanted to live, the cost of the apartment, did we want a car. All those kinds of things. And yeah, we definitely live, we live in Oakland, so it’s very expensive, but it’s a trade-off. We’ve had to be at peace with that choice.

Impact of Location and Commute

10:05 Emily: And let me, I’ll just ask also, so you’re living in Oakland, but you’re going to UC Davis, and those are not the same city. So, is there like, are you commuting or is it different now because maybe you’re remote or what’s going on with like your choice of location?

10:19 Laura: Yeah. So everything is online at Davis until next year. So, our lease in Oakland ends October, 2021. So, we definitely have the option to go closer to Davis if we want. But honestly, my schedule is very flexible and I only have to be up there twice a week, on average, if I was going up there. So, I don’t anticipate us moving somewhere cheaper so that I can be closer to Davis. My husband works in tech, so he has to be in San Francisco. So it’s really, we have to prioritize how much he has to commute, because that would be like an everyday occurrence almost for him.

10:56 Emily: Gotcha. Well, we’ll see how all of this evolves. You know, we’re recording this interview in November, 2020, and the future is very uncertain. I guess you at least know when your remote period will definitely go until, if not maybe further. Yeah. So, we’ll see how that goes. Anything else you want to say about that? The strategy of like, of budgeting and balancing?

11:17 Laura: I mean, I think you just have to like, not be afraid of the numbers and, you know, we really sat down, especially with the rent. Coming from Manhattan, we thought there’s no way it can be more expensive than Manhattan. And it was. So, you know, this is down to my husband’s great sales skills. He really haggled with the building and got us a really good deal. I wish I could give advice on how to do that, but I don’t. You might be better to interview him for that. So, we got about 12 weeks off of our rent. So, three months of this year we don’t pay for, and we managed to get free parking in our building as well for a little bit. So, negotiation skills is probably my next financial education to-do list point.

Financial Strategy #2: Side Hustles

12:01 Emily: Yeah, that’s incredible. And I think that’s both, it’s just good to know that it’s possible and some people are successful with it. Even if you don’t know, like particularly the script that he used or whatever, you can look up those kinds of things. But I am thinking that, you know, being in San Francisco adjacent kind of area, and also during COVID times, you know, the willingness to negotiate on behalf of the company that’s running the building or whatever is probably increased. So, it’s worth trying whenever, but I suspect your success rates are going to be higher now than they will be a year or two from now or whatever. Okay. So, what is strategy number two?

12:38 Laura: So, number two is something, again, that you’ve talked about a lot is side hustles. So, I’d always aimed to find a side hustle during grad school. You kind of have to. But, I ideally wanted something that was remote during this weird time. So, I was lucky to get, it’s a grading job with UT Austin. So, you’re basically grading papers for this program that they do for high school students who are taking college-level composition classes. And I’m not totally sure how I feel about it yet. It’s definitely a lot of work for the money that you make. So, that’s something to probably think about. You know, maybe have a goal in mind in terms of how much money you want to make off of your side hustle, how much you need to make, and then decide whether that side hustle is the best fit for you. So, I’m going to do it for a few more months and see what else is out there. But I would never say no to even like a little bit extra money in the week on those stipends. So yeah, definitely go for a side hustle if you can.

13:37 Emily: Yeah. So, I do want to note that you’re saying that you did the side hustle post-getting your green card, because you’re not allowed to have an income that you are working for as an international student. So this is only for, you know, people who are citizens or residents and also even a subgroup within that of people who are not going to be risking their funding by pursuing a side hustle or, you know, their relationship with their advisor or whatever. So, it sounds like the kind of the one that you chose is probably quite flexible. Maybe the pay is not great for the hours, but you can fit it in around the other things that you’re doing.

Flexibility and Fellowships

14:09 Laura: Yeah, totally. It’s definitely very flexible and yeah, that’s a good point. I’m on a fellowship. So, I cannot work at UC Davis or any of the UC campuses, but I’m allowed to work anywhere else off those campuses. So, this was actually recommended to me by UC Davis and I felt pretty confident going into it that it was, you know, a good space in which to work. So, yeah, I think keeping an eye on how much I’m probably making per hour, given how much work I’m doing for them. And I love the job itself. I just want to be careful that I’m not giving too much of my time for, you know, a really low rate of money. So, that’s something to definitely be aware of.

