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The Financial and Career Opportunities Available to National Science Foundation Graduate Research Fellows

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In this episode, Emily interviews Kelsey Wood, a National Science Foundation (NSF) Graduate Research Fellow who now teaches others how to write competitive applications for the Graduate Research Fellowship Program (GRFP). They discuss the decisions that new fellows have to make regarding when to start receiving the funding and the internship opportunities available. Kelsey also issues a warning regarding paying quarterly estimated tax and gives great insights from her course for GRFP applicants. At the end of the interview, Kelsey shares her best financial advice for current graduate students and postdocs.

Links Mentioned in This Episode:

Further Reading:

NSF GRFP finances

Teaser

00:00 Kelsey: I think that a lot of times the graduate groups or the administration will attempt to get as much free labor out of graduate students as they can, but there is actually a lot of money there to pay people, so I think a lot of times grad students need to be proactive in asking for money for things like leading workshops or teaching classes, TA-ing, et cetera.

Introduction

00:26 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season five, episode 16, and today my guest is Kelsey Wood, a graduate student at UC Davis and National Science Foundation Graduate Research Fellow. We discuss the decisions that new NSF fellows have to make regarding when to start receiving the funding and the internship opportunities available. Kelsey also issues a warning regarding paying quarterly estimated tax. Throughout the interview, she shares her insights into how to best manage your finances as a fellowship recipient. Kelsey now teaches others how to write competitive GRFP applications, and she details some excellent strategies from the online course she developed. Without further ado, here’s my interview with Kelsey Wood.

Will You Please Introduce Yourself Further?

01:15 Emily: I am so delighted to be joined on the podcast today by Kelsey Wood. She is currently a graduate student at UC Davis, and she is also a former NSF GRFP fellow. And she’s going to be talking to us about that program and also the advice that she gives people in her course regarding applying successfully for the application. So, Kelsey, I’m so glad to have you. Welcome! Will you please tell the audience a little bit about yourself?

01:39 Kelsey: Sure. Thanks for having me on. I am a PhD student about to graduate in integrated genetics and genomics at UC Davis and I currently am studying plant pathogen interactions. I got my bachelor’s in biology from Reed College where I studied animal behavior and then I happened to get a job in the biotechnology industry working on potato disease resistance. And I really liked my time in industry, but I found that I was frustrated that I couldn’t pursue my own independent research questions. So, I realized I needed to go to graduate school.

02:14 Kelsey: And so, I applied for the NSF GRFP during my first year. Mostly due to peer pressure from a senior grad student who was a GRFP fellow, and he actually gave a workshop on the fellowship where he basically convinced everyone to apply. And I’m glad I did because I actually got it. And then after I received the fellowship, I decided take over that workshop and also encourage other people to apply and give them tips on how they can actually get it. So, I’ve offered a variation of that workshop for the last five years, and I did an online version last year. I held some free webinars that were attended by over 200 people all across the U.S., and then I also offered an intensive workshop with additional webinars, one-on-one and personalized editing services. Participants said that was really helpful in preparing their applications. And actually, out of the 10 people who submitted in the workshop, three of them got it this year and one honorable mention. So, I’m really proud of them and happy that I kind of helped people to get it.

Kelsey’s NSF GFRP Workshop Updates

03:18 Emily: That’s incredible. Oh my gosh. I would have loved to participate in something like that when I was early on in graduate school. Tell people right up front where can they go to find more information about that course?

03:27 Kelsey: Right now, the best place to probably get updates on what I’m going to be offering it–and I’ll also be posting a lot of the materials–is my Twitter. It’s @klsywd (Kelsey Wood), but without any vowels. So, K L S Y W D.

03:42 Emily: So, it sounds like you were a fellow between your second and fourth years of graduate school. Is that right?

03:49 Kelsey: Let’s see. I started the fellowship–it would have been in June, 2014–the summer before my second year. Yeah.

Major Decision Points for NSF GRFP Recipients

03:58 Emily: Okay. And so, what are the decisions? Okay, so let’s say we’re speaking to one of the people who has just found out that they received the GRF. Amazing, congratulations! But they’re faced with a few decisions either right away or during the course of their tenure. So, can you talk through–kind of give them a little preview, what are those decisions that they need to make, and what are some things they should consider as they’re making them?

When To Start Receiving the Stipend

04:23 Kelsey: Sure. So, I mean the first one is when to start receiving the fellowship stipend. So, you’re technically a fellow for five years, but you’re only receiving the stipend for three of those years and then the other two years you’re on tenure–you’re either on tenure or on reserve. Anyways, you only get paid for three years and then the other two years you just you have additional benefits that you can receive from the fellowship, but you’re not paid any longer. And you can start that at any time. What you really want to consider is potentially what other funding sources you might be encountering during graduate school. For example, there are a number of fellowships that you can get after you’ve passed your qualifying exams, which usually happen second or third year. So, if you think you’re going to be applying and getting those fellowships, it can be really good just to start the GRFP right away.

Consider Timing (and Adequate Payment) for TAships

05:14 Kelsey: And then the other fellowship will take over once your GRFP funding runs out. Some really lucky people got multiple fellowships, actually, right at the beginning. Somebody I knew got the GRFP and the Ford fellowship this year, actually. So, they need to decide which ones, what order to get those because you can’t get them both at the same time. But that’s a pretty lucky problem to have. I would say that. And then the other thing is, some people have to do TAships in order to satisfy a degree requirement. And you can’t do a 50% TAship while you’re doing the GRFP. That’s not allowed. So, you might want to maybe get that out of the way first so you can pass your qualifying exams and have that TA under the thing. What I did is I actually TA-ed for free. But in retrospect, I don’t know if I would make that same decision again because it was a lot of work, and I don’t know. I’ve kind of changed my feelings on just doing things like volunteering and for free because there actually is–I think that a lot of times the graduate groups or the administration will attempt to get as much free labor out of graduate students as they can. But there is actually a lot of money there to pay people. So, I think a lot of times grad students need to be proactive in asking for money for things like leading workshops or teaching classes, TA-ing, et cetera. So, that’s what I found. I started asking for stipends for my workshop and I got them. I started asking for stipends for TA-ing grad level classes. They weren’t offering them before, and I started to get them. So, I think in retrospect I maybe would have tried to get paid for a TAship to meet my degree requirements and then taking the GRFP.

07:09 Emily: It is kind of strange that universities have different policies around who gets paid for doing what exactly, because TA-ing–sort of similar to your situation, but–in the department that I was in, in graduate school, we had what they called, a graduation requirement to TA for two semesters, and it was not tied to our stipend. So, we were all being paid in some manner, either research assistantship or on fellowship or something, but we just had to do this TA work on top of it during a couple of semesters. So, that was the way they structured it. It wasn’t tied to our income. But in other places, of course there are some people who are TAs and that’s their stipend and that’s their funding and that’s the source of it. But then there is even another option that I’ve heard of which is essentially sort of being hired as an adjunct, as a graduate student. So, it doesn’t have to do with your base stipend. That could still come from a fellowship or research assistantship or whatever else. But if you take on an additional class as a TA or even as the lead instructor, you could be paid like an adjunct would be paid. So, different places do things different ways.

Check with Your Advisor About Research Grant Cycles

08:11 Emily: But I think to your original point about deciding, “Okay, when do you want to be paid for these three years when you’re in those three years of having the GRF?” You said that you should think about, “Are you going to be applying for different kinds of fellowships post-quals or post-prelims? Are you going to need this TA thing?” You could potentially get it out of the way first and have your funding come from there, initially. I would also want to throw in there, maybe ask your advisor about research grants, and are they at the end of a grant cycle, the beginning of a grant cycle? Because that could also play into it. You don’t want to take the fellowship when your PI has tons of money and then, you know, three years later, maybe there is no funding there for you. So, that’s a potential risk too. So, it’s just kind of being open about what are all these financial factors within your department, within your group, that could play into this.

09:03 Kelsey: Yeah. And actually, that’s a really good point. Because for a lot of people, getting the GRFP actually influences what lab they can join because you’re coming in with your own funding. So, you might be able to join a lab that you wouldn’t have been able to join otherwise. And in that case, you’d probably want to start using your funding right away. And then, you know, you can essentially help your PI get other grants that will take over once the funding runs out. So, that’s a big benefit.

Are You Listed as a Dependent on Your Parents’ Tax Return?

09:33 Emily: I wanted to add one more point. It’s tax season right now. So, I’m thinking a lot about taxes. And so, this weird thing happens with fellowship funding when you’re under the age of 24. I don’t know how old you were when you first started, were you under 24?

09:48 Kelsey: No, I don’t think so.

09:49 Emily: Okay. Yeah. Because you had had at least one year of work experience. But if you’re starting when you’re 22 or 23, anytime that you have fellowship income in a year when you’re age 23 or younger, some weird stuff can happen with your tax return. Namely, your parents might be able to have more of a claim on you as a potential dependent on their tax return, which is not good for you if it turns out that way. And secondly, you might be hit with this weird high tax called the “Kiddie Tax.”

10:16 Emily: And so, I don’t want to go into all that right now, but if you go to my website, pfforphds.com/tax, there are articles there about both of these issues. But my point is just when you have fellowship income and you’re under the age of 24, sometimes it can have these weird effects of making you pay a lot more in tax than you would normally if you were over the age of 24. So, to me that’s just another factor that I want to throw in there of, “Hey, if you’re under the age of 24, maybe consider delaying a year until you actually turn 24, and then take the fellowship if your alternative is having a research assistantship instead, which is W2 income, which is treated somewhat differently tax-wise. So, more details about that if you want to talk with me about it or read about it more, but I’ll just throw that in there for those of you on the younger side.

25% TAships Possible During GRFP

11:00 Kelsey: That’s a really good point. Oh, and I actually thought of one more thing regarding TAships, which I think a lot of people don’t know–or I didn’t realize at first–is that it usually is possible to get a 25% TAship while getting the GRFP. So, that might be an option if that will satisfy your degree requirement. And the other benefit is that you actually get paid on top of the GRFP additional money for the 25% TAship, and that’s allowed within the GRFP rules. So, it’s just something to consider. I did that for one quarter, and it was really nice.

Financial and Career Opportunities for GRFP Recipients

11:34 Emily: Yeah, I love hearing all of these different ideas. Okay. So again, speaking with a new fellowship recipient, what are some of the financial and career opportunities that come along with receiving the fellowship?

11:46 Kelsey: Well, probably the biggest one is just the fact that the stipend is a lot higher than most standard stipends offered for grad students. And so, that makes a really big difference to be able to afford cost of living, which has really gone up in a lot of places, especially in California. I’m sure other places as well. And then another benefit for your career is that winning one fellowship usually leads to winning additional fellowships and awards. And I think one reason for this is that the reviewers look at your CV and they’re like impressed that you have the GRFP so they are more likely to give you these other awards. And then the other reason is that I think that just the practice of writing the fellowship in grants, you become better and better at it. And so you’re able to write more convincing applications.

12:35 Kelsey: So, for me personally, after I got the GRFP, I won research funds from UC Davis. I got like three or four travel awards for conferences. I got the USDA predoctoral fellowship. And then I also applied for a Dean’s award for mentorship and got that. And I’m pretty sure the GRFP helped me a lot in that. And also writing these and teaching classes on fellowship writing probably helped me also become a lot more convincing. So, that’s a huge benefit for your career.

Get the Snowball Rolling, Start Early

13:05 Emily: I’ll actually add in there that I think it makes a ton of sense, like what you’re doing with your course, or the students in your course, it makes a ton of sense to focus and put so much effort into these really early funding applications like before you enter graduate school in your first, maybe second year of graduate school. You don’t have to say, “Okay, this is going to be my bar for every application I’ll ever do.” But as you said, if you can get that snowball rolling of receiving awards right away in the start, it does make the rest of it easier and is very impressive. It’s a wonderful fellowship to win. So, I’ll just say, go take Kelsey’s course. Or somebody else’s. Just get these resources and make sure that you are putting as much effort as you possibly can into these early applications. And like you said, the skill of writing the application itself, that is something that carries over into the future. So, yeah, when you have your time before you’re deep into your research and you’re still doing your classes or whatever, make time for this. Make it almost like a course in your schedule in that semester that you’re applying. Because it really is worthwhile to put in the effort.

14:08 Kelsey: Yeah. And a lot of people don’t want to apply, for example, because they just don’t think they’re going to get it, for various reasons. And I encourage them just to do it anyways as an exercise. And usually by the end of it, I always ask my students during the course evaluation if they thought that the class was worth it, even if they don’t get the fellowship. And like 95% of them say yes, just because it’s the skill, it’s writing about your research. A lot of times if you’re actually writing about your real research, you can use that GRFP application in other grants or your qualifying exams, which is really useful. So yeah, definitely a good skill to get and to get early. And then if you get it, like you said, it’s just a snowball effect.

Internship and International Travel Opportunities

14:54 Kelsey: I was going to mention just the internship and the international travel opportunities that GRFP fellows are able to apply for. So, I didn’t actually apply to either of these, but I have known people who have done the Graduate Research Opportunities Worldwide, the GROW program, and that just allows you to do like three to six months research abroad. You identify a host in another country and then you apply for it. And I heard it has around like a 50% acceptance rate, and they fully fund your travel and living expenses abroad. So, it’s just a nice way to kind of get some international experience, maybe learn a new technique, or use some instrumentation that’s not available at your home lab. And it’s just another fellowship you can add to your CV.

15:49 Emily: I’m also thinking that that’s just an incredible thing to be able to talk about in future job interviews, or whatever. Just having a different kind of experience that broke up graduate school a little bit. Expanding your network, you know, seeing things from another perspective. It’s in the name, right? It’s a real growth opportunity.

Even Without the GRFP, Talk to Your PI About Collaborations

16:08 Kelsey: And I mean, something to consider too is even if you don’t have the GRFP, if your PI does have enough funding, this is something you could probably set up on your own basically doing research in a collaborator’s lab internationally or in the U.S. So, I think it’s something to consider just to diversify the experience that you get and you can talk to your PI about it and it might be something they go for.

16:34 Emily: Yeah. I know actually one of my labmates while I was in graduate school did the Whitaker Fellowship. I don’t know how subject matter-specific that is, but he was able to spend nine months in East Asia. And yeah, I think it was a great experience.

16:48 Kelsey: Yeah. The NSF has another one too that I think is open to all, not just GRFP fellows, that’s just a travel abroad or research abroad fellowship. There are other ones out there too. So, it’s definitely something to look out for and apply for.

17:03 Emily: Okay. So, that was the GROW fellowship, but there’s another internship program, right?

17:07 Kelsey: Yeah. So, there’s the GRIP program. So, it’s the Graduate Research Internship Program, and that one you do research at a federal agency. I don’t know all the ones, but I know like you can do research in the Smithsonian for example, any of the agencies, basically the governmental agencies.

17:28 Emily: That also sounds like an incredible career opportunity.

17:32 Kelsey: Especially if you want to go into government research. You know, I think that nowadays more and more graduate students are realizing that the academic path of being a professor–there are so few opportunities for that and so many graduate students trying to get those, that a lot of people are considering alternative career paths like industry or government jobs. I had a lot of people who took my class who really wanted their end goal to be to work for a governmental agency and do research in that respect. And actually the NSF really encourages that for GRP applicants. So, I tell people, if that’s their career goal, to write about that in their application.

Timing of Internship Programs During Fellowship

18:16 Emily: Just to add on to that, I think having outside work experience before you actually finish your PhD is incredible for finding whatever your next job is. Even if you decide to stay within academia. Again, it gives you multiple perspectives, broader network. But a question I have about the internship programs, is that something that you have to do during your funded years or is that something you can still do on the remaining two years?

18:39 Kelsey: Yeah, that’s a good question. So, both the international program–the GROW program–and the internship program can be done while you’re on reserve. So, while you’re not receiving the stipend. So, it has to be done within the five-year period of when you first start the fellowship. But yeah, that’s really one of the benefits. And I think the GROW is really something you’d probably want to do towards the end of your graduate career–probably both programs–because one, it’s additional funding? So, maybe your GRFP funding has run out and now you can get some more funding for your travel and living expenses.

Design a Custom Internship

19:16 Kelsey: And then the other thing is that you really are probably better able to identify a lab or a governmental agency that would be a right fit for your research at that point. And actually something else regarding internships is, you know, there was a program at UC Davis that’s like the biotechnology program. It’s like a degree, an “emphasis,” and they require that you do an internship as part of the emphasis. But one thing I realized is, even if you’re not in a program like that or even if you’re not a GRFP fellow, you can a lot of times arrange an internship in industry towards the end of your graduate career. Potentially, the company will fund you to do that, too. And it can be a really good chance to explore these career opportunities.

20:07 Kelsey: A lot of times, if you end up doing a good job, the company will be really excited to hire you and it kind of lets you trial industry or trial a company and maybe contribute something else to your research, too. So, I just have realized that a lot of times you can kind of design your own programs. Obviously, you want your advisor to be on board with this, but a lot of times, especially if you can get funding from the company, then they’re going to be very happy about that and they also want to see you grow in your career. So, I think that’s something that people should consider. Even if you’re not a fellow or even if you don’t have an official program, you can kind of craft your own internships during graduate school.

20:51 Emily: Yeah, I totally agree. I think it’s one of the most powerful things you can do for your career, prior to finishing your PhD, while you know you have something to go back to after the summer ends, or whatever. I actually did a science policy fellowship that was three months, the Christine Mirzayan policy fellowship. It’s at the National Academies. And I did it after I finished my PhD. I applied basically around the same time that I was defending, but it’s open to current graduate students as well. In retrospect, sort of like you, I wish I had done it while I was still in my program and I think it would have informed some of the decisions that I made as I was finishing up. So, internships, great for everyone. I know not everyone thinks that internships are for them. I’m from an engineering field, so it’s sort of more normal to think about doing an internship. And of course in computer science or similar fields like that. But I think it’s expanding and it should expand more to other disciplines where it hasn’t been a traditional part of the PhD path.

Commercial

21:50 Emily: Hey social distancers, Emily here. I hope you’re doing okay. It took a few weeks, but I think I have my bearings about me in my new normal. There is a lot of uncertainty and fear right now about our public and personal health and our economy. I would like to help you feel more secure in your personal finances and plan and prepare for whatever financial future may come. You can schedule a free 15-minute call with me at pfforphds.com/coaching to determine if financial coaching with me is right for you at this time. I hope you will reach out, if only to speak with someone new for a few minutes. Take care. Now, back to our interview.

Financial Advice for Fellowship Recipients

22:36 Emily: So, let’s broaden this line of questioning a little bit. Not just for people who have just received the NSF GRFP, but people who have received it in previous years who are still receiving that higher stipend. And maybe other people who’ve received outside fellowships that also have some stipend augmentation based on that. What’s your financial advice for people who have received one of these lucrative outside fellowships?

File Estimated Quarterly Taxes (NOT Yearly)

23:00 Kelsey: Yeah, so I think the biggest pieces of advice I have are regarding taxes and savings. And so, the thing you should do immediately is start to file your taxes quarterly instead of yearly. And you can estimate how much taxes you’re going to have to pay quarterly so you can start to save up. My personal sob story is that I did not do this the first year and I ended up filing my taxes and I owed about $5,000, which I didn’t have saved up. So, I ended up having to do a payment plan with the IRS which charges interest, actually quite a bit of interest. So, I ended up having to pay way more in taxes than I would have if I had just started filing quarterly. So, do that right away. I know taxes are not fun, but it’s actually not too hard to calculate if you’re only getting the stipend income, and that’s way better than having to owe it.

23:56 Emily: Actually, let me pause there because this is one of my big areas, right? It’s tax for fellowship recipients. So, was that $5,000 just the IRS or was that split between California and federal?

24:08 Kelsey: Oh, yeah, it was California and federal, split.

24:10 Emily: Okay. That’s within the more reasonable realm. Okay. Yeah, definitely. I mean I’ve actually had, I think, two other people interviewed on the podcast who have also set up payment plans with the IRS based on this exact same situation. So, this is not at all uncommon, and it’s one of my big areas of focus is to get this information in front of new fellowship recipients. No longer is income tax–this is the case at almost all universities–no longer is income tax going to be automatically taken out of your paychecks. It’s something you now have to take responsibility for, like you were just saying.

