money story

What Happens When Personal Finance Education Becomes Your Hobby

January 11, 2021 by Meryem Ok

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

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.

Catching Up with Prior Guests: 2020 Edition

December 21, 2020 by Lourdes Bobbio

Emily published the first episode of this podcast in July 2018. This is the one hundred and seventh episode, and over the last two and a half years, the podcast has featured 94 unique voices in addition to Emily’s. The last episode in 2020 catches up with the guests from Seasons 1 through 3. The guests were invited to submit short audio updates on how their lives and careers have evolved since the time of their interview. The question with which all the interviews are concluded now, “What is your best financial advice for another early-career PhD?” was not one that was asked in the earliest seasons. The guests who didn’t have the opportunity to answer the question in their initial interviews answer it in this update, so you’ll hear lots of financial advice throughout the episode as you have grown to expect from this podcast.

Link Mentioned in this Episode

Episode Guests and where to find them online:
- Dr. Emily Roberts (Season 1, Episode 1, Episode 2, and Season 3, Episode 1) — website, Twitter
- Dr. Caitlin Faas (Season 1, Episode 7) — website
- Latisha Franklin (Season 1, Episode 8) — website, YouTube
- Nicholas Giangreco (Season 1, Episode 10)
- Bailey Poland (Season 1, Episode 12) — Patreon
- Lauri (Lutes) Reinhold (Season 2, Episode 1)
- Dr. Gary McDowell (Season 2, Episode 3) — website, Twitter, LinkedIn
- Maya Gosztyla (Season 2, Episode 4) — Twitter
- Dr. Jill Hoffman (Season 3, Episode 4) — website
- Crista Wathen (Season 3, Episode 7) — website, Instagram
- Dr. Gov Worker (Season 3, Episode 8 and Episode 9) — Twitter, website
- Dr. Toyin Alli (Season 3, Episode 12) — website, YouTube, Instagram, Facebook
Free masterclass: How to Know What to Expect in Your First Semester so You Don’t Have to Be Anxious About Starting Grad School
Personal Finance for PhDs: The Wealthy PhD
Personal Finance for PhDs: Community
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Subscribe to the mailing list

Introduction

00:10 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 seven, episode 16, and today I’m featuring many guest voices. I published the first episode of this podcast in July, 2018. This is the 107th episode and over the last two and a half years, the podcast has featured 94 unique voices, in addition to my own. For a last episode in 2020, I thought it would be fun to catch up with the guests from seasons one through three. I invited them to submit short audio clips to update us on how their lives and careers have evolved since the time of our interview. The question with which I conclude all of my interviews now “what is your best financial advice for another early career PhDs?” was not one I asked in the earliest seasons. I asked the guests who didn’t have the opportunity to answer the question in their initial interviews to do so in this update, so you’ll hear lots of wonderful financial advice throughout the episode, as you’ve grown to expect from this podcast. The audio clips in this episode are ordered by when the original episode was published. If you’d like to circle back and listen to any of the previous interviews you can do so in your podcatcher app, or at my website, pfforphds.com/podcast. To keep up with future episodes, please hit subscribe on that podcatcher and/or join my mailing list at pfforphds.com/subscribe. Since I featured my own financial story from graduate school in season one episode one, you’ll hear an update from me first followed by the rest of the guests. Happy listening and here’s to the end of 2020!

Dr. Emily Roberts

01:53 Emily: Hi, this is Emily Roberts from Personal Finance for PhDs. I was on season one, episodes one and two, and season three, episode one and it’s been about two and a half years since I recorded the first of those episodes. Not a whole lot has changed career-wise in that time. My husband still works for the same startup that brought us to Seattle, and I’ve expanded my business into a few new areas. I now offer one-on-one financial coaching, run a group coaching program called The Wealthy PhD a few times per year, and facilitate the Personal Finance for PhDs community. And of course, continue to host this podcast and give seminars and webinars for universities and conferences. The big personal changes are that we had a second child, so our daughters are now ages four and two, and we moved from Seattle to Southern California in August, 2020. Moving in a pandemic with toddlers was much more challenging and less enjoyable than the move I described in my earlier episode, but it went very smoothly, all things considered my husband and I are now technically location independent, at least for the time being. Our current big financial goal is to buy our first home in Southern California in 2021. For the last several years, we’ve balanced investing for retirement with saving a down payment, so hopefully we’ve done enough on both fronts. I’m really looking forward to stability in the housing area of my life. Thanks for listening to my update. If you want to get in touch, you can visit my website pfforphds.com or find me on Twitter at @pfforphds.

Dr. Caitlin Faas

03:27 Caitlin: Hi there listeners. My name is Dr. Caitlin Faas and I was on episode seven of season one, October of 2018. A lot has changed for me since then. I left my position as a faculty member. I was tenure track at the time earned tenure, became a department chair and then left the position at the end of 2020 to work for myself full time as a certified life coach, I made that decision officially in February of 2020, right before COVID hit. And I knew it was time to take the leap. And then the universe sent me all the tests, my husband being laid off and COVID and so many other things, but I still trusted and knew it was time to leave. And I’m proud to say this year, I’ve earned over a hundred thousand dollars and we paid off all of our debt and all my concerns and worries that I managed along the way are what made it possible for me to be ending the year of 2020 successfully.

04:33 Caitlin: We also, in that time adopted our teenage daughter out of foster care and something I wish I could tell myself, looking back in 2018, as I had an idea that I might want to leave academia and continue to grow my business was I just wish I could tell myself not to stress as much about the debt we had. I took it a little too seriously. It all worked out as it was supposed to, and I didn’t have to hustle and grind my way there. I definitely followed a budget and Dave Ramsey’s plan, but the biggest thing was money mindset and law of attraction, setting those goals for myself and continuing to trust the flow and surrender to the process. That’s what made the difference. So best of luck as you hear my update and go about your own path with Emily.

Nicholas Giangreco

07:13 Nicholas: Hi, this is Nicholas Giangreco from season one, episode 10. I am a systems biology PhD student at Columbia Medical Center. I’ve kept a budget throughout my studies and living in New York City, logging in my expenses and savings. First switching to a rainy day fund goal, then a more moving fund/cushion goal, and now recently, been able to transition to more heavily into a retirement saving, and that’s because having the budget has helped me be more conscious of my spending and saving decisions over time. That would be my advice for new graduate students — keep a budget. I use Google sheets. Whatever makes you conscious of your decisions and helps you stick with a goal that you have in mind is really important throughout your graduate career. As well as taking advantage of opportunities, such as tutoring, teaching, and internship. They can help you get to your goals and become more financially stable. Hopefully that helps out people and enjoy the rest of your listening.

Bailey Poland

08:51 Bailey: Hi, my name is Bailey Poland, and you can find me at Patreon.com/BaileyPoland. I was originally on season one, episode 12. I’m now a fourth year PhD candidate in rhetoric and writing studies. And I’m about a chapter and a half away from being done writing my dissertation. I’m currently on the job market, both for academic and industry jobs, especially given the way the COVID-19 pandemic has affected the academic job market. In the original episode, Emily and I talked a lot about side hustling, so I wanted to give a little bit of an update about that. While I do still have my Patreon, my other side gigs have changed a lot and this year I’m on an assistantship that allows me to focus exclusively on my dissertation, so that’s my main priority right now. But in the past couple of years, I’ve worked as a virtual social media assistant for a women-focused finance organization called city girl savings. I took on some extra work in my department as a digital development and promotional outreach assistant, and I’ve done various freelance jobs in writing and editing, especially professional writing and editing, as I’ve had the opportunity to work on those. So despite my stipend only going up a little bit across the time that I’ve been in the program, I’ve managed to hit a six figure net worth over the past couple of years by keeping my expenses low, doing that extra paid work and investing.

10:14 Bailey: And on that note, my best financial advice for another early career PhD is to find a way to save and ideally invest as early as you possibly can, even if it’s just to get into the habit of having some money set aside or having an automatic transfer of some kind of set up. Even if you’re still paying off other debt, even if it’s only a little bit of money here and there, that really, really adds up, especially over the long-term. Time is a huge factor in creating financial security for yourself and the earlier that you can build those foundational habits, the better off you’ll be.

Dr. Lauri (Lutes) Reinhold

10:51 Lauri: Hi, my name is Lauri Reinhold, formerly Lutes, and I was on season two episode one. My main updates are to share that I completed my PhD and amidst the pandemic, which was quite an achievement for me. And I now have a postdoc position. In my episode, I spoke a lot about the ways I took advantage of resources in my area to overcome some of the challenges of being a single mother and a graduate student. One of the goals later on in graduate school that I looked into was home ownership. And I wanted to share this with you because had I looked into it sooner, I probably would have benefited a little bit more. I am settling into a higher cost of living area, especially in comparison to where I grew up in the Midwest. And looking into home buying is quite intimidating due to the average cost of a home. I found in my state in Oregon, there’s a program called an individual development account or an IDA, and this is a three to one matching program where I can contribute $2,000 and walk away with $8,000 that I can use for a variety of different expenses — educational buying a car retirement. However, I was most interested in using these funds for a down payment on a home. Unfortunately since I looked into this later in my career and my admittance into this program was delayed due to the pandemic and this perfect storm of things occurred, my current income puts me just over the threshold to qualify for this program, so I’m no longer able to participate. However, I am happy to report that I have learned a lot about the home buying process along the way, and that I am still actively pursuing this long-term goal. My advice to you is if you have these financial goals, I encourage you to see what’s available in your state and take advantage of these programs sooner than later, so that you can start saving. And perhaps you might be more likely to meet some income thresholds and take advantage of some of these opportunities to get ahead.

Dr. Gary McDowell

12:54 Gary: Hi, I’m Gary McDowell and I work as a consultant on early career researchers and affecting change for and with them. I’m now based at Lightoller LLC, but you may have heard from me on season two, episode three, when I was the executive director of the nonprofit Future of Research. I’m doing almost exactly the same kind of work and have the same motivations to work on behalf of the interests of early career researchers. Now I’m just in a different business model. I’m also now more permanently settled in Chicago, Illinois. I spoke about our effort on postdoc salaries with you before, and I’m still working on that in my spare time. I’m currently embarking on a new set of data requests from universities, and I hope to have five years of data to look at and share with you all in the not too distant future.

13:38 Gary: But I think the best advice that I can give to you at the moment is that you should be very proactive in bringing up the topic of salaries when talking with current or potential supervisors in an academic setting. I mentioned this for a couple of reasons. Firstly, my sense is that compared to when I started working on salaries nearly five years ago, it has become much more acceptable to talk about money, hopefully in no small part because of the efforts of people like myself, constantly putting this up as an issue publicly with academics. This is particularly true, I think, in the present situation with the COVID-19 pandemic and the increased financial burdens that that’s placing on early career researchers. I think it’s important that you try, if you can, to advocate for yourself.

14:23 Gary: Secondly, I always advise that you bring this up with a potential supervisor because how they react can tell you a lot too. Even if you don’t get a raise in the salary offer from the discussion, if they react with, “why would I pay you more?” I think you should probably question generally whether this is the person you actually want to work for versus someone who might respond that they can’t give you a raise, but then talks about how that could be explored through fellowship applications or talking to the department chair, or just generally seems willing to about it. If you don’t feel able to advocate for yourself, maybe you have a precarious visa situation, for example, find ways of advocating with others through a union or association. There’s strength in numbers and decades of recommendations from blue ribbon panels that you should be paid more. So make sure you’re advocating for your worth because you are worth it. Feel free to contact me. You can do so through my website, lightoller.org or emailing [email protected]. Or you can always contact me on Twitter at @GaryMcDowellPhD, or find me on LinkedIn. Thanks for listening.

Maya Gosztyla

15:33 Maya: Hi guys, this is Maya Gosztyla from season two, episode four of the podcast, which came out in February of 2019. And that episode was about how during my postbac fellowship at the NIH, I was able to save about 30% of my income despite having a fairly low salary of only around $30,000 a year. We also talked about how I use science communication as a side hustle to earn a bit more money on top of that. It’s been almost two years now, about a year and a half since that was published and a lot has changed since then. I got married to my then fiance and we had a very simple wedding. We just eloped at the cherry blossom festival in DC and spent some money on a two week honeymoon abroad, which was lovely. I also started grad school at the University of California, San Diego, which is also lovely. I love it here.

16:25 Maya: A lot of the things that I talked about in that episode have continued. I still live very simply. I don’t eat out very much and I try to budget very carefully. But of course, 2020 had a lot of things that made it much harder to live the way I had last year. In grad school, I have a pretty similar stipend as I did as a fellow and I also have a fairly similar cost of living, but the difference is now of course it’s me and my husband, not just me living by myself since we were long distance during my fellowship. As a result of COVID, like so many other people, my husband does not have a job right now so we’re basically both living on my grad school stipend. As a result of that, I’m no longer able to save 30% of my income. Unfortunately, we pretty much just break even with the stipend alone. However, I have continued doing my little side comm side hustle, and all of that is kind of on top of my stipend just goes into savings. So that just gives us a little extra buffer to continue saving a little bit toward our goals as much as we can. And having that emergency savings that I did build up during that fellowship was super helpful. It gives us a lot more peace of mind in case we have any major expenses, like when we just had to get some car repairs done, and having to buy health insurance from my husband when he aged out of his parents’ insurance. We were able to do that without much problems. So that’s been really helpful to have that little cushion.

17:45 Maya: Our plans for the future are basically when my husband does get a job, and hopefully this pandemic ends, people can go back to work, we’re going to continue to live on my stipen as much as possible and then try to use anything that he makes to just work on paying down student loans, and eventually saving toward retirement. My advice for students would be definitely save up some emergency savings before grad school, if you can. And if you’re living with a partner, try to live on one income, if you can. I’d be happy to talk to people who are in a similar financial situation and gives some advice, so you can feel free to reach out to me on Twitter. My username is @alzscience on Twitter. Good luck to everybody.

Dr. Jill Hoffman

18:25 Jill: Hi, this is Jill Hoffman from Toddler on the Tenure Track. I was on season three, episode four, where I talked about public service loan forgiveness, as well as the decision that my husband and I made to have him become a stay at home dad. Career-wise, I’m still on my tenure track position and I’m on track to submit my tenure package in October of 2021. Also in September of 2020, my husband started a part-time position that he does from home. So he’s still doing the bulk of the childcare, but we’re switching off with childcare responsibilities when our work hours overlap. Financially, given the pause on student loan interest that’s happened as a result of the pandemic we’ve put our more aggressive student loan payments on hold for now. I still have a significant amount left on my loans and I’m still on the public service loan forgiveness program. And with my husband’s loans we’re waiting to see what happens when the new administration takes office before we start back up with our focus on paying those off.

19:24 Jill: Personally, we’ve had some major ups and downs since I was in the podcast and are currently trying to work out the logistics of a move back East to be closer to family. We’re currently in the Pacific Northwest. Sadly, my dad passed away in late 2019, and we had some other family emergencies that really made us reconsider the distance from family at this point in our lives. And financially, the money associated with traveling back and forth isn’t sustainable for us at our current income level. on a happy note, we’re expecting our second child in may of 2021, so that’s also playing a role in our interest to at least be an easy driving distance to family. You can find more about what I’ve been up to toddleronthetenuretrack.com.