14:48 Emily: Yeah. I’m really glad that UC Davis actually gave you that clarity around what the policy was, because I don’t know that that’s actually that common. So like, here’s what’s not allowed, here’s what it is allowed. Oh, recommendations for what, you know, what work you might do. I know I had a side hustle that was doing editing for journal articles for a while after I finished my PhD. And I similarly had to be really conscious and sort of suppress my like perfectionist tendencies, because I was just like, for the rate that I’m being paid, I need to be very careful how much time I spend per paper. And like, yeah, maybe I’m just going to get it 90% of the way there. That’s okay. That’s good enough. And not, you know, toil over every like last detail. So, yeah. Great tip to be conscious about that. Anything else you wanted to add about side hustling?

15:32 Laura: So, one thing I am doing right now is I’m almost a qualified yoga teacher. So, that is something I really want to pursue. And I don’t know enough about setting up my own business yet and things like that. You obviously want to make sure that you’re not, you know, you want to be paying taxes and things like that. That’s really important. But the yoga stuff is just something I love to do. And I started becoming a teacher actually during COVID. Like right at the beginning, there was a really great online course. So things like that, you know, try and make those side hustles fit in with your schedule. Don’t be like missing time on studying just to make money if you can avoid it. So yeah, just looking for flexibility and not being exploited is the most important thing, I think.

16:15 Emily: Totally agree with both of those. And I’ll also add, I really like that you are just experimenting with things. You know, like you aren’t holding onto like, what’s exactly the most perfect thing, and that’s the only thing that’s going to be acceptable. Or you don’t have these limiting beliefs around, I’m not allowed to do anything. I can’t do anything. I can’t fit it in, I don’t have time, I’m not allowed. Yeah, you’re just trying things out and I think that’s a great approach.

16:36 Laura: Yeah. It’s definitely fun. And you know, again, podcasts like yours, you know, finding out from other people what they’re doing. It doesn’t have to be a conventional, probably pretty dull side hustle. Like, you know, try and enjoy your life as much as possible because I think these years only get more intense as you keep going with the PhD. So, try and do something that is good for your soul as well as your bank account.

Financial Strategy #3: Check Your Bank Account Regularly

16:58 Emily: Yeah, that sounds good. Okay. Let’s talk about your third strategy.

17:03 Laura: Yes. So, I think just checking your bank account every single day is, it seems like the most simple advice, but something that I never used to do. I would just, you know, live in denial and not check it for days at a time. So, like take advantage of the apps from your bank. Like they need to be good for something. So, have it on your phone, check it every day. And I also try and look at the last five to six transactions. And I try and work out, are there any patterns in my spending? Are there things that I’m wasting money on? But that also helps you figure out what you actually enjoy spending your money on in the first place, so you can be prepared for it. And it also will just show up any kind of like random transactions that were maybe incorrect, which actually do happen. Like you think that they won’t, but they definitely do.

17:51 Emily: I have an example of that actually, that I was looking at our, my husband, I share a Mint account. I was looking at it the other day, and I saw a charge from Amazon Music for like $15. And I was like, Hmm, husband, did you subscribe to Amazon music without discussing that with me? And he goes, Oh, no, like weirdly my phone was like freezing up and I thought I tapped something and then I wasn’t sure. And so anyway, it was a total mistake that he, you know, accidentally subscribed and, and he, you know, he talked with them and he got it reversed and it was totally fine. But if we had gone a month or two without like catching that, or if it had just gone into the, you know, swept away with all the other transactions, then, Hey, you’re out $15 every single month. Not just one time.

18:32 Laura: Yeah. It’s a lot of money. I mean, also like looking for those free trials that you forget to cancel. Happened to me twice this month. I was so embarrassed because I pride myself on not letting that happen, but Microsoft charged me 75 bucks, which, you know, I would have gotten that free through Davis and I forgot that I paid for last year, and Hulu as well. So yeah, we still have it for one more month, but not worth it at all.

Monitoring Short-Term Savings Goals

18:56 Emily: So, what else do you get out of the particular strategy of checking every single day? Like, are you, I mean, you mentioned finding patterns in your spending, which I think is super valuable. What else are you getting out of that practice?

19:09 Laura: I think the other thing right now that I’m getting out of it is checking on my short-term savings goals, which I’ve actually established, which is really great and has lowered my anxiety. Also like looking for avoiding any bank fees, which are really, really tricky, especially with someone like Wells Fargo, who we can talk about that later, maybe, but like that bank is terrible about those fees. Checking for example, how many times I’ve used my debit card to make sure that I avoid the monthly fee. Things like that, that I never really did before. It’s just another way to be as fully engaged as possible with my spending.