Personal Finance for PhDs Tax Center

24:43 Emily: So, most likely you are going to be required to pay quarterly estimated tax. And I have a ton of materials about this. Again, if you go to pfforphds.com/tax there’s an article there. And in particular, I have actually a workshop for people in just this exact situation. If you go to pfforphds.com/qetax for quarterly estimated tax, it will forward you to my most recent workshop. And probably similar to yours, Kelsey, I have prerecorded videos for that, and I also do live Q&A calls to help people with questions as they come up through tax season. So, just because of when we’re recording this though, I want to add in that part of the response to the coronavirus crisis actually has been to delay the first, like the Q1 payment for 2020. So, just like with your annual tax return, right now, this year in 2020, it’s no longer April 15th, but rather it’s July 15th.

25:34 Emily: So, for those fellows out there, you have a little bit extra time to figure out what’s going on in 2020 regarding your quarterly estimated tax and making those payments. So, the first payment as of this recording is actually due [July] 15th, which is the quarter two payment. But yeah, totally a common story, like you were just saying, Kelsey, is just to not realize the change that had gone on with your income tax and catching up with it when you actually file your annual return and realizing, “Gosh, now I have all this money that I owe to the IRS.” So, how did that payment plan go for you? Like was the increase in stipend more manageable, or what were your tips around saving I guess?

Start Saving Immediately

26:11 Kelsey: Yeah, so I think I’m still paying off some of my taxes monthly for that. So, anyway, just do it ahead of time and you won’t have to worry about it. And then in terms of saving, the other thing is that, because the GRFP stipend is a lot higher than the normal grad student stipend, you can kind of get used to a certain style of living. Like you’re able to go out to eat more or buy more expensive groceries. And then as soon as the stipend stops, it can be kind of a shock. So, what I’d advise doing is actually just start saving almost immediately. And I use automatic monthly withdrawals to a mutual fund. And the benefit there is I don’t see the money. Like it’s just automatic.

27:02 Kelsey: The savings are out of sight, out of mind. And then when I actually really need it I can go and be like, “Okay, here’s how much I have.” And I’ve done that a few times. I used that to fund a vacation to Europe. And so I advise just like setting something up right away and make sure you can’t see the money. Save up for when the GRFP ends, and also just because you have all this extra money that you wouldn’t be getting otherwise, so you might as well save part of it and not just spend it all.

27:33 Emily: Yeah, I definitely echo what you’re saying. And I think especially where you’re living, it’s a high cost of living area. It’s probably already challenging to live just on that GRFP stipend and it’s certainly less than we’d be making if you were having a regular job. But, think about your peers who are somehow probably managing to survive, hopefully without debt, on that lower stipend level and see if you can maybe keep your fixed expenses, like your housing, your transportation, at that lower level, so that if your income does drop after the fellowship ends, you don’t have to move or you don’t have to sell your car. Or you can adjust the groceries and adjust the restaurant spending. And it’s much easier and more palatable than having to go through those more major upheavals. So, I totally agree with what you’re saying.

Stipend Negotiations and Bonuses for Fellowship Recipients

28:19 Emily: So, something I know that some fellowship recipients do–and it sounds like maybe you didn’t or maybe it wasn’t possible for you–is that once they know that they’re receiving the fellowship, they actually negotiate to have their stipend stay at that fellowship level. Even after it ends, instead of going back down to the baseline level. Or, alternatively, sometimes programs give out one-time bonuses to fellowship winners. Have you heard about that or have any experience in that area?

28:47 Kelsey: It’s something I thought about asking my PI, because after the fellowship ended, I was struggling a little bit, financially. I ended up doing the 25% TAship to recover that income. But I do think that, I mean it’s really going to depend on your PI and their sources of funding, but it is something that is possible, potentially.

29:15 Emily: Yeah. I think it’s kind of a “no harm in asking” situation. And actually, if you happen to receive this fellowship when you’re not yet committed to a program, so prior to starting your first year of graduate school, that is something I would take to every program that you’re heavily, heavily considering, saying, “Okay, I got this fellowship. Can you augment, can you extend the guarantee?” Like what more negotiation room is there now that you’re bringing in all this money for them, right?

29:46 Kelsey: I mean, exactly. You’re bringing in just about a hundred thousand in your stipend dollars alone, not to mention tuition and fees. So, it is pretty lucrative. It’s lucrative for a program and a lab to want to accept you because you’re coming in with all this money and you just asking like, “Oh hey, can I get an extra $5,000 a year?” When you’re bringing in $100,000, it’s really still a pretty good deal for them. So, I definitely encourage people to do it. I’d love to hear if anyone is successful at this.

Details on Kelsey’s NSF GRFP Course

30:17 Emily: Yeah, I always want to hear negotiation stories. Absolutely. Email or tweet me those. So, let’s hear more about your course and the content that you create there. You said the best place to find out more about that is your Twitter, could you repeat your handle?

30:34 Kelsey: Sure. It’s @ K L S Y W D (@klsywd). So, it’s my name without any vowels. It’s pronounced Kelsey Wood.

30:41 Emily: So, tell us a little bit more about the structure of the course. I know you’ve mentioned this a little bit upfront, but last year for example, you ran it between what month and what month and you know, what goes on in that time period?

30:53 Kelsey: Yeah, so one of my biggest pieces of advice for the GRFP is to start it early. So, it’s due in like October now. And if you’re on the quarter system, like UC Davis, classes start at the end of September. So, it’s basically due during the first month of classes and it’s also your first month of grad school. So, you’re either just starting in a lab or doing rotations, and that month is just crazy. So, if you don’t start the fellowship early, it’s going to be really hard to do it all and do it well. So, my course actually starts in August, so then you have kind of a full month to start to think about stuff, outline it.

31:35 Kelsey: And then you have September to really refine it before classes start. And then we do all the final drafting and editing in October. So yeah, my course is a three-month thing. And that’s one of the benefits of doing it online. I wasn’t able to start in August at UC Davis because not everyone had come to Davis yet because it was still summer. So, doing it online, I was able to get people just at least starting to think about it and getting ideas rolling. And so, what I do is I had four different webinars on different topics. So, I covered the two NSF criteria, which are intellectual merit and broader impacts. Basically like a full 45-minute webinar on both of those topics. And I think that’s really important because especially the broader impacts one is really confusing to a lot of people.

Focus on Broader Impacts, Know Your Audience

32:27 Kelsey: It’s something that you pretty much probably have never heard of until the NSF fellowship. And it’s a really important part of that fellowship, too. So, I really emphasize the importance of that. And also, it’s really important that you get broader impacts experience before you apply. And if you’re starting the application early or even people who are listening to this, thinking about applying for next year, should basically right now find some activity that you can do that you can write about in your broader impacts section. So, volunteering, outreach, teaching, et cetera. Because if you don’t have any experience, you’re not going to get it. And then I also do a webinar on writing tips. The biggest one that I’ve learned in all my years of writing is probably just like really knowing your audience and writing for them.

33:21 Kelsey: So, you really want to just imagine who’s reading it and who they want to fund, and you really want to just be that person that they want to fund. I help people do that in their essays. Something else that’s really interesting, and it actually might be a regional difference, is in the way that you want to sell yourself in these essays. So, a lot of people are really understated or humble, and I’m like, “No, you have got to really come off like a rock star and show off all the awesome things that you’ve done.” And apparently, somebody told me that that’s actually frowned upon in the UK or in Europe to do that in your grants.

34:10 Kelsey: But in the U.S., at least, it seems to be more popular or more of a winning technique. And so, the other part of the course is that I read people’s essays and give them a ton of tips and just help them write it and rewrite it to just have a better chance of getting the fellowship. And I also set up peer editing groups, too. And I do think that that’s something you want to do, if you take a class or not. Just find somebody who, especially who’s experienced with the NSF, and have them read your proposal and give you feedback. So, for example, when I applied, I was really lucky to have a former NSF reviewer read my application and give me feedback. And he pretty much destroyed my initial draft. It was red everywhere and he’s like, “Get to the point. Be more concise. This is too vague.” And so, I kind of have internalized his feedback and I use that now when I’m editing people’s essays.

35:13 Emily: Yeah, that sounds incredible. Thanks so much for telling us about the course. And were there any other tips you wanted to add in? I know you just gave several already, but any others?

35:23 Kelsey: I guess the last one would also just be to read a lot of example essays, too, for inspiration. And there are a lot out there. I have my own personal collection. I actually have quite a few in my personal collection that I share with people in the course. And then the ones that are okay to share publicly, I’ll probably be posting on my Twitter or on my website once I get that up.

Best Financial Advice for Early-Career PhDs

35:46 Emily: Yeah, that sounds great. Well, Kelsey, thank you so much for joining me for the interview today. And final question that I ask of all my guests is what is your best financial advice for another early-career PhD?

35:59 Kelsey: Well, I think the number one is to apply for fellowships and you know, cast a wide net and apply for anything that you’re eligible for, pretty much. I think it’s totally worth it. I have a quote that’s from that previous grad student who helped with the NSF workshop, which is, “You win 0% of the fellowships you don’t apply for.” So, I think it’s worth it. You can do it. And I guess the other thing is that I think it is important to consider the cost of living and the stipend amount when you are choosing a graduate school. I don’t know. This wasn’t really made apparent to me. And you know, you’re just like, “Oh no, you just choose the best school or the best lab.” But there is kind of a range in stipends across the U.S. and cost of living. So, I think it’s something to really consider because your finances are a part of your happiness in grad school. So, apply for fellowships, and consider that.

36:58 Emily: Totally, totally concur. Absolutely. Well, Kelsey, thank you so much for joining me today and telling us more about these decisions that come up for GRFP recipients and your own experience and about this fabulous course. Thank you.

37:10 Kelsey: Yeah. Thank you.

Outtro

37:12 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.

How a Book Inspired This PhD’s Financial Turnaround

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In this episode, Emily interviews Dr. Amanda, a tenure-track professor at a small college in the midwest. At the start graduate school, Amanda was disengaged from her finances and considered grad school to be a financial continuation of undergrad. She had resigned herself to being a “poor graduate student” until she read Ramit Sethi’s book, I Will Teach You to Be Rich. Slowly, the financial messages in that book replaced the limiting beliefs she had absorbed from academia. Amanda took small steps to improve her finances, starting with her bank accounts and opening a Roth IRA, and over time her strides with her finances became bigger and bigger. At the end of the episode, Amanda summarizes the financial success she is now experiences and connects it to the hard and slow work she did on her finances during grad school and her postdoc.

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Links Mentioned

Teaser

00:00 Amanda: I was initially a little bit resistant and I had the, “Oh, I’m a poor grad student” identity, I definitely did. I thought of myself as a poor graduate student and thought, well, all grad students are poor, that’s what it’s supposed to be, and I hadn’t challenged that at all at that point.

Introduction

00:19 Emily: Welcome to the Personal Finance for PhDs podcast, higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season five, episode 15. And today, my guest is Dr. Amanda, a tenure track professor at a small college in the Midwest. When she started graduate school, Amanda was disengaged from her finances. She had resigned herself to being a poor graduate student, until she encountered Ramit Sethi’s book, I Will Teach You to Be Rich. Slowly, the financial messages in that book replaced the limiting beliefs she had absorbed from academia. Amanda took small steps to improve her finances starting with her bank accounts and over time, her strides with her finances became bigger and bigger. At the end of the episode, we get a glimpse at how the hard and slow work she did on her finances during grad school and her postdoc is now paying off in spades. Without further ado, here’s my interview with Dr. Amanda.

Will You Please Introduce Yourself Further?

01:16 Emily: I’m so glad to have Dr. Amanda joining me on the podcast again today. She was first on in season one, episode 11 talking about geographic arbitrage, and her career transition from her postdoc into her academic job. And anyway, if you didn’t listen to that episode, and you have time right now, go back and listen to it. But today we’re going to pick up and talk about something that she briefly mentioned in that first interview that I thought was fascinating enough that I wanted a whole interview devoted to it, which is her financial turnaround story. We would definitely say that Dr. Amanda is financially successful today, but she’s not always identify that way, so we’re gonna explore that story in a lot more depth. Amanda, thank you so much for coming back on the podcast and being willing to share this aspect of your story.

02:01 Amanda: Thanks for having me.

02:02 Emily: So would you please tell us a little bit more about yourself, maybe for those of you who didn’t listen to the first episode?

02:08 Amanda: Sure. I am an assistant professor in a college of education. And I work primarily with doctoral level students. I teach courses on research, writing, qualitative methods. And then I also teach a course on information and information literacy and innovation. My background is in digital media and learning, and specifically video games and learning. A lot of my research has been around the digital games industry, and then how people learn from playing video games, both games designed to be educational, but also commercial games and game communities.

Life Before the Financial Turnaround

02:45 Emily: Great. And tell us briefly about where you went to graduate school where you did your postdoc and about your family, how that formed along the way.

02:53 Amanda: Sure. I guess the first thing is, after I graduated from college, I moved out to the San Francisco Bay area for a short time, and worked as an editor in the games industry. And that’s how I developed an interest in video games and doing work on games. But I was always a school person and I had intended to go back to school to attend graduate school. And so I decided at that time that I wanted to do something with games. When I was looking for graduate programs, really my criteria was I want to work with people who are doing interesting things with video games. I felt like there was a lot of emphasis on games research, on games and obesity, games and violence, really negative things. And I thought, you know, there are a lot of great things happening in this industry. And I felt like there was a lot of potential for games to be used for a more positive impact. And so my search for graduate programs was really just who’s doing stuff around games in their potential.

Amanda: I found a group of people at the University of Wisconsin, Madison called the games learning society group, and they were a group of scholars doing really fascinating work from games and learning perspective. These were people looking at games like Civilization and World of Warcraft and how are students learning about history from a systemic point of view from Civilization, and how are high school boys, who are really disengaged with school, acquiring literacy skills and critical thinking skills and math skills from playing World of Warcraft. That was graduate school. And then following, that I did a postdoc at USC, the University of Southern California in Los Angeles, where I worked on a project where we were looking at using a game to teach first generation, low-income students about the process of applying for college.

04:43 Emily: Wow, that is so fascinating. And I think along the way you met your husband, is that right?

04:48 Amanda: I did. So I met my husband Dennis in graduate school. His advisor was actually married to my advisor.

04:55 Emily: Oh, wow. Incestuous relationship.

04:58 Amanda: Yeah, and I was I think resistant to dating him for a little while because of that, but he just turned out to be too awesome of a person, and so we started dating in grad school. Then we ended up getting married during the postdoc, and he went out to Los Angeles with me.

05:14 Emily: Was he doing a postdoc during that time as well? Or did he have a different type of job?

05:16 Amanda: He was working for the University. I’m blanking on his job title. But he was working with the USC games group, teaching courses, and then also helping manage their tech program. So he was working more with students who are learning to be game developers. And then I was in the College of Education, doing work – it was a large grant with the US Department of Education is what I was working on.

05:38 Emily: Okay, yeah. And going back to that first interview, the transition out of your postdoc, deciding where to apply for academic jobs, all that we covered in the previous interview. So if people are interested in your subsequent career path, they can go back and listen to that. But today we’re going to be talking about your financial journey during that whole time. Can you start with kind of the before, when you weren’t feeling so financially successful? What was your financial life like at that time and what were your financial attitudes?

06:11 Amanda: I think it wasn’t even that I wasn’t feeling financially successful. I wasn’t financially engaged. I had this narrative in my head, you know what, I’m good at school, as long as I do well in school, and I work hard, I will be successful and that is something that I worry about when I’m done with school. Later on, when I’m an adult, even though of course, if you get a PhD you end up spending a good amount of time in school as an adult. But I had this attitude that money was something that I would worry about later.

06:40 Emily: I’m curious how that actually plays in because you had work experience prior to starting your PhD. Is that the same attitude you had at that time? Or did it actually switch when you entered graduate school?

06:51 Amanda: Yeah, so I was working. I did work full time as an editor after my undergrad, and so I started paying off my student loans. I didn’t have a huge number of student loans, but I had taken out some loans, particularly I took two classes abroad when I was an undergrad, and so I had borrowed some money beyond scholarships for that. So I started making the payments, and I just sent in whatever the minimum expected payment amount was, and wasn’t really thinking about it. I mean, I did pretty well in that I was an English major, who at least managed to pay my rent and make a living in San Francisco. And this was right around the time of the beginning of the financial crisis, too, so there was a lot of anxiety and I knew a lot of people who are laid off at that time. I kind of felt like, “Oh, well, I have a job and I’m paying the rent and it’s San Francisco, so I must be doing just fine or even really great.” Things like investing for the long term or bigger goals weren’t really on my radar. I was just sort of paying the rent and paying the student loans.

07:57 Emily: Yeah, well, given the the time and the place that you were in I actually think you probably were doing very well. But in graduate school, you had that same attitude of just kind of going along and school is your primary focus. Is that right?

08:10 Amanda: Yeah. I hadn’t really had a good understanding of how graduate school was different from undergraduate, and so I borrowed money my first year of grad school. I took out whatever loans were offered as a part of the FAFSA, even though I had a project assistantship that year. And it wasn’t until I was kind of well into that first year that I understood, “Oh, you can work as a project assistant or research assistant, a teaching assistant and throughout grad school, I had each of those roles. And that can be enough to live on.” It’s not an exciting lifestyle, but I hadn’t realized at first that I didn’t need to be taking out those loans. So I took them out, and then I just didn’t do anything mindful with them. I probably did a little bit of travel, I ate out probably more than I needed to, and just that money sort of trickled through. I didn’t blow through it right away or anything like that, or need to take out additional loans, but I just didn’t understand the ways that you could avoid taking on additional debt in grad school. I sort of treated it like undergrad, just not knowing how that system worked until I was further along.

What Sparked the Financial Turnaround

09:16 Emily: I see. Yeah, that kind of makes sense, actually, because you were thinking about yourself as a student again. I guess that’s part of what this podcast is about, right? Making a wider awareness known that graduate school should be handled financially completely differently than you’ve handled your undergraduate degree. So when did this start to change? When did you start to have a greater degree of engagement or awareness around your finances?

09:40 Amanda: Sure. So my boyfriend at the time, now husband, had started reading, I Will Teach You to Be Rich, a book by Ramit Sethi. And if you’re not familiar with it, it’s really a book that just sort of walks you through how to set up a financial framework tohelp you be successful. He talks about how to use credit cards strategically how to set up the right sorts of bank accounts — checking savings, how to get started investing. He was reading that book and we just decided to read it together. We worked through it chapter by chapter. And from there, we started feeling really motivated by by that book, in particular.

10:23 Emily: This is really interesting to me, because this may be a better question for your husband, but the title of Ramit’s book, I Will Teach You to Be Rich — how did you even have the idea that that book was for you, because rich was nowhere near what was going on for you at that time?

10:40 Amanda: Not even close.

10:41 Emily: Maybe it was the teach you, like you were a learner, you wanted to be taught?

10:45 Amanda: I remember being really resistant to the book because I hated the title. I remember actually making fun of it or just saying, wow, it seems really cocky. And there were parts of the writing style where I felt like it was a little more aggressive than really appealed to me. But I also found I was just kind of drawn in by some of the message. I was initially a little bit resistant. And I had the, “Oh, I’m a poor grad student” identity I definitely did. I thought of myself as a poor graduate student and thought, “well, all grad students are poor. That’s what it’s supposed to be.” And I hadn’t challenged that at all at that point. But I do remember being actually turned off by the title of the book, so it’s funny that you mentioned that. But he was reading it and it was fun to be reading a book together too, and having that partner to talk things through and bounce ideas off of, and then we were able to hold each other accountable to actually doing something once we had read through the book.

11:42 Emily: Yeah. So did you encounter any other resistance to that identity as a poor graduate student? Was that pushing back at all against the messaging you’re receiving from the book?

Mindset Shift

11:55 Amanda: Yeah. I came up against some limiting beliefs at that point. As I was reading the book, I started having these feelings that “oh, well, I feel like I’m starting too late” or “as a graduate student, I don’t make enough money for financial planning to be worthwhile, that that’s still not something I can do.” I was simultaneously feeling like I had waited too long and like I still needed to wait longer. And that was really frustrating for me, because I have the type of personality where once I decide I want to do something, I want to act on it right now, or yesterday. It was frustrating to me to start learning about all these things, but not really feel like I had the means to put everything that I wanted to into place right away.