Crista Wathen

20:08 Crista: Hi everyone. This is Crista Wathen from Richful Thinker. Last time you heard from me was season three, episode seven, where I spoke about the benefits of completing your education abroad and how I am using my PhD salary and Swedish kroner to pay down my US student loan debt. The biggest update since the interview that I have for you is I have finally reached positive net worth after being negative for so many years. I was also asked what was the best financial advice that I can give you, but that has changed in the meantime, and it is increase your savings rate so you can let that. You do have to decide the vehicle in which you want to place it in, but you have to let that grow. Now you can follow my journey as an American abroad. You can go to my blog, richfulthinker.com or my Instagram account, which is @richfulthinkerblog. Thank you guys so much for listening and I hope to speak to you soon.

Dr. Gov Worker

21:12 Gov Worker: Hi, this is Dr. Gov Worker and I appeared on season three, episodes eight and nine. Emily and I talked about the FIRE movement and the FIRE movement stands for financial independence and early retirement. Since that time I’m still on a path towards early retirement and financial independence. And in fact, with the large market gains that have been going on since the time we recorded, I’m further ahead than I thought it would be towards achieving financial independence. Once I reach financial independence, I’m still planning on working right now, but it’s nice to know that if something were to happen, I’d never need to work again, but I’m enjoying my job right now too much to leave.

21:58 Gov Worker: And I know I gave advice on the podcast, but if I had more advice, it would be really understand your employee handbook. Or if you work for a university, the university rules, or the federal government rules. Whatever your workplace is, understand all the rules about your employment, because sometimes you might find a benefit buried somewhere deep in an employee handbook that you don’t know about. And I think a lot of what I am really passionate about right now is educating people on how to get the most benefits out of their jobs that they’re they’re already at. I definitely recommend doing that. And if you want to get in touch with me, I’m on Twitter. You can tweet at me it’s @govworkerfi, and I’d love to hear from you. I love hearing from my readers. I also have a blog governmentworkerfi.com, but if you just tweet me, you can get to my blog.

Dr. Toyin Alli

22:59 Toyin: Hi, this is Toyin Alli from The Academic Society. I was on season three, episode 12 of the podcast where I shared how grad students can find the perfect side hustle while working on their degree. Since recording my episode, my job hasn’t changed much besides doing it remotely. I’m still a lecturer at the University of Georgia, and I’m up for promotion this year. My business, The Academic Society has grown so much since the episode. My YouTube channel has grown to almost 6,000 subscribers and my time management programs and courses are helping so many grad students. I’ve also revamped my signature grad school prep course for new grad students. It’s the resource for new grad students. Inside of my program I help recently accepted in first year grad students uncover grad school secrets by learning about the culture of grad school. I help them transform their mindset from an undergraduate mindset to a grad school mindset. I help them up level their productivity so that they can actually get their work done, and master time management so they can have time for themselves without worrying about how grad school works. I help grad students become more prepared and understand what grad school is all about so they don’t feel anxious about starting. I’m so happy that my business is in a place that allows me to not depend solely on my income as a university lecture. This summer, I was able to buy my first home, a condo in a pandemic. I’m paying off my student loans from undergrad, and I’m excited about building wealth from my side hustle.

24:41 Toyin: Thank you so much for taking the time to listen to my update and catching up with me. You can find me on my website, theacademicsociety.com on YouTube, my channel is called The Academic Society with Toyin Alli. You can also follow me on Instagram @theacademicsociety_, and you can join my Facebook group for grad students, it’s called The Academic Society for Grad Students. Across all platforms, I talk about time management and productivity, but my overall mission is to show grad students and academics that you can live a fulfilled life and be successful in academia at the same time.

Follow-up from Emily

25:23 Emily: Hey, it’s Emily again, adding onto the last update. After Toyin and I got back in touch for this update episode, she invited me to guest lecture for Grad School Prep, the course you just heard about. The recording of the workshop I gave, “Set yourself up for financial success in graduate school” now lives inside Grad School Prep. If you are a prospective or first year grad student, I highly recommend joining Toyin’s course. In hindsight, I recognize how desperately I needed the skills and information in Grad School Prep when I started my PhD. My contribution lets you in on the financial secrets of grad school, explains the financial mindset you should adopt, and walks you through the financial steps you should take during your application year and first year of grad school. Toyin gave a free masterclass on what to expect from your first semester in grad school and how grad school prep can help you with the transition, including a description of my workshop. You can sign up for the free masterclass theacademicsociety.com/Emily.

26:28 Emily: Toyin’s interview was the last one in season three so we are finished with this update episode. I hope to devote an episode at the end of each calendar year to updates from previous guests. I hope you have a restful and joyful holiday season, despite the year we’ve had. We’ll be back with a new episode on Monday, January 4th, 2021.

Outtro

26:51 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. 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 Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

Working Before Starting a PhD: The Financial and Career Advantages

November 9, 2020 by Emily

In this episode, Emily interviews Diandra from That Science Couple, a PhD student in nutrition at the University of Wisconsin at Madison. Diandra went straight from undergrad into a funded master’s program, then worked for six years before starting a PhD program. She lists the career and financial advantages to working before embarking on a PhD—and the disadvantages. Diandra and her husband are currently pursing SlowFI (Slow Financial Independence) while she is in her PhD program, and she gives excellent financial advice at the conclusion of the interview.

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Links Mentioned in the Interview

Teaser

00:00 Diandra: I said that I never want to retire because I love research. And then I kind of shifted to, well, if money’s not the determining factor in the position that I choose, then we can spend more time with family. We can travel more and be open to different opportunities so that maybe money is more of a tool rather than a requirement. And if I want to donate my time to work on some really awesome, amazing lifestyle research that maybe doesn’t have much money in the budget to pay me, then I can choose to do that.

Introduction

00:40 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 seven, episode 10, and today my guest is Diandra from That Science Couple, a PhD student in nutrition at the University of Wisconsin at Madison. Diandra went straight from undergrad into a funded master’s program, then worked for six years before starting a PhD program. She lists the career and financial advantages to working before embarking on a PhD. And the disadvantages. Diandra and her husband are currently pursuing slow financial independence while she is in her PhD program. And she gives excellent financial advice at the conclusion of the interview. This interview came about because I noticed That Science Couple tweeting about financial independence. I checked out Diandra and her husband’s website and noticed that she is a PhD student. So I decided to invite her on the podcast. It turns out that Diandra is a long-time listener of this podcast.

01:41 Emily: I literally did not know that until just before we started our interview. So I have a message for other long-time or short-time listeners, i.e., you. I am actively looking for interviewees right now. If you have personal finance knowledge or a skill that you want to teach through an interview, I would love to have you on. It’s absolutely fine if you gained this knowledge or skill from personal experience. So don’t shy away from volunteering because I use the word teach. Go to pfforphds.com/podcast to volunteer to be interviewed. Do not make me hunt you down on Twitter. Also, if you would like to hear me interview a particular person on the podcast and can help me make that connection, please send us both an email or tag us on Twitter. I’m actually looking for interviewees who can speak to two topics in particular. One, the proper tax treatment of travel and research grants. Two, exactly what kinds of income-generating activities are and are not permissible on F1 and J1 visas. If you know a professional who works in either of those areas in the U.S., please email me that recommendation. I hope to feature many of you on this podcast. Without further ado, here’s my interview with Diandra from That Science Couple.

Will You Please Introduce Yourself Further?

02:57 Emily: I have joining me on the podcast today Diandra from That Science Couple, and I was so pleased to run across her and her brand on Twitter, that’s where I found her, to find another science couple like me and my husband, who are passionate about personal finance. So Diandra, it’s a real pleasure to have you on today. Would you please introduce yourself a bit further to the listeners?

03:18 Diandra: Okay. Thank you, Emily, for having me today. I’m a long-time listener to the podcast. I actually listened before I got into my PhD program. So that was a bonus. And my name is Diandra and I’m a second-year student, PhD student, at the University of Wisconsin-Madison in nutritional sciences. I have a Master’s in Cell and Molecular Biology from Towson University. And before I started my PhD program, I worked in the industry from technician to scientist in the field of late-stage cancer diagnostics for six years. I’ve held five positions at four different companies over the six years and met my future husband, Brad from That Science Couple, at one of them. Each move was growth and financially motivated. And I’d like to say that it all started with a simple 1% cost of living increase.

Career Advantages of Working Before School

04:02 Emily: Wow. Okay. Very fascinating. So I heard in that description that you had a pretty big change in fields between what your master’s was in, what you worked in, in industry, and then what your PhD is in. So maybe we’ll get into a little bit why that happened. Because the topic that we’re going to discuss today is that path that you took between your master’s degree and your PhD and what the advantages are of working for at least a year or two years, few years, before you start a PhD program. The financial advantages, the career advantages. So let’s dive into that. You obviously have experience in this area, but you’ve probably also observed peers as well. So what are the career advantages that you perceive for working for at least some period of time between, you know, the first round of training, whether that’s undergrad, whether that’s a master’s, and then embarking on the PhD program?

04:52 Diandra: All right. So one of the big career advantages that I noted was that you’re able to test the waters. So you can gain experience before committing that five or more years to a program. And you can also determine what you don’t want in a career rather than like, focusing on what you wanted. So as you go through, you might identify different work environments that don’t click with you or ones that you like really do like, and that can help you channel your focus for your PhD program and what career you would want after that. You also are able to learn about the business side of things. You could go through different phases to take a project from beginning to completion. You work in diverse teams. So I specifically had worked in several different companies, and that collaboration either with inside my company, or to other branches, was very valuable, I think as well.

05:47 Diandra: It also trained me how to have proper documentation. So this is very useful for a PhD program. A lot of the beginning part of work for my program right now is all acquiring samples and making sure that we have good QC metrics and that we’re starting from a level basis for all of our samples. And then also I learned a realistic view on the cost of research. So I did a lot of ordering with my jobs, and then I could see what it would take to run the samples, how many times, what you needed for different replicates and then including like the final, like analysis cost as well at the end. So I think that was really important to get a realistic view of what a project I could propose in the future might cost.

06:34 Diandra: Also, another career advantage is that I was able to network early. So when you work in the industry, every time I changed jobs, I would go on LinkedIn and I would request my coworkers so that I could follow them after I had moved on. And they became references for my future applications. I gave several of them references as well. And then I also gained new mentors through working before going into my PhD. And they’re spread across a variety of fields. So now when I come back from my PhD, I’ll be able to see where they are and then potentially choose a path that maybe they’re already on or they switched to during the meantime. And then, also, I believe that I bring something unique to my PhD from working in the industry. It definitely helped me to improve my PhD application because I had a series of projects that I completed. Products that I helped launch. So that was something that I was able to include. And then I acquired additional skill sets, knowledge, and problem solving. And I’m definitely a lot more confident this time around, and I have more life experience. So when they throw a curve ball at you, or there’s an issue with your dissertation, then I’ve already been through so many times when we’ve had to switch projects or stop in the middle and change course and correct from there.

Projected Future Career Advantages, Post-PhD

07:55 Emily: So clearly there are advantages to you as the future PhD applicant, like having a stronger application, once you do decide to go for those kinds of programs. There are advantages to you in terms of knowing what you want out of your own career, whether or not a PhD is going to fit in that, and what you want to do after the PhD. And so you’ve described what you’ve experienced so far as, you know, your path to getting into the PhD program. I wonder if you can project forward, what are going to be the advantages of having worked prior to doing the PhD, once you’re looking for your first post-PhD position. What do you imagine will be the advantages then?

08:33 Diandra: Yeah. So one of the advantages then is that I already have this network built in. So I’ve tried to collaborate potentially with like my former colleagues and so far it hasn’t gone through. But when I’m looking towards the future, there are potentials that if I was a PI, that I could actually collaborate with them more. So it being like across industry is a good connection to have. So they can give you a discount on your study as long as you’re willing to share the information. So I think that’s a big proponent and I already have some of my former colleagues that are keeping in touch with me now and seeing like where I am. So I know that they’re vested in me and that if I were to say, “Hey, I need to start a team.” I have several people who have already told me, you know, “Just let me know when and where.” And they would be willing to make the leap and come join me potentially in the future.

Financial Advantages to Working Before the PhD

09:31 Emily: Wow, that’s fantastic. I also think that it takes a variable out of the equation for your future employers of, can this person be successful in my setting, an industry setting and not just an academic setting. And that question has already been answered, especially for like you had maybe a longer period of work experience, not just like a year or two. That’s already been well demonstrated for you. Okay. So we’ve covered the career advantages. This is not a career podcast. This is a financial podcast. So what are the financial advantages to working prior to starting a PhD program?

10:05 Diandra: Okay. So this was a big one for us because it took a lot of thought into, you know, why go back when I’m already established in my field, right? So it will make a big impact on you financially. And so I think the basis is just knowing what you’re getting into. Knowing that you’re going to have a few years of low income, but you can weigh that versus the potential future gains. So originally the program that I was thinking I wanted to go into would have given me a similar skillset and would not have provided any leverage up in comparison to where I already was. But then this past year, as I was developing and choosing which lab I wanted to go into, I was able to identify like, look, this is a gap in my knowledge, this is a skill that I don’t have.

10:53 Diandra: So if I add this, and it was data analysis, so if I add data analysis, then I can be potentially location-independent. I can also add this as like potentially a part-time job as well. So I could do research and then do data analysis on the side. So it’s a side hustle potential as well. So, it brought a lot of additional motivation to the PhD that I’m not going to just go out and make the same money that I was making before, but I can actually leverage that further in the future.

How Did Finances During Work Help with the PhD Transition?

11:26 Emily: Yeah, absolutely. I’m also thinking about, you know, let’s say traditional PhD student, you know, straight out of undergrad, straight of a master’s degree, early twenties, not a lot of capital, maybe a lot of student loan debt. What were you able to do in your finances in those years when you worked that helped you once you transitioned into the PhD program?

11:49 Diandra: Yeah, that’s a great question. So financially I didn’t have any student loan debt because my parents paid for my bachelor’s degree, which was great. And then when I got my master’s, I said, I’m only going to do it if they pay me to do it because I wasn’t quite sold on the need for it yet. And it was just at a transition point where I had an opportunity to stay on as a master’s student with my current research, my undergrad research. So it just kind of flowed right through. And I was able to get a TA position that covered it and then paid a small stipend. So I wasn’t able to pay off any, you know, credit card debt or things like that during that time. But once I started working, I was able to over the years level that out.

12:34 Diandra: So I had $5,000 of debt that I had to level out. And then Brad had also had some minor student loans that he was able to pay off during that time. So we go from a negative net worth of, you know, five, 10,000 to a positive net worth. And starting to open that 401k was a turning point for me because I had always started saving cash. And I had this number, this like specific amount that I could always get to my bank account. And then something big would happen. Like I would have a car repair or I would have a medical expense or something like that. And then I would have to, you know, bring it down again and start over in the savings. So working helped me to start investing earlier in comparison to some of my counterparts that are in the PhD program with me now.

13:28 Diandra: And I have that capital there that can grow during my program. So I was able to open a 401k, an HSA, which was very crucial. So I don’t have a ton in there since I was using it as I was contributing. But it’s been able to sustain me so far. And I’m hoping that after my program, that it will either still be there or it will have just covered all my medical expenses during the program. So I don’t have to worry, which is really, really useful. And then I’ve also started a Roth. So I’ve been able to do that post-tax money as well, that I will be able to access earlier. So if we choose to be, FI [financially independent], take time off you know, work remotely, or try to do more traveling, then I’ll have that money that I’ll be able to access since I’ve already paid the taxes on it.

14:22 Emily: Yeah. I call being able to start investing, and/or pay down debt, before you start graduate school. I call it having a financial wind at your back, right? Like if you just get that little nest egg started right at the beginning of graduate school before graduate school, and then you take whatever five plus years for your PhD training, even if you don’t add any more money to that, it’s something that it can be growing alongside you as that time passes. So it’s fantastic to be able to have that.