Financial Strategy #4: Make Financial Education a Hobby

19:47 Emily: Alright. So, what’s your fourth strategy?

19:49 Laura: Fourth is just making your financial education a hobby. I guess that’s the best word to describe it. I used to view finances and the education around it with a lot of fear and anxiety, but finding fun ways to learn about it has really changed my life in so many ways. For example, your podcast. I’ll go for a walk by my apartment. I’ll go running, I’ll go to the gym. And I just pick an episode and then I, you know, listen to it and I make notes on it afterwards, normally. Getting an audio book is a really good idea as well. Going on YouTube and just sifting through different people’s videos. There’s definitely some weird people out there for sure. So you can, you can judge that as you, as you figure your way through it. But just making your education a part of your lifestyle, I think is really important.

20:37 Emily: Yeah. I definitely also went down this road with when I was sort of getting, I had been learning about personal finance through reading some books and stuff, but then when I got a little bit interested and more engaged, I was reading about a lot online and like starting to connect with bloggers and then I started blogging myself. So, there was like a community, you know, developing online around it. And I definitely would call that my hobby at that time, which of course has since become my business. But at the time it was just a fun thing I was doing like, you know, wake up, like check my email and like check my like feed for, you know, what the new blog posts are. And I really liked having that perspective from other people. I think those communities have moved more towards like Reddit and YouTube now.

21:17 Emily: It’s not so much like blogging. I mean, people still do that, but it’s not quite as huge as it was at that time. But just finding like a way that you like to consume information, like you were just saying, like audio works really well for you. Obviously, I love podcasts. So, audio works for me too. Finding a way you’d like to consume information and then a few people maybe like on whatever medium that is that you like to follow. There’s a big personal finance community on YouTube now, I know. So, if that’s your thing, like you could definitely find, you know, great influences there. And yeah, I think books still have their place for sure. And if audio books can do well, or if you have the time and capacity to read, then that’s perfect too.

Commercial

21:54 Emily: Emily here for brief interlude. Taxes are weirdly unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available at pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which you can find links to from PF F O R P H D S.com/T A X. The first live Q&A call for my workshop on preparing your 2020 PhD tax return is this Sunday, January 17th. Also, for those of you who are paid by fellowship or training grant, the deadline to make your quarter four estimated tax payment is January 15th. If you’re not going to file your tax return by the end of January. It would be my pleasure to help you save time and potentially money this tax season. So, don’t hesitate to reach out. Now, back to our interview.

Financial Strategy #5: Decide What Makes Your Life Rich

23:21 Emily: So, what is the fifth strategy on your list?

23:24 Laura: The fifth one is actually from a really good book called I Will Teach You To Be Rich, which was actually the audio book that I just downloaded. And one of the questions, gosh, the author’s name I’ve totally blanked on.

23:36 Emily: It’s Ramit Sethi.

23:38 Laura: So, yes. He’s really great. And I wasn’t super sure about the title at first. I thought it was maybe like a little bit crass, but he has some really good advice including sit down and decide what makes your life rich. And that doesn’t mean in terms of how much money you have for retirement or how much money you have on the day-to-day, but what do you really value and what do you enjoy spending your money on? So, that was something that I kind of made my husband and I sit down and talk about. You know, like what are our individual, you know, finance goals and our joint ones as a couple in the next five, 10 years. Like where do we want to live? Like what kind of life do we want to have for ourselves? And it’s not just helped us plan our savings more appropriately, but it’s also alleviated my personal guilt when I see like what I’m spending money on. For example, I love eating out. Like I never did it growing up and I love doing it now. And that’s part of what makes my life personally rich. So, it just helps you, I think, feel less shame if you’re spending things and you’re initially worried that it’s not appropriate. But if that’s what you value, then you should enjoy it if you can afford it.

24:46 Emily: Yeah. I think Ramit’s voice is a very unique one in the personal finance space, because he does have this emphasis on, you know, spend extravagantly on the things that are really important to you and increase your income so that you can support that. And do not worry about like, cut spending in the areas that are not important to you. I was just actually listening to him as a guest on another podcast a couple of days ago. And I think he said something like, you know, he drives a super old car still and he like, there are some areas of his life that he really does not spend on, but there are a few that he’s identified they’re really important where he spends lavishly. And so that’s, I think it is a really good perspective for someone who is like you were talking about earlier, like sort of afraid to spend money or like hoarding money that like, I can definitely see how that message could help you with your own money mindset.