12:38 Emily: Yeah, I can imagine that a lot of people starting to learn about personal finance in graduate school, from whatever source, can feel that way. And it’s to your credit that you kept engaging with the material, instead of just totally turning off and say, “Oh, I have to pick up this book again in a few years later on.” I can definitely understand why hearing the message, while maybe this is not what he intended, but to you interpreting as I’m already starting too late when you were probably in what your mid-20s or so?

13:07 Amanda: Yeah.

13:09 Emily: Yeah, it’s not like objectively actually that late, but when you understand that people who did not go to graduate school route can be working on this right away when they finish their bachelor’s or even potentially earlier, that can be really frustrating. And like you said, you have all these great ideas once you start accepting the messages, but still, nothing has really changed in terms of your means and ability to work on them.But still, you were able to start making some changes. Once you started accepting the messages, what did you do right away even while you were still in graduate school?

Small Steps Make a Difference

13:47 Amanda: The book actually had really specific instructions about how to set up — I don’t think he frames it this way, but it’s essentially setting up a framework for yourself. One of the things that Sethi talks about is getting away from high-fee brick and mortar banks. A lot of banks charge to have a checking account if you don’t have a certain amount of money in it. And for most graduate graduate students, those minimums aren’t necessarily realistic. ATM fees are things that just can kind of bleed through. He had recommended switching to an online bank, and at the time, he had specifically, I think, recommended the Charles Schwab high yield investor checking. And so we both switched over our banks, because I think one of us was with Wells Fargo at the time, the other was with Bank of America. We were with exactly those banks that he was saying, “you know what, these are just set up to make you fail. They’re never going to do you any favors, get out.”

14:42 Emily: I don’t think anything has changed in the 10 or so years since that point. I would still say anyone who’s a Bank of America and Wells Fargo, get out of that relationship ASAP.

14:53 Amanda: Exactly. And one of the things that I love about the Charles Schwab account and that I think is really good for grad students, especially if you’re presenting research, is you get reimbursed ATM fees from anywhere in the world. Any ATM fees that you end up paying while you’re at a conference, it can even be an international conference where those can be really steep fees, at the end of the month, you will get a deposit in your checking account that reimburses you for all of those fees. That’s a feature that I just really like, and it’s not a lot of money, but over you know, several years that does start to add up.

15:25 Emily: And I think that on a graduate students stipend, those $3 or $5 here and there — it’s a higher percentage of the money that you’re working with as a graduate student that it would be for Ramit’s general audience. Like maybe that tip is “okay, it’s a good thing for them to do, but it doesn’t make that big of an impact,” but for graduate students, coming up at the end of month with 20 extra dollars or so like that can make a decent difference in your life, especially if your savings goal starts out at that $10, $20, $50 level. That can really help you meet that

15:58 Amanda: Yeah and it’s okay if that’s where you’re starting. Another thing that we did is we set up higher interest savings accounts. This was when interest rates were really low. Right now it’s realistic to maybe get, at the time of this recording anyway, 2% or a little over 2% on a savings account. At that time, I believe 1% was the absolute most you’re going to get, and so we weren’t talking a lot of money, but it was the same principle. I was with one of those banks where I think the interest was under 0.5%, so even with a lot of money, you’re not going to be earning anything. And so, you know, with the amount of money that I that we had in savings at that time, 1% was still only earning us, maybe pennies, but a few more pennies. But over time, as we started saving more and built up an emergency fund, those pennies became a latte every month. Now it looks a little bit more like a dinner out, maybe a modest dinner out, but it’s something. I think it’s important if you can aggregate those kinds of small gains across a bunch of areas, then they do start to make a difference. It’s changing your attitude from I don’t care that I’m bleeding money a little bit here and there on fees and interests that I could be earning. It’s saying, I’m taking control of this and I am mindful of where all of those dollars go and how I can now be in control of my financial situation.

17:26 Emily: Yeah, I can see how this example of changing where you bank can be a really impactful psychological when at the start of a financial journey, like what you’re talking about, because it’s not like you’ve set a savings goal and that you’re feeling discouraged about that, because you know, you only make X amount of money. It’s something that you do have complete control over and it doesn’t cost you any money. In fact, it’s going to be bringing money back into your account, a few dollars at a time. I can definitely see how this can be a wonderful first step to take when you’re starting to take in your financial life. You actually just mentioned a term I wonder, based on our last interview, if you also listen to the Choose FI podcast?

18:07 Amanda: Definitely. What was the term that I used?

18:08 Emily: You didn’t quite say it the way they did — aggregation of marginal gains. I’ll explain that for the audience. This Choose FI podcast is about the financial independence movement. We’ve had a pair of interviews on that with Gov Worker in season three, so if you want to learn more about the FIRE movement, financial independence and retire early, you can listen that one. We also touched on it in Amanda’s first interview. But anyway, on this Choose FI podcast, they have this term that they’ve come up with throughout their episodes, the aggregation of marginal gains, which is when you just make a tiny little change in your financial life, like the one that Amanda just mentioned, of stopping to pay ATM fees or stopping to pay fees just to hold a small balance in a checking or savings account. Those are very, very small things to do. But once you add up ten small things or hundred small things, that aggregation becomes really significant in your finances. This can be that step one for your aggregation of marginal gains. So yeah, thank you so much that example Amanda.

Commercial

19:09 Emily: Emily here for a brief interlude. Tax season is upon us and while no one loves this time of year, it’s particularly difficult for post-bac fellows, funded grad students, and postdoc fellows. Even professional tax preparers are often thrown for a loop by our unique tax situation. And don’t get me started on tax software. I provide tons of support at this time of year for PhD trainees preparing their tax returns. From free articles and videos, to paid at-your-own-pace workshops, to live seminars and webinars for universities and research institutes. The best place to go to check out all of this material is pfforphds.com/tax that’s P F F O R P H D dot com slash T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now back to the interview.

Long-Term Changes

20:17 Emily: Anything else structurally that you changed around your finances at that time when you first started following the I Will Teach You to Be Rich framework?

20:24 Amanda: One other account that I got set up, which I think in the long run is going to have been really important, is taking control of getting started with retirement savings. Because I had opened the checking account with Charles Schwab, which is an investment firm, I also then opened a Roth IRA and I forced myself to remember that I had had some 401k savings from that editorial job that I had had before, but I wasn’t paying any attention to it. I couldn’t have told you how much I had saved. I sort of knew where it was. I still to this day today do not know how I had had that money invested at that time. So what I did is I opened up an IRA and I rolled that 401k over. And it was not much money, because I had not been — at the time I had been in San Francisco, I was proud to be paying my rent, I wasn’t worried about saving for decades out in the future. But what I did is I got that money to where now I knew where it was and then I had it on my radar to when I had windfall money from contract work or side projects that I was doing, I was like, “You know what, I can start to invest in a Roth IRA.” And that’s something that, sure, it would have been great to start at 18, but I can start right now and that’s still going to be really good for me over time.

21:41 Emily: Yeah, that’s amazing. I love that you specifically tied any windfall money or any extra side hustle money or whatever it was, you then had a place to put it. There wasn’t the extra hurdle of, “Oh, I have an extra $50 in my account right now. What do I do with it? I’m not sure” and it ends up just floating away somewhere you don’t even know where it went. You had then a place to put it. This is another great first step to take, is just to open an account, just to set it up, as long as there’s no minimum, or you can meet the minimum required to open it, just so you have a place about money to go. I think it makes such a huge difference that once you have that goal in mind, okay, any money extra money that comes in, this is where it goes. And it’s really easy to follow through on that once you’ve gotten over the activation barrier of setting up setting up the account.

22:31 Amanda: And both my husband and I, throughout the years have split that money between Roth IRAs and then that’s how we made substantial payments to our student loans. Both of us have done side projects where we might get a couple thousand dollars here and there, for consulting work or book projects or other things. We were very mindful that 100% of that money, we would just take it and allocate it toward one of those two goals. We had actually paid off a good chunk of student loans while we were still in school or within that first year, just because we were really consistent about taking that extra money and putting all of it towards either long term investments or towards the student loans with the highest interest rates, because at that point, we had pooled together all of those loans and actually started tracking, “Okay, what are the interest rates on each of these and which do we need to tackle first?”

23:28 Emily: Is that something else you learned from I Will Teach You to Be Rich, how to handle the debt? Were you following that part of earnings plan as well?

23:37 Amanda: Yes. And we were big fans. It was it was obvious for us that we wanted to tackle highest interest rate first. I know some people will start with the smallest loans, just to get those those wins, that sort of dopamine hit from getting a loan paid off. But for us even if the higher interest rate loans were bigger, we started with those.

23:57 Emily: So you’re going through the remainder of your graduate degree and you had this system for living off of your stipend for your budget and then pushing forward your finances with the extra money that was coming in. That’s how you finished out graduate school. Was there anything you did to keep yourself on this path of sticking to your goals and sticking to this idea of financial improvement through that time?

24:20 Amanda: Yeah. I mentioned that I have an “I want to do things now, now, now” sort of personality. As we transitioned from graduate school to the postdoc phase, we were in a higher cost of living area, but we are making more money. I felt like “okay, now we can start to do some more things.” There are things that we couldn’t do as students that now we can really tackle. One of the things we did, we were in Los Angeles, which means we spent a good amount of time in traffic. We were fortunate enough that we both were working at USC, at the same university. That meant we had a good chunk of time every day in the car and so we started listening to podcasts at that time.

Amanda: Really there’s a handful of podcasts that we had started listening to. We started listening to Afford Anything, Paula Pant’s podcast. We listened to The Mad Fientist, which is another financial independence podcast. We started listening to some entrepreneurial and side hustle podcasts. We were really just looking for ideas for things we could do and those podcasts really kind of helped keep us looking for new improvements that we could make and kept us motivated too. Sometimes the smart thing is not to change your goals, but just keep doing what you’re doing, but for me, I needed that motivation. I needed to be constantly learning new things and assimilating new information, and then making little tweaks along the way.

25:55 Emily: Yeah, I think those are all fantastic suggestions. I also love listening to podcasts. Not surprising, having my own podcast, I love the medium and listen to a lot of different ones. All the ones that you mentioned are excellent. We’ve already mentioned Choose FI, that could be another one to throw into the mix for the listener. Of course mine has a completely different audience than many of these other ones. If you’re already a listener, please stick with it, because I think this will help motivate you as well. And then the other one that I really like for motivation is Dave Ramsey’s podcast/radio show. You probably have to be in a debt repayment phase of life to really appreciate it, but he is very motivational, I will say that. That’s another idea if you’re looking for motivational podcasts.

Life after a Financial Turnaround

Emily: Let’s take the last couple minutes here, Amanda, and just give us some highlights of what’s been going on. What did you hit? You eventually paid off your student loans. What would have been the financial highlights of years, finishing out your postdoc, and then since then?

26:54 Amanda: We were fortunate enough to really get our loans paid off within a couple years of us graduating. That was a huge win for us. But of course, I wanted to keep that momentum going. Every time we complete a goal, I say, “okay, but we can’t lose momentum. So what are we going to do next?” And so we, we paid off the student loans and then we were kind of in that transition to a lower cost of living area, which I covered in that other podcasts, so I won’t talk about it. But that was another thing we wanted to do. My family’s in the Midwest, I had wanted to get back to the Midwest. That was something that we felt was important before we started a family.

Amanda: We started transitioning from high cost of living area to a lower cost of living area and that made home-ownership really feasible for us. We saved up and at the end of the last year — we weren’t planning to buy a house until this year, but we just ended up finding the right house in the right neighborhood, and we we had enough saved where we were able to make that happen. That was one of the latest things we did and now we just had our first child. I had a daughter in June, and so we’re wanting to get a little bit put away for her college already, too. We’re working on that and we’re kind of hoping to make a purchase of a rental property in the next couple years, so that’s another goal that we’re working on right now.

28:14 Emily: I think this is an amazing example of how much your financial progress accelerates once you have the higher income to be working with, and you can’t expect that to necessarily happen if you haven’t laid the groundwork earlier. If you do have the attitude of, “well, I’m still in graduate school, I’m still in my postdoc, I just have to worry about money later,” It’s not necessarily all going to turn on a dime for you when your income changes. But for you, Amanda, because you guys have been working so diligently on these various goals with whatever means you had for all those years, once you had the higher incomes, it was just like, boom, you knew exactly what to do with it. You knew where to funnel your money. You could make really, really quick progress and that’s the same thing that happened my finances as well — laying the groundwork during graduate school, once the income changed, the winds just come faster and faster and faster, even though they were really slow and hard fought in the beginning years. I really appreciate hearing this more about that “after” aspect of your story, after the financial transformation.

29:17 Amanda: I’ve heard that the first $100,000 is the hardest, for net worth. And I do believe that that’s probably true. I don’t know how well documented that is, but that’s something that I’ve heard before on podcasts and on blogs. It does seem like, it doesn’t really matter if it’s $100,000 or whatever it is, the beginning is the hardest to make progress because your money isn’t making much money, you probably aren’t making much money, because otherwise you could be making things move a lot faster. But it is true that if you’re just consistent about it, and have a framework set up and have goals that you’re working towards, it does really feel like your ability to do things does you know pick up pace a little bit.

30:01 Emily: Yeah, I would agree with that. I can definitely attest in my own life, the first $100,000, which I documented, actually, it’s in season one, episode one, of how we got to our first $100,000 of net worth, that was a long journey and it’s the next iterations that have come a lot faster, obviously. Now, I didn’t start very much in debt, we had sort of a slightly negative net worth, not huge. But if you have like a very negative net worth, maybe you’re working on over $100,000 of student loan debt to pay off, there’s sort of two phases to that journey — there’s getting to zero and then there’s getting to the first $100,000, and your first $100,000 of positive net worth will be easier than when you’re working to get to zero. It’ll be easier than that, but it will not be totally as easy as someone who started at zero, if that makes sense, just because of the way compound interest work.

30:54 Amanda: When we first calculated our net worth it was negative. It wasn’t significantly negative. And I do agree that if you are one of those people who happens to have six figures of student loan debt, you’ve got a different process to go through. Hopefully a soon to be future income that will help you tackle that with pretty good pace. When we first calculated it, it was below zero, and that was frustrating. That was definitely something for us that didn’t feel good. But we knew that we couldn’t get to zero and above zero without just tackling it. We were fortunate enough, right around the time we got married, we calculated and we were at zero when we got married, and we had a very, very modest tiny family only wedding in order to keep it that way. We didn’t want the wedding to drag us further down, but I think when we got married we are right around zero. So that was kind of a neat place because symbolically It was like okay, you know, we’re married and now we have nowhere to go but up. Let’s get moving on that.

31:57 Emily: Yeah, that sounds amazing.

Final Words of Advice

32:00 Emily: Final question here, Amanda, which is one that I asked all of my guests. Now, we’ve already heard you say a lot of financial advice during this entire podcast, but it was mostly you following the advice of others. I’m curious now that you’ve been through this whole process, what you would turn around and say to another early career PhD, in terms of your best financial advice for that person?

32:18 Amanda: Sure. So something that we do, and I guess this applies for people who have a partner, something that my husband and I do is we do a monthly finance update. It’s really just a spreadsheet where we keep track of our debts, and our savings and investments. We just go through and update the balances of all of those accounts every month. It doesn’t really take long, but it’s something that I look forward to because it means that we have a conversation around money and it means that at least once a month, probably more often just because it’s become a hobby of mine. But you know, if it’s not something you’re that interested in scheduling a regular check in, like once a month, it’s just a good way to make sure that you’re communicating financially. And I feel like that’s been really good for us because it means we’re making sure we’re still on the same page about our goals. And if we are starting to have different ideas, then we have a conversation about Okay, do we want to prioritize this thing or this other thing first?

33:18 Emily: Yeah, that’s a fantastic suggestion. Again, for anyone who is in a relationship with another person, however you handle your finances, you know, joint separate or Yours, Mine and Ours. I think that monthly check in can serve any one of those models really well.

Emily: Amanda, it’s been an absolute delight to have you back on the podcast. I’m so glad that you made time for this. Congratulations on the new addition to your family, both the baby and the house and the potential next rental property, all of it. It sounds wonderful, and it was really great to catch up with you today.

33:47 Amanda: Yeah, you too. It was good to talk to you, Emily. And thanks for having me on.

Outtro

33:51 Emily: Listeners, thank you for joining me for this episode. PFforPphDs.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, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars covered 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 Lourdes Bobbio.

This PhD Student Buys Her Time Back by Living Car-Free

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In this episode, Emily interviews Alina Christenbury, a first-year PhD student in computer science at the University of Delaware. Alina doesn’t own a car, preferring to bicycle for her daily commute to her university and around town as much as possible. She relies on her roommate, sister, and other friends for occasional rides to the grocery store, bus stop, or hometown, but also uses ridesharing apps and dreams of owning a portable bicycle. While living car-free certainly helps keep Alina’s expenses down, the reasons for and benefits of her commitment to a cycling lifestyle go far beyond money. This is a great episode for anyone interested in living car-free.

Links Mentioned in this Episode

grad student car-free

Teaser

00:00 Alina: I think, financially, it’s generally a really good idea to have your priorities figured out. Like I’ve decided personally for me right now that cars are not important at all. And that lets me focus on things that are more important and dedicate my time and energy and resources to the ones that do matter.

Intro

00:25 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 five, episode 14, and today my guest is Alina Christenbury, a first-year PhD student in computer science at the University of Delaware. Alina is committed to cycling and does not own a car, which frees up a great amount of her income and time to be used for other purposes. We discuss how the location of your home and your city’s infrastructure can support or not support a cycling lifestyle as well as how Alina handles transporting groceries and traveling outside of her city. At the end of the episode, we touch on how Alina’s cycling lifestyle supports her values of frugality, time freedom, and sustainability. Without further ado, here’s my interview with Alina Christenbury.

Will You Please Introduce Yourself Further?

01:16 Emily: I am delighted to have joining me on the podcast today Alina Christenbury, and she is going to be talking to us about a commitment to cycling, which is a topic that I’ve been searching to find someone to talk about. So, I’m so glad that Alina and I found one another. On Twitter, in fact. I’m really excited about this. So, Alina, thank you so much for joining me on the podcast today. And will you please tell the audience a little bit about yourself?

01:37 Alina: Yeah! Thanks for having me and everything. So, I just finished up my undergrad degree at the University of Delaware in computer science, and I just started my PhD in spatial computing–well, technically computer science, but the study area is spacial computing–in June. So, that’s very recent.

02:00 Emily: Yeah, I should say we’re recording this in August, 2019.

02:04 Alina: Yes.

02:05 Emily: So, you have just, in the past few months, it sounds like, transitioned out of undergrad and into a PhD program.

Transitioning from Undergrad Into Grad School

02:09 Alina: Yeah. I wasn’t really planning on doing this, but then circumstances kind of arose where it seemed like it was a good idea for me. Particularly, they hired this professor who started a human-computer interaction lab at the university. So, that’s very related to my interests, and I kind of immediately latched onto her. She’s cool, and I’m working in her lab. I’ve been working in her lab for the past year now, since she was hired, essentially. So, yeah, it’s going pretty well, I think. For the lack of planning that it had, it’s turned out really well.

02:49 Emily: That’s really good to hear. It is a pretty easy way to get into a PhD is to just work with someone in an undergrad who you’re really clicking with and they just say, “Yeah, just come into my program, just come into my lab. I’ll accept you. I’ll make it happen. You don’t even need to apply, or you know, submit your GREs or whatever has to happen.” But yeah, it’s a great, stress-free way to go about it. So, you must like the University of Delaware to want to stay there longer, right?

03:14 Alina: It’s a good place. I started going here because it was in-state and because tuition costs are crazy and I’m not trying to incur a lifetime of debt. So, that’s kind of why I ended up going here initially. But I’ve kind of grown to really like the bikeability of the place, which is definitely really a contributing factor into how I’m going to examine life situations for the rest of my life. And I’ve gotten a lot of friends and kind of buried myself in a community here. So, yeah, I like it so far.

Personal History with Biking and Driving

03:53 Emily: Great. I’m so glad you brought up bikeability and the environment that you’re in right now because of course, that’s the topic that we have for today. So, tell us what is your personal history with biking and also car ownership? Have you always been a cyclist? Have you ever owned a car? That kind of thing.