Common Objections to Working Before Grad School

14:50 Emily: Something I hear from people who are debating with themselves about going directly from undergrad into graduate school, debating with themselves about that versus working for a while. I hear two things. One is I’m going to get used to my financial lifestyle on my industry salary, and then it’s going to be too hard to live on a PhD stipend. So I should just go directly and never have that, like lifestyle intermediary. That’s one potential downside or whatever. The other one is that they’re concerned that their academic abilities, basically their ability to do school well, is going to deteriorate if they’re working for more than a year or two. How do you feel about those two objections?

15:36 Diandra: Yeah. Okay. So the first one, the financial aspect. I do agree. It can be really easy to get swept up in there. So I think for us, like the turning point was that we didn’t want to start like putting off our future. So we wanted to start traveling now and we didn’t want to say, “Oh, when we’re 65. That’s when we’ll start traveling.” So what we did initially was, when we started dating, moved into this nice apartment together, started saving for our first international vacation. And then when it came time to renew the release, it was going to go up. And we said, look, we can either do the vacation when we planned, or we can live in this nice apartment. And we looked at each other and I was like, I don’t want to live here. I would rather have the adventure that we planned than live in just a nice, shiny apartment that I can’t afford to have parties because I spent all my money on rent.

16:37 Diandra: So that kind of got us to stop with the lifestyle inflation. To cut back early on. And then we did back to back three years in a row, we did international trips for our birthdays and then just for the summer. So it was really nice. Like each one was only two weeks at a time, but instead of paying that extra to the nice, shiny things, we decided to pay it towards experiences. So I think if you were to work, you can still do that. But then like, what are your values? Like, does your spending align with your values? So if you value having a nice house for your children to grow up in, then that’s fine. But if you value adventure, then you don’t need to spend as much on your rent. So I think that that can be can be difficult to go up against like financially and having that inflation. But also every time I got raises, I pretended like I was still making the money that I was making in my master’s. So of course it was slightly more. But what I did was I took that extra when I got the raise, when I, the bonus and I put that into my savings and my investments, and I said, “I don’t want to see that money at all.” So I had that mindset that like, I’m still living on this fixed income, and no, I don’t have the extra to spend.

18:03 Emily: Yeah. I think that’s it’s a particular application of the advice live like a college student, live like a grad student, live like a resident, which is, if you are anticipating a future income decrease live on that future income. This is the same advice you hear, like people who are, for example, going to buy a house. Well, can you live on the mortgage payment that you’re going to make in the future? You know, is that possible for you in your budget? So like sort of projecting to your future, live on what that is, so that you make the adjustments in advance instead of having a real sudden, real abrupt, real painful lifestyle decrease when you enter, you know, something like graduate school. So I really liked that you took that approach of especially keeping your living expenses, your fixed expenses, on the lower side as if you were still a graduate student or will again be a graduate student. And saving the increase and also spending it on experiences. Because it’s not really lifestyle inflation, unless I guess those experiences become habitual for you.

Commercial

19:01 Emily: Emily here for a brief interlude. On Saturday, November 14th, 2020, I’m facilitating a new workshop: Chart Your Course to Financial Success, and you’re invited to attend. The central question this workshop will help you answer is, What should my singular financial goal be right now, and how should I best pursue it? This particular instance of the workshop is just for funded grad students. Future dates will be for post-docs and PhDs with real jobs. You can learn more and sign up at pfforphds.com/chart. That’s P F F O R P H D S.com slash C H A R T. The deadline to register is Wednesday, November 11th. So don’t delay. Now, back to the interview.

Financial Independence and Early Retirement (FIRE)

19:46 Emily: You discovered FIRE, it sounds like, in your time in industry. Financial Independence and Early Retirement. How is that pursued, or how are the principles still carrying on for you in graduate school?

19:58 Diandra: Yeah, so our basis going into graduate school was very important to see where we are and what we still need to do to get to potentially FIRE, or if not, just financial independence. So individually my husband and I are both 25% of the way towards our FI numbers. So that’s good. It means we have money that can grow. And then while I’m in my program, we’re working on our savings in two different ways. So instead of me trying to do everything and him trying to do it all separately, my focus is more on the post-tax money. So I make sure to pay myself first, every paycheck. And I have 25% of my stipend that will go in towards savings and individual investments. And then I also have another 10% that goes into a 457, and I’m treating this as a Roth account.

20:53 Diandra: So I’m paying the taxes now while I’m in a lower tax bracket in comparison to what I expect to be when I graduate. And then, so what Brad is doing is the kind of opposite. So he’s focusing on the pre-tax savings. So he’s also a university employee, but not a graduate student currently. So he’s been able to ramp up his savings and utilize a 457, 403(b), and HSA. And then while he has a moderate salary, he’s living on a similar income to me. So everything above that, instead of inflating our lifestyle, he’s saving that additional amount.

How Do You Have Access to a 457?

21:33 Emily: I was surprised to hear that you have access to a 457. How do you have access to that?

21:40 Diandra: So I have access to that through the UW system. So I actually didn’t know I had access to it in the first year of my PhD program. So I was doing like those micro investing apps. And then like, I would randomly put money into my individual retirement account, my IRA. So when Brad had gotten a job with the University, he saw all the benefits and explored it fully. And then he’s like, so I’m looking at these details. And it says that, aAt UW, that graduate students are considered employees. So since we had that label, we do have access to a 457. And I was able to go through and say, I could have it pre-tax, or it could have it post-tax. But since I know that I want to work for a few years, at least once I graduate, I’ll be in a higher tax bracket then. And so I’d rather pay the taxes now. So the whole point of it is that maybe we can get together funds that the whole first five years, when you become FI and you leave work is, it’s really hard to access your funds. So if you do like a Roth conversion ladder, that takes five years. So my aim was, what can I do now to build that initial five-year cash cushion?

Tracking Finances and Navigating Lifestyle Expectations

23:03 Emily: It sounds to me from the way you described that, that you and your husband either keep separate finances or like sort of track things kind of separately. Is that right?

23:11 Diandra: Yeah. So we don’t have any joint accounts but we do, you know, send money back and forth to each other all the time. So we keep it separately, and it’s good because then since we both did work around the same amount of time, that we have that money to grow. But we know that jointly, like if we’re going to go and buy a house, we can pull from both accounts. So like the HSA, since we got married this year, he’s going to switch over to a family plan. So I can’t contribute to my HSA during my program, but he’ll be able to contribute double. So it’s separate, but we joined them together. And like, when we look at our numbers, we’ll do both. So what do we individually and what do we combined have?

23:59 Emily: Yeah. And I think it’s also kind of a great, even though you’re keeping separate finances, it sounds like your lifestyle level you’ve agreed on. And you’re both living at this kind of grad student stipend ish level, and just doing a lot of saving above that. Because it sounded like you were saving 35 or maybe more percent of your stipend income, which is very high, very impressive. You must be keeping your lifestyle expenses quite low.

24:22 Diandra: Yeah. Yeah. So when we moved to Wisconsin from Maryland, actually, the last bonus that I got from my job paid for us to move across the country. So that was nice. It was just a net zero after that. Unfortunately I didn’t get to save any of it, but that was fine. So what we did when we moved here is we said, let’s pick an apartment that we can afford on my stipend. Since he was moving with me and for me, and he didn’t have a position to start with here. So we just immediately said, what is the lowest that we can find? And then like, you know, can we go slightly above that? You know, you want to live in a decent neighborhood, something that’s safe. But we were just very lucky. We got an apartment sight unseen.

25:12 Diandra: But it was actually only slightly higher than our rent back in Maryland. So we were able to just like, keep that nice low rent amount there. So that helped. And then one of the big things for us is that we do track all of our spending. We have a calendar. And so every day when we spend money, we have to write it on the calendar and then stare at it for the rest of the month. So it’s more like, was that purchase worth your life hours because that’s what you did and now you have to admit it. So we’re not like as stringent on what we spend, but like we always go into the grocery store with a budget. We say, we’re going to spend a hundred dollars on all our groceries. And we put every item in there individually. So we know when we’re hitting the cap. And if it’s only $5 more, well, that’s fine, but you don’t want to blow your budget. Like if you just don’t track it, then you can easily spend a lot more than you intended.

How Do You Describe SlowFI?

26:13 Emily: Well, thank you. So I actually have never heard that tip before of writing your spending on a calendar and then looking at it for a month. That’s actually a really great one. I understand that you identify as being on a SlowFI track right now. And I actually wrote a post recently on the flavors of five. So there’s all these different versions of FIRE, SlowFI being one of them. How do you describe SlowFI and yourself on that path?

26:38 Diandra: Yeah, so SlowFI is a term that was coined by the Fioneers. And so give like three big components. So they say it’s like embracing your dreams. So working in positions that will motivate you to like add to the world. To give back. Also being more intentional. So instead of just, I’m gonna work, work, work, work, work, you are in whatever you’re doing and that you’re actually like focusing on it and it speaks to you. So your position, your ultimate career should give you energy rather than take energy away from you. So I thought that was really, really key for the SlowFI movement. And then it’s also against that consumeristic kind of viewpoint of our country, where as you gain more money then you just buy more things. And then more things means more upkeep and being like environmentally-conscious.

27:38 Diandra: So for us, we just want to focus on the journey. So I think of it as what are you running towards instead of what are you running away from? So initially, we didn’t like our jobs, we weren’t satisfied. So we wanted to just get to FI so that we could take a break. But actually it’s really interesting with the pandemic right now that we’ve had glimpses of what life would be like if we were FI because we were fully remote for a while and we made our own schedules and it was interesting to see what do we choose to do with those extra hours. So finding that out now, while we still have incomes is better than leaving your job entirely, and then not knowing what you want to do, because if you say, I want to sip mojitos on the beach, that’s great.

28:30 Diandra: But how long is that going to last? So, I mean, for us, it was a really big shift when we met, I said that I never want to retire because I love research. And then I kind of shifted to, well, if money is not the determining factor in the position that I choose, then we can spend more time with family. We can travel more and be open to different opportunities so that maybe money is more of a tool rather than a requirement. And if I want to donate my time to work on some really awesome, amazing lifestyle research that maybe doesn’t have much money in the budget to pay me, then I can choose to do that. So that’s what SlowFI brings to us.

29:15 Emily: Yeah. I think the SlowFI path is probably one that’s quite appealing to PhDs. I know it’s appealing to me. Well, one, because it’s kind of necessary if you’re going to do graduate school at some point, you’re going to slow down your FI pursuit during that period. Almost certainly. It’s going to add some years. Like you said, though, earlier, there is income upside on the backside of the PhD, depending on, you know, what field you’re in. But I think PhDs also by and large have more opportunity to create work that they really love, that they’re really passionate about. That’s more, it goes with the territory, I think, of pursuing a PhD is that you found something that you love. And so yeah, work being part of your lifestyle long-term could still be attractive. Finding a job that you like, doesn’t have to be necessarily the most high-paying. Again, you don’t go into research if you want to be paid super, super, super well. You are talented enough to do other things if that’s your, you know, your primary motivation. So yeah, I think the SlowFI pursuit goes along very, very well with a lot of things that are common personality-wise to academics.

Best Advice for Another Early-Career PhD

30:15 Emily: So Diandra, as we wrap up here, would you please tell us your best financial advice for another early-career PhD?

30:23 Diandra: Sure. My best financial advice would be to fight lifestyle inflation and determine your value of enough early on. So this will be easier than trying to cut back, but instead use your bonuses or raises to supercharge your investments and move you along the path to financial independence.

30:44 Emily: So you’ve used language a couple of times in this interview that I have recognized as being from Your Money or Your Life, which I am currently reading. Would you recommend that book or how has that book shaped your journey?

30:55 Diandra: Yes. Vicki Robin is amazing. I would highly recommend Your Money or Your Life. She’s the one that talks about calculating your life-hours. And so how much money you make, and then how many hours does it take for that? So, when I was working at the startup company, I was driving an hour and a half down to the company and hour and a half back. So it was three hours. So instead of saying I had an eight-hour day, I would have to say that I had an 11-hour day, and then I needed time to wind down. So it turned into a 12-hour day. And then I had car maintenance. So then, the money that I got paid per hour started getting ticked off because of all these additional costs that I didn’t think of initially. Because you think of your hourly rate is one flat rate, but I would highly recommend it if you want to get more context and see that, is your job really paying you what you think it is or are you trading too many of your life-hours for that paycheck?

That Science Couple Blog

32:01 Emily: Yeah, absolutely. Thank you so much for that recommendation. And finally, tell us a little bit more about That Science Couple and what you’re doing with the blog.

32:08 Diandra: All right. So That Science Couple is a blog between Brad and I. And it was originally born out of a newsletter that we had written for our friends and family. So a couple of years ago, we had started our journey to becoming plant-based and we’ve used evidence-based nutrition. So there was the documentary Forks Over Knives, which I would highly recommend, and also the website nutritionfacts.org, which really motivated us to say like, look, there’s some science behind nutritional choices and that it’s not all about the macros. So we had noted that a lot of our friends and family didn’t understand the nitty-gritty details of this. And we wanted to start breaking down those complex ideas and topics into more relatable terms. So when we started our blog, we wanted it to be more holistic. Dr. T. Colin Campbell, his whole idea is treating us as like whole people.

33:07 Diandra: Also Dr. Dean Ornish does the same thing and there’s several other physicians that if we just look at one part, then we’re missing the whole picture. So what I really wanted to get across with our blog was that we can’t just talk about nutrition. But we are here because nutrition is important, but finances and having healthy finances is super important to having a lifestyle that, you know, supports health. And then our other point was the environment. So we didn’t want to tax the environment a lot. Brad was an environmental science major and got his master’s as well. So he wanted to talk about sustainability, and then that grew into, well, what makes a sustainable life? So when I was working as a scientist, it wasn’t sustainable. The commute wasn’t sustainable. The hours, the stress wasn’t sustainable. So how does that branch out further than just your impact on the environment, but your impact on you, personally?

34:09 Diandra: So those are the different categories that we’ve chosen to talk about on our blog. And, overall, we just want to provide a place for people to get information. So if you love those, you know, nerdy little citations and you want to see the references, like we’re going to be the place to go to, but then like personal growth is just like a free reign. So we had talked about The Value of Enough was a recent post that we put out. So if you’re trying to determine, you know, what makes your life sustainable, then maybe that’s a post that you would be interested in, too.

34:45 Emily: Yeah. We’ll link that post from the show notes. I can very easily see how those three topics interlock with one another and support and complement each other. So sounds wonderful. I’ve of course been to your blog and would recommend that everyone else go and check it out. And Diandra, thank you so much for joining me today and giving this wonderful interview.

35:04 Diandra: Yeah, thanks for having me. It was great.

Outtro

35:07 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes-commentary about each episode. Register at pfforphds.com/subscribe. 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 Grad Student Travels for Free by Churning Credit Cards

October 26, 2020 by Lourdes Bobbio

In this episode, Emily interviews Julie Chang, a graduate student at Stanford University. Julie’s partner and parents live on the East Coast and she has family abroad, so during grad school she has pursued a specific credit card rewards strategy known as churning to help her travel hack. She has regularly flown domestically and internationally for several years almost exclusively using points and miles instead of cash. Julie details how she manages her churning strategy, including how she meets minimum spending requirements on her stipend, and how she has changed her strategy during the pandemic.