25:38 Emily: I Will Teach You To Be Rich actually came up earlier on the podcast and we’ll link it from the show notes. We did an interview with Dr. Amanda and she talks about how that book in particular, when it was first published like 10 years ago or whatever totally turned her like money life around. That was like the sort of inception of her money, her financial journey. So, if you want to hear another perspective on, you know, how that book’s helped someone else, that’ll be linked from the show notes. Yes.

In Other Words: What Are Your Values?

26:05 Emily: So, another way of like saying this, like figure out what makes your life rich thing, which is a little bit more like classic financial planning, is what are your values? What is important to you? You also mentioned identifying goals. And I think it’s a wonderful process. Not, you know, not a lot of graduate students might get into this because they feel like they’re more on the survival level. But what I like about this exercise of figuring out what’s really important to you, what really makes you happy, what really makes you feel satisfied, is that there are sometimes ways that you can find a way to fulfill those values that don’t involve spending. And that’s okay. Like for instance, you know, you said earlier that you’ve been trained to become a yoga teacher. So, maybe, I’m guessing, physical health and mental health and balance and things like that are important to you. And it doesn’t take a lot of money to have a yoga practice, right? So, there are ways to find fulfillment, even if you aren’t able to spend right now. But then later, you know, when your income is higher, post-PhD, you can maybe think of ways that you could spend and even enhance that more later, but still find some ways to do it now and fit it into your life right now. Instead of just sort of saying to yourself, I can never do anything. I can never spend anything. I can never afford anything because of my stipend right now. And just sort of shutting all of that down.

27:19 Laura: Totally. Yeah. And I think that’s something as a cohort when you’re in your PhD program, like you should definitely talk about that with other people. Because the attitude, at least from what I witnessed, is like, everyone’s scared about their money. But you’re totally right. If you sit down and think about what brings a particular richness to your life. But when I did it, I realized, Oh, wow, I do yoga. I love hiking. I love going for walks. Like I’m such an old lady that way. So it’s like, I have all these things already there for free. And it just helps you feel, it gives you perspective on your money. It’s, you know, you don’t have a lot right now, but that’s okay because X, Y, and Z doesn’t cost me anything.

Financial Strategy #6: Talk to Your Partner About Money

27:55 Emily: Well, it’s a wonderful point. Thank you so much for expanding on that one. Sixth strategy. What’s that one?

28:02 Laura: So, the sixth is to anyone in a relationship. Talk to your partner about money. It’s not something you talk about the first couple of years, probably, when you’re on your first dates. But I mean, my husband and I have been together for almost nine years, married for just over a year. And you know, he’s so good with money and he has such a natural interest and I have such a fear of it normally that we’re kind of a perfect match that way. But the more we’ve talked about it, the more our relationship has improved, the better our goals are with our spending. There’s no awkwardness about things that we’re both buying. We do also keep, you know, separation there, which I think is healthy. I don’t know everything that he’s spending his money on, but we both know exactly how much the other person makes every month. We both know our bills when they’re due and if there’s any kind of more extravagant purchases that we’re both thinking of having as individuals, we do run them past the other, because it’s just a respectful little gesture. So, just making it a not scary thing. Just talk about it with your partner. The worst thing is to keep it a secret, for sure.

29:10 Emily: It sounds like you two have found like a balance. You have transparency but you also have a degree of autonomy. So, no secrets, anything that needs to be flagged as brought to the other person’s attention, but the decisions are still ultimately your own individually for certain aspects of your spending. And obviously certain aspects you have to come to an agreement. I did a pretty interesting podcast interview recently with Dr. Michelle Roley-Roberts where we talked about joint and separate finances.

29:40 Laura: Yes. I listened to that.

Financial Strategy #7: Learn About U.S. Credit Card Culture

29:42 Emily: Cool. Yeah. So, I’ll link that in the show notes, in case people want to follow up on like, okay, well, what is the money management system that might work well for me? And you can certainly hear, you know, Michelle and I discuss our respective systems, which are somewhat different and somewhat similar. I think that your last strategy is specific to international students. So, will you share that one please?