04:12 Alina: So, in high school, I started driving. I used to live in southern Delaware, which is like an hour and a half south from where I am now. And you have to drive there because it’s just so spread out and very rural. And then when I moved to Newark, I pretty much immediately got a bike because it’s a lot closer and it’s actually viable for someone to bike here on a regular basis without too much hassle. So, I started in undergrad, like 2015 I want to say. And I’ve been biking pretty much daily ever since. Just commuting and going to classes, living life. I still do take infrequent car trips particularly for grocery shopping and visiting family downstate because they’re far away and I don’t want to take three days to go see my family, just getting there. So, yeah.

05:02 Emily: Yeah. We’ll get into kind of all those challenges in a moment. But first, I kind of wanted to ask you. So, okay, you’ve just transitioned out of undergrad. Are you living off-campus? Or were you living on campus for part of undergrad? Or what’s been the living situation versus where you work?

Commuting to/from Campus in Grad School

05:21 Alina: So, I live off-campus but very close. It’s maybe a six-minute bike ride from The Green, which is the central area for the University, pretty much. It’s maybe a 20-minute walk or so. Some people bike, some people drive. There are a lot of commuting options. I’ve pretty much always lived just off of campus within a 10-minute bike ride max, which has definitely helped a lot. So, yeah, the one time I stayed in dorms, even then it was on the northern part of campus, which is farther from the base hub of it. So, even when I was living on campus, it was kind of off-campus and still far enough away to make biking seem much more appealing than just walking everywhere.

06:12 Emily: That’s good to hear that you have been able to situate yourself so close to campus. And maybe you don’t know yet because you’ve been a graduate student for a short amount of time, but do a lot of graduate students live that close to campus or do some people live farther away?

06:28 Alina: The few whose houses I’ve been to are pretty close. There’s this one guy, Kent, who lives about the same distance as me, and I’m actually living with another grad student in another department in the same house and he’s as far away from campus as me. So, I’m not totally sure how common it is across the total grad student population, but I’m not the only person doing this.

06:53 Emily: Yeah. There are at least some opportunities to live that close to campus.

06:57 Alina: Yeah.

Bikeability of Newark, Delaware

06:57 Emily: So, tell me a little bit more about the city and how it’s set up to support cycling or not.

07:06 Alina: So, it’s very much a college town. The University really defines a lot of how Newark operates. So, during the summer it’s very, very quiet because all of the students are just gone. But beyond that, infrastructure-wise, there are a handful of bike lanes. Campus itself is very bikeable so you can pretty easily weave in between different university buildings and everything to get around, which is helpful. They’re actually redoing some of the main streets over the summer while a lot of the students are gone, which should make it even easier in the future. But yeah, so it’s set up pretty well to just be a person on a bike, which is not something you can say about every place.

07:48 Emily: Yeah. So, specifically, when you say it’s set up pretty well, can you describe exactly what you mean by that? Like, are there dedicated bike lanes? How do the drivers behave?

08:02 Alina: Dedicated bike lanes is the big one. Drivers aren’t too aggressive. I mean, it’s a small city, so there’s not hyper crazy traffic like somewhere in like New York. Yeah, I don’t think there are any protected bike lanes. There are some bike trails though that kind of snake in circles around. And then there are like some different park-ish areas that it goes through too. So, that definitely helps a lot too, I think.

Comparison to Dedicated Bike Lanes in Seattle, WA

08:33 Emily: Yeah. So, I’m at home in my apartment in Seattle right now, I’m looking out the windows onto a rather major street from my neighborhood that we live off of. And in the last couple of years that street has switched from having, I would say not actual–I guess there are bike lanes, right. But they’re not protected. So, on either side of the road, right. One going north, one going South. It switched to having a totally separate bike lane in parallel with the road that essentially takes up about as much room as a car lane. But there was, not physical barriers, but some space between the bike lane pair and the car lane pair. And my husband cycles to work along this road. And so, I think it’s really been helpful in giving me peace of mind knowing that he’s not so close to cars, you know?

09:18 Alina: Yeah.

09:18 Emily: But it sounds like there aren’t necessarily dedicated bike lanes like that, but there is designated space on either side of a lane of traffic for bikes.

09:25 Alina: Yeah, it’s more like where the shoulder would be is a bike lane and then maybe a shoulder beyond that. I do love how some cities are doing the dedicated bike lanes thing. And I wish we had more of that, but it’s hard to say how it’s going to shape out, I guess.

09:41 Emily: Yeah, there’s actually–not super close to where we live, but along the same road and bike path at a little bit of a more major intersection–the bike lane even has its own traffic light now, which I feel like is so European or something. Like, wow, the bike lane has its own traffic light and a time when they’re allowed to go and the cars aren’t allowed to go. In Seattle, there are a lot of people who commute not by single car. A lot of people cycle here. So yeah, the infrastructure is really being set up to support that. So, it’s really nice.

When Driving is a Necessity

10:11 Emily: Okay. So, we talked about Newark a bit. So, you brought up earlier that you do use cars infrequently for some certain special situations. So, when you do have a challenge, what are the kinds of things that you can’t or don’t at this point accomplish on your bike? And then what do you do to accomplish them?

#1 Grocery Shopping

10:30 Alina: So, the most frequent is probably grocery shopping, which I can kind of do, but I’m only within range of the more expensive grocery stores and the cheaper ones are a little farther away. Usually, I’ll go like grocery shopping with one of my roommates and we’ll just pick up a bunch of stuff for the week and then bring it home, everything. But sometimes for single one-off bits where I need food for just tonight, I’ll just bike to one of the stores and get like two things.

10:56 Emily: Is the main challenge more the distance or is it more transporting the groceries?

11:02 Alina: It’s more distance. For transportation, if it’s like only a couple items, I generally have a basket on the back of my bike that can handle small amounts. Not a whole truckload or anything of groceries, but enough for like two people for a week. And yeah, some of the other grocery stores are just, again, farther away and it’s like an hour-long bike ride to get there and then back would be another hour. It’s not necessarily as feasible.

11:35 Emily: You know, I saw a really funny thing the other day. I was just at Costco a couple of nights ago because I’m a Costco shopper. I actually saw someone in Costco in cycling type clothing and he had one of these little trailers that usually goes behind a bike that I see children sitting in but it was filled up with his Costco bulk food. It’s like, wow–and he also had his dog, like, you are dedicated to your craft, sir.

12:03 Alina: Part of me wants to try that one day. But I have not gotten around to it.

12:08 Emily: Yeah, I’ve never seen that before, but it happened just this week. Yeah. So, okay. So, you covered grocery shopping, but you also mentioned when you go visit your hometown because of your parents in that situation.

#2 Visiting Family

12:20 Alina: Yeah. So, my parents and six younger sisters all live in Millsboro, which is a little bit of a drive. So, maybe every couple months I’ll go down there for a weekend and hang out, you know, missing them and everything. So, it works pretty well. My sister coincidentally lives right across the street. So, she’s very close and we’ll generally drive down together for a couple of days.

12:50 Emily: So, if I’m hearing this correctly, your sister lives where you do and has a car?

12:56 Alina: Yes.

12:56 Emily: And so, you will both go back and visit at the same time. And that’s how you get there. Have you ever traveled without your sister?

Community Reliance When Car-Free 

13:04 Alina: Yeah. So, sometimes she’ll drop me off at the bus station and stuff, or I’ll just borrow her car. So, those are kind of some of the workarounds there. Sometimes I’ll take trips up to see friends in New York for a weekend or two and they’ll just drop me off at the bus station in Wilmington and I’ll just take a Greyhound, which I don’t know if I’d recommend. The Greyhound is okay. It’s very cheap but a time.

13:32 Emily: So, I had one year when I lived car-free when I was living just outside of DC. I was working at the NIH and I had a postbac there and I lived car-free. But, like you, I did some things borrowing other people’s cars or asking for rides from other people. So, the grocery situation, right? Going with a roommate. My now-husband, then-boyfriend, when he would drive his car to visit me there in Maryland, I’d be like, “Okay, well, you’re coming for the weekend. Awesome. We’re going to go to the grocery store as part of this trip. So I could mooch off you with the car situation.” So, I’m very familiar with this solution of, “Well, you end up relying on your community a little bit.” Which is not a bad thing. But I wonder, so in the 10 plus years since I did that one year living car-free, ridesharing has become a total thing. So, do you use Uber or Lyft or anything like that to any degree?

14:32 Alina: Not on a daily basis. I have occasionally used it to get to bus stations and airports and stuff. Just when the timing hasn’t worked out for other people. But generally, I try to go with friends and just make a whole thing out of it. So, yeah. I’ve mostly used it when navigating other cities when in conferences and stuff. But I kind of really want to get a folding bike so I can just take it with me and do that instead of relying on Uber and Lyft and those kinds of ride-sharing services.

Portability of Folding Bikes

15:06 Emily: Yeah, I saw a folding bike actually for sale a couple of days ago. I don’t know if I’d seen one in person before. It was very impressively small, but it looked kind of heavy. I don’t know. I didn’t try picking it up. How portable are they, really?

15:19 Alina: I mean it depends, right? There are ones that will fold to the size of maybe, I don’t know a good comparison for this, like a large dog, I guess? And then others that’ll be a lot smaller and just very light. There are a lot of variants within that whole arena. But I think if I can get one that is small enough that I could just carry it on a plane or a train or something, I think that’ll deal with a lot of those niche edge cases when traveling in other places. So, yeah.

15:53 Emily: Yeah, I would think that if you’re able to bike to a public transit hub and then take your bike with you, if it’s going to be a longer trip, that can definitely solve a lot of those issues.

Commercial

16:08 Emily: Emily here for a brief interlude. Tax season is upon us, and while no one loves this time of year, it’s particularly difficult for post-bac fellows, funded grad students, and postdoc fellows. Even professional tax preparers are often thrown for a loop by our unique tax situation. And don’t get me started on tax software. I provide tons of support at this time of year for PhD trainees preparing their tax returns, from free articles and videos, to paid at-your-own-pace workshops, to live seminars and webinars for universities and research institutes. The best place to go to check out all of this material is pfforphds.com/tax. That’s P F F O R P H D S.com/T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now back to the interview.

Benefits to Living Car-Free

17:12 Emily: What benefits have you experienced by this commitment to living car-free?

17:17 Alina: So, it gets me outside, which is really nice. It’s one of those things where I am not naturally very motivated to exercise without a real reason. And transportation is a real reason that gets me consistently sort of working out, but just moving and doing something with my body. I only really recently started going to the gym regularly with some friends and that was mostly for social reasons and not necessarily for fitness. So, it kind of built-in this exercise regimen without me necessarily having to think about it and plan for it and everything, which is I think is really helpful. So, yeah.

17:58 Emily: Yeah. So, you get outside. You get your body moving. This is a personal finance show, let’s talk about the numbers. Let’s start with how much money you are spending. So, where did you get this bike from? And how much does the maintenance cost?

18:14 Alina: So, the bike I got at a local bike shop. I think it was around $500, and then another maybe $200 and little add-ons like the rack and some bike bags and stuff. And then maybe once or twice a year, I’ll take it back over there for maintenance. But initially, when I got it, I got a maintenance plan. So, even when I do get it maintained, the labor’s free and I only have to pay for parts. So, I maybe get my brake pads replaced once every year or two years, or so. And then stuff like with tires blowing out or whatever is also pretty infrequent. So, it’s really not a lot. I’d say like a hundred in maintenance a year. And I’m not paying for insurance. I’m not paying for gas. I’m not paying for the “car” bike itself. So, yeah. I haven’t really looked into buying a car, so I don’t totally know what the numbers would look like if I were doing that instead. But I think the financial savings are pretty substantial just based on the frequency of use alone.

19:19 Emily: Yeah. I mean, I can tell you as a car owner, cars are a lot more expensive. Even a very, very cheap car–several times as expensive as a bike as well. And really, the gas costs, the insurance, as you mentioned.

19:33 Alina: It all adds up over time.

19:35 Emily: Yeah. And the maintenance, too, on a car is like–if you haven’t planned for it, if you haven’t saved for it, budgeted for it–it can be a real shock. I mean $500, a thousand dollars, multi-thousand dollars easily for maintenance. And you’re just not going to get to that scale with a new bike. You’re just going to buy a new bike if things got to that degree of a problem. Yeah. So, I’m sure it helps with the budgeting and everything. So, yeah. Have there been any downsides to this commitment? Aside from the slight challenges that we’ve already discussed. Like I don’t know, maybe weather? Anything like that?

Downsides to Biking Commitment: Weather and Community Reliance

20:10 Alina: I was going to say, the weather is probably the biggest one. I definitely have to limit how I dress in certain ways during certain seasons in order to accommodate this. It’s pretty hard for me to wear longer dresses and skirts and stuff because it can just get caught up with the gears and everything. And then I definitely have to layer well, particularly in cold and rainy weather. Otherwise, my entire body just gets soaked, which is not great. I don’t recommend it. But yeah, that’s probably the biggest one, honestly. And then again, the community reliance is a little bit annoying sometimes. But we have backups for that, like Uber and Lyft, so it’s not as much of a hurdle as it would be otherwise. Yeah, those are the two biggest downsides, I think.

21:05 Emily: Yeah, it definitely sounds like a worthwhile tradeoff given the amount of money that you are not spending. And I can just say, again, my husband cycles to work. We live in Seattle. It rains–not heavily, but quite frequently–here. And so, he’s biking in the rain a lot and like you said, he had to buy some special clothing that’s water-resistant, waterproof. But after that, he’s pretty okay. Like, it’s alright, he just takes off that layer when he gets to work and puts it back on when he leaves again.

Peer Perceptions About Not Owning a Car

21:34 Emily: So, what do your peers think about you not having a car? Is this an unusual thing?

21:44 Alina: I don’t think it’s totally unusual for this age range and location. I’ve definitely convinced some of them to try this more because I really like this, I just talk about it a lot. So, I’ve kind of seen a handful of my friends pick up their own bikes over time, which is always like, “You’re doing it! Good job, I’m proud of you.” So, I mean, they’re generally supportive, I think. So, yeah.

22:13 Emily: It’s clear from your enthusiasm in this conversation that you are a biking evangelist, right? You want to spread the good word about biking.

22:23 Alina: Yeah! It’s so much cheaper! There are so many benefits!

Additional Bike Benefit: Sustainability

22:28 Emily: Well, another benefit that you haven’t brought up yet is sustainability and energy usage. So, can you talk a little bit about that?

22:34 Alina: Yeah. So, the only thing it really costs is human energy. And even that is beneficial because it’s cheaper than a gym membership, for one, but it doesn’t pollute the air, which is a perk. And it’s very location-dependent, but if you can get past that, it doesn’t damage anything.

23:09 Emily: Yeah. I have observed that there are many, many overlaps between frugality and living a more sustainable or a smaller carbon footprint kind of life. This is one of the big areas, right? If you drive less, if you can drive less to the degree that you don’t even need to own a car, then you’re really shrinking your carbon footprint as well as not having those line items in your budget that are pretty big ones.

23:38 Emily: I mean after housing, transportation, and food are like the next two big expenses for Americans. And so, if you can pretty much eliminate one of those three big ones by using a bike instead–as we said, it’s a very small outlay of cash to buy the bike and the maintenance is very, very low–it has an incredible impact on your finances, but you can also feel good about the impact on the Earth, right?

24:05 Alina: It doesn’t use as many resources as a car, that’s just fact.

24:08 Emily: Right. And many, many of us Americans, we have calories to expend, I’ll put it that way. There’s plenty that we’re already eating that if we decided to burn it off through biking, that’s a great use. As you said, instead of maybe going to the gym. Like maybe just building this exercise into your general lifestyle and then not having to seek it out on extra time and extra kind of dedicated way that again, costs more money as you were just saying. I understand that you are, well, I don’t know what you’d like to call yourself. Some people say FIRE walkers, right? What’s the term that you like? You are pursuing FIRE, which is financial independence and early retirement, and I understand that this cycling lifestyle plays into that. Can you talk a little bit about that?

FIRE: Financial Independence and Early Retirement

24:56 Alina: I mean, I don’t really like titles. I’m just a person trying to live in what I think is the best way that I know of so far. But the FIRE movement is really inspiring and I think really had an influence on how I look at priorities in life and what really, really matters. And cars, I’ve decided really don’t matter for me and I’m willing to work around that in other ways to work on other things. I think freeing up most of my time is really important just so I can work on things that aren’t necessarily going to be paid. So, I wouldn’t necessarily say volunteering, but community organizing is really important to me. Game design is really important, and there are all kinds of other things that are more deserving of my attention than cars. So, this helps free up the most time for that, I think.

25:57 Emily: Mhm. So, you’re really thinking about and being inspired by the FIRE movement, not only in having more control and autonomy over your finances but also over your time?

26:06 Alina: Yeah, I mean I view it as buying my time back, really. This is a really big motivation for looking into it and kind of following a lot of the tenets, I guess. So, it’s one of those things where I don’t think the ultimate purpose of humanity is to work and accumulate capital, right? There’s so much else to do, but you have to have the time and autonomy to do that. And if you don’t have that, then you turn it into this negative cycle of just always working for someone else and never really fulfilling what you really want to do with your time.

More Details About the FIRE Movement

26:43 Emily: Mhm. Yeah, so we haven’t really defined this that well in this episode, but if people want to hear more about FIRE, financial independence and early retirement, I did a two-part interview with someone else pursuing FIRE, Dr. Gov Worker, that was published in season three of the podcast. So, you can go check that out. But basically what we’re talking about is lowering your expenses, raising your income, saving a whole lot of money so that you can, as you were just saying, buy back your time. Maybe you want to leave your job, eventually. That would be more like what we call retirement. Maybe you want to do that particularly early, early retirement, or maybe you just want to have the ability to be able to have more control over what your job is. Like have more negotiation ability around what your job is because you have the ability to walk away.

27:29 Alina: Being able to say, “No,” matters so much because if you feel like you can’t say, “No,” to bad opportunities and bad decisions, then you don’t really have a lot of power over your life. And then it just gets really depressing, which is where policies like universal basic income can be really empowering to kind of fix that issue for the general person across everywhere instead of specific niches that are trying to do it themselves.

28:03 Emily: Yeah. This is so interesting. I would love to talk about this topic further, but we said we were going to keep this episode about cycling, so that’s I think we’re we’ll leave it. So, there’s definitely a lot to follow up on if other people are interested in being inspired by the FIRE movement, as you were. Can you give a couple of recommendations for where you learned about this or maybe people to follow in the movement that you like?

Personal Finance Subreddit and Mr. Money Mustache

28:27 Alina: So, the only real interaction I had was the personal finance subreddit. They have a very extensive FAQ and Wiki, and it goes into a lot of different detail about different strategies for managing your finances and potentially reaching early retirement. Mr. Money Mustache is also the really big figure people probably should already know about him by now. He’s been around. And then I actually took a personal finance class in high school because I was like, “I need to be prepared for this. It’s an inevitability of adult life.” So, those are the majority of my influences here.

29:06 Emily: Yeah, that’s great to know. I also really enjoy the personal finance subreddit. Mr. Money Mustache–you have to have a certain taste for his material. I’ll say that. You either love him or not so much, but he’s a great person to have at least a little bit of exposure to, as you said, because he’s such an influential figure in the FIRE movement broadly. The thing is, his definition of frugality, definition of what living a rich life is on a low amount of money is very compatible and consistent with the graduate student experience. So, if you are looking for ways that you can be inspired to spend less money–maybe because you don’t have money to spend–Mr. Money Mustache is a great person to look to and he is, not surprisingly, a huge cycling advocate as you are. Yeah. So, if you’ve been intrigued by what Alina’s had to say, as a next step, go to Mr. Money Mustache’s blog and read more about cycling because he will definitely motivate you.

30:09 Alina: Oh my gosh. Yeah, he’s crazier about it than me.

Best Finance Advice for an Early-Career PhD

30:12 Emily: Yes, he’s very committed. So, last question here as we wrap up. What is your best financial advice for another early-career PhD?

30:21 Alina: So, I think, financially, it’s generally a really good idea to have your priorities figured out. I’ve decided personally for me right now that cars are not important at all. And that lets me focus on things that are more important and dedicate my time and energy and resources to the ones that do matter. And if you don’t necessarily have that straightened out, it can be kind of difficult to budget and figure out what you really want. And finance is just another element of that.