Links Mentioned in this Episode

Teaser

00:00 Julie: Even if you don’t want to start off with churning right away, my best advice is to just get a credit card with a low minimum spend, and at least use that to start building your credit score and acquiring some points.

Introduction

00:18 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host Dr. Emily Roberts. This is season seven, episode eight, and today my guest is Julie Chang, a graduate student at Stanford university. Julie’s partner and parents live on the East coast and she has family abroad, so during grad school, she has pursued a specific credit card rewards strategy known as churning to help her travel hack. She has regularly flown domestically and internationally for several years, almost exclusively using points and miles instead of cash. Julie details, how she manages her churning strategy, including how she meets minimum spending requirements on her stipend and how she has changed her strategy during the pandemic.

01:06 Emily: Julie and I don’t go deeply into the topic of who can or should pursue credit card rewards or how to get started, so I’m going to point you to some free resources I’ve created on those topics. They’re all linked from the show notes for this episode, which you can find pfforphds.com/podcast. My article titled “Perfect Use of a Credit Card” explains how to avoid all the pitfalls that easily accompany credit card usage by putting in place some pretty stringent rules. You will have to be well-practiced and following strict rules in this area if you want to succeed with credit card rewards. My article titled “How to Establish Credit in the US” is for people who have recently arrived in the U S or who have lived in the US for many years, without taking out any debt. It explains how to get your first toe hold in the world of credit and how to build your credit score over time. Finally, in 2019, I published a podcast interview with Seonwoo Lee titled “How To Make Money Without Working: Credit Card rewards and 529s”. That episode is quite complimentary to this one, and I recommend listening to it. If you want to go deeper into the subject. Without further ado, here’s my interview with Julie Chang.

Will You Please Introduce Yourself Further

02:20 Emily: I have joining me on the podcast today, Julie Chang. She is a graduate student at Stanford currently, and we’re going to be talking about credit card hacking, credit card rewards strategies today. So, Julie, will you please introduce yourself a little bit further?

02:34 Julie: Sure. I’m a fifth year bioengineering PhD student at Stanford, and I’m currently studying how the mechanical properties of the extracellular matrix affect cell behavior and specifically in the context of cancer.

Credit Cards vs. Debit Cards

02:48 Emily: Yeah. Excellent. You have done what I used to view as the impossible, which is having a strategy for credit card rewards during graduate school. And I always thought there’s a little bit out of reach, so I’m really excited to learn more about credit card reward strategies in general, and then the strategy that you use in particular. Let’s just start off for listeners with what are the general advantages for using a credit card versus using a debit card? Because I know for me, I definitely started out just using debit cards. I was a little bit afraid of credit card. So what are the advantages?

03:22 Julie: Yeah, so I think there’s a couple of main advantages. The first is that you can earn rewards often in the form of points or miles, and then you can actually redeem this for either cash back or for miles to fund plane tickets. And on another point is that you can actually use credit cards to help build credit history. So in the future, when you’re buying a house, getting a mortgage, having a high credit score is super important.

03:50 Emily: And another benefit I’ll add to the two that you just mentioned is there’s a little bit more fraud protection available for credit cards. It’s quite easy to have a fraudulent charge reversed, erased on a credit card versus maybe more of a process or maybe even potentially impossible with certain charges on debit cards. Those are three, three great ones.

Pursuing Credit Card Rewards

04:08 Emily: Specifically on the rewards aspect of using credit cards, what are the different kinds of goals you might be able to pursue?

04:15 Julie: Right. Sometimes you can acquire airline points, so you can get a lot of Delta points, American airline points, and then you can use those to re redeem tickets, either domestically or internationally. On the other hand, you can also use points for cash back. Then you can actually use this to kind of pay yourself back when you purchase, say groceries or anything else. It kind of depends on the credit card.

04:43 Emily: Yeah. I know when I was in graduate school and I started learning about this area, I definitely only tried to pursue the static cashback, because I guess I sort of felt like the travel rewards were a little bit more, it’s a little bit higher level. It’s a little bit more complicated. It’s something you have to learn. There’s more of a learning curve on that. So I definitely stuck with the static stuff at first, which I think is a pretty common approach for people. But both of those are different kinds of strategies that will work. For you in particular why are we talking to this today? Why is this a strategy that you have learned a lot about and decided to pursue during your graduate degree?

05:19 Julie: For me, I’m doing my PhD program in California, but my family lives in New York, so then I would have to go back during breaks and my partner, he’s actually also a PhD student in Atlanta, so this requires a lot of traveling. Also a lot of my relatives are in Taiwan, so occasionally I make these international trips. Basically my perspective is using credit cards on things that I would purchase anyway and slowly build points to then redeem for these flight tickets. My goal was to not spend too much money on flights during grad school, but I don’t want money to be kind of a limiting factor in that I can’t see my partner or my family.

06:08 Emily: Okay. And was there…when did the shift happen? When did you set this as a goal? Was it just when you were starting graduate school, when you were looking at the geography of the situation and realizing the challenge, or did you go for while paying for flights in cash and then said, well, there must be a better way here.

06:23 Julie: I got into it just before graduate school since, I think to apply for credit cards, it’s a lot easier to apply for credit cards after you’re a certain age. It might be 21. So before then, I wasn’t really applying for credit cards anyway. And I think just when I turned 21 and then it was right before I went to graduate school, so it kind of worked out in that sense. And then I just kind of learned about it from searching online.

06:54 Emily: Yeah. And would you say that you’ve done more traveling than you would have been able to do just if you were paying straight cash? What’s been the effect on your finances, I guess?

07:06 Julie: Yeah. Essentially I typically don’t really need to factor flights into my budget, which is really, really awesome. And basically when I need to travel, I typically am able to, of course I still need to look at my budget overall, but there is a lot of flexibility. Another example is that my partner and I, we were able to go on a vacation to Greece, which typically the tickets might be a little bit more expensive and because we were able to pay for our flights in points, then maybe we have a little bit more flexibility in our budget for say housing or for food, during our vacation. So it definitely just reduces the impact of needing to spend a lot on a vacation.

07:50 Emily: Oh yeah. I mean, I can’t remember exactly what I was saving to spend on travel during graduate school, but I think it was at least a couple hundred dollars per month per person. And that was really mostly just for like obligation travel, like I have to go see my family, I want to go attend this wedding. So yeah, it’s really inspiring what you’ve been able to do. I’m really excited to dive into the mechanics of exactly how this happened.

The Basics of Credit Card Churning

08:13 Emily: What you have been doing as a strategy known as credit card churning. Can you explain what that is?

08:20 Julie: Yeah. Basically the bulk of the cash back from credit cards isn’t necessarily through the exact amount of money that you spend. It’s actually through these bonuses of signing up for new credit cards. For example, in some credit cards, you can get a certain number of points, usually it’s pretty high, maybe like 50,000 points, if you spend a certain amount of money in a few months. So a lot of cards you might have to spend $1,000 to $4,000 in about three months. And these points have 50,000 points. It could translate to say $500 if one is 1 cent, but if you can actually increase the value, say 1.50 cents per point, it becomes $750.

09:05 Emily: Yeah. I think maybe another way of phrasing what you just said is the amount of money that you need to spend to gain a given level of rewards is much less when you do that through signup bonuses, rather than through ongoing spending and ongoing cash back. There’s this lucrative period available right when you sign up for a new card. It’s the incentive that they’re giving you to do your business through that card versus some others. It’s this opportunity to capitalize on, right when you first switch onto a card. And so credit card churning is like very frequent switching onto new cards to gain those early on sign up bonuses. Is that right?

09:42 Julie: Yes, that’s correct.

Keeping Track of of Credit Cards

09:44 Emily: Okay, awesome. For you, as I said earlier, this is a little bit of an advanced level strategy. How do you keep track of all these cards that you either currently have, or maybe ones that you need to close, or maybe ones that you’re planning on opening? What is your mechanically…how do you keep track of all this?

10:04 Julie: Oh yeah. I basically do this through an old-fashioned spreadsheet. I color code everything. I typically put when I sign up for a credit card. And this is especially important if a credit card has an annual fee, because potentially you might want to cancel or downgrade the card when the annual fee comes up because it might not be worth keeping the card.

10:27 Emily: Yeah. So you keep track of when you sign up for a card, and then when one year, let’s say, is up for something that has an annual fee. Do you keep track of anything else? Maybe the minimum spend amount I would imagine, and the time period over what you have to do that?

10:40 Julie: Yeah. I keep track of all of that. I actually go into more detail in which I actually, every month I update all the point totals that I have and I also keep track of all of my redemption. So I think that might be a little bit extra in the amount of information I’m keeping track of, but for me it’s actually pretty fun to just tabulate everything.

11:01 Emily: Yeah. I could totally see how this would be fun because there’s kind of two halves of this, right? There’s like the accumulation of points and then there’s the planning of how am I going to actually use these points. And that is the really pleasurable par, I think, especially if one enjoys planning then getting to play around with different scenarios and so forth. Well, let’s come back to that in a few moments.

Meeting Minimum Spends

11:20 Emily: We just mentioned the minimum spending requirements like between one and $4,000 over a period of some months, that might seem like a lot of money on a graduate student’s stipend. So how do you actually make sure that you’re going to meet these minimum spends without, as you said earlier, outspending your budget, outspending your planned expenditures?

11:40 Julie: First I just want to be clear that everyone has to be very careful and tracking their finances. And you’re definitely in a very privileged position if you are able to do this. But for me, I look at many different factors. So one is timing. If I have a big purchase coming up, then I might as well use it in a minimum, spend another, more specific for graduate students is if you have conferences. So conferences can be pretty expensive. Sometimes you have to use your own credit card, so why not actually use it to help meet a minimum spend? Another thing that I’ve done is paying stuff in advance for other people, especially my family, where, for example, if we have a cell phone bill, I can pay that ahead of time. Another one that actually found out more recently is that you can actually pay estimated taxes with credit cards. And this is really interesting because with a credit card, there is a fee of, I think the lowest is 1.87%. But say, if you have a credit card that does 2% or even a special credit card, if the rotating category matches 5%, you can actually make money by paying the estimated taxes, which you actually have to do anyway. However, if you don’t have a card for that, if you’re actually trying to meet a minimum spend, perhaps it is worth it to pay that fee to kind of help you get that really high bonus for the credit card.

How Many Cards is Too Many

13:09 Emily: So for you, like let’s say in 2019, how many new cards did you sign up for?

13:19 Julie: I would say I haven’t signed up for too many cards just because I’ve been slowing down a little bit towards the end of my PhD, but I would guess maybe three to four cards, so nothing too crazy. I know there’s people that are super into it that might sign up for 10-20 cards per year.

13:36 Emily: Yeah. Well, that’s 10-20, that’s a number of more minimum spends that you need to hit. Actually three to four sounds like fast, but like okay, reasonable pace for graduate students. I think that this strategy of keeping track of minimum spends and what your expenses might be that are coming up that might help you meet those minimum spends, it goes actually really well with the strategy I love to talk about, which is that of targeted savings accounts. Not specifically the saving in advance for doing things, which is also a good idea, but actually more the planning aspect that comes along with keeping account budgeting like that is that you can look out over the next six months or over the next year and say, yup, I know that this large expense is hitting in this month. I know this needs to be, be paid here. And I definitely found that there were some one, two month periods when I was in graduate school where I would have like a flight I needed to buy, well, I was buying them in cash, a flight I needed to buy, and my six month car insurance premium was coming up and there were some other maybe some housewares or electronics purchase we need to make. There were definitely months where they would hit kind of like that, and I was budgeting for those and using targeted savings and thought that was great, but hey, the next level up from that is yes, save in advance, but why not also put it on a credit card and meet a minimum spend that you’re gearing up for anyway.

When to Apply for a New Card

14:48 Emily: This is more of a personally motivated question, but how far in advance of, let’s say a major purchase that you know is coming up on a certain date, would you need to sign up for a card? How do you actually time this so you know that you have the card ready to go when you actually need to make the purchase.

15:04 Julie: Yeah. I mean, I would probably do at least a month just because you have to apply for the card. And in some cases, if you’re not approved right away, you might have to wait a week or so. And that doesn’t mean that they’ll reject you, it’s just something that is part of the process. Another is if you put a credit freeze on your credit score, so that’s actually something I’ve done to be extra careful, you might have to lift your credit freeze, and that also takes some time. So I would budget at least a month.

15:35 Emily: Yeah. I know there’s a little bit of a game there because you need to give some buffer time in advance, but you also need to have enough purchases within the period of time to get the bonus to go through.

Commercial

15:46 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at pfforphds.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, which I add to every month. There is also a discussion forum, monthly live calls with me, book club and progress journaling for financial goals. Basically, the community exists to help you reach your financial goals, whatever they are go to pfforphds.community to find out more. I can’t wait to help propel you to financial success. Now back to the interview.

Using Credit Card Churning to Fund Travel

16:50 Emily: So you mentioned the challenge that you were facing of living far from your family and your partner, and you also mentioned, okay, you’ve been able to, for instance, you were able to go to Greece with your partner. What were some of the other benefits that you’ve experienced by doing this? For instance, have you ballparked like how much money you have not spent on travel by doing this strategy? Or can you tell us a little bit more about the upside?

17:13 Julie: It’s definitely quite a bit of money that I’ve saved through travel. I don’t remember exactly how much, but for example, I would go from California to New York round trip before the pandemic, probably two to three times a year. Then in addition, I would also go to Atlanta or vice versa maybe a couple of times a year. So it’s definitely many flights that I’ve saved on. And pretty much I’ve been able to not pay cash for most of my flights during grad school.

17:44 Emily: Yeah. It’s just an incredible benefit to not have to have that aspect in your budget, of paying for travel when you know that you have to do it like this. It’s really amazing that money can come kind of from nowhere, if you have a great credit score, if you’re really on top of your budget, if you have a spreadsheet like you do and you’re keeping track of everything and being diligent. It’s just amazing how much money you can free up for your budget. So I hope this is sounding like good news to some people in the audience who are currently spending more than they would like to on travel.

Credit Card Churning Strategies

18:14 Emily: For you, like when you’re realizing you’ve come to the end of a one period of minimum spend and you start thinking, well, what’s going to be my next card, how do you search out these cards? How do you actually find that’s going to be the best fit for you?

18:27 Julie: There’s a lot of very active communities on the internet. Specifically on Reddit, there’s a subreddit called churning that has all of these. There’s a lot of specific websites such as Doctor of Credit. Actually, I keep pretty up to date and people will typically announce whether there might be a new card coming up. But for me as a graduate student, if I know I don’t have any big purchases coming up, it’s also a practice of self-restraint, where I know I shouldn’t apply for new credit card, and instead kind of look at my portfolio of credit cards and see perhaps certain cards have increased points per certain category and maximize that instead.

19:10 Emily: I see. And then you mentioned earlier cards with annual fees, specifically canceling a card with an annual fee before that second fee comes up. How do those overall play into your strategy? Is it something that people should consider or maybe should avoid? What are your thoughts about that?

19:26 Julie: I would say definitely for beginners, maybe focusing on cards without annual fees because they also have much lower minimum spends, so it would be pretty easy to hit minimum spend. But for me, the only card I have with an annual fee that I currently use is a Chase Sapphire Reserve. For me, I always have to do a calculation, whether it’s worth it for me to keep the card for the next year. There’s certain factors that I consider. One is looking at the benefits that the card offers and if I would actually use that, and another that I might consider is whether keeping the card will help me increase the value of the points that I’m spending. For example, with the Chase Sapphire Reserve, each point I can actually redeem for 1.50 cents instead of just 1 cent.