30:00 Laura: Yeah. So this one, I so wish I’d known before I moved here, but better late than never. Learn about credit card culture in the USA, because it’s not going away and you will be all the better for accepting it. And I know it’s not always possible on a student visa to get a proper credit card. That was the problem I ran into, but they will give you something like a credit card from certain banks, and it will be a way to transition into an adult credit card, so to speak. I just got my first credit card. I’m not ashamed to admit it. So if anyone else out there is thinking, Oh gosh, I don’t even have one yet. It’s okay. Like better to just go and do it. But I just had so many questions about them because growing up in Scotland, we were always told don’t get a credit card. It’s, you know, it’s because you’re a failure financially, if you need to get one. But here it’s a very valuable thing to have a good credit history. So, learn about it as soon as you can, and go to your bank and just ask a ton of questions. And do not leave until you know the answer to all of them. Because they’ll try and just brush you off most of the time.

31:08 Emily: So, the credit card culture that you were just mentioning. It’s so closely held for me. I was taking a second, like, what do you mean by this? What is this culture? So, what you’re saying is like the importance of credit, like your credit score, your having good credit reports and so forth is not just for when you want to get a mortgage or when you want to take out a car loan or whatever. It can be checked by landlords. It can even be checked by employers in some cases. And so it’s like, yeah, weirdly important to have a really good credit or, you know, a decent to good credit score. And it doesn’t mean, like you were just saying, that you’re necessarily in debt or, you know, taking out lots of debt, or that you’re in a need or anything like that.

31:50 Emily: But yeah, it is it’s pretty weird and it’s pretty insidious that other kinds of payments are not reported on your credit report. Like, Hey, I pay my rent every month. Shouldn’t that count for something? And it’s also weird that your income doesn’t factor into your credit score. So, it’s a very strange system. I agree. And so, okay. So, I understand. So you had to understand what was going on with the U.S. system and kind of accept that, yes, you did need to establish a credit score. These are the steps to do, you know, get a secured card, later on, get a regular credit card once you have a credit score, and then kind of work it up from there. Is that right?

32:26 Laura: Yeah, totally. And again, like I was in a very privileged position because my husband has a credit score. But again, I didn’t know that to get an apartment, for example, in New York, even with his credit score, which is really solid, it was still a challenge. Like you got to wait until it’s processed. There are a lot of questions afterwards as well. So, just establishing that, the sooner the better. It will lift your anxiety about it and it, unfortunately it just will give you more freedom down the line. So, I would start off really small. You know, I just got my credit card and I’m only allowing myself to use it for certain expenses in the month so I can practice using it appropriately. So, just figure out how to use it properly and stick to the rules. And I think you should be good to go.

Credit Cards Can Intimidate Anyone 

33:12 Emily: I’ll actually like add in, even for, you know, people have grown up in the U.S. or whatever. Like, I also was very afraid of getting my first credit card, which thankfully I don’t know how, because I was very ignorant at the time, but thankfully I did not sign up for any credit cards during my undergraduate degree. So, I got through all of that with only, you know, I had student loans and so I actually had a credit score, but I didn’t have any credit cards. Thankfully. And by the time, I don’t know, I had just been like warned so strenuously about the dangers of credit cards that I was very, very nervous to get one for the first time. But like you, I was reading about how important it is to build credit. And this is, you know, an easy way to do it without actually paying interest on anything, which is also nice.

33:52 Emily: So, I like very carefully picked out my first credit card, very reluctantly, like signed up for it, used it very infrequently. And, you know, have still maintained that account to this day because it’s my oldest account. So, it’s definitely not just international students who can be kind of like perplexed and nervous about this whole system. It’s a little bit easier, of course, if you did go to college in the U.S. and you did take off student loans because you will have a credit score, even if you have never made a payment on student loans or anything like that. It’ll actually probably be a decent, I don’t know. It’s so weird. It’s such a weird system.

34:26 Laura: It’s so weird. Yeah. I mean one last thing I would say is just when they give you those documents at the bank with all the terms and conditions. It’s very tempting to just put it in an envelope and not look at it again. I have a whole box, actually in my office right now, and I’ve gone through the whole thing with a highlighter. And I asked my husband the definitions for things. I search online. I called the bank twice more because I wanted to confirm something. Like, ignorance is just not bliss. You just, you need to know what exactly you signed up for to really feel confident about it.