30:53 Emily: Yeah, I totally, totally agree. I mean getting your priorities straight, figuring out what’s most important to you is super foundational and helpful in personal finance, but it’s really something that you need to know in every area of your life. Especially as a graduate student or a postdoc and early-career PhD, you’re making a lot of decisions around your career. And so, I think, unfortunately, sometimes because of the bleak job prospects at the faculty level, we can get a little like, not very confident or down on ourselves about our employment prospects and can kind of be like, “Oh, just take whatever comes my way. Anyone who wants to get me a job, like I’m going to take that job.” And having thought through a little bit more, what are your priorities when it comes to your career? What are your priorities when it comes to your personal life? How can your career support your personal life? That can help you be a little more selective around the job choice and as you were saying, be able to walk away or design the job that you want to, if you also have your personal finances in order. That gives more power on your side of the table rather than your employer side of the table. So, Alina, it’s been a real pleasure chatting with you about this and I’m so excited for you starting your grad student journey. And yeah, thanks for coming on the podcast.

32:05 Alina: Yeah. You can find me on the internet at alinac.me and @AlinaWithAFace on Twitter.

32:11 Emily: All right. Thank you so much.

Outtro

32:14 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, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. 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.

Combatting Climate Change with Your Finances, Individually and Collectively

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In this episode, Emily interviews Jewel Tomasula, a graduate student at Georgetown University in biology, specifically ecology and evolutionary biology. Jewel participates in climate change collective action through the Sunrise Movement, through 500 Women Scientists, and at her university. Emily and Jewel discuss how people can combat climate change as individuals and collectively through the lens of personal finance, covering frugal and environmental strategies, socially responsible investing, and leveraging our affiliations with universities. You do not need to be a homeowner or in command of massive capital to explore the advice in this episode.

Links Mentioned in This Episode

climate change investing

Teaser

00:00 Jewel: I think people are maybe a little quick to discount the power that you have as an individual in these collective action movements and just being a body that’s part of this protest really makes an impression on the people who are making the decisions. People we’ve elected can’t ignore you when you were physically sitting in their office or physically outside the building and you’re part of a mass group of people.

Introduction

00:28 Emily: Welcome to the personal finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season five episode thirteen, and today my guest is Jewel Tomasula, a graduate student at Georgetown University in biology, specifically ecology and evolutionary biology. Jewel participates in climate change collective action through the Sunrise Movement, through 500 Women Scientists, and at her university. We discuss how people can combat climate change as individuals and collectively, through the lens of personal finance, covering frugal and environmental strategies, socially responsible investing, and leveraging our affiliations with universities. Listen on for actionable strategies that do not require you to be a homeowner or in command of significant capital. Without further ado, here’s my interview with Jewel Tomasula.

Will You Please Introduce Yourself Further?

01:24 Emily: I am so happy that Jewel Tomasula is joining me on the podcast today. This is a really special one for me because Jewel was the person who worked with me on editing the podcast and creating the show notes in the first three seasons, so really happy to have her back on now as a guest even though she’s moved on from the editor role. And today we are actually talking about kind of one of Jewel’s areas of special interest, which is climate change and climate change collective action. And we will get into how this intersects with personal finance momentarily. But before we do, Jewel, would you please introduce yourself to the audience?

01:50 Jewel: Hi. Thanks Emily. So I am a PhD student at Georgetown University. I’m working on a biology PhD and more specifically my discipline is ecology and evolutionary biology. The ecosystem that I focus on is the salt marshes. And they’re an ecosystem that is really affected by human activities, as well as really important for us adapting to climate change in dealing with sea level rise and salt marshes are important for carbon storage. I look at the resilience of this ecosystem and so I have a very ecology perspective, but I also think about climate change a lot because of the setting of my research.

02:47 Emily: Yeah, that’s perfect. So very strong professional connection as well. What is it that you’re doing outside of your professional capacity in terms of climate change collective action?

02:57 Jewel: I would call myself an active participant in the Sunrise Movement, and also a mobilizer of the 500 Women Scientists network. I wouldn’t say that I’m like a big leader in any sorts, but I’m someone who closely follows along and participates when I can. With the sunrise movement, I participated in a December 2018 action, where we visited out members of Congress and talk to them about supporting a Green New Deal resolution, which hadn’t been formally introduced yet, but it was an initial talking about ramping up climate action and taking on more stringent goals than just the Paris agreement and saying we want a stronger plan for climate action. And then it was a sit in of Nancy Pelosi and Steny Hoyer and McGovern — representatives of the top Democrat offices. That was a really powerful experience, just to be one of hundreds of people that joined together and are taking this action and really showing our representatives that people care about this. And they can’t avoid it when we’re all sitting in the hallway or sitting outside their offices.

04:18 Jewel: I’ve tried to keep up with Sunrise Movement and participate when I can, not that often because I’m doing my PhD work as well. Then with 500 Women Scientists, with other leaders in that organization, we wrote an op ed for Scientific American called “Scientists Must Speak Up for the Green New Deal” and we outlined why scientists should be interested in this resolution and should take it seriously and advocate for it. And then that’s the group that when I go to, and just participating in in strikes or protests, that I usually kind of group up the DC pod of 500 Women Scientists to go together to these actions and support the leaders. And I try to amplify in my offline and online networks what the leaders of the youth climate strikes…their message, and the Sunrise Movement message as well.

05:24 Emily: Yeah, I think you have this interesting crossover identity that you are, identity-wise, compatible with these various friend groups. And it’s nice that you can be an intersection point between them and be, as you were just saying, amplifying messages from one to the other. And back and forth. So that’s great. Thank you for detailing that.

Climate Change and Personal Finance

05:50 Emily: I think that now we’ll get to the point where I want to say a couple of words about why we’re even talking about climate change on a personal finance podcast. Because maybe, you know, you say, well, Emily, this isn’t a good fit. This is about money, why are you talking about this? Or like, Emily, this is too political, why are you covering this topic? You don’t usually cover politics. And that’s not at all my intention, but the reason that I think about climate change in the way that it intersects with my business is because within personal finance and what I do a lot is thinking about the long-term — in my own life and the lives of my clients. When I talk about like investing and the power of common interest, I’m throwing out 50 years as a timeline that we should be looking over to think about our money. And over 50 years, over many decades — as you said, we’re already seeing effects of climate change and certainly over to 2030 and beyond that point, this is something that I think should be factored into our financial plans. As well as whatever motivation you might have to care about this as a human being specifically, it intersects our finances in this longterm planning aspect and also short-term planning.

06:56 Emily: There is this wonderful sort of synergy between frugality and conservation, or environmentalism and minimalism. A lot of the strategies that you might use to reduce your carbon footprint or be more environmentally focused in general are also ones that dovetail really, really well with being frugal in general or being a minimalist in general and not consuming so much. And so I just think whether you’re focusing first on reducing your carbon footprint or focusing first on frugality, you’re going to end up probably doing a lot of things that will benefit both facets, just naturally by the choices that you make. Because, as we’ll go through in a few minutes, there are a lot of things you can do that are good for your wallet and good for the planet. That’s kind of why I wanted to bring this up because there’s just this wonderful overlap. Not only should you be thinking about your own finances and what’s best for you in the long term. Maybe you can also direct your finances and your life choices in a way that’s compatible with being more sustainable long-term, as well. Jewel, can you just start, just make a couple of comments here — what can people do as individuals to reduce their carbon footprint?

08:13 Jewel: I think you outlined that so well about how we have to think about our personal finances in the long-term and that’s good for us, that’s a healthy thing, but if we’re going to be doing that, we also need to be thinking about the state of our environment and how sustainable our economy is as a whole and how that might be changing over the long term. I would hope that our economy is going to look really different in 50 years, that’s what my big hope is. And so this question of the individual carbon footprint and your responsibility there, it really centers on the power you have as a consumer. That’s often what you see in articles. If you can just Google how to go green and you can find lots of options and lots of suggestions, but I feel like they hardly ever take into account what power you actually have as a consumer and your dollar. If you’re someone with a constrained income and you only have a few hundred dollars of discretionary spending every month, if even that, it looks really different than somebody who has a lot of discretionary income, and the power you have with that.

09:33 Emily: Can I just jump in to ask — something I see for example in these how to go green suggestions is make your home more energy efficient. And so I’m thinking, okay, well I’m a renter, I have absolutely no influence over this. When I become a homeowner, I would love to think about that, but it’s not something for me in the here and now. Is that the kind of thing that you’re talking about that people just have differing degrees of influence over their own lives in terms of especially how much discretionary income they really have?

09:58 Jewel: Yeah, exactly. I live in the state of Virginia and there’s essentially a monopoly with Dominion Energy and you don’t have very much choice over where your power comes from. You see a lot of these lists and it’s like install solar panels or make your home energy efficient. And I’m like, I live in an apartment. But it is really empowering to think about, even if you have a constraint income, where you do have power in your budget and your spending and trying to direct that as much as you can towards the way we want the world to look like — a more ethical world with healthier and safer communities. I think part of that is if you are living in an apartment, there’s only so much you can do, but maybe you can live closer to work and you can take out that transportation part of the carbon footprint because you’re walking or you’re taking public transit.

The Impact of Individual’s Choices

10:58 Jewel: With individuals, the big things I think for anyone are your diet and transportation. If there’s ways that you can alter those to have a smaller impact, a smaller footprint, then those are two big things. Meal planning is one that I’ve been engaging with more recently, especially since starting grad school. My partner and I found that that’s also part of frugality and really making a difference in our personal finance wellness. Meal planning makes a difference and also really reduces our food waste. It made a big difference in how much for wasting, not just in food but also in the plastic that comes with food. If you’re not having take out all the time or just getting pre-prepared meals, there’s like a lot of packaging waste that’s produced there.

11:52 Jewel: I guess something that I care about with having that zero waste is that I have really minimized how much I use. That’s kind of in that minimalism that you talked about. Kind of that buy nothing new or going to thrift shops or just holding onto things and repairing them if they break. There’s still clothing alteration shops and shoe repair shops out there and so that’s something that I utilize. Those things aren’t always the most frugal, necessarily. Sometimes it is cheaper to just buy a new pair of shoes, but if I have a pair of shoes that I can get fixed, then that’s more in the mindset. Just because it is just as cheap to get a new pair, they are still a good pair of shoes. Those kinds of things I’ve really built into my budget and I think a lot of PhD’s could think in those terms as well and just rejecting our disposable consumer system that we have. Those are some of like the individual actions I think people could look towards.

13:02 Emily: Let me jump in there because I have a couple of comments about what you just said, which I thought was great. In terms of like the food that you eat, you’re talking about reducing waste, which is awesome. I think I read, years and years ago, I think there’s a book called American Wasteland*, which is about food waste. And I think it said that 50% of food is wasted, like that we grow in America doesn’t get into people’s stomachs. Most of that does not happen in your refrigerator, it happens prior to that point. Again, not something you necessarily have influence on, although I guess we can choose where we source our food from. So maybe getting it more from like local farmers or something rather than conventionally grown agriculture.

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

Emily: And also, I guess I’ve been seeing these advertisements for ugly produce and like similar sorts of services like that where it’s food that wouldn’t make it to the grocery store, you can still buy that and eat it because it’s perfectly good. It just doesn’t look pretty enough to be in the grocery store. There’s different sourcing things you can do around that as well, and you were just saying about packaging. That also reduces packaging, all that kind of stuff. You didn’t mentioned what you eat, but I know that one of the major things that you can do is reduce your consumption of meat and dairy, particularly beef. I think beef is one of those big offenders in terms of greenhouse gas emissions. Food selection can also go into that. And it’s really difficult to change your diet, I know that. There’s all kinds of things that influence why you eat what you eat, but to the degree that you’re able to, think about addressing that in terms of less beef, lamb consumption, and dairy.

14:35 Jewel: It’s a really personal thing, that’s something that I’ve experienced. I would say I’ve spent the last 10 years of my life trying to be vegetarian. And it’s a really personal and often a cultural thing too. Food is how you connect with your family often. I get really excited with plant based diets. I have a special spot in my heart for plants and so I think it’s so cool what we can do with plants. I have like a personal excitement about plant based diets and then from the frugal side, meat is often more expensive, especially beef. When we do have beef every now and then, it’s always what’s on sale. If we’re getting it on sale, it’s not really part of the driving demand for beef, in a way.

15:30 Emily: I see what you’re saying.

15:31 Jewel: Right. That’s thinking about what’s the power of your dollar here and having beef is part of it. I have looked into what they say the average American consumption of beef is and it’s a little absurd. It’s not healthy for us as a culture to be eating that much beef, for our own bodies, as well as for our environment. That’s very justified and that’s one of the first things to cede. But if you’re someone really constrained in your income then you’re probably not eating very much meat anyway and I know there are calls for meatless Mondays and stuff. When we do meal planning — and this is me and my partner — my partner is environmentally minded, he still has the attachment to meat and that cultural element that we’re kind of working through.

Jewel: I’ll just be honest there, I’m the one that pushes more for plant-based foods and he’s still like, “Oh, but the meat, it tastes good. And it’s part of how I know how to cook.” That’s just the expectation that your plate has like a meat and then a veggie and a potato. It’s like a very ingrained American conception. But we’ve been looking at our weekly meal plans and it’s only meat for one meal a day typically and often the meat is a small part of the meal. That is something that has changed as we’ve started being more intentional with our meal planning. If you just think meatless Mondays, that’s three meals out of your week that don’t have mea. I would say for everyone, if you can have two meals a day without meat, that’s kind of a big win right there and you’re probably a lot less than the average American. We definitely do need to change this expectation that every meal should have meat in it.

17:39 Emily: Yeah. And I don’t actually think that’s a historically accurate view of the American diet. But anyway, you’re right in that it is sort of in the cultural zeitgeist. A larger point that I wanted to make about what you were just saying is that, as you were just saying earlier, as a consumer and especially if we’re talking to graduate students and postdocs and people who have a smaller degree of control over their finances and their lives — make the changes that you can and that you’re willing to and do what you can. It’s okay if for the time being you cannot change your diet because of whatever else is going on in your life, or you cannot change where you live to start taking public transit. Maybe you can choose one of these areas to make a big shift in and worry about the other ones later. It’s good like to make even a small change, like you were just saying with meatless Mondays or having two meals a day that are meaningless or whatever. It’s not that you have to become completely vegan or completely vegetarian to make an adjustment from where you are today. It’s just about making some degree of progress in that area. Were there any other individual actions that you wanted to discuss?

Being Mindful with Where You Keep Your Money

18:47 Jewel: Yeah, I have one more that I’ve been exploring recently, but I do want to mention two articles that I’ve found can really be like light bulb awakening for the nuance of this issue. One of them is titled “What We Should Really Do for Climate” by Samuel Miller McDonald and that’s published in The Trouble. The other is “I Work in the Environmental Movement. I Don’t Care If You Rrecycle” by Mary Annaise Hegler.

19:16 Emily: I think actually read that one.

19:17 Jewel: Yeah. And honestly, anything by Mary Hegler is on point. That one’s in Vox. Those are two I think that are really helping to increase awareness and making you understand how constrained this can be and how to feel that individual responsibility but also to channel it and grapple it with it better and understand how income plays in and how we kind of just need the whole system to change. How trapped you can feel, but also what personal empowerment you can find in it. Along those lines, something I’ve been looking at just this summer that kind of just slipped by me before was where my money is actually kept in my bank — who I’m letting have my money while I’m waiting to use it. And also looking into investing and trying not to be a typical like 20-something grad student who just puts off investing.

Jewel: I have been using Wells Fargo just because that’s the bank that my parents set up for me and I never really thought about it. Even when I was learning about how Wells Fargo is funding oil pipelines and doing other shady stuff, I just didn’t think about it and didn’t think about taking my money out of there. That’s something I’ve like just done and I’m transitioning to using a bank called Aspiration. They are an online bank that tries to make themselves an accessible option that’s not using any of the money for fossil fuels or gun manufacturing either. Those are two of their big things and building that social awareness into their whole model. It’s nice to have a bank that’s like thinking about this ethically. They also have sustainable investing options. I have $2,000 in there now, but I put in $1,500 and so over two years — I think it’s a little over $1,500 that I put in, so it’s grown like a few hundred dollars over two years. And you actually get to set your own fee for that. They have what’s called a pay what’s fair fee. I had it set pretty low and so over two years I’ve only paid just under $10 in the fees and you could set it to zero actually, if that’s something you really need to do, just to start trying investing.

21:52 Emily: That’s interesting. I hadn’t heard about that model before. And even Wells Fargo’s actions that you just mentioned — I know that they’re sort of blacklisted because of their like consumer protection fails, but I didn’t think before about the way that they’re using just the cash you have with them at any point. I’ll have to take a look at my bank and see how they’re ranking on this metric.

Commercial

22:21 Emily:

Emily here for a brief interlude. Tax season is upon us and while no one loves this time of year, it’s particularly difficult for post-bac fellows, funded grad students, and postdoc fellows. Even professional tax preparers are often thrown for a loop by our unique tax situation. And don’t get me started on tax software. I provide tons of support at this time of year for PhD trainees preparing their tax returns. From free articles and videos, to paid at-your-own-pace workshops, to live seminars and webinars for universities and research institutes. The best place to go to check out all of this material is pfforphds.com/tax that’s P F F O R P H D dot com slash T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now back to the interview.

Socially Responsible Investing

23:24 Emily: Okay, great. So you thought about where your cash is. I know we also wanted to talk a bit about investing, about what’s called socially responsible investing or SRI. This is something that you’re learning about, that I’m learning about right now, so can you start making a couple of comments about that?

23:41 Jewel: My understanding is that there’s a spectrum. Maybe it’s with typical investing group like Fidelity or Vanguard and they just have options that are more socially minded and you can pick those options as well, but it’s still focused on growing your money. And then —

23:59 Emily: Oh, we should say more generally that socially responsible investing is not just about these environmental causes. It could be about like social justice or working conditions or the sort of sin areas, like tobacco and firearms and those kinds of areas. Depending on your exact social preferences, you can make different choices within these groups. But continue, I just wanted to say that SRIs they cover more categories than we’re talking about today. But yeah, go on.

24:31 Jewel: Yeah, kind of this overall ethical minded. Like “Is what I’m investing in doing harm to other people that I’m not necessarily seeing every day? Is there harm or sketchy things being done out in the world with where I’m investing my money?” And that empowerment say, “no, l want my money to be supporting the things that do good in the world and not the things that are doing harm.” And that’s bigger or more encompassing than just environment or carbon emissions. It’s about how the people are treated as well. There’s someone more typical — I guess I don’t know if that’s more typical options, like through Fidelity or Vanguard. They’re big investing options. But then there’s kind of the filter out options since that’s what I have, where it’s still performing pretty well.

Jewel: Through Aspiration, they have these pretty accessible investing options. The deposit you have to make is pretty low, they have where you can set your own fee. I think for someone starting out in investing it’s something accessible, and it’s also passive, like you’re not having to pick out each stock that you want to invest in. It’s a diversified portfolio already, but they do have, I think I was looking at it, Amazon and Facebook are part of their portfolio. Some people might think that those companies are a little sketchy, but then what they do have filtered out are anything with fossil fuels and gun manufacturing and some of these other big sin stocks, as you had mentioned before. And then with socially responsible investing, there is the option to pick out the specifics stocks, but then it’s not passive anymore, and that’s something that I don’t have any experience with and it’s a little like out of my realm at this stage in my life that I would look into.

26:38 Emily: Yeah. Long time listeners definitely know that I teach the strategy of passive investing versus active investing. And so when we’re talking about getting into the socially responsible realm, it is a bit more active, because you’ve decided, you the consumer, and also the person running the fund or whatever, have to look into, okay, it’s not just a strict definition on what are the biggest companies in the US, it’s more like, okay, we have some criteria that we’re evaluating these companies on and some are not going to make the cut. So it’s a little bit more active in that sense, but it can still be a fairly passive approach if you go with a managed fund, because their criteria can be rather fixed.

Emily: And again, they’re not trying to market time and they’re not like picking and choosing necessarily individual companies that are in or out based on whims. It’s all based on sort of an investing plan that’s been laid out in advance. So it can still be a fairly passive strategy, in terms of the important aspects of passive investing, like being well-diversified and not trying to market time and so forth. It’s a little bit more active than like classic passive investing strategies, but still fairly passive overall, or at least it can be. And really I think that it’s so difficult as an individual to do all the research that is necessary to pick individual stocks when you’re trying to evaluate them on these metrics that we’re talking about, that SRIs care about. So I do think it’s a really good idea to go in with a larger fund where there’s a professional, a set of professionals doing that kind of research for you. And as long as you are selective about which fund you go into and make sure that it matches up with your values, then you should be good to go and it’ll be fairly passive on your end.