20:19 Emily: Yeah. I actually, so also for me, the Chase Sapphire Reserve was the first or maybe the second card with an annual fee that I ever signed up for. And I actually just canceled it a few months ago because I was like, I’m not traveling. I’m not traveling anytime soon. I don’t want to pay this fee because I do not see any redemption on the horizon. What I did specifically with that was I transferred the points to another Chase branded card that we had figuring at some point in the future, I’ll probably get the Reserve or the Preferred again, transfer the points back and be able to redeem them at at least that much value, if not more/better later on. So that was my particular solution to that, but I’m glad that you reevaluated and decided, okay, I’m going to keep this card for the time being. It does have some pretty nice perks to it for a high fee.

Churning During the Pandemic

21:04 Emily: Speaking of the pandemic and recent changes, what has been going on with you and this strategy in the last six months?

21:11 Julie: Yeah. So there has actually been a lot of changes to the point space since the pandemic and I think these effects are likely to stay for quite a while. So obviously I’m not redeeming my points for travel; however, for Chase, because they realize this they’re actually allowing you to redeem 1.50 cent per point for groceries. Before it used to be just travel, but now it’s actually for grocery purchases. So for me, if I put my grocery spend on the Chase Sapphire reserve, I’m able to redeem those points for the groceries. And also since I had a few canceled flights this earlier this year, then I’m not really looking to apply for cards that will give me more miles, but I might look for cars that give me a little bit more flexibility in how I can use those points.

22:01 Emily: Hmm. So when I thought about the pandemic and affecting my travel plans, both personally and professionally, I’m already in a period of not applying for cards right now because my husband and I are looking forward to buying a house in a few months. And so we don’t want to be messing around with our credit right now. If not, I think I would probably still be signing up for stuff because I, again, hypothetically, I think my attitude would be well, get the points, bank them now, spend them later at some point. Why is that not your approach? Why do you prefer the flexibility right now?

Julie (22:36): Well, so actually right now, I’m not really applying for cards and I’m just kind of using my current portfolio of cards to reach or to kind of build up the points, as you said. I might look towards applying for a card later this year, but I’m actually not in a rush to apply for new cards right now.

Planning Point Spending

22:59 Emily: Yeah. You said you updated your spreadsheet monthly with figuring out how many points you currently have and with what providers and so forth, how do you go about planning how you’re going to spend the points? What is that process like for figuring out, okay, these points transfer to this airline, you know, all of the complexity that goes along with that.

23:18 Julie: Yeah. That I would say is actually the hard part of figuring out how to use those points. There’s certain programs, like Chase, where it’s pretty easy to redeem the points because you can just do it through any airline by using Chase travel, but certain cards you can actually transfer it to specific airlines and convert it into miles, which is actually, even though it’s harder, it could be better because you could get better value for your points. For me, I like having points in several different companies, for example, also in American Express. I also have points specifically in Delta, so then whenever I, for example, if I want to travel to New York, I can look at what are the different points I have and figure out which program I want to redeem it in for the best value.

24:10 Emily: I’m also thinking that some of this, the planning of the redemption might be specific to your local city. You obviously live in a major city with several different airports and airlines to choose from. I’m also reflecting, I recently moved from Seattle to the Los Angeles area. So in Seattle it’s all about Alaska. Like Alaska is by far the winner airline right there, so I was always trying to sort of figure out how to get Alaska airline points versus other things. Now that I live in a different kind of city I’m thinking, well, my strategy might need to be different. Do you know of any resources where people can find out more about the airlines that service their local airports or maybe their destination where they commonly go, they want to figure out how to do that?

24:51 Julie: I think the best way to figure that out is just looking through the specific airline website and figuring out which destinations your city travels to. But otherwise also just looking online to see what other people tend to do in your city.

25:08 Emily: Yeah. And I guess if you live in a major city, like the San Francisco Bay area, Seattle, Los Angeles, there’s going to be plenty of conversation around how to do this in cities like that. Well, is there anything else you want to add to tell the audience more about your strategy or what you’ve been able to do with it?

25:26 Julie: I think as a graduate student, even if you don’t want to start off with churning right away, my best advice is to just get a credit card with a low minimum spend and at least use that to start building your credit score and acquiring some points.

Best Financial Advice for Early Career PhDs

25:43 Emily: So Julie, as we wrap up this interview, what is your best financial advice for another early career PhD?

25:50 Julie: My best financial advice would be to start early. Many financial related actions serve their greatest benefits when done early, so the effects can be compounded over time. And I think this not only applies to investments compounding over time, but also any positive practices that you do such as saving money on food by not eating out too much or using credit cards to your advantage.

26:14 Emily: Yeah, absolutely agree. Starting early, I mean, a lot of graduate students might feel like they don’t have a lot of options right now, especially living on a lower stipend, but anything you can do any habits that you can form any even habits of mind that you can work on, it’s all going to benefit you throughout your time in graduate school, after that going into your career, and really, I like to think of it as, if you build up these habits and practices and thought patterns right now during graduate school, once you get that higher salary later, you’re going to be able to like hit the ground running blast through financial goals, when you get to that point, if you’ve done the sort of mental preparation beforehand, even if you don’t see a lot of actual financial progress earlier on.

26:57 Emily: Thank you so much that advice, and thank you so much for joining me today, telling the audience about your strategy. I’m really excited post buying a house to be back on the credit card rewards game so this is really inspiring to me.

27:11 Julie: Thank you.

Outtro

27:13 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. 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 Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

Why and How to Start a Coaching Side Hustle as a Grad Student, Academic, or Researcher

October 5, 2020 by Meryem Ok

In this episode, Emily interviews Cheryl Lau, a PhD student and branding and content coach serving graduate students, academics, and researchers. Cheryl assists her clients with their service-based side hustles, and our interview today is on why and how to start a coaching business on the side of your PhD training or full-time job. Cheryl identifies two mindset shifts that new coaches might need to make before they dive into their businesses and the first three steps they should take. Cheryl shares her story of figuring out personal branding following a quarter-life crisis and the financial impact that her own coaching income has on her grad student finances.

Links Mentioned in the Episode

Teaser

00:00 Cheryl: And that’s what I realized that, “Oh, wow. I actually have some answers and suggestions and tips. Maybe I can help people on that.” So, what I did first was actually started working with people for free. And I saw that, well, one of my clients actually was able to get a paying client for her own business. And that’s when I realized, you know what, I can charge for this.

Introduction

00:23 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 seven, episode five, and today my guest is Cheryl Lau, a PhD student and branding and content coach serving graduate students, academics, and researchers. Cheryl assists her clients with their service-based side hustles, and our interview today is on why and how to start a coaching business on the side of your PhD training or full-time job. Cheryl identifies two mindset shifts that new coaches might need to make before they dive into their businesses. And the first three steps they should take. Cheryl shares her story of figuring out personal branding, following a quarter-life crisis, and the financial impact that her own coaching income has on her grad student finances. You can find out more about Cheryl and her business at cheryltheory.com. Cheryl and I met through the self-tenure community run by Dr. Chris Cloney. And speaking of coaching, Chris is actually my online business coach. If you want to learn more about starting and running an online business as an academic or researcher, definitely check out Chris’s resources at gradblogger.com and selftenure.com. What Cheryl and I cover in this interview dovetails very nicely with some resources I’ve released this fall inside the Personal Finance for PhDs Community. If you run a business as a side hustle, whether coaching or otherwise, you may be interested in my new course, Best Financial Practices for Your Self-Employment Side Hustle. I’ve covered two topics so far how to budget with a variable side income and how to choose a self-employment retirement account. If you are maxing out your IRA this year and don’t have access to a 401(k) or 403(b), I highly recommend the latter module. To view all the benefits of being part of the community and sign up, visit pfforphds.community. Without further ado, here’s my interview with Cheryl Lau.

Will You Please Introduce Yourself Further?

02:30 Emily: I’m really excited to introduce you all today to Cheryl Lau. She is a branding and content coach focusing on PhD, students, academics, and researchers. And specifically today, we’re going to be talking about coaching businesses. Now, I just said, Cheryl herself is a coach, she helps other people who are also coaches, and I also serve as a coach. So, we have a lot of coach talk going on today. And just to frame this a little bit, Cheryl specifically works with people who doing coaching or other service based businesses as a side hustle. So, this is absolutely something that you can do on the side of your graduate work, your PhD training, your full-time job. That’s perfectly okay. So, I want you to keep listening to this episode, even if you’re initially thinking, “Wait, why would I become a coach? What could I possibly coach someone about?” No, that’s what we’re going to be talking about today. So, you’ll probably have your mind expanded a little bit about the possibility of you starting a coaching business, and Cheryl’s here with us too, to help us do that. So Cheryl, will you please tell the audience just a little bit more about yourself?

03:32 Cheryl: Sure. So hi everyone. My name is Cheryl and I am originally from Toronto, Canada, but right now I am based in Hong Kong. So, originally I studied psychology at the University of Toronto, and now I am starting my PhD in Social Welfare at the Chinese University of Hong Kong. And online, I am a brand and content coach or strategist, and I basically help academics, graduate students, and researchers to really show up online confidently and build a brand and a side hustle business that really makes an income and an impact.

What is a Coach, and What is a Coaching Business?

04:05 Emily: So perfect. Thank you. Okay. So, Cheryl, what is a coach, and what is a coaching business? Because I know a lot of people, my audience will never have hired a coach for anything, they aren’t coaches themselves. So, what exactly are we talking about?

04:18 Cheryl: Sure. So the pure, pure, pure definition, if you search on Google, I’m sure the definitions will be something along the lines of empowering the client to make a decision for himself or to empower clients to really think on their own and think about how they want to achieve their own goals. So, that’s like the pure, pure definition of coaching. But how I like to look at a coaching business is basically using your own preexisting skills, knowledge or experiences to help someone solve a problem. And that could be in the form of coaching, mentorship, or teaching. So, basically if you’ve been able to get a result for yourself or for others and you can help other people achieve that same result, you can start a coaching business on that.

04:59 Emily: Yeah. So, a coaching business could be drawn out of professional expertise, certainly, but it can also kind of be drawn from expertise that’s developed through your personal journey and then expanding that beyond just yourself, working with other people, learning from other people. And I would say that latter describes, you know, my journey as a personal finance expert, right? Like I don’t have any certifications when it comes to like the financial stuff, but I’ve spent enough time in this space, talked with enough people, listened to enough great resources that I consider myself an expert, and bill myself as an expert in that area. So really, you know, you don’t have to be a professional in the area that you ultimately coach in. You just have to be, well, frankly, you just have to be more competent than your clients, really. I’ve heard it said that, to be a coach, you have to be just one or two steps ahead of the person you’re trying to help. So, like in the financial realm, you don’t have to be a certified financial planner. If you want to coach people on their budgeting, you have to be like pretty good at budgeting. You don’t even have to know about investments or all the other stuff. So, you can sort of narrow the scope of what you’re going to be coaching on based on the actual expertise that you do have. Don’t feel like you have to be an expert across the board at everything, right?

06:11 Cheryl: Yeah. And I totally agree with that. I feel like there are maybe a few different ways that people can look inside or in the past and assess where they can draw, they can derive a coaching business from. So, maybe like you said, your personal experiences or maybe achievements you’ve accomplished. Let’s say, for example, maybe you were a TEDx speaker. You can teach people how to become a TEDx speaker or get invited to speak at TEDx events. Or maybe if you’re really just naturally gifted at something, maybe you’re just a naturally good listener, so maybe you have a particular strength and you’re really upbeat and motivating and uplifting to other people. You can support people by being a listener. Perhaps you can become a life coach eventually. So, there are many different ways you can look at your skills, your achievements, or your strengths. And I think by looking at those three areas, you can kind of start thinking about what are things I can help people solve a problem on?

Why Coaching is a Good Side Hustle

07:05 Emily: Absolutely. So, let’s get back to like the idea of the coaching business. Why would someone want to pursue this while they have a full-time job or while they are in graduate school, for example? Like why is this a good side hustle?

07:20 Cheryl: So, as graduate students or academics, your time is very, very valuable. And by being able to start a coaching business on something that you already know by using your preexisting knowledge, skills, or experiences or achievements, you’re not starting from scratch. You’re not learning an entire new craft from stage zero, but rather you’re already building on top of what you already know. So, the learning curve is a lot faster. And that said, you really do not need an original idea. So, contrary to maybe startups where you need something that’s very new and fresh and original, here, your coaching business model or the problem that you’re helping to solve for other people. It’s usually kind of mundane. It’s nothing that new. So, maybe for example, for me as a brand and content coach, there’s many people helping others in marketing or starting an online business or side hustle.

08:17 Cheryl: So, the idea itself is not new, but in fact, where there is competition, that means there’s more demand for that service. And so, because time is so valuable as a graduate student or a PhD or academic, by building a business that doesn’t require you to learn that much skills upfront, you can save a lot of time. And also by working closely with your clients, whether that’s one on one or in a group setting, you’re really able to help pinpoint what are areas that people are getting stuck on and you can really answer their questions and help them resolve issues as they come up really quickly. And as a result, your clients are getting much faster results and much higher quality results than if you were to just create an ebook and give them all the information and they were to implement it on their own. Because challenges do come up, limiting beliefs and self-doubts do come up. But if you’re able to coach them through those limiting beliefs, then they’re able to get results much, much faster. So, those are a couple of reasons people might consider starting a coaching business.

Active vs. Passive Coaching Income

09:17 Emily: Yeah. You made a couple great points in there that I wanted to follow up on. One is regarding like the value of your time as a researcher. Service-based side hustles in general, they’re the fastest way to make money on the side when you’re literally trading your time for money. So, you know, you mentioned this in contrast to like for instance, writing ebook and publishing it and maybe generating passive income over time. That’s another way to help people, but they’re very different approaches and you can charge a lot more for one-on-one or small group services than you can for an ebook, for example. And you’re literally just trading like your hours for money. And so it’s very, very fast. You can build it very quickly, turn it around. Of course, you need people who want your service.

10:03 Emily: But it’s a very quick way to make money and more reliable, I would say, then doing something like trying to generate passive income from an ebook. And I think another point that you made in there that I wanted to pull out is that the way that you’re serving people is different than them just trying to learn something on their own. They probably have already attempted to learn and take action on whatever the subject area is that you are coaching in. Like in my sphere, in personal finance, maybe someone listens to my podcast, other podcasts, maybe they love to read about personal finance, maybe they read books. But there is still a disconnect between absorbing that information and actually implementing it in their life. And so if someone is at that stage of, “Well, I’ve taken in a lot of content, but you know what, I’m just not making changes in my life, and I want to.” That might be a place where a coach could step in, like I could step in, and help that person get to that next step. So, they’re both valuable, but it’s very different approaches for helping people achieve their results.

11:03 Cheryl: Yeah, totally. And you know, there are so many different ways that a person can make money online using your own skills and experience and knowledge. But one thing that’s very unique about coaching is that, or one benefit I should say, is that by serving your audience in such a high touch, high accountability, high personalization manner, even the quality of the results that your clients will get will be a lot better than if they were to do it on their own. And because of that, the testimonials that you’ll get in return at the end of your work together will be much better. And your testimonials are very important, especially when you’re building a coaching business because other people want to see that, “Hey, this person can actually help me solve a problem and get me really good results.” And so testimonials are really important for the marketing aspect of your coaching business.