Benefits of Reflecting on Your Money Mindset

34:55 Emily: Yeah. Well, thank you so much for adding that. I know that a lot of international students I think hear this advice of open up a secured credit card when you get to the U.S. But I think a lot of them will kind of find some kinship with you in your like trepidation about this. And what exactly is this about and what are the attitudes? So, yeah. Thank you so much for adding that. So, what are the benefits that you’ve experienced from going through this, you know, this process and reflecting on your money mindset that you grew up with and putting all these strategies in place. Obviously, I’m assuming your hard numbers of your financials are looking rosier than they would have if you hadn’t gone through this process. But is there anything else that you want to add about benefits aside from the, you know, the black and white?

35:38 Laura: Yeah. I think that the biggest benefit is just, you know, getting out of this mindset as a grad student that you can’t have any savings goals. That was the big misconception that I had. You know, once you learn, for example, what an emergency fund is, what a Roth IRA is, all these little things. You realize, Oh, wait, it is possible to save for the future. Yeah. It’s not going to be as much as someone working as a lawyer or whatever, but it’s going to add up over the five, six years that you are on this smaller stipend. So, you know, it gives you a lot of hope and I think the mental health during graduate school, that’s something you have to be aware of. And putting aside, you know, a couple of hundred dollars a month to your Roth IRA, for example, that’s a great feeling. And that’s, you know, one of my goals that I have by the spring. You don’t have to sort of wait to be an adult to do those things. Like you are an adult already in grad school, and you can, you can do other things that adults do with their money for sure.

36:35 Emily: Yeah. I also, very coincidentally, I gave an interview this morning for Roostervane, which is Dr. Chris Cornthwaite’s brand. And I was talking about this as well, the mindset of really that label of being a student. It makes sense in a context, but it can really trip you up and mess you up, like in your mindset, because I think, you know, at least in the U.S., you know, for traditional college students, we’ve kind of accepted that it’s an extended adolescence period of time until you graduate from college and it’s okay to be dependent on your parents. And, you know, you may be still not really working on your finances because, Hey, you’re probably taking out a bunch of debt. We’ve kind of accepted that. And then when that student label gets applied to funded PhD students, there’s really a disconnect. And it’s much healthier, as you were just saying, to not really make that student like the closest part of your identity, but recognize that you are an adult, you need to have a well-rounded life, you know, financially healthwise, in your relationships, all these other areas. It’s not really feasible for you to kind of suppress and ignore various different facets of your life for the length of a PhD, which is very long.

37:42 Laura: No. Yeah, I completely agree. And also, I do understand the anxiety of the student label, right? But at the same time, you do have to kind of wake up to the fact that people are actually offering you money from a lot of different resources. Like, especially at Davis, where they are excellent at emailing us with fellowships and funding, money here and there. You do have to be proactive about it. You know, it’s still very hard and it’s stressful, but for example, go through your emails every month. And if you’ve missed anything with free money, put it in a spreadsheet like I’ve been doing. It does add up after a while and you realize, Oh, wait, year two, I can apply for, you know, $2,000 here for this. It doesn’t have to be so limited for the entire time.

38:26 Emily: Yeah. It’s kind of funny because I think in some ways earning more money while you’re a graduate student is like frowned upon in certain corners of academia or even not allowed as we talked about earlier. But there are other ways where earning more money is like completely sanctioned and encouraged by everyone which is applying for fellowships and applying for grants and doing all these like academia-style, like raises and like, you know, the things that we would use different terms for it outside of academia, but inside it’s still allowed and still a good idea. And like you were saying, some programs are pretty good about, you know, showing those opportunities to you and presenting them in a way that’s easy for you to take advantage of. So yeah, that’s wonderful to hear.

Best Advice for Another Early-Career PhD

39:04 Emily: So, I’d like to conclude with your best advice for another early career PhD. I feel like we’ve already heard a ton of great advice throughout the whole interview, but if there’s anything you want to add to that in a different area or something you want to emphasize, make sure the listeners walk away with, you know, please let us know.

39:20 Laura: Yeah. I mean, just, I think two things. My main points of advice would be to just make your financial education, or whatever you want to call it, a hobby. The more you know, the less anxiety you’re going to feel. And don’t think that saving for things like retirement or long-term savings goals have to be put on pause. It’s better to have a little bit saved towards that kind of goal than to have nothing in five years. So, the longterm does not have to be on a permanent pause by any means.