28:18 Jewel: Yeah, and I’ve been trying to think in terms of like, I really appreciate that Aspiration just has a whole values model behind what they’re doing, as opposed to just being a bank that’s all about the money, no matter who or where is getting hurt, or just what’s good for business.I feel like it’s part of that system change. Let’s have institutions that are actually accountable, and that care about the well-being of communities instead of institutions that are about the bottom line with profit.

28:57 Emily: Before we started recording this episode, I sent you another podcast episode that I had listened to from “How to Money,” which is another great personal finance podcast that I’d definitely recommend. Episode 97, “Socially Responsible Investing” is where they went over this model that I was really learning about for the first time, that there are gradations within social responsible investing. And I think you’ve already covered two of them — what’s called ESG, environmental, social and governance, and then also SRI, socially responsible investing. Those are more about…They’re pretty similar to like your classic like mutual fund where it is largely driven by what’s going to be best in terms of like the profit and bottom line for the investor, with differing degrees of sensitivity towards these social issues that you might care about. And then the final category was impact investing where the goal of impact investing is not necessarily get a great return, although maybe that will happen, but the goal is really to influence the world through with the companies that you invest in. The profit thing is secondary to the mission. Do you do any impact investing at this point?

30:07 Jewel: No. It’s a little out of my realm, as someone who’s at the grad student stage, where I’m just trying to actually invest instead of not investing in. I could bring up here that if you go into the real job that offers the 401k, that’s a great plan and you need to do it, but I am trying to take this time in my life where I don’t have that option, where I don’t have employer match, I don’t have the 401k option and it opens me up to try other investing options. I’m trying to look at it that way, but still with that passive investing, where I can just pick a managed fund and make contributions to it. That impact investing is interesting and I don’t know if I would manage to get there in the future, because you have to really pay attention and do research.

31:06 Emily: Well I think there could still be impact investing funds that you go into. It’s just that they’re going to be composed differently than like the SRI or the ESG types of funds. But I totally agree with you, I think that’s an amazing point that when you have an employer and you’re being provided a 401k or 403b, especially if there’s a match involved, you really do need to use that in terms of your own personal finances. That is the best place for your retirement money to be. But when you have an IRA, either because you don’t currently have access to a 401k, or you haven’t in the past, but any IRA money that you have is completely self-directed. So if you want to invest inside SRIs with your IRA money and do whatever is offered to you through your 401k, that’s a really good balance that you can strike as an individual. And as graduate students, postdocs, we start out probably only having access to an IRA. So the core and the part of your investments that are growing the most over time because you started them the earliest, those are the ones where you can have like the most discretion over where they go. And every time you leave a job, you close out your 401k or 403b, you can roll that money into your IRA and still have that total discretion over how it’s invested. I really love that you made that point.

Collective Action

32:15 Emily: We’ve kind of moved from talking about individual actions and diet and transportation and so forth to now we’re talking about investing, which is something you can do as an individual, but you’re really banding together with other individuals when you go into these funds and you choose SRIs over conventional investments. What are some other things that we can do as individuals but that is joining together with other people for this collective action around climate change?

32:40 Jewel: With collective action, I think the understanding there is that there are some decisions made at the collective level with the idea that they’re accountable to you as an individual. We have voted people in that should be accountable to us as voters or there are people working on behalf of the community that should be accountable to the community members. Whether it’s elected officials or a board of trustees at university or at another institution that you are associated with, those people are making the decisions on behalf of everyone else, but they should be accountable to you and you have power in holding them accountable. That’s where you as an individual have the chance to use your voice and to pay attention.

Jewel: Maybe starting with, since we were talking about investing, there’s also the question with universities and where they have their investments and their endowments. If you’re a PhD, you have an association within a university, whether you’re currently there or you’re an alumni and you have power in influencing how the university is using their money. Especially I think when you’re an alumni, when you can say, I’m not going to donate to you. Or you can contact the university, or be part of a movement. I think people are maybe a little quick to discount the power that you have as an individual in these collective action movements. Just being a body that’s part of this protest really makes an impression on the people who are making the decisions. The people we’ve elected like can’t ignore you when you are physically sitting in their office or physically outside the building and you’re part of like a mass group of people. Paying attention to those and joining anyone you can and just even voicing support and talking about it amongst your coworkers and your family is an important thing. If you have the right to vote, where you are able to use your vote, in the US, paying attention to what kind of plans the candidates have and how firm they are in their belief and voting for those candidates and then not stopping at voting. Actually realizing that you have power as a constituent to go and meet with them and join as a group to go meet with them.

Jewel: I mentioned being part of the Sunrise Movement action in December. That started with us going to our representatives office. I went with a group of people who are Northern Virginians to representative Tom Steyer’s office and we talked with the staff there. Then about a month later we got an email that our representative had changed his attitude towards the green new deal because of what we had come and said to him. You can all see more immediate change and impact just by like stepping up a little and using your voice and being part of movements. But you could also look in your communities and see what kind of like actions are happening there and any time that you can like hold systems accountable or change systems and think about how can your community be more resilient. I think it’s part of that power that is a little under utilized by people in their 20s. It’s definitely growing. And that’s really exciting to me but I think we could use more people. We could always use more people at least paying attention.

36:34 Emily: I like what you brought up there and it goes back to what we said near the beginning of the episode of like you as an individual can be part of groups at different levels. You’re a voter and you have representatives at both the national and also the state and the local levels and you vote for the people that you want to be in office. But then also once they’re in office, you still have influence with them, to some degree, over the decisions that they’re making once in office. They’re still supposed to be representing you. And then not only are you a voter, but you’re also a member of an academic community with your university, maybe multiple different universities. And then you also are a person who lives in your community and like you, you’re using your identity in terms of what age you are, to be affiliated with one movement. And also like you’re a scientist, you’re affiliated with another movement. I think we can all think about the various facets of our identity, and where we live and so forth, and the different groups that intersects with, and to see, as you were just saying, sort of see what’s going on in our own communities at these various levels and start participating as you feel comfortable, or as you see there’s something to participate in to make your voice heard. I really appreciate that. It’s not something I’ve been involved with personally to this point, but I’m definitely now going to be looking for more of those opportunities.

37:50 Jewel: I think just following your representative on social media or signing up for their email is really enlightening and just like a way to see what are they actually saying about these issues or what kind of bills are they introducing? That’s a really simple way that raises your awareness by a lot and shows you the opportunities to go to a town hall or to call them up. That’s one really simple thing.

38:18 Emily: The larger point around a lot of the discussion we’ve had today is you can evaluate where you are now and what you’ve been doing and you don’t have to keep doing the same thing. You don’t have to give into inertia of “well, I’ve always eaten this way” or “I’ve always lived in this place” or “I’ve always kept my money here.” Now that you are aware, if you weren’t already, that these various different areas impact how sustainable your lifestyle is or where you’re putting your money and what it’s doing in the world, now that you have a little bit heightened awareness about that, you can reconsider and make changes where you’re able to.

38:52 Emily: Jewel, thank you so much for coming on the podcast today. This is a real treat for me.

38:57 Jewel: Yeah. Thank you Emily.

Outtro

38:59 Emily: Listeners, thank you for joining me for this episode. PFforPphDs.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, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars covered 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 Lourdes Bobbio.

This Grad Student Didn’t Let a $1,000 Per Month Stipend Stop Her from Investing

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In this episode, Emily interviews Dr. Rachel Blackburn, an assistant professor at Columbus State University. Rachel’s PhD stipend at the University of Kansas was approximately $1,000 per month and her rent claimed half of that, but she resolved to do more than scrape by financially. Emily and Rachel discuss in detail how Rachel optimized her pay rate in her side hustles, generated extra income through credit card churning, and travel hacked her personal and professional trips. By combining these techniques, Rachel not only contributed to her Roth IRA during grad school but also paid down student loan debt. You won’t want to miss the excellent insight she shares at the end of the interview.

Links Mentioned in the Episode

Teaser

00:00 Rachel: Don’t underestimate your own creativity. One of your strengths and skills as a PhD student is researching, so why not take that same skill and apply it to your financial life?

Intro

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 five, episode 12, and today my guest is Dr. Rachel Blackburn, an assistant professor at Columbus State University. Rachel’s PhD stipend at the University of Kansas was approximately $1,000 per month, and her rent claimed half of that. But, she resolved to do more than just scrape by financially. We discuss in detail how Rachel optimized her pay rate in her side hustles, generated extra income through credit card churning, and travel-hacked her personal and professional trips. By combining these techniques, Rachel not only contributed to her Roth IRA during grad school, but also paid down student loan debt. You won’t want to miss the excellent insight she shares at the end of the interview. Without further ado, here’s my interview with Dr. Rachel Blackburn.

Will You Please Introduce Yourself Further?

01:17 Emily: I have with me on the podcast today, Dr. Rachel Blackburn, and she has a really exciting story to tell us from back when she was in graduate school, how she managed to generate extra income so that she was able to start a Roth IRA which is just an amazing goal and I’m so excited to hear more about the story. So, Rachel, thank you so much for joining me today, and would you please introduce yourself to our listeners?

01:40 Rachel: Yeah, thank you so much for having me. So, I am Dr. Rachel Blackburn, and I am currently an assistant professor at Columbus State University, which is in Columbus, Georgia.

01:51 Emily: Great. And where were you in graduate school?

01:55 Rachel: So, I did a Master of Fine Arts degree at Virginia Commonwealth University, and then I did my PhD at the University of Kansas.

02:04 Emily: Excellent. So, you’ve moved around quite a bit, it sounds like.

02:08 Rachel: Yeah, I have.

02:11 Emily: Tell me about your stipend during graduate school and why you needed to look outside of that–why you ended up generating extra income.

Grad School Stipend at the University of Kansas

02:20 Rachel: Yeah, absolutely. So, during my MFA program, it was all student loans. That’s all it was. And when I got to my PhD at KU, I was really determined to not take out any more loans no matter what my stipend was. And my stipend was basically $1,000 a month, and my rent was of course about half that. And so, I realized that if I ever found myself in a situation where–it was okay to scrape by, like if I budgeted really carefully, I knew I’d be okay. But I was worried about unforeseen elements like a car breaking down, a major hospital visit. You know, something that would really require me to come up with a lot of money at once. And that’s what I was concerned about.

Balanced Money Formula: Necessary Expenses = 50% of Pay

03:08 Emily: A couple of points in there that I just want to follow up on it because I think it’s a great example for anyone who’s maybe looking at a stipend offer letter or maybe you’ve just started graduate school and you’re kind of still figuring out what your budget’s going to be. So, you just mentioned your rent was about 50% of your pay, which is sort of widely considered to be too high. Right? So, according to the balanced money formula, which to me is a good reference point, all of your necessary expenses should be about 50% of your pay. So, not only rent but also utilities and paying any contracts that you’re in and your transportation and your basic food–all of that stuff is supposed to be within 50%, which is actually a high bar for many graduate students to reach, but it’s just kind of a good reference point.

03:53 Emily: So, you knew seeing rent at 50%, this is going to be pretty challenging. And like you said, you also were anticipating having occasional large, hard to cashflow expenses, which is so, so common. Anyone who lives for about a year or longer, you’re going to realize you have these large expenses sometimes. So, that’s why you turned to generating extra income outside of your stipend. So, did you start that right from the beginning of graduate school–or, rather at the beginning of your PhD program–and I’m wondering, was this a common thing among your peers? Did your advisor know about it? Was this a thing that people did and they were open about or was it more kept quiet?

Side Hustles and Financial Situation Often Kept Quiet

04:34 Rachel: You know, it was really kind of kept quiet. I don’t know how many students revealed to faculty that we were all taking on side hustles. I think maybe later on it did when push really came to shove and things like my advisor saying, “I think we need to look to defend your dissertation in the following semester instead of this one.” And me being like, “I literally cannot afford another semester of tuition. You’re going to have to help me get this done now.” So, things like that. I think when push came to shove, we probably revealed a little bit more about our financial situation, but really the only people that were doing okay in grad school and didn’t need to side hustle were frankly people that had two-income households. So, most often married couples. Yeah.

05:25 Emily: Yup. Super common there. I mean, really, paying $1,000 a month. The faculty should be aware–I mean also living in the same city, right? And presumably having a much higher income. They should be aware that that is not enough to live on without either taking out student loans, which as you said, people have enough experience with student loans to know that they should avoid them if at all possible. No, it’s really not enough to live on. So, it should be no surprise to anyone that this is going on. Yet, as you said, most of the time, it’s not really something that is talked about very openly, at least between students and their advisors or students and the administration. Maybe students, among themselves, talk to each other. Okay. So, thanks for giving us kind of the picture for being on the ground there. So, just give me a quick overview. What were your methods of generating extra income that we’ll then dive into?

Primary Side Hustles: House and Pet Sitting

06:15 Rachel: I would say, primarily, my side hustles were housesitting and pet sitting. Those were easy to do, and what was great about them is that if you did a decent job with one, that professor would recommend you to other professors. And professors are always going out of town for guest lectures and conferences. A lot of them have pets. If you have a halfway decent sense of compassion as a human being, you’ll be fine taking care of a pet. Some just want their plants watered or some just want their home to look lived in while they’re away. So, falling into that circle is a really great thing. And that was a lot for me. Also, I did some teaching online and there are various ways to do this. So, I actually taught online for a community college in just outside of Lawrence (KS). And also, another hack about this is that if you’re interested in possibly teaching English online, for whatever reason, there are a lot of companies specifically for Chinese and Korean and Japanese students who will advertise their online teaching English programs, but they will do so on the New York City Craigslist. At the end of the day, you only need be online. You don’t have to live in New York City, but they’re targeting those bigger markets because they’re just expecting to have more people that they can interview. And so, I honestly went on to New York City’s Craigslist a number of times and found online teaching that way as well.

Secondary Side Hustles: Online Teaching and Waiting Tables

07:43 Emily: Just to jump in there, I have another interview where another grad student is currently side hustling with VIPKid, which is one of the companies that you just described that offer that kind of work. So, if anyone’s specifically looking for a company that’s going on right now and we’re recording this in July, 2019, check out VIPKid and check out that other interview. Yeah. Any other online teaching besides that, that you did?

08:08 Rachel: Those mainly comprised what I did online. Now, some people are a fan of waiting tables. This is also something I did. And, really, the only hack there is that if waiting tables is something that really takes it out of you, energy-wise–and it can, you’re on your feet the whole time–I recommend if you can only do it like once a week, do it on a Friday or Saturday night when the restaurant is busiest, that’s when you’re going to make the most tips. Doing a Wednesday lunch is not going to help you out. Doing a Friday night dinner might actually cover your groceries that week, or what have you. So, that’s the hack there. Try and get signed up for the busiest times.

08:48 Emily: Get that hourly rate up as high as you possibly can so you can minimize the number of hours you actually have to do it. Okay.

Side Hustling Apps

08:56 Rachel: I will just add really quickly that there are a few apps out there that can help you generate income as a side hustle. I made a list of some that I’ve used. So, Rover is a pet sitting app, so sign up to petsit. TaskRabbit is basically anything. So, somebody in the neighborhood needs help painting a fence. That’s TaskRabbit. Turo, you can rent your own car out to other people. That’s T U R O. Fat Llama is where you rent out your own possessions. So, say you have a Nintendo Wii sitting around not being used. You could rent out your Nintendo Wii for a weekend to some kids. So, there’s that. Also, Instacart is where you shop for other people. So, anyway, those are some of the ones that I’ve tried.

09:44 Emily: That’s awesome. Thank you so much for adding those specifics. In fact, I guess I talk about side hustling a lot on this podcast because in fact we have another interview where someone’s talking about using Rover and another interview where someone is discussing Instacart. That’s season three, episode two with Shana Green. That one’s already out. So yeah, to follow up on any of those, but thank you so much for giving those specifics. That’s a really great next step for anyone looking to those side hustles. And we also wanted today to talk about credit card churning and travel hacking. So, the listeners may not be very familiar at all with what credit card churning is, what travel hacking is. So, can you start with some basic definitions here for, let’s say, credit card churning first?

Credit Card Churning Fundamentals

10:29 Rachel: Yeah. So, credit card churning is the idea that you take advantage of credit card signups who are offering major big signup bonuses for when you sign up for that credit card. Now, let me preface and say that I’m really just a beginning level churner, like beginner-level churner. Some people are really sophisticated with how they’re tackling this. And I’ve seen spreadsheets of multiple cards when you’re signing up, when you’re canceling the card and things like that. In a nutshell, that’s credit card churning.

11:10 Emily: There’s suddenly a huge subculture within personal finance that is specifically about credit card churning and maximizing credit card rewards. So, if people want to dive, dive, dive into this, that is available. We are fine with the beginner level here. So, whatever you’ve been doing is great. I want to specifically point out that there’s a difference between credit card churning and having credit cards on a longterm basis that give you ongoing reward. So, what we’re specifically discussing today is getting, as you said, those signup bonuses. And so signing up for new cards fairly frequently, doing whatever you need to do to get the signup bonus. And then usually either moving on–keeping the card open, but not using it anymore–moving onto the next card in your churn list, or, potentially closing it pretty quickly. So, just wanted to clarify that for the listeners. So, can you tell us how you got started with this? What was the first credit card you opened for this purpose, for example?

12:06 Rachel: Yeah, absolutely. So, my first year in my PhD program, I was friends with a guy who was an entrepreneur and he was opening his own business. And he fell into the credit card turning scene because he was starting to try and figure out, “How can me and my business partner fly around the US? Because we anticipate that we’re going to fly a lot. So, how are we going to cover all of those tickets?” And so, he really introduced me to the world of credit card turning. So, I should say from the very top that if you’re someone who has trouble paying off your credit cards every month, if you have not so good credit, it’s not the best thing. It’s really ideal for someone who’s really good at paying off the full amount every month, who’s really good at not spending a credit card on things that either you don’t need or things that may be superfluous to your daily life. And so, the one that I opened was Chase.

Disclaimer: Use Credit Card Churning Wisely

13:10 Emily: I want to jump in a second and just emphasize that point because credit card churning and using credit card rewards is really a fairly advanced strategy. I would not recommend this for anyone who is new to using credit cards. My personal rule on this would be use credit cards in your life, in your regular budgeting for at least one year before you even attempt something like this. Because you need to have a lot of confidence in yourself, as you were just saying, that you’re going to be paying off that card in full every month, that you’re not going to be spending any extra money just for convenience factor or whatever it is because you’re excited about the rewards. You need to be a super, super good budgeter and super, super organized before you jump into this world. And it can be really lucrative, as we’ll get into in a moment. So, it’s very tempting, but show restraint. Hold back. Be sure you have your budget totally aligned before you try to attempt it. I’ll link in the show notes, I have an article that I wrote previously called, “Perfect Use of a Credit Card.” So, that will outline what you need to master in terms of using a credit card before you jump into what we’re talking about now. So, thank you so much for emphasizing that. Now, you were just mentioning that you opened a Chase card, first.

14:18 Rachel: Yeah. So, when I first started to get into this–now, like I said, I just wanted to take baby steps. I have used credit cards for most of my adult life, and I feel pretty confident with my use of credit cards that I don’t really have an addictive personality. I don’t go gambling or drink alcohol very much. I’m just kind of pretty unattached that way. So, I felt confident starting to do a baby churn with just one card. I should also mention by the way, that if you open too many cards within the space of 12 months or 24 months, some credit card companies will take note of that and they’ll say, “Okay, don’t give them any more cards.” And it can damage your credit that way. So, that’s just something to be aware of.

15:03 Rachel: So, I recommend, personally speaking, I would probably top out at three in the space of one year. I think that’s plenty to keep up with. So, Chase, for example, had a credit card, and often what they are is that there’s a signup bonus and in order to achieve that signup bonus, which is usually in the value of points and then those points can be exchanged for either travel points, like they can translate to air miles. They can translate to gift cards. Sometimes they can translate to cash back. With Chase–and I did this a few years ago, so I can’t speak to what it is now, but–when I took the Chase card a few years ago, I crunched the numbers and I basically found that gift cards was my biggest bang for my buck. So, I exchanged my signup points all for gift cards for things that I would spend money on regardless, like grocery stores, gas stations, things like that, Walmart, those kinds of things.