Flexible Working Hours

11:51 Emily: I think another thing that you haven’t necessarily touched on yet, but is another point in favor of coaching as a side hustle, is that it’s very scalable in terms of time. Like you can spend an hour a month coaching if you want to, or you can spend many hours per week and that could be your side hustle. And so, it’s different than, you know, a side job, let’s say where someone else is dictating your schedule and the amount of hours you should work. It’s completely up to you as the business owner to dictate how many hours you’re going to work per period of time.

12:20 Cheryl: Yeah. That’s a really great point because the flexibility of the coach is just incredible because all you really need is wifi and Zoom basically. So, by being able to, basically honestly, you can work from anywhere. You can be a coach anywhere, as long as you have the internet, even the startup costs that you need to start a coaching business are quite low compared to other business models. You don’t need that much tech. You don’t need that much software. You just need Zoom and internet, basically. You can easily package later on if you choose. So, you can package what you’ve taught and coach people on into a digital course, a passive product. But after you gain more experience, after you really pinpoint what are areas that people really struggle with and what are questions that come up over and over again, and you take notes on those issues and challenges that come up, you can easily create a digital course or digital product based on your experiences as a coach. And you can sell that much better, as opposed to just creating a course upfront and not really knowing if it’s going to be able to help people get results.

Mindset Shifts to Start a Coaching Business

13:22 Emily: Yeah, I totally agree. We’re talking to like graduate students, a lot of people and other PhDs, and they might be thinking like, who, “Who am I to be starting to be starting a coaching business, what is this? So, what are some of the mindset shifts that someone in my audience who is sort of intrigued by this idea? What do they might need to work on in their mindset before they’re able to really embark on a coaching business?

13:44 Cheryl: So, you just mentioned basically imposter syndrome: who am I to start a coaching business? And I think that is massive. And I think one other, I guess, belief that goes hand in hand with imposter syndrome is the idea, or basically the fear of judgment. So, what are people going to think if I start a coaching business? So, one perspective shift that I would really like to offer your audience today is to think about who are you trying to work with versus who are the people who might potentially be making judgments about your business? Because ultimately whatever you do in your life, there will be people who are making judgments about you, even if you’re not doing anything. Even if you’re not doing a coaching business, you’ll still receive judgment. So, the question is how much time and concern are you giving to the people who you’re trying to serve versus the people who really aren’t going to become clients in the long run?

14:32 Cheryl: And so, I would really encourage the audience who might be thinking of starting a coaching business to really think about, “Okay, this is a target audience I want to serve and how can I actually get my message and/or work in front of them so that they can see the value of my work?” As opposed to just worrying about what people are going to think, especially those who are really just never going to become fans or supporters of my work, because there’s definitely people who would never really see the value of coaching. So, that means that they’re unlikely to become paying clients or part of your audience. So, if you are really worried about what are people going to think, I would urge you to just to just focus on the impact that you can make and the audience that you want to serve, as opposed to worrying about people whose opinions really have no bearing on you serving that particular audience.

Navigating Imposter Syndrome

15:17 Cheryl: And also, as we mentioned, imposter syndrome. One really easy way to navigate this imposter syndrome is to remember that imposter syndrome really roots from feeling like you’re not credible enough to start this coaching business. But if you just remember that you’re starting a coaching business based off of your preexisting skills and knowledge and experiences, these are things that you’ve already done before, and you’re simply helping other people do the exact same thing. So, if it really is an issue that comes up, one thing that I encourage all of my own clients to do is to start working with people for free first. That way you can actually make sure that you can help people and get them results and not worry about, “Oh my gosh, can I really help people?” But by having actual evidence, concrete evidence that you can get results for other people, you are not only running your business in integrity, but you’re also able to work through that imposter syndrome by seeing that, “You know what, I can do this.”

16:13 Emily: Some people around you might be saying, “Wait, would anyone find value in the coaching that you’re providing?” But like you said, if you actually start working with clients and on a free basis or low-cost basis to begin with, then you can prove to yourself and the people who might be questioning around you, “Oh yes, I do help people get results. Like this is what I’ve done. This is what I’ve helped them do in the past.” You have the receipts basically. Once you start working with people and you can keep track of those testimonials and keep track of their results, that can both encourage you and help you answer to people who are wondering really what you’re doing here.

16:48 Cheryl: Yeah. I love that point. And you know what, very recently, I think about two months ago, I was meeting with an old classmate. So, my classmate said, “Wait, people actually pay you for this?” And I’m not gonna lie, I was pretty taken aback when I heard her say that. Because for many, many months, I’ve been working on my business and I’ve been working with clients and helping them get results. And to suddenly hear someone I used to be friends with question the validity or the legitimacy of my business was really shocking. But then in order to snap back into the swing of things, I reminded myself that, “Hey, you know what, I do have the receipts, just go on my website and you’ll see all these testimonials.” And I remember once again that I have worked with people, I’ve helped them get results.

17:35 Cheryl: And as a result, I’m able to run my business in integrity. And I think that’s really important for people to remember that you are focusing on people that you can actually help as opposed to faking your way into getting clients. Because, as opposed to just signing on every single client that is in sight, really focus on helping people that you can actually help so that imposter syndrome doesn’t come up and you can actually see the clients achieve amazing transformations.

18:01 Emily: Hmm. I totally agree about being selective about the clients that you take on. I think just coaching overall is kind of an unknown industry, or at least maybe among like the academic audience, it might be a little unfamiliar. So, I think the question of like, “People pay you to do that?” I can understand why you’d be a little taken aback by that, but I don’t think it was probably meant in offense, just like, “Oh my gosh, like there’s an industry around people getting paid to do this thing?” But like we were saying earlier, you know, for people who really want that high touch interaction with a coach, then yes. They decide at some point some of them that it is worth it to them and they choose to pay for it. So, it’s the decision of your clients, not the people around you.

Commercial

18:44 Emily: Emily here, for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at pfforphds.community. The Community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the Community, you’ll have access to a library of financial education products, which I add to every month. There is also a discussion forum, monthly live calls with me, a book club, and progress journaling for financial goals. Basically, the Community exists to help you reach your financial goals, whatever they are. Go to pfforphds.community to find out more. I can’t wait to help propel you to financial success. Now, back to the interview.

First Steps Toward Starting a Coaching Business

19:47 Emily: Let’s say that we’ve talked someone into, “Okay, I’m going to consider starting a coaching business. I have my area of expertise, my area in mind that I want to coach in.” What are some of the first steps that that person should take towards starting this coaching business?

20:02 Cheryl: So, I would say the first step is really getting clear on what do you want to coach on? And I think that if you want to gain more clarity on that, one of the steps that you can take is to really identify an achievement or a process that you’ve undergone and just map out that process step-by-step. What are the steps that you took or different areas or components that contributed to that final result? So, really just write down what are the different steps or parts of you being able to achieve a certain result or solve a specific problem for yourself.

20:35 Cheryl: And that will become kind of like your framework or methodology that you can walk people through to help them get results as well. Because ultimately, the goal is to be able to help someone through a process that is unique to you and something that you’ve done for yourself as opposed to teaching something that you haven’t really done for yourself. So, I think the first step is to really identify what are the key steps or key areas that have led you to where you are today. And then the next step would be marketing and sales. So, perhaps you can be on social media to share your services, to talk about your program, and to talk about how you’ve been able to get results for yourself. And really just share how excited you are about the program and why this worked for you and why it will work for other people who are struggling with something similar as well.

21:22 Cheryl: And finally, just delivering a really awesome coaching experience for a client. And I think those are the very fundamental steps that people can take when they’re just starting out. I mean, there are so many different things that you can do. You can start a webinar funnel, you can start an email list, you can create a podcast or YouTube channel. There are so many different things you can do to market and promote your coaching program. But I think at the core of it, having clarity on your offer, being able to share insight on your first few clients and also deliver really good results with people. I think that’s the core. The first few steps that people should look into first.

Finding Your First Few Clients and Charging for Coaching

21:55 Emily: I also think that there might be some people in the audience who are a little bit nervous about, you know, you used the word marketing. Like a little bit nervous about kind of putting themselves out there as like this coach in this certain area. You know, you mentioned earlier taking on your first few clients for free. So, I sort of view that as like an exploratory process, both for the coach and the people being coached. The coach is sort of investigating, is this something, you know, like you said earlier, can I provide value? Can I help this person achieve results? Do I like it? What do I think my time is worth? They’re kind of exploring through that process. And then of course you do need to start charging and I would say pretty soon. You know, don’t do that for very long. Can you talk to me about those first few clients? Maybe how to find them and then also the transition between doing that for free and then starting to charge for it.

22:44 Cheryl: Yeah. The interesting thing that I’ve learned about working with people for free is that because they’re not necessarily financially invested in your program, the chances of them staying committed throughout the entire process is not as committed as someone who has actually invested money into your coaching program. So, what I would suggest when you’re finding beta clients is to really be selective about it. So, invite people as opposed to just shouting it from the rooftops and hoping that people will inquire about it. So for example, what I did was actually, I looked at my current audience and I would recall the conversations I had with people and identify two or three people who I think would be a good fit and really fun to work with. And I send them a personalized message and say that, “Hey, this is my goal. I really want to launch this paid program in a few months time. But first I want to make sure that this actually works. So, based on our conversation so far, here’s what we talked about. And I think that this will be a really helpful program for you, and it will be complimentary, it’ll be for free. And in return, I just would really love for feedback and a testimonial if I provided value.” And so that’s how I would go about inviting people to be clients, your first few beta clients, you could say.

Transitioning from Free to Fee-Based Coaching

23:58 Emily: And how about that transition to starting to ask for money? I think that’s a really intimidating one for everyone, self-employed people–especially people who have been cultured by academia to believe that they should be giving away their work for free.

24:14 Cheryl: Yeah, that is a very, very interesting topic to talk about because you know, how I did it was I simply worked with people for free first and got the testimonials. And that just gave me the full-fledged confidence to tell people that, “You know what, here are the results I was able to help people achieve, both internally in terms of mindset and externally in terms of what they’re able to achieve online or for their own personal goals. And here’s why I am so confident in my work.” I think for someone who is starting a coaching business, just being very confident in yourself is something that is very important when it comes to marketing or selling your program. As long as you truly believe that you’re able to get results with people, as long as you truly believe in the impact of your work, I think that that energy can exude and can translate and people can tell. People can really tell when you’re confident in your work. But for someone who might be a little bit nervous about it, what I recommend is, I think pricing is a tricky thing. But what I recommend is just to pick a price that you are comfortable saying and sharing with people and just stick with it. No need to compare your prices with other people. Just pick a price, a number, it’s very arbitrary, to be honest. Just pick a number and then increase from there. As you gain confidence, continue increasing your prices and have it reflect the value of your work.

25:32 Cheryl: So, I think for people who might be nervous for charging, start low and increase as you go, that might be a way to go about it. Of course, please charge. Please charge for your time and the value and impact that you’re going to make for people. But when you’re just starting out, it might be a little trickier. But over time, you’ll recognize the value and impact of your work. And as a result, your prices will go up naturally as well.

Free is Okay at First, But Start Charging Soon

25:57 Emily: Yeah, I definitely agree. Okay. So, what we’re pointing out is, okay, free is okay at first, but put a limit on it. Start charging somewhere, and increase it. Whatever you feel, whatever you think you can say with a straight face, maybe after talking yourself up a little bit, start there and then increase it. I’ll say two quick anecdotes about that. One was from when I started my speaking aspect of my business. I decided to offer a free seminar to three clients. It was based on what was convenient to me geographically. And then I said, “After that, that’s it. I’m done doing things for free, and I’m going to be charging, and this is the price point.” So, I did that. One school turned me down. So, I gave two free seminars, and then I started charging. And in those first few months of starting to pitch myself and telling people about the seminar content and stuff, I was laughed at, and I was told that my prices were not appropriate a couple of different times. But I sort of knew that they were appropriate based on what I’ve learned about the market pricing.

27:00 Emily: And I just kind of had to persevere through that and, you know, ultimately, just a few months later, was able to earn that amount that I had been asking for, and then have increased my prices every year, since then. So, talk with a lot of people, once you’re ready to start charging. Cast a wide net for potential clients, and don’t be discouraged if the first two people you talk to don’t like the price point. That’s okay. Just keep pitching it and keep putting it out there, making sure of course that it’s reasonable for the market that you’re in. So, that’s one anecdote for my business.

27:32 Emily: Another that I’ll relay is Dr. Jen Polk, whose brand is From PhD to Life. She is a career coach specializing in PhDs. And I remember her saying that when she started this, this was probably about 10 years ago, she started doing this. She asked people, her first paying clients, for $10 for an hour of work. And that was the price point. And she is a huge advocate of people increasing their prices and charging what you’re worth and so forth because she did start out with like way, way, way, undervaluing herself right out the gate. And I think she did that for a little longer than she would like, which is why she’s always telling people the advice that we just gave, which is just increase, increase, increase. As you were saying, as you grow in confidence, as your pile of receipts of great testimonials grows and grows.

Origin Story of Cheryl’s Coaching Business

28:17 Emily: So, I totally think your action steps were were wonderful and right on the point. And now I want to get to a little bit more of your story. Out in the front of this interview, we wanted to talk about coaching more generally, but now I want to hear a little bit more about your story. And especially now that you’re starting a PhD program, what your coaching business is going to look like on the side of your graduate work. So, can you tell us more about your story of starting your business?

28:40 Cheryl: All right. So, let’s bring it back to a few years ago when it really started for me through a quarter-life crisis, essentially. So, what had happened was I was actually in law school. I finished my undergrad and I went straight into law school because I was in the mindset of, “Oh my gosh, what a prestigious career.” That was the mentality I had back then. So, I immediately jumped into law school without really thinking about, “Is this a really good personality and career fit for me?” But, you know, lesson learned. But fast forward a year later into law school, I realized this really was just not the right fit for me. I mean, it was very interesting to learn about the law, but being a lawyer is a completely different story. And after my internships, I realized that I just cannot do this. And so I made the very difficult decision to drop out of law school, and this was late 2018.

29:29 Cheryl: And I realized at the time, “Wow, what am I going to do with my life? Essentially, I entered my quarter-life crisis at that point. And I was dabbling in the internet looking at career websites. And I found the term personal branding. And that was very interesting to me. I’ve never heard of the concept before, but I thought, “You know what, let me try to build an online presence. I don’t know where it’s going to go.” So, what I actually ended up doing was creating a YouTube channel to share my experiences about navigating parents’ expectations, making difficult life decisions. The channel does not exist anymore, but what happened was that I was actually building a slow and steady audience on Instagram and YouTube, and people were asking me questions. They were asking me questions about, “Wow, how did you have the confidence to show up online? Like, I really want to share this experience or that experience, but I’m just so scared. Or, “How are you able to grow an audience on social media?”

30:18 Cheryl: And that’s when I realized that, “Oh, wow, I actually have some answers and suggestions and tips. Maybe I can help people on that.” So, what I did first was I actually started working with people for free. And I saw that, “Wow, one of my clients actually was able to get a paying client for her own business.” And that’s when I realized, you know what, I can charge for this. And that’s how my coaching business came about. I officially launched my paid program in March of 2019 and have been charging ever since. And fast forward to today as a PhD student, this is a side hustle for me. And my PhD is my first priority right now, but that said, my side hustle is a large source of income for me compared to my stipend. And just having that extra income, it’s able to help me feel more financially secure. Especially with such uncertain times right now, just having that sense of security is very comforting for me.