39:48 Emily: Yeah. And even, as you know, from compound interest, any little tiny bit of investing or debt repayment that you can do right now makes a massive difference later on. So, you know, don’t feel bad if it’s like $10 a month, $50 per month. Anything on that scale is still going to really, really add up over time. Well, thank you so much for this wonderful interview, Laura. I really enjoyed getting to know you a little bit.

40:09 Laura: Yeah. Well, thank you for having me. This was really fun.

Listener Q&A: Savings

40:16 Emily: Now, on to the second of two new segments. The listener question and answer. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall. So, it is anonymous. Here is the question. How can I effectively build my savings back up while still feeling like I have room to go out to dinner or buy a book when I’d like to? I feel so guilty whenever I make unnecessary purchases. Thank you so much for that question, Anonymous. It sounds like your main financial goal right now is to build up savings. And you’re struggling to find a way to balance that with discretionary expenses. And you might hear this as a strange solution, but I think the answer is budgeting. Most people think of budgeting as a way to cut back on their expenses or reduce their expenses or beat themselves up when they go over the amount they were supposed to spend in one category or another.

41:17 Emily: But that’s actually not how I see budgeting. I see budgeting as a method of intentionally and thoughtfully creating balance among the different purposes that your money has. So, what I think you should do is write into your budget “unnecessary purchases,” like going out to dinner and buying a book. And in this sense, these are not categories that you should, you know, try to spend much, much less than the cap. Your goal is instead going to spend right at that level that you identified when you set up the budget. This means that you have to decide what is an adequate savings rate. There are not just two broad categories in your budget, that is paying for your necessary expenses and saving. There are three. Necessary expenses, discretionary expenses, and saving. I’ll point you to the balanced money formula, which I really like the idea behind, although I have to acknowledge that it does not work in every city in the U.S. on any grad student stipend. The balanced money formula is that you would devote no more than 50% of your after-tax income to necessary expenses, 30% to discretionary expenses and 20% to savings.

42:31 Emily: Now, for your budget, that savings rate might be a little bit too low, or it might be unattainable, depends on where you are right now. But the point is that discretionary expenses hold a place in a balanced budget. It is really psychologically difficult to go for months and years spending little to no money on discretionary purchases. If you accept what I’m saying, that you need to build discretionary expenses into your budget, but you’re still saying to yourself, I’m not saving as much as I would like to, instead of cutting back on those discretionary expenses, I want you to take a really hard look at your necessary expenses. Necessary expenses are almost like this misnomer because, yes, it is necessary to house yourself and feed yourself and clothe yourself. But often we’re spending more than we absolutely baseline need to, to accomplish those things. So, for pretty much every quote, unquote, necessary expense, there’s going to be an actual necessary portion, and a discretionary portion.

43:34 Emily: So, I would really encourage you to go through your necessary expenses with a fine-tooth comb, starting with your largest fixed expenses like housing, perhaps transportation, moving to other fixed expenses like utilities. Then moving into your large necessary expenses like groceries. Then moving into your smaller necessary expenses, like maybe gas for your car. Reevaluate every single one of those expenses in that order to try to find a way that you can reduce them. Now, that may not happen instantaneously, if you have to do something like move, obviously. But the point is that you don’t just have to focus on your discretionary expenses and your savings. You can also pay some attention to those necessary expenses. In my mind, it’s way more fun to save money and also to spend on discretionary expenses. Spending on necessary expenses doesn’t really light people up. So, it definitely makes sense to reevaluate them and see where you can cut back.

44:34 Emily: Now, if you’ve done all of that, you’ve built the discretionary expenses into your budget. You’ve really evaluated if you can reduce any of your necessary expenses, and your savings rate is still not as high as you want it to be, then you need to consider increasing your income. Maybe that is the right solution. Some grad students are able and allowed to side hustle. So, you can look into that, if that’s your case. Some grad students are not allowed to work outside their appointment as a graduate student. And so in those cases, you might have to look for side incomes that don’t require work to generate them. I’ve talked about this quite a bit on my site. You can search for a side income or side hustle to find more discussion about that. Okay, Anonymous. I hope this helped. It is legitimate to spend money on discretionary or quote unnecessary purchases.

45:22 Emily: Absolutely. It’s just a matter of finding the right balance between your savings, your discretionary expenses, and your necessary expenses. And oftentimes, the two culprits in those areas are your necessary expenses and your income being too low. I hope that helps. Thank you so much for submitting this question. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions. So, please submit yours.

Outtro

45:53 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly on social media with an email listserv or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing debt, repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.