Credit Card Churning: Timing is Everything

16:05 Rachel: A lot of these signup points are dependent on you spending a certain amount of money within the first three months, that’s often the typical amount of time. So, I would time my opening a credit card with an event in my life where I knew that I’d be spending more money than I typically do. So, say for example, I think mine was $1,000. I had to spend $1,000 within the first three months of opening this card. And if I did, I was given a reward of 50,000 points, which ultimately translated to my plane ticket to a conference I was presenting at. So, I timed this for when I had been to the doctor and I’d had a hospital visit and I knew I was going to be paying off a lot of doctor’s bills. So, I knew I’d be spending that money anyway. So, that’s how I timed it.

16:53 Emily: We use the exact same strategy–I wouldn’t say we were credit card churning, but signing up for signup bonuses from time to time–doing the exact same thing as you did, like looking at our upcoming six months or a year, whatever, and identifying a few points in the year where, “Okay, we are going to pay our car insurance once every six months.” So, that’s like a pretty big bill, we can put that on the card. “Oh, we’re going to have to buy a flight to here or there. We can put that on the card.” All within a window that was the window that we needed for achieving the signup bonus. So, we did the exact same thing. I think that meeting those minimum spending requirements can be, very typically, a challenge for someone who lives on a lower income, right?

17:31 Emily: Because you don’t have a lot of spending that goes on in a given month, let’s say. Most people will not be paying their rent with a credit card. Usually you have to pay a fee or something to do that. So, if you’re going to exclude rent from this calculation, then there are not that many other things, maybe, that will help you achieve this minimum spend. So, definitely looking your calendar and anticipating upcoming expenses, signing up for a card that’ll give you the right window when you’re going to have to pay those expenses. There’s a little bit of a trick to it when you have a lower-spending lifestyle.

18:00 Rachel: Absolutely. Timing is everything. I also didn’t realize, even for myself, how much I spent cash on lots of things. When I started really concentrating and focusing and saying, “Okay, I could pay cash for this, but I could pay a credit card. Let me just pay with a credit card.” I’m starting to realize that there are very few instances in which it benefits me to use cash, to be honest. Now, I do keep cash on me at all times, just in emergencies. Who knows. But I did start using a credit card for a lot more things than I had. And I find that the rewards do come back to me. Yeah. But no, that’s a fair point. Timing is everything with the credit card churning. When you open the card, when you decide to cancel the card, that kind of thing. Yeah.

Credit Card Points for Gift Cards and Air Miles

18:50 Emily: So, you said that for you, you probably max out at about three cards per year. That’s what you’ve decided you can handle in your personal spending and tracking everything. Other people do a lot more, but that’s what works for you. And that, when you first started doing this, you would trade these points you generated for gift cards because that was what you figured was going to be maximizing those points. Has that continued to be the case? So, do you always do gift cards, or have you redeemed for other types of rewards?

19:18 Rachel: At one point, I did redeem for travel points because, like I said, I was paying for a plane ticket. So, it was easy to translate those to air miles and to do that. What I have found, in my experience–what’s helpful is letting life happen and determining, “Oh, okay, you know what? This month, I have a lot of unexpected expenses. So, actually what I could do to save myself some money this month is go ahead and redeem some points for, say, a grocery store gift card or a gas station gift card. Because that helps offset the unexpected expenses that I’m having.” However, later on down the year, I might find like, “Oh, I really need to take a trip to this conference,” or, “I need to go on this research trip.” And at that point, maybe the air miles are more helpful.

20:10 Rachel: So, it just depends. The nice thing about gift cards too is that if you want to, dare I say, splurge, and get yourself a gift card to like AMC Theatres so you can see a movie, or something that’s like a small, not too expensive luxury. Later on, when you go use that gift card to go see that movie, you don’t really feel as guilty about it because you’re not spending your own money. You’re actually just spending the rewards that you’ve already incurred from paying on your credit card. So, that’s kind of a nice thing that I feel like is a guilt-free way of treating yourself to the occasional movie, or what have you. Because, as we all know, grad school is so stressful. Yeah.

Credit Card Churning: Spreadsheets Are Your Friends

20:53 Emily: I really like that strategy that you’re using the points or whatever that you build up as almost kind of a piggy bank that you can then deploy as needed in the future. And of course, using it for lifestyle upgrades, like going to the occasional movie or whatever you want. When you have your stipend paying your baseline expenses, then you can use your side hustle money, the credit card rewards, whatever it is, for big expenses as they come up to ease your stress or just more of life’s pleasures. So, I really like that strategy. Any other things you want to share with us regarding credit card churning?

21:27 Rachel: I really do recommend keeping a spreadsheet with all of your information, just to make sure that you’re keeping track of what you’re spending, you’re keeping track of, “Is this really for sure financially benefiting me? Am I getting rewards?” Versus, “Am I tempted to spend more money just because I’m trying to meet some kind of signup reward, or something.” Also, don’t be afraid to cancel credit cards. A lot of these cards start off free the first year, but then have an annual fee that they’ll charge you. And sometimes those annual fees hit you and you go, “Oh no, I didn’t realize I was already a year out from when I started this card.” So, you know, make sure that you keep a tally of dates of like, “Okay, I need to make sure I cancel this card by this date,” and so on and so forth. Just to keep yourself on the straight and narrow with the churn.

22:18 Emily: Totally. Totally agree. I have to admit myself, just last month I had an annual fee for one of my cards hit, and I was kind of like, “Oh I guess I’m keeping that card another year.” I mean, I could probably still call and get out of it, but I was kind of debating, “Should I cancel it before the year is up or should I keep it?” And then the year was up before I had my bearings about it. So, I’m going to start a spreadsheet and put that in because I’m definitely canceling it by the end of the second year. In fact, it’s already on my calendar as a reminder to do that. So yes, being very organized, super, super crucial with this strategy.

Commercial

22:57 Emily: Emily here for a brief interlude. Tax season is upon us, and while no one loves this time of year, it’s particularly difficult for post-bac fellows, funded grad students, and postdoc fellows. Even professional tax preparers are often thrown for a loop by our unique tax situation. And don’t get me started on tax software. I provide tons of support at this time of year for PhD trainees preparing their tax returns, from free articles and videos, to paid at-your-own-pace workshops, to live seminars and webinars for universities and research institutes. The best place to go to check out all of this material is pfforphds.com/tax. That’s P F F O R P H D S.com/T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now, back to the interview.

Let’s Talk More About Travel Hacking

24:01 Emily: So, let’s talk more about travel hacking. And you already mentioned using the credit card signups to then generate points that can be translated to different airlines depending on the card and who their partners are. So, that’s definitely one way to go about travel hacking. But you said you had a few other travel hacks that you like to use.

24:19 Rachel: Yeah, I do. So, okay. So, some of these are really simple and kind of a onetime thing. Some of these are a little bit more “shady,” if you will. Not shady, I’m not going to recommend anything illegal, but a little sneaky. So, one of the sneaky things that I did, and I’m sure I can’t be the first person to do this or come up with this, but I would be very careful about timing my applications for funding within the university, because some funding applications will say, “Are you receiving funding for many other source?” And I want to be able to say, “No, I’m not.” And that’s true if I have not yet received official funding from another source. So, I was very careful to time my applications in such a manner that allowed me to always be able to say, “No, I’m not receiving funding from another source.” And if I then applied to another source after I submitted that application, well you know, who could have foreseen that I would do that. So, that’s one. Yeah. Another smaller hack is that a lot of us, I think, forget that as grad students, we’re still entitled to student discounts. So, things like STA Travel, which is the Student Travel Association. They have a website where you can look up airfares and all kinds of things. That’s something to take advantage of in addition to all of the sort of usual suspects like couchsurfing and Airbnb, and things like that.

25:52 Emily: I don’t know about Student Travel Association. Can you say more about that?

STA Travel and Hostelworld

25:56 Rachel: Oh yeah, sure. Student Travel Association. I discovered them when I was in college, actually, because I was studying abroad and I was looking into airfares and things and wondering if, “Is there a way I can hack my way into traveling more beyond my study abroad semester?” So, that’s when I discovered STA Travel. STA Travel covers a lot of things. They also, and I could be wrong on this, but I believe they are the same company that issues international student identification cards. That’s the ISIC card, International Student Identity Card. And that has some benefits to it. In fact, recently they’ve started making them like a credit card so you can even add money onto them and use them as a form of payment. But yeah, STA Travel has a lot of different options. And some of the airfares might be, the stipulation is merely just that you’re a student. Some of them might be, you need to be 35 years and younger. So it kind of depends. You have to check it out. But it’s at least another source.

27:00 Emily: This reminds me, and maybe this is part of that association, but just about hostels–like some of them are only open to students or maybe people of a certain age; not super common in the US. But abroad, much more. So, is that kind of the same idea?

27:14 Rachel: Yeah, absolutely. And actually when it comes to hostels, if you haven’t discovered Hostelworld–hostel W O R LD.com–they’re a great source for housing. And I’ve used them abroad a lot. But in the bigger cities in the U S you’ll find Hostelworld locations, too. And it’s amazing how cheap you can get. A lot of people say, “Well, I don’t feel comfortable sleeping in a room with 10 other people that I don’t know for $10 a night.” A lot of properties on hostelworld.com do offer private rooms, and they’re still cheaper than what you would find on Airbnb.

27:54 Emily: I actually used Hostelworld–I think it was through Hostelworld–when I traveled to Chicago one time when I was in graduate school. And my husband and I, who had no interest in staying in separate rooms with many other people, were able to book a private room together at the hostel, which worked out really well for us. It was very inexpensive. So yeah, thanks so much for mentioning that. And also STA Travel. I spent 10 years in college and graduate school and I’m really kicking myself that I did not know about this. So, thank you so much for mentioning it. What’s the next travel hack on your list?

Budget Airlines, Driving, and Incognito Browsing

28:26 Rachel: Yeah. Okay. So, some of those websites also worth mentioning briefly if you ever are traveling abroad. Ryanair and EasyJet are budget airlines and they’re really inexpensive. That’s helpful to know. But unfortunately, those seem to be limited to Europe. Okay. So, I’ve also crunched the numbers on this, and if it’s possible to drive and if you are receiving funding for say a conference or a research trip, driving actually optimizes the money that you’re spending because you might actually get more back. A lot of universities have a really nice high mileage reimbursement for driving. And so if you can drive but you were thinking of just taking a plane just because, it might actually be worth your while financially to drive. Another thing is, I don’t know if this is widely known, but browsing “incognito” on your browser when you’re looking at flights and hotel rooms and things like that.

29:27 Rachel: So, with most browsers, you just go to the settings. I use Google Chrome. So, for Google Chrome, it’s the upper right-hand corner, and you pull down the dropdown menu and you just say that you want to browse incognito. And what that does is it sort of erases all of the memory and cookies that are stored in your browser. And for whatever reason, say like Orbitz for example, if they know that, “Oh, Rachel Blackburn comes to us and she buys plane tickets through Orbitz a lot, we can probably charge her just a little bit more because she’s likely not going to look at any other sites for fares.” And so browsing incognito takes away their ability to do that.

30:12 Emily: Yeah, really good tip. Anything else in that travel hacking list?

For the Bold and the Brave: Motel Pricing Negotiation

30:18 Rachel: Okay. So, one thing I’ve done–and this might be a little on the riskier side, and I certainly would never, ever blame anybody for not wanting to do this–but, let’s say I’m driving long distance and I know that I’m going to have to crash somewhere. If you feel comfortable, and especially as a single woman, maybe you feel more comfortable doing this if you have a friend with you or something like that. A lot of hotels that are these kinds of like motels that you see on the side of the highway when you’re driving long distance and you’re kind of in the middle of nowhere. They will lower their fares quite a bit if you show up late at night and you’re like, “Hey, I need a room.” And they’ve only got like maybe 10 other people in the hotel and they’ll say, “Okay, it’s $99 for the night.” And I’ll say, “Oh, you know what? I’m sorry. That’s a little bit more than I was wanting to spend. So, I’m just going to go on.” And then they’ll say, “No, no, no, no, wait.” Because who else is going to drop by late at night to stay? So, a lot of them will actually negotiate fare with you, and they’ll drop it down, say like, “Okay, well can you do 75?” “Yeah, that’s better.” Okay. Now, that does mean that you’re not making a reservation ahead of time. You also run the risk that they may not negotiate with you. That can happen too. So, if I’m taking this route, I try to always stop off in a town that’s large enough to have at least three or four off-the-highway motels where I can try that tactic.

31:52 Emily: I’m really glad you mentioned that because we have so few opportunities for negotiation in the US for these types of sales. So, yeah, that never occurred to me, but I really like this strategy. I can’t say I’ll necessarily do it, but I like the idea.

32:08 Rachel: Yeah, it’s for the bold and the brave for sure.

32:11 Emily: I mean, if there is a town where there are two, three, four of these, then they know that you can just walk down the street and try the same tactic. It’s not going to cost you hardly any more time. So, why not? How late is late at night by the way, for you, after what time?

32:25 Rachel: Hmm, that’s a great question. Most people, especially thinking of highway driving, a lot of people like to be in a motel before it gets dark, especially people with families and stuff like that. So, I would say any time after sunset you’re good to negotiate. Yeah.

32:44 Emily: Yeah. Sounds good. Any more travel hacks?

Inviting (non-PhD) Friends to Conferences

32:49 Rachel: One thing I have done, and I wouldn’t exactly call this a hack, and anytime I have done this, I’ve been totally upfront with my friends about it. If I’m going to, say, a research conference or a research trip or something. I’m going somewhere, I can anticipate I’m going to need a hotel room or an Airbnb. I will often invite my friends along, and not friends who are PhD students, but just friends of mine. And I’ll be upfront and I’ll say, “Listen, would you want to come hang out with me in this city for a weekend? We can split an Airbnb, and when I’m at my conference, you can do your own thing. And when I’m not at my conference, we can hang out together.” And I’ve done that before and it’s great. It’s a double benefit of getting to see friends that you wouldn’t otherwise see. But also, you have someone to share the conference with who’s not necessarily associated with the conference. So, I did a research trip to LA at one point and I invited two of my girlfriends along, and I said, “Hey, I’m going to be in LA for a long weekend. Come hang out with me. There’s going to be times when I’ll have to be at this conference, but most of the time I’ll be free to hang out.” And so they shared an Airbnb with me and immediately split my Airbnb three ways instead of one way. So yeah, that’s another hack, sort.

34:06 Emily: Yeah, why not? If you’re going to a desirable location and you like your friends and like to hang out with them, no harm in suggesting it, certainly.

34:13 Rachel: Yeah. I mean, I know so many people that go, “Oh no one else is going to this conference. I guess I’m footing the bill for the whole hotel room by myself.” And it’s like, “No, you might have some friends who like to travel and who would love the excuse to just get away for a weekend.” So, yeah.

34:33 Emily: Yeah. I like that idea.

Prefixes: To Doctor, or Not To Doctor

34:35 Rachel: Okay. Last one. This is the last hack. I often, when I’m booking a hotel or a plane, I have read that specifying your prefix as doctor can make a difference. Even if you’re not a doctor yet, what are they going to do? They’re going to go find your transcripts? Probably not. I don’t think American Airlines has time for that. So yeah, start using doctor as a prefix. It couldn’t hurt.

35:03 Emily: So, when you say that it can help, what do you mean? Would that actually change the rate that you’re paying, or what difference would it make?

35:13 Rachel: Yeah, well I’ve read stories of people saying that they got a better seat or they got a better rate. Sometimes it might just be like, “Oh, you’re a doctor? Continental breakfast is free for you,” or whatever. Or maybe it’s just a few dollars off your bill, or something. But my guess is that this only leads to really minute differences, but again, every little bit helps. Why not? Worst-case scenario, somebody calls you Doctor?

35:44 Emily: Yeah, I think I may try this out. I’m trying to remember. I think in most cases when I travel, I don’t use doctor as a prefix because I don’t want to be approached with a medical situation on a plane. Of course, I’ve never even seen that happen. So, the chances that it would are really, really, really tiny. But I think that’s been my reason to shy away from using my proper title. But now that I know that I may actually get something out of it, I might try using it consistently going forward. Okay. So, we’ve talked about your side hustling. We’ve talked about how you’ve generated other extra income and how you’ve reduced expenses with your associated travel and so forth. And you told me when we started preparing this episode that all this allowed you to open a Roth IRA during graduate school, which, if you told me I’m being paid $1,000 a month and I’m going to be living in Lawrence, Kansas, I’d be like, “Good luck with that.”

36:46 Emily: You know, who would ever think that that would be possible? Yet, it sounds like through these different mechanisms that you were able to. So, tell me more about why you decided to start saving for retirement while you were in graduate school and why in particular you used a Roth IRA?

Why Start a Roth IRA in Graduate School?

37:00 Rachel: Yeah, absolutely. So, I’m in the humanities. I was a theater professional, theater artist for many, many years professionally before I decided to go back to school, years later. And because of that, I was a freelance contractor for a lot of my life–a lot of my working adult life. So, I was never hired on a permanent full-time basis. I was often hired on a full-time basis for the next three months, you know? And then I was again hired somewhere else for the next three months. And I think in the back of my mind, I kept hoping, one of these days, surely, I will get a job that will offer me benefits and savings plans and things like that. And after a few years, I realized, that’s not going to happen. And then when I went back to school, I didn’t know what my options would be there, either.

37:54 Rachel: I knew it was going to be a tight budgeting situation. I was not under any illusion that I would be–I mean, the idea of like saving for an IRA was completely out of my mind. But somewhere during the PhD–and at this point in my life, I’m like early thirties, 32, 33–and I thought, “If I don’t make this happen for myself, it might never happen.” We all know the statistics about finding a tenure-track job after you graduate. And I just thought I can’t keep telling myself, “Don’t worry. One day you’ll get that job. Don’t worry, one day you’ll get those benefits.” I thought, “Okay, it’s up me. It’s up to me to do it. So, I just need to really be creative and smart about how I’m saving money.”

Know Yourself to Choose Which IRA Works For You

38:42 Rachel: I was able to open a Roth IRA with Vanguard. Now, there again–and for those listening, PhD students who are great at research–just research around, figure it out. One thing I liked about Vanguard was that they seem to have, I believe–and I don’t want to misspeak because I could always be wrong. There could be information I don’t have–they seem to have kept their nose clean, relatively, through the recession. And that was one thing that really attracted me to them. I also spoke to friends and family that were involved in business and they all said, “Oh yeah, Vanguard’s a great company.” So, that’s how I chose them. I also just researched financial products and I said, “Okay, what makes the most sense to me?” I wanted something that would hold onto my money and wouldn’t let me at it. Because if I could pull it out without penalty, I probably would. And that’s just a personality assessment on myself. So, I wanted a financial product that I could put money into anytime. I wasn’t worried about being taxed on it. So, that’s why I chose the Roth IRA that I did. And, it would give me incentive to not take the money back out. So, yeah.

39:53 Emily: That sounds perfect. I think you had great insight there. If you don’t make this happen for yourself, it may not happen. Now, we know that you now have that tenure-track position. You’re one of the lucky few, right? But so many people, so many people currently in grad school or maybe in a postdoc or something–yeah, you don’t know what your job is going to be in the future. And kind of the way things are trending is, not only are pensions in many cases a thing of the past, even having what would be full-time benefits, like having access to a 403(b) or 401(k) or whatever, that is disappearing too as more and more people are entering the freelance market, as you said, or doing contract work. So, really, at some point, as you just said, you just need to make it happen for yourself because you can’t necessarily rely on an employer to do this for you anymore.

40:50 Emily: So, it’s a hard realization, but it’s one that if you do have it early on, like you did prior to graduate school or maybe during graduate school or during a postdoc for other people you know what, go ahead and get started. Because now is always kind of the best time to do it, right? Like best time to start saving for retirement. Well, that was 10 years ago, but the second best time is right now. So, go ahead and get started and don’t let, “Oh in the future things will be different hold you back from that.” So, I really love having the story from you of, “Yeah, my stipend was very small, not really sufficient for even a relatively low cost of living area. Yet, this is what I did to change this. I hustled in this way. I was super smart about deploying my credit score in this other way. I kept my travel expenses down in this way, and look at that. I was able to start saving for retirement based on all those strategies.”

Best Financial Advice for Early-Career PhDs

41:39 Emily: And now of course you have the full-time job and things are working out very well, it sounds like. So, love this story and thank you so much for this interview. And as we kind of sign off here, I just wanted to ask you, what is your best financial advice for another early-career PhD?