31:15 Emily: Absolutely. I don’t know how your stipend is at your university, but there are plenty of places here in the U.S. where graduate students are not paid a living wage, barely paid a living wage. And having a side hustle, especially like we talked about earlier, one where you can immediately start making money trading your time for money can really help you through. Through feeling more financial security, as you were just saying, through being able to, you know, enable some pleasures in your life that you want to pay for, to enable saving. Like there are all different kinds of goals that you might put in place for your side hustle income. So, I’m really glad that you mentioned the financial aspect of this too.

Learn More About Cheryl Theory

31:56 Emily: So, where can people find you online, Cheryl, if they want to learn more about your business and your work?

32:01 Cheryl: Alright. So, I can be found mostly hanging out on Instagram. So, you can find me @cheryltheory. And just for a fun fact, my last name is not theory, but it was simply because all of the variations in the full name was taken. So, I had to pick an Instagram handle name. So, I decided to call my business name Cheryl Theory because back in high school, I thought, “One day I’m going to have my own theory.” So, that was just a running joke for myself. So, I created my business name, my username as Cheryl Theory. And you can also find me at my website, cheryltheory.com.

Best Financial Advice for an Early-Career PhD

32:37 Emily: Perfect. So final question, Cheryl, that I ask all of my guests is what is your best financial advice for another early-career PhD? And it could be related to something that we’ve talked about today, or it could be something entirely else.

32:51 Cheryl: Sure. So, I think if I were to tie in a piece of financial advice related to the topic we were talking about today, is starting a coaching business can really bring in an extra source of income that can create so many different opportunities and options for you. But that said, one mistake that I see time and time again when it comes to new coaches, is that they get stuck in consuming information and not actually taking action on it. So, this is more so a business advice as opposed to financial advice, but I think it ties in with your coaching side hustle. So, instead of just waiting for you to feel ready and waiting to listen to another podcast or watching another YouTube video or download another PDF guide, just take action on what you’ve learned in those pieces of content, and actually just move forward. And if you fail, fail fast. And if you have to make tweaks, tweak fast.

33:42 Cheryl: The point of the matter is to take action really quickly and refine as you go so that you can keep moving forward. Because the interesting thing is that rather than having a step-by-step checklist that you can follow, and if you check off all the boxes, you’re going to get the coaching business success. That’s really not how it works, but rather there’s so many different ways that you can make money online. Just find what works for you and commit to it. So, continue taking action and not get stuck in information consumption or analysis paralysis.

34:08 Emily: Thank you so much for joining me Cheryl. This was a great conversation. I really hope that some people in the audience are going to start businesses based on, you know, hearing this. If you do, please let me and Cheryl know. And thank you. Yeah. Thank you again, Cheryl for joining me.

34:23 Cheryl: Thank you for having me.

Outtro

34:24 Emily: Listeners. Thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This PhD’s Message for University Housing Is “Work with Us, Not Against Us”

September 28, 2020 by Lourdes Bobbio

In this episode, Emily interviews Dr. Travis Seifman, a postdoc at the University of Tokyo. During graduate school, Travis lived in university housing at multiple universities, but chiefly two campuses of the University of California. While the housing was subsidized and convenient to arrange, Travis noted a few downsides and annoyances. Travis and Emily discuss the differences between university housing and private housing and wonder how best to allocate this scarce resource. Travis proposes an adjustment in the approach that universities can take toward their housing administration: “Make it reasonable for adults.” This episode, recorded in August 2019, should serve as a conversation starter regarding the objective of university housing and its administration, especially in the era of COVID-19.

Links Mentioned in the Episode

Find Dr. Travis Seifman on his website and on Twitter
Personal Finance for PhDs: Community
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Subscribe to the mailing list

Teaser

00:00 Travis: The purpose of university housing is not to make money for the university. The purpose of university housing is to provide an affordable place to live for students, in light of the fact that we’re only making X amount and they know full well that we’re only making X amount. And in light of the fact that in many of these communities, local housing, regular market housing is extremely expensive. Making it affordable, and then also making it reasonable for adults.

Updates

00:31 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 seven, episode four, and before we jump into the interview, I have some personal and business updates to share with you. I’m going to start adding short updates to the beginning of each episode. This week, I have a pretty huge one on both the personal and business front, which is that my family moved from Seattle, Washington to Orange County, California at the end of August, my husband and I lived in Seattle for five years and had both of our kids while we lived there, so it’s a big change for all of us. This move brings us one step closer to our next financial goal of buying our very first home, which we are trying to do in 2021. I am documenting all the steps we’re taking to reach that goal in my progress journal inside the Personal Finance for PhDs community. If you want to keep up with our journey, or document your own, or access the multitude of resources in the community, you can find it at pfforphds.community. Now onto the interview.

Introduction

01:35 Emily: My guest is Dr. Travis Seifman, a postdoc at the university of Tokyo. During graduate school, Travis lived in university housing at multiple universities, but chiefly two campuses of the University of California. While the housing was subsidized and convenient to arrange, Travis noted a few downsides and annoyances. We discussed the differences between university housing and private housing, and wonder how best to allocate this scarce resource. Travis proposes an adjustment in the approach that universities can take toward their housing administration: make it reasonable for adults. I expect that this episode recorded in August, 2019 will serve as a conversation starter regarding the objective of university housing and its administration, especially in the era of COVID-19. Without further ado, here’s my interview with Dr. Travis Seifman.

Can You Please Introduce Yourself Further?

02:29 Emily: I have joined me on the podcast today, Dr. Travis Seifman. I’m delighted to have him. Travis, thank you so much for joining me. We’re going to be talking today about university-affiliated housing and Travis’s wide range of experiences with university affiliated housing. So Travis, thank you for joining me today, and will you please tell the audience a little bit more about yourself?

02:49 Travis: Thanks so much for having me, Emily. I’ve just finished my PhD in history at UC Santa Barbara, University of California, Santa Barbara, this year. My main research focus is on early modern Japan and Okinawa and rituals, diplomatic relations between them. I previously did two master’s degrees, actually at the University of Hawaii and the School of Oriental and African Studies at the University of London. Um, so I’ve lived in a few different places. And during my research, I also lived for a short time at the University of the Ryukyus in Okinawa, and at the University of Tokyo.

Travis’s Experience with University-Affiliated Housing

03:25 Emily: And all these different places that you’ve lived, at least some of them, or most of them you’ve lived in what I’m saying is university-affiliated housing. Can you describe the housing situations — main situation or multiple — that you’ve had?

03:37 Travis: Yeah, sure. Just to say it very briefly. When I was at SOAS in London, I stayed in grad student dorms, university housing. University of Hawaii, I stayed in regular private departments for one year. And then for two years, I lived at the East West Center, a federally funded think tank organization located adjacent to the university of Hawaii. So I lived in their dorms for a couple of years. Then, when I moved to UC Santa Barbara, they have dorms for single grad students and they also have family housing. I’ve lived in both of those, and I’ve also lived with my girlfriend at the family housing at UCLA. And during my research trips, I stayed at university dorms, visiting researcher dorms at both University of Ryukyus and university of Tokyo.

04:22 Emily: Why don’t you start with where you UCSB where did your PhD? What was your experience there with that housing?

04:28 Travis: To a certain extent, I would say it’s overall positive, simply in that university housing is always an easy go to option when you’re moving across the country or even moving to a different country. You know how to apply for it. You don’t have to arrive early, or get a hotel while you search for apartments and all this kind of stuff. And it’s often cheaper than the housing that’s around.

04:50 Emily: Do you think that it’s sometimes or usually is cheaper than going off campus because the accommodations are different, like maybe less private, for example, than what you’d get off campus, or have you actually lived in like subsidized university housing?

05:08 Travis: I think everywhere I’ve lived has been subsidized, whether it’s subsidized enough is another question. One place we could start is to just talk about the price. When I was living in the single dorms, the single person dorms at UC Santa Barbara to begin with my first year, the rent was somewhere around $980 per person in a four bedroom apartment. And the apartments in that area are somewhere around that cost. It’s the most I’ve ever paid to live anywhere. It was more than I paid to live in a private apartment in Honolulu. It was more than I’ve paid anywhere else that I’ve lived in my life for dorms in Goleta, which is a town that I had never heard of before I even moved there. We’re not even in Santa Barbara proper.

05:52 Emily: One clarifying question — you were living in a single person room, right? You had a private room in a four bedroom suite, is that right?

06:00 Travis: Yeah, it’s four individual private rooms, shared in a suite. It was $980, or somewhere around there, per month. And after I think, my second or third year there, the grad student association, or perhaps it was the TA union, actually managed to negotiate with the administration to get the rent lowered to $780, which I thought was an incredible victory. I don’t know how typical that is at other campuses, but we did manage to get it down. Regardless of what the market can bear in the area, it’s much more reasonable based on what we’re being paid.

06:38 Emily: Do you mind sharing what your stipend was at that time?

06:41 Travis: I believe it was somewhere around $1,900 a month, so if you spend half of that on rent —

06:46 Emily: Yeah, that’s quite high.

06:48 Travis: Yeah, and meanwhile, the family housing was somewhere around $1,300 a month, so you’re paying $1,300 for an entire apartment. I understand, obviously, subsidizing for families because they need it more, they have more dependents, but just to sort of mentioned that.

07:07 Emily: When you describe family housing or a whole apartment, are you saying it’s a studio or a one bedroom, two bedroom? How large is it?

07:14 Travis: Yeah, so I forget what precisely the rates are, but UCSB family housing has one bedroom apartments, they have two bedroom apartments. There’s a number of different configurations, but basically one bedroom and two bedroom, and I think they charge somewhere around $1,300 a month. And I’ve lived in one of those two bedroom apartments for a year as well.

07:36 Emily: So that was $1,300 for the entire apartment, so split between two presumably adults, maybe they have kids or maybe they don’t.

07:47 Travis: Yeah, exactly. So split between two adults, presumably both adults have some kind of income, but you know, one of them might not, one might be on a grad student stipend and the other one might be stay at home spouse, with children.

08:01 Emily: I think that’s not uncommon among international students, that if you get a spousal visa, the spouse is not permitted to work in the United States.

08:10 Travis: Right. That’s true. I hadn’t actually thought about that point. That’s true.

University-Affiliated Housing vs. the Private Market

08:13 Emily: How did it compare for you as a renter in that place versus if you had gone to the private market, as you had in the past?

08:22 Travis: When you’re working with the university housing, at least you have the advantage of that there’s an entire administration there and you kind of know who to talk to, as opposed to finding the landlord, like how do I actually get in touch with them? And to be fair, I suppose a lot of the rules probably aren’t too different, in terms of whether or not you’re allowed to have pets, most apartments don’t allow pets. Most landlords don’t want you repainting the walls or putting nails in the walls or anything like that. So in terms of a lot of those things, I suppose, I can’t say it’s too different. University housing has the opportunity to be more caring and more understanding about students. The idea that a landlord is in it for the money, that’s just the way things are. The university, ostensibly is not in it for the money. They’re in it to provide housing for members of their community. And so there’s an opportunity there to say, not just anything goes, but just to kind of be understanding of people’s needs, provide allowances, and just be a little bit more open.

09:30 Emily: I think what you’re saying is these students are part of the university community, right? The university is also their employer in many cases, or the administrator of their fellowships. It’s where they’re spending all their time and you’re part of this specific group. It’s not like when you go to the open market and as you said, it’s basically just about price, that’s it. It’s not intentionally trying to foster community or positive relationships between the landlord or the tenants or among the tenants or anything. So university housing is in a different position in that way. And like you said, one of the really positive things that it does is it makes it easy for students who are moving to a new area to find housing. They know they’re not going to be hosed. They’re not going to get in with a bad landlord or whatever. If it’s provided by the university, they know they have already a degree of trust there, is that right?

10:20: Right, right. And I think two places where private housing has the advantage over university housing because of the way that it’s administered, is in terms of access to guests, for example. I’ve had private landlords who’ve said we don’t want really loud parties, we don’t want you disrupting the whole community. But generally you have a key to your apartment that you can give to a guest if you’re leaving for a week or whatever it is. Nobody needs to know about it. You can have overnight guests and nobody needs to know about it. You can sublease and whether that’s officially allowed or not under the lease, you can sublease and people generally don’t have to know about it. University housing, they have all kinds [rules] — you can only sublease to single students who are actively UCSB students. Or if you’re in a family apartment, you can only sublease to people who qualify to be in a family apartment. If you’re going away for the summer, or if you’re going to wait for a whole year to do your research, it’s extremely limiting and for no really good reason.

11:21 Travis: A lot of university apartments, typically at UCSB, they’ve instituted that you don’t have any kind of key to your apartment. You open it with your student card. So again, if I’m even just having a guest over for one night, and I need my student card to get myself into stuff on campus, I can’t give them the card to get into the apartment. It’s these kinds of, I guess, on their point of view, it helps them enforce things maybe, or maybe it’s just a convenience that they didn’t think about the ramifications of, but it’s that kind of stuff where I’m an adult and who’s to say that I can’t have overnight guests. And even at the University of Tokyo apartments, even though the rules said that your overnight guest has to be officially a family member — a sibling, parent, or spouse, or child, I guess — when I actually, when my girlfriend actually came to visit me, they said, “well, we’ve put her down as your sister, so don’t worry about it.” And it’s that kind of, we can get into it later or maybe not, but it’s that kind of being willing to bend the rules that I think is, or not even bend the rules, but just be willing to help students rather than I’m here to enforce the rules, which I think a lot housing departments could afford to have a bit more of.

12:33 Emily: Yeah, that’s interesting. Thanks for providing the example of how you actually access your home. I was thinking, I guess it kind of makes sense for security purposes that you don’t want keys being given out and anybody being able to access whatever, especially because you have roommates within your suite, right?

12:51 Travis: That’s true. And security is an issue.

12:53 Emily: But like you said, it doesn’t allow for any discretion on the part of the actual person who lives there. And you wouldn’t have that kind of — I mean, with landlords, it’s like, okay, you’re not allowed to make copies of your keys. Most likely that’s in the lease somewhere. But as you said, it doesn’t mean you can’t allow your guests to have access a time or two when you’re not physically with them. It’s again, up to your discretion, as the person having the guest over.

Interplay Between the University and it’s Housing Office

13:18 Emily: What other experiences would you like to share?

13:20 Travis: One main thing that I would like to touch upon as I touched upon a little bit already is just the idea of having the staff there to say, I’m here to help you, I’m here to help you figure things out rather than I’m here to enforce rules. To give just a couple of examples of that, UCSB housing, if you have your own car, you can register that car, not any other. Only one car and you can park in the parking structure every day. If you don’t have your own car, you get, I believe it’s two visitor park passes a month and it’s included in your rent. I had my girlfriend coming up from LA however often, and granted that’s not allowed under the lease to be having overnight guests, but even so you won’t let me register her car because it’s not in my name, so what am I supposed to do, how am I supposed to have people park? I’m allowed to park all the time. It’s included in my rent if I have my own car, but because I don’t, I only get two passes a month. Anyway, the point of the story is to say that you walk in and the administrators say, “I don’t make the rules, I just enforce them” rather than saying, “I don’t make the rules. And I know they’re stupid, so let me tell you, actually, you can park over there over the weekends, or actually you can park here, or actually, if you use this code, you can get extra visitor passes.” Fill me in on what tricks or tips there are for making this more viable. And similarly —

14:56 Emily: I think that’s a more generalizable problem with bureaucracy, and the people who enforce it, as you said, rather than actually make the rules, but the people who are on the ground, interacting with those who are displeased about the rules. Often, the first response is just a recitation of this is the rule. Like I know the rules and this is the rule. It’s a little bit harder to find someone who’s willing to like find a creative solution. And often those people know what the creative solutions are because they know the rules so well, they’re supposed to enforce them, so they know the ways around them. It’s nice when you do find someone who is willing to work with you, but it might be something that you have to push for a little bit like, “I know the rule, but like, is there another way that I can get the result that I’m going for without breaking the rule?”

15:39 Travis: Right. Exactly. And that has to do with the way that university housing is integrated into the university administration, rather than being a separate entity, because if you have a private landlord, you can deal with them and they might be more friendly or less friendly that you can deal with them without it impacting reputation with the administration or I don’t know what to say, because it’s so integrated. And then of course, you have the opposite problem as well that very often housing is not integrated well enough into the administration, and I’ve had times when the cashier’s office agreed to let me defer my rent beausethe knew they hadn’t paid me. They knew that I wasn’t in the payroll yet, so they agreed to defer my rent for a few months and then nobody told housing.

16:21 Emily: Can you talk a little bit more about that? Because not being paid on time is actually a surprisingly common problem among graduate students. You would think that if whatever the problem was — the fellowship didn’t come through, it wasn’t processed on time, whatever it was — that housing, being affiliated with the university, they would have some procedures in place for “Oh yeah, this happens sometimes. It’s not the student’s fault. It’s again on the administration, and we have this policy where they can not pay rent for awhile.” You would hope that that would be in place. Whereas with the landlord, it might be a lot of hoops you have to jump through to convince them that it’s okay for you to not pay rent. Maybe you’ll get kicked out. That’s a possibility. So it sounds like it didn’t operate quite so smoothly for you.

17:05 Travis: Right. Actually that’s a really good point too, in terms of the pros and cons of university housing. The landlord doesn’t care whether you’ve been paid or not. I mean, they could choose to be flexible on a personal basis. Whereas the university you’re hoping it’s more integrated that they know. This particular case at Santa Barbara, it worked out very well in the end. Generally speaking, I’ve had overall, I don’t know why, but somehow UC Santa Barbara administration overall seems to be the least problematic of places that I’ve interacted with. They do seem to get their stuff together. When I first arrived at, at UCSB, as happens, I think anywhere that you go, it takes a little time to get into the payroll system. The semester or the academic year starts at the very end of September, so until you’ve worked through the month of October, then you get paid at the beginning of November. Otherwise they have no work to pay you for just yet. For whatever reason, maybe it’s typical for undergrads to pay for their housing on a quarterly basis rather than on a monthly basis. So originally they charged me three months rent at once and they wanted to take it all out of my fellowship before I could even pay my credit card bills, before I could buy groceries, before I could do anything else. Long story short, I talked to the cashier’s office and they were understanding and flexible and they agreed to not only put me back onto a monthly basis, but also to defer it so I didn’t have to pay the first few months rent until November. I then started receiving notices from the housing office saying that I hadn’t paid the rent.

18:44 Emily: So it was more of an internal communication problem within the housing office.

18:46 Travis: Right. It was just an internal communication problem between the cashier’s office on campus and the housing office over by the dorms.

Commercial

18:56 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at pfforphds.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, which I add to every month. There is also a discussion forum, monthly live calls with me, book club and progress journaling for financial goals. Basically, the community exists to help you reach your financial goals, whatever they are go to pfforphds.community to find out more. I can’t wait to help propel you to financial success. Now back to the interview.

Single vs. Family University-Affiliated Housing

19:59 Emily: And then the other thing that you brought up that I was interested in is you brought this up a little bit earlier about the price differential between single student housing and family housing, and you mentioned to me earlier that what is the definition of a family is a little bit of a strange thing to be talking about with university housing, right?

20:21 Travis: Right. Sure. At UCSB and I think probably UCLA as well are quite flexible and quite open minded about what counts as a family. I hope that it works similarly at other campuses. I hope that it does. At UCSB, when I applied for family housing with my girlfriend, you don’t have to be married, you don’t have to be in a hetero relationship. All kinds of different possibilities are possible — single parent with children, all kinds of different possibilities are acceptable. But you have to prove it. And I understand why on the administrative side, because you have such a limited number of units for family housing, you want to make sure that the people who are living there are actually families who are ostensibly more in need of the extra subsidized apartments. So I understand from the administrative side that they have to find some way of kind of proving that you’re a family.

21:28 Travis: At UCLA, they just do that through a very limited set of things. You have to have a shared bank account, proof of a former lease that you used to lease together under both of your names, marriage certificates, other kinds of very formal things. UCSB, for better or for worse, they say, even if you don’t have those kinds of very formal documents, you can share with us Facebook posts, texts, screenshots of your personal and private stuff to help try to show, try to prove that you’re in a meaningful relationship. So we shared with them screenshots from Facebook and from texting to say, “Oh, my parents are coming in for Thanksgiving. Are you going to be coming to dinner with us?” Or things like this.

22:18 Emily: This reminds me a little bit of, and I only know about this from TV or whatever, about green card marriages. Not green card marriages, but marriages in which a green card is involved and like having to prove to the government that you are actually in a romantically-inspired marriage, as opposed to some other kind of arrangement. It seems a little bit of overstepping.

22:45 Emily: I guess what I’m curious about with respect to family housing, and maybe this gets into more what you think or what you think the university thinks the purpose of family housing is? What do you think the purpose of it is? And is it accomplishing that purpose?

23:00 Travis: Yeah, that’s a good question. I think it’s a complicated issue because I think that for families, especially for grad students, like I was saying before, if one partner is on a grad student stipend and the other partners being a stay at home spouse, stay at home parent. Or even if both parents are on grad student stipends, you’re providing an opportunity, providing a way for them to live affordably as a family, with their dependents. For those in those situations obviously it’s a very good thing that that’s provided. I can’t imagine how some of my friends managed to afford…just how do you afford to live? We get paid roughly $1,900 a month. If your rent is $1,300 a month for the whole apartment, and that’s your only income for an entire family with one or two kids, I don’t know how people do it. So I appreciate that they have family housing for that purpose.

24:05 Travis: But then of course the flip side is that the single students are saying, just because I’m single, just because I don’t happen to have a romantic partner or a larger family, I have to pay more per person at least to stay in these smaller apartments. I personally have never had problem with being in a dorm room situation where I have my private room attached to a common room. But I know a lot of people also who say, I’m an adult and I want a whole apartment to myself or something like this. UCLA has studio apartments for single grad students and they charge a lot of money for them. UCSB the only option on campus is these two or four bedroom apartments, like I was talking about before.

24:54 Emily: Yeah. I guess this conversation is making me think about what is the purpose of family housing? Because like you said, it’s a differentially applied benefit. There’s more subsidy available to some people because of their family versus other people. And is that fair or is that not? But we were talking about university housing versus private off campus housing, where off campus the only regulation you’re going to find is a maximum number of people who can live in a certain size space. They don’t care, married, unmarried, children, not, it doesn’t matter. So maybe there is an opportunity with on campus housing to provide some, as we were talking about earlier, some additional support for the students in most need, like we were talking about students moving long distance or from overseas — hey, that university housing is there for you to make the whole process easier. And so maybe there is an opportunity to sort of subsidize students who are more in need, like those with dependents. But for me, the harder argument actually is extending that benefit to students in two income households, two income families without any dependence. That’s what, to me, gets a little bit tricky. Like you were saying, single adult versus a couple where it’s just two adults — why should that couple get any more subsidy if both of them are working, if both of them are permitted to work? For me it’s a little bit harder to extend this benefit beyond those who have actual dependents, whether they’re children or non-working spouses.

26:29 Travis: Right. And also, as you’re saying about this, it makes me think about international students who — I don’t know the ins and outs of it. I think being an international student is a lot more difficult in all kinds of ways than the rest of us know. But I wonder, I would imagine that for international students, even beyond the simple matter of the convenience of not having to look for an apartment, the convenience of being able to just arrive in the US and have already arranged an apartment. I would imagine that looking for a private apartment as an international student, you probably have all kinds of trouble with documentation with guarantors. Part of the reason that I’ve never looked for a private apartment for myself in Japan the many times that I’ve gone there for research is because I don’t have a Japanese guarantor, and I don’t have a Japanese bank account, and I don’t have a Japanese phone number until after I have an address to give the phone company to say that I live in Japan and to get a phone number.

27:25 Emily: There’s credit scores as well. That’s another major hurdle for international students coming to the US. The US doesn’t recognize any credit that might have been established in other places.

27:35 Travis: So that’s a whole other conversation to be had about whether some kind of more consideration should be given to international students, especially international students with a family, with dependents rather than domestic students, perhaps. And then just to kind of throw it in there, at the East West center, you have the opposite situation where the East West center dorms are only for people who are on a fellowship or otherwise sort of officially affiliated with the East West center, which is this sort of Asia Pacific studies organization. And it’s about, I think it’s about 75%, my numbers might be wrong, I think it’s about 75% international students. You can only get in there if you’re on a particular kind of affiliation with this organization. If you’re a UH student who doesn’t have that affiliation, you don’t get to live in these dorms. And the dorms are primarily single rooms and double rooms. The single rooms are $400 a month, the last I checked. That was about 10 years ago, but extremely reasonable, especially for Honolulu. But if you’re in a family, you can’t live there. It’s actually kind of the opposite situation of trying to get into these subsidized apartments and family housing at other campuses. That’s a whole other complicated…they really want people to live in the community and interact with each other, on a day to day basis. But if you’re in a family, then you can’t. I think you’re absolutely right. These are the conversations that people are having. Is it fair to have these subsidized apartments only for people in certain situations, and especially if the the second spouse, the non grad student spouse is earning a proper full salary at whatever job it may be, then they absolutely can afford that apartment while other people can’t.

29:16 Emily: And in your experience, has there been any means testing. Have you been asked what your income is when you apply for housing?

29:23 Travis: I don’t recall whether or not I’ve been asked, but I’m not aware of…I mean, I don’t know what goes on in the back rooms, but I’m not aware of that being a policy. I’m not aware of them giving preference to people who don’t have the second income or anything like that. I definitely know people who live in family housing who have a second income, people who don’t have a second income, international students, non international students.

29:54 Emily: It’s just interesting, because again, when we’re comparing with private landlords, how much you make is a very important question for them to ask, to make sure that you can afford the apartment. But of course, there’s no case where they’re going to say, Oh, you make too much, of course we can’t live here. Make however much you want. It’s fine. But it goes again, back to the question of what is the purpose of university housing, and if it is subsidized, and if it is one of their objectives to help students and students’ families who have less means to be renting off campus or whatever, then it might make sense to ask about that. But again, that’s another example of maybe some overstepping that could be going on. So this is a very complicated issue, obviously.

The Ideal University Housing System

30:29 Emily: I’m wondering for you, Travis, if you were to design your ideal university housing system, maybe what would your goals be? And how would you try to achieve those goals?

30:42 Travis: It’s a really good question, and I tried to give it some thought. I don’t know, I have to admit as much as we all have gripes, and I certainly have gripes. At the same time, I’m not an expert administrator, all of the ins and outs of how it should be done, and I understand that people are trying to do what they can, but I think the key point is the purpose of university housing is not to make money for the university. The purpose of university housing is to provide an affordable place to live, for students, in light of the fact that we’re only making X amount and they know full well, that we’re only making X amount. And in light of the fact that in many of these communities, I guess it all depends on where you are at college, but for the places that I’ve lived, local housing, regular market housing is extremely expensive. Making it affordable, and then also making it reasonable for adults.

31:34 Travis: I think part of it is also whatever regulations you have — we didn’t really get into this too much — but whatever regulations you have for undergrad housing, keeping in mind, I mean they are legally adults, but you mind certain notions of trying to take care and keep control over the community in loco parentis, and all of that kind of stuff. Simply extending those policies to grad students isn’t the best way, and acknowledging that as grad students, we want to have a full apartment to ourselves, or at least have the option. We want to redecorate our places. We want to be able to have parking. We want to be able to have pets. We want to be able to come and go over the summer or for a whole year and still retain our apartment. Or if we can’t retain our apartment, then work with us as adults, I think is sort of the key point.

32:13 Travis: And again, just working with people in a way that works with us and not against us. I understand there’s a much more complicated conversation about bureaucracy in general, in terms of, if you give people exceptions, then who are you not giving exceptions to? And how is that fair? And what’s the purpose of policies if you’re not going to enforce them and all these kinds of things. Saying you can’t have overnight guests unless officially of your relationship. And then what happens when you have a girlfriend or even just a friend coming? I pay for this apartment, I should be allowed to have people stay. Just various things like that. I think the key point is just making it affordable, making it a place where real adults can live and making it friendly and workable. Making it a place where people are working with you and not against you. It’s kind of the three points I would make.

33:04 Emily: I’m really glad to have your perspective as someone who’s lived in multiple different university-affiliated housing situations like what’s worked well, what have you, what positive things have you seen about it, maybe what things can be changed. It seems to me that one of the main points that you’re making is just that the administration needs to listen to the students, and as you were just saying, treat them like adults. It seems like that at least happened in your experience at UCSB, when the union or the GSA or whichever it was, was heard and actually got that rent lowered, which is an amazing victory. I just really appreciate your perspective on those issues.

Best Financial Advice for Early Career PhDs

33:41 Emily: As we finish up, would you please share with us what your best financial advice is for another early career PhD?

33:48 Travis: Yeah, I think as someone who’s just finished, I’m not sure what kind of advice I can give for other people who have just finished, but for people who are still in the PhD, I think my main advice would just be to keep your eyes out for whatever you can apply to, and kind of be aware of the fellowships and other kinds of resources that are available for you. You can’t spend hours and hours and hours applying to every single thing and investigating every single thing, but be aware of what’s available to you and take advantage of it. If your department offers whether explicitly or sort of implicitly offers that everybody gets summer funding, at least once or offers that everyone gets at least one quarter or two quarters off before the end, make sure you take advantage of that, make sure you do that. Don’t miss the deadlines. Just be aware of what’s out there and be aware of what you’re eligible for, not just in your department, but also in grad div or in School of Humanities or in whatever other things it might be coming from.

34:49 Travis: The other thing I would say is push and advocate and make the professors, make the faculty and administration aware that certain kinds of things are not funded. This is going into a whole other conversation, and I’ll just take one more minute, but for example, at Santa Barbara, I was fortunate to have a certain amount of funding available possible, potential to me for conference travel and for research travel. And that seems very logical from a top down kind of, okay, we’re giving money for conference, traveling for research travel.

35:22 Travis: Well, what about language study and what about things that are not strictly language study? Because I’ve gotten the funding in the past to study, there’s a thing called FLAS, the Foreign Language Area Studies scholarship, which allows you to study modern languages that the government considers to be of strategic value. But then when they find out that you’re studying classical Japanese or classical Chinese, or you’re not really in a language program per se, but you’re doing paleography or how to handle documents or a workshop on how to handle documents. Well, now it’s not language study, so now there’s no funding for that. You need to make people aware that these programs exist and they cost money and you need to have funding for it from some avenue. FLAS won’t pay for it and if conference travel and research travel won’t cover it, what can the department do? What can grad div do to create something that will cover book history workshops, paleography courses, archeology field, school, and so forth.

36:18 Emily: Yeah, it sounds like, again, you’re bringing up the points of being flexible with people. If everyone’s on the same page about what the goals are, then let’s be flexible about the way that we get there. Or just not letting people fall through the cracks. If you create big planks and boards, let’s make sure there aren’t gaps that people are actually falling into between those boards. Thank you so much for adding that Travis, and thank you so much for giving this interview.

36:45 Travis: Thanks so much for having me. This was really wonderful. I really appreciate it.

Outtro

36:48 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. 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 Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.