41:55 Rachel: Don’t underestimate your own creativity. One of your strengths and skills as a PhD student is researching. So, why not take that same skill and apply it to your financial life? If you had told me when I was in my MFA program, “Hey, guess what? In a few years, you’re going to make up your mind that you’re bound and determined to open an IRA.” I would’ve said, “That’s crazy. How am I ever going to save for an IRA on a stipend that I have?” And my other best piece of advice, I decided that because your loans are deferred while you’re in school, if you can pay on your loans while you’re in school, you’re only paying principal. So, that was my other goal throughout grad school. Financially speaking, I was bound and determined, even if it was $10 a month, that was still $120 less on my principal at the end of the year. So, however small it is, just chipping away at those student loans while you’re in school will really help you by the time you’re out of school.

43:01 Emily: I love both pieces of advice. Deploying your creativity and your research skills to your finances as well as your academic interests. And then, just because your student loans are deferred doesn’t mean you have to ignore them. Go ahead and start paying on them to whatever degree you can or are interested in. And/or do this retirement investing. Both of them are going to greatly benefit you by the time you finish up with graduate school and start having to make payments on the student loans. So, Rachel, thank you so much for this interview. This is really, really insightful and I enjoyed speaking with you.

43:34 Rachel: Yeah. Thank you so much for having me. It was great talking to you.

Outtro

43:38 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, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. 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.

Learn From This Poor Kid-Turned-PhD Student’s Different Perspective on Frugality and Debt (Part 2)

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In this episode, Emily interview ZW Taylor (Zach), a PhD student in Educational Leadership and Policy at the University of Texas at Austin. As a child, Zach identified as a “poor kid” and never thought higher education was for him. His upbringing and winding path through community college and his bachelor’s and master’s degrees taught him lessons about money that he has carried into his life as a PhD student – for better and for worse. In this second half of the conversation, Zach gives detailed and unique financial advice to prospective and rising graduate students on evaluating stipend offer letters and selecting housing. He was determined to not go into debt during his PhD, so he thoroughly investigated his stipend offer letter and the socioeconomic layout of his new city before accepting the offer. Finally, Zach shares his vision for the future of his finances once he’s done with his PhD and earning a significantly higher paycheck.

Links Mentioned in This Episode

PhD research housing

Teaser

00:00 Zach: If they want you and they offer funding, then in a different side of the same coin, they should be able to tell you specifically what you’re getting, because how can you budget, how can you plan without knowing what your income is? I mean, it’s incredibly important. So to your point, encouraging PhD students to be their own best friends and their own advocates and be very clear about what you’re getting before you go.

Introductions

00:29 Emily: Welcome to the Personal Finance for PhDs podcast, higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season five episode eleven and today my guest is Zach Taylor, a PhD student in educational leadership and policy at the University of Texas at Austin. Zach has such a unique perspective and so much wonderful advice that I’ve split our interview into two episodes, last week’s and this one. In this episode, Zach gives detailed and unique financial advice to prospective and rising graduate students on evaluating stipend, offer letters and selecting housing. He was determined to not go into debt during his PhD, so he thoroughly investigated his stipend offer letter and the socioeconomic layout of his new city before accepting the offer. At the end of the episode, Zach shares his vision for the future of his finances once he’s done with his PhD and earning a significantly higher paycheck. Without further ado, here’s the second part of my interview with Zach Taylor.

Financial Advice for Early Career PhDs

01:30 Zach: You know, in terms of advice for other early career PhDs, in terms of saving money and thinking about going to grad school, especially with the kind of frugal mindset is I was not going to go to grad school one, if I had any debt. That was just something that I had always thought to myself that if I’m going, again another childhood lesson, if I’m going to pay for it, I’m going to pay for it in cash and I’m not going to take out a loan. My best advice for early career folks who are thinking about the PhD is if you can work before you go to grad school and pay down any undergrad debt you might have. I know it’s not possible for some folks, but try your best to get some work experience and pay down that debt.

Further reading:

02:18 Zach: And then when you’re thinking about doing the PhD, do some of the same leg work that I did. Investigate the city — where is public transportation? Where are groceries? How can you get around? Talk with other folks who have been there for a couple of years. You know, one reason I came to UT Austin is that everyone was eager to give me their perspective. I mean, when I asked people how do you like living? How much do you spend? Where do you live? How do you get to school? No one held information back from me. Everyone was so willing to share because I think you want to help other folks out. So ask questions and be inquisitive and see where you can make it work financially. But then when you make that choice, I made the choice that I was going to go to a funded PhD program. I was going to work through. I wasn’t expecting just to not have to have an assistantship. I’ve worked all the way through, but I’m also not gonna have to take out any loans. And I think if you have the right combination of work experience and academic experience in certain fields, you can find those programs that are very, very low cost or no cost and be able to work through.

03:27 Emily: I just want to add a couple of comments on those pieces of advice, starting with your most recent one. So in the STEM fields and engineering, where I’m coming from, there’s this advice I guess, that people sometimes say to a prospective graduate students, which is that an acceptance without funding is a tacit rejection. Like if you are not offered funding along with your offer of admission, they don’t really want you there. And that’s typical in those kinds of fields. And at a certain, I’ll say tier of university. Not every graduate students — I mean some people do either take, you know, fully pay for their PhDs on their own, like there’s no funding package offered or they go into a situation where they know, okay, sometimes there’s going to be funding, sometimes there’s not going to be, or okay I’m going to have funding to a degree but I’m also going to have to do X, Y, Z to make up the deficit.

Emily: It’s really hard for me to ever say something as blanket as don’t go to a PhD program if you have to take out debt, because I just, I want to allow for individual situations. But I mean it sounds like from your perspective, even being in a totally different field than I’m coming from, you were still determined, I’m not going to go to graduate school if I have to take out debt. It’s just not going to happen under those circumstances. So you were very selective about where you applied slash the programs that you were actually considering going to, to make sure that you could make it happen in that way, even though it did in your case involve outside work as well.

What to Research When Choosing a Program

04:59 Zach: Absolutely. And one thing that I really insisted upon before I came and I don’t, know of too many other young PhD prospective PhD students who do this, but you really have to push the graduate coordinator or someone in financial aid. Know exactly what you’re getting. It’s really easy to say you’ll have an assistantship and it’ll provide a stipend. After taxes and benefits, how many specific dollars am I getting? When in the month am I being paid? Am I being paid biweekly or monthly? Am I paid over the summer? What are the opportunities for employment over the summer? As someone who is going to embark on a five or six year journey, they owe that to you. They have the information, they can provide that to you.

Zach: Before I came I was very, very explicit in saying, if I’m going to leave this job that I know that I like and I’m going to forego wages for five years and give up a salary and not be able to save any money, what am I specifically getting? What are the specific opportunities? And then matching them up with the area and saying, okay, I can make this sacrifice for four or five years. Yes, I’m going to forego wages and a savings, but I’m also not going to be in so over my head or I’m going to feel pressured to make choices that I wouldn’t normally make. And you know, Emily, to your point, it’s absolutely been the case in my experiences and other classmates that there have been times where they’re unclear about their funding package because it wasn’t made specifically clear when they were admitted. Kind of that tacitly, if you’re not fully funded, we don’t fully want you. If they want you and they offer funding, then in a different side of the same coin, they should be able to tell you specifically what you’re getting, because how can you budget, how can you plan without knowing what your income is? I mean, it’s incredibly important. So to your point, encouraging PhD students to be their own best friends and their own advocates and be very clear about what you’re getting before you go.

07:10 Emily: Oh my gosh, I’m so glad that you made this point even more explicit because it’s one that I talk about frequently during admission season. Check the show notes, if you are a prospective graduate student because there will be links there to further articles and workshops and resources that I have on that exact topic of figuring out exactly what your offer letter is saying to you and asking questions when there’s a lapse in information in the offer letter. And I mean, to your point, pay frequency. I mean that’s not even something that you would necessarily think about, but it’s really important once you’re actually on the ground and doing that budgeting. I’m super glad you brought that up.

Further reading/listening/watching:


Emily: But to go back to one earlier point would you mentioned which was paying off debt and working potentially before starting graduate school. I totally have to concur on this because, now student loans I’ll put in one basket, okay, because student loans can be deferred while you’re in graduate school, but other kinds of debt — credit card debt, car debt, any other kind of debt that you have to be making payments on during graduate school — do everything within your power I would say to clear that before getting into graduate school because the stipend is already so meager, you don’t want to have ongoing payments that you don’t have to, once you’re in that situation. And then of course the student loans in another basket, if it’s at all possible to pay down part or all of them are maybe the ones that the highest interest rate or just to make some kind of progress on that student loan debt, if you’re carrying a lot of it, before you start graduate school. It’s an amazing step to take. It’s a gift to yourself. Me personally, I had some student loans coming out of undergrad. I was sure to pay off all of the unsubsidized student loans before I started graduate school. The subsidized student loans, they’re not going to garner interest during that time. At that point, wasn’t caring about that so much, but I got the unsubsidized ones wiped off before I started graduate school. Just wanted to emphasize that point as well. Please go on with your other other advice for early career PhDs.

08:59 Zach: Yes. So this is more about where you’re planning to study and how you can kind of network beforehand. You brought up a great point that I want to hit on again about where you’re living and how much you’re paying and understanding kind of the socioeconomic context of not the university, but the city. Austin, like you said, is really rapidly growing and I applied across the country. I applied to Indiana, Vanderbilt, Stanford, Michigan, Princeton, Cornell, all over the place. But I was really specific about researching Austin when I got in because I knew how rapidly Austin was growing. And to give you an idea of the cost of living increase and how much graduate students are actually paid, I moved into this current one bedroom apartment back in the spring of 2017 for $960 a month and I am a one hour commute from campus. So I’m one hour away for $960, with utilities it’s about $1200 a month. That was a sacrifice I made. However, these apartments now go for $1310. So they have increased almost $400 in two years. And I’m still one hour from campus. If I was arriving to Austin today and having to sign a lease today, I would pay almost $400 more than I would have paid just two years ago. Now you had talked a 10% increase — 30% increase, 40% increase. And these are not….we don’t have a garage. We don’t have a private yard. We don’t have too many amenities. It’s a pretty standard one bedroom apartment with air conditioning, but it’s also an hour away from campus.

10:53 Zach: I always host PhD students in the spring who are prospective students. And I always, when I show them apartments, I ask not only for the current rent because a lot of major cities have market rent, which means it changes, with the ebbs and flows of moving season throughout the year. Don’t only ask for the rent now and move in, but ask for it three years prior because they have records of all the leasing contracts and all of the, um, leasing and rental agreements. So you can see how rent has changed and gone up or gone down in a certain area. And actually I just helped a friend from Michigan move in just the other week and he and his partner made a very specific decision to go to a certain complex and neighborhood because the rent had been somewhat stable over the past three years and had only gone up about $180 over three years. Whereas my neighborhood is in a different kind of more developing area of Austin and it is growing like crazy.

Zach: Especially when you’re moving into a new city, getting an idea of historical trends and then do the exact same thing for the stipend. How much was the living stipend, how much was the assistantship five years ago? What does it now and do you anticipate a cost of living increase and is that going to be compensated by the university? Something that UT Austin recently did was dedicate new money to try to keep up with cost of living and try to develop some new graduate student housing, which we haven’t really talked about, but always inquire about graduate student and subsidized housing because some universities still do have it. Even though in a very landlocked, city locked university like UT Austin, there’s not a lot of room for expansion anymore, but always ask about the cost of living increases in historical rent in the city, how that relates to the stipend from the university and then what the university is going to do to keep up with that cost of living. I couldn’t agree more.

12:56 Emily: Yeah. I’m so glad you made that point.

Commercial

13:02 Emily: Emily here for a brief interlude. Tax season is upon us and while no one loves this time of year, it’s particularly difficult for post-bac fellows, funded grad students, and postdoc fellows. Even professional tax preparers are often thrown for a loop by our unique tax situation. And don’t get me started on tax software. I provide tons of support at this time of year for PhD trainees preparing their tax returns. From free articles and videos, to paid at-your-own-pace workshops, to live seminars and webinars for universities and research institutes. The best place to go to check out all of this material is pfforphds.com/tax that’s P F F O R P H D dot com slash T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now back to the interview.

Understanding The Role of Cost of Living Increases

14:05 Emily: Really, a new idea for me is actually asking about those historical rents and seeing the increases. This might be a silly question, but does Austin have any rent protection in place? Like increases can only be a certain amount over time, like in terms of laws in place?

14:21 Zach: Not that I am aware of and it doesn’t seem to have translated to people who have actually been into leases and stayed multiple years. Our rent has only gone up $60 in two years, but for the same apartment, for new leases, it’s that new elevated price. However, and this to me was just absolutely ridiculous, I was actually outraged by this, that we have a valet trash fee that is mandated. That we have to pay $14 a month to have somebody pick up our trashcan outside the door and take it to the dumpster. Now the dumpster is a half a block away and I don’t want to pay for valet trash, but I have to because it’s part of the lease and it’s an industry that Austin supports. So there are some fees — you know I’ve heard a lot about the fee creep and higher education where you might have a tuition freeze, but you can keep charging student fees and those add up. The same thing happens with amenities and fees in Austin. The trash fee has gone up, water has gone up, electricity has gone up. It used to be that we would come in a close to $100 over the summertime for air conditioning. Now it’s closer to $140 or $150, and it’s a dramatic increase. So not only understanding the rent, but really understanding what fees you have to pay, what are mandatory, what are optional, and then how those feeds are going to be adjusted over time, because in some big cities they’re just mandated and you just have to bite the bullet and pay for them even if you don’t want to. But those really add up just in fees. We pay an extra $95 or $100 a month just in fees.

16:09 Emily: Yeah. What I’m getting from this part of our discussion is just the importance of interrogating every single component of your offer, of what your living expenses are going to be. And all the time that you put into researching these different components before you actually move to the city that your graduate school is in, or after graduate school, same story, it’s really going to be worth it. It’s going to pay off when you do this research, because the less you have to learn on the ground once you’re there and make changes, the easier it’s going to be. If you can find a place you want to live for several years right from the beginning, it’s a lot easier for you. I did want to go back to make one other point from what you said earlier about asking about the historical stipends. I definitely think you should and can ask a graduate program that, but I wanted to plug my own website, which is PhDstipends.com and also I have another one for postdocs, postdocsalaries.com. PhD Stipends has been around for five years now, I think. And people enter which academic year, the stipend their listing is for. So if your university has enough data in there, you definitely can look back, even potentially at your own department and see what they were paying five years back to compare it to what’s in your offer letter.

17:24 Zach: Yeah, absolutely. And to your point about having that access to data and actually seeking that out, now that you mentioned that, I don’t know anyone else who did that when they came. A lot of folks were really excited just to be able to come to Austin and to be in a PhD program. It’s a very highly ranked program. It’s very prestigious around the country, so a lot of folks were just happy to be there. But then down the road they really kind of regretted not understanding where they were going to live, how much they were going to make. Also the time crunch in making a decision. I had to make my decision in a series of three or four weeks. I mean really in graduate student visits when I was admitted to PhD programs, I the beginning of February really until about mid-March to visit places, do my research. So also understanding how that’s going to affect whatever job you have at the time.

Zach: When you’re exploring PhD programs, it is a serious time commitment. I mean just finding a PhD program in a city that fits you and your budget and that you can continue to maintain your expectation of living whatever that is, is like a full time job. It’s like being on the job market and people should take it with the same seriousness and explore all of those resources that they can because like you said, I have been very, very fortunate. It was some good planning, but I’ve been very, very fortunate not to have to move every year, not to have to sublet. That means my computer workstation has stayed the same. I have a routine. I’ve been able to write. I’ve been able to travel because I haven’t had to worry about where I’m going to live, how much money I’m going to make. It’s all very budgeted, all very meticulous and I think that has really made the PhD program a much more fulfilling experience, because like you said, I have gone through those hoops initially to make sure that I was in a place that I could afford and I would feel comfortable in.

Final Words of Advice

19:24 Emily: Yeah, absolutely. I’m so glad that you brought up that point as well. Any final advice for other early career PhDs?

19:31 Zach: Yes, so I guess lastly, and it’s kind of more of a philosophical point, is I did make the choice not to go to a PhD program that wasn’t going to financially support me. And I think, most people who pursue a PhD, it’s right in the prime of their earning potential, right? So you’re talking early twenties to anywhere in the late thirties like that 10 to 15 year period, you can make a lot of money during that time of your life and pay down a lot of debt. You have to understand that going and getting a PhD, you’re going to forego wages and you might take on debt. It’s such a double edged sword because you’re losing money on one hand, and you’re kind of having to borrow more money. So really, really committing and making that sacrifice, because understanding how many hundreds and thousands of dollars you may be foregoing in the future, and having to pay back debt, and having lost wages.

Zach: The sacrifices I made were having a very compromised social life and a very kind of frugal living down here because I knew it’s going to be four or five years of just extreme sacrifice. I am not going to go out. I am not going to go out to eat very often, I have only gone out for drinks three times in three and a half years and all three times were for professional networking, and to work on projects. I just don’t do it. A margarita is $12 and that’s my food budget for almost an entire week. I have made that kind of level of commitment to stay out of debt and to do it frugally. Not everyone can do that, but if you can commit to doing that, you can get out without debt or with very low debt and 10 or 15 years down the road, you’ll really thank yourself, and you’ll look back and you’ll realize, you know what? I think that sacrifice was worth it.

21:27 Emily: Yeah, I think so. I mean your point about opportunity cost is a very, very important one and not something that people, I think think about enough going into PhD program. For me, it’s another reason to work before you go into a PhD program because you have a better idea of what you are giving up on the one hand in terms of salary potential during that time. And you also have more context for your PhD work. What is this going to do for me on the career side?

Financial Plans After Grad School

21:51 Emily: I’m gonna surprise you with one last question, Zach. This is not what I prepared you with, but what do you think you’re going to be doing with your finances once you’re done with the PhD? And hopefully, you have a job you enjoy that pays you much better than whar you’re being paid right now. Do you see yourself shedding some of these mindsets and habits that you’ve carried with you to this point? And if so, how? How can you even step away from this since it’s been going on for so long in your life now?

22:22 Zach: Yes. It is such a lifestyle. I cannot emphasize that enough. I have thought about what I want to do with my money when I graduate and get a job and now I don’t have debt and the money is mine to spend. I don’t want a larger than two bedroom house because I’ve never lived in a place larger than that. I wouldn’t feel comfortable in a four bedroom house in the suburbs. That’s just not me. I would not feel at home there or comfortable. I could never buy a new car. I could never do that. I would not feel comfortable driving in a 2019 anything. I’ve always bought used cars. I wouldn’t even feel comfortable doing that. If you remember actually from HEFWA, though, what is really, really important to me is donating. I wanted to stay out of debt and get a PhD and have the earning potential to donate to certain programs that I was a part of as a kid and that really helped me out. I think when people are asked about “why do you save money?” I saved so I can give more. Since I’ve been a PhD student, I have been able to donate about $700 to my alma mater and a mentoring program that they have going that I was a part of when I was there. For me, that is such a better use of the money instead of going downtown a couple of weekends and having drinks. I feel so much better about it.

Zach: I think having an understanding of the kind of money I will make when I’m done and then how I’ve grown up, it’s going to allow me to do a lot more good and amplify a lot of the philanthropy that I’ve started doing, and that is really how I’m going to be spending a lot of my expendable income as you could say. I’m going to start a savings account. I’m going to start a 403B or a 401k or some employer sponsored a savings account. If there’s a state pension program, I’ll participate in that. But it’s really going to free me up to spend money where I think it needs to be spent, which is education and low income kids. And like I said, I’m going to look back on my time at UT and Austin and say, maybe I was able to send some kid to community college because I didn’t go out. I was able to help some kid get their associate’s degree because I made those sacrifices and I will trade that any day of the week.

24:56 Emily: I’m so glad to have that incredible perspective from you on the podcast today. It sounds like a really bright future and happy for you that you’ll be finished quite soon, and you’ll get there before too long. Zach, it’s been an absolute delight to have you on the podcast today. Thank you so much for joining me.

25:16 Zach: Absolutely. Thanks Emily.

Outtro

25:18 Emily: Listeners, thank you for joining me for this episode. PFforPphDs.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, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars covered 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 Lourdes Bobbio.