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Why and How These Grad Students Purchased Homes

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In this episode, Emily presents first-person stories from grad students who bought homes during grad school. The volunteers were simply asked to share their stories of home ownership, whatever they may be. You’ll hear from three volunteers throughout this episode, both on how they purchased their homes but also what’s happened since then, the benefits and the challenges. Perhaps you’ll be inspired to pursue home ownership yourself sooner rather than later. The final person included in this episode is a mortgage originator specializing in early-career PhDs, who summarizes why graduate students and anyone paid by fellowship have a difficult time securing a mortgage and his system for framing them as qualified borrowers.

Links mentioned in the Episode

grad student home ownership

Teaser

00:00 Courtney B: Owning a house is all about the long game. We hope to see large returns on the remodeling and roofing work once we sell, but for now we have to be willing to put a decent amount of cash down for deductibles, emergencies and our new monthly loan payment.

Introduction

00:18 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others.

00:47 Emily: This is Season 15, Episode 2, and today we’re featuring first-person stories from grad students who bought homes during grad school. I simply asked the volunteers to share their stories of home ownership, whatever they may be. You’ll hear from three volunteers throughout this episode, both on how they purchased their homes but also what’s happened since then, the benefits and the challenges. Perhaps you’ll be inspired to pursue home ownership yourself sooner rather than later. The final person included in this episode is a mortgage originator specializing in early-career PhDs, who summarizes why graduate students and anyone paid by fellowship often have a difficult time securing a mortgage and his system for framing them as qualified borrowers.

01:32 Emily: By the way, there is still time to volunteer for one of the compilation episodes coming up later in the summer, specifically the episode on unions and unionization movements. If you have a story to share on that topic from the last few years, please email me at [email protected].

01:52 Emily: This next announcement is specifically for those of you who are applying to PhD programs in the US in the upcoming academic year. If you’re not in that group, please share this information with someone who is! On Friday, July 14, 2023 at 10:00 AM Pacific Time, I’m delivering a free webinar titled “Don’t Accept Admission to a PhD Program without a Sufficient Stipend.” Yes, this is something you need to understand and commit to even before you start applying to PhD programs! The three phases of this webinar are to go over why you need to be sufficiently financially supported in your PhD program and what that means to you; how you can ensure that you will be; and what actions you need to take in the fall during application season, in the spring during admissions season, and in the summer before you matriculate to make this come about. This webinar includes what I wish I had known as a prospective graduate student and the hidden financial curriculum of academia that it’s taken me over a decade to uncover. It’s so vitally important for prospective graduate students to have this information early, which is why I’m giving it away for free! Please help me spread the word! Anyone interested can register for the webinar at PFforPhDs.com/sufficientstipend/.

03:20 Emily: You can find the show notes for this episode at PFforPhDs.com/s15e2/. Without further ado, here’s our compilation episode on home ownership.

Hannah Stroud, PhD Student: College Station, TX

03:37 Hannah S: Hi, my name is Hannah Stroud. I am a final year PhD student at Texas a and m University, uh, which is located in College Station, Texas. College Station, Texas is a city with a extremely low cost of living compared to other areas of this country, uh, which is pretty much the only reason that I am here sharing my home ownership story with you today. , I guess I started my PhD in 2020 and purchased my house in March of 2021, and I had been a grad student before that and had been living in college station since 2014, so I’ve been here a while. Uh, and the low cost of living in this area in general allowed me to save a pretty substantial amount of my stipend just comparatively. So in my master’s, I think I was paying like six 50 in rent, uh, per month, uh, which meant that a decent portion of my stipend could go to fun activities or savings in general.

04:37 Hannah S: Um, how I grew my savings was through a robo-advisor managed, uh, money market account and also ETF investments. Um, and that was really helpful in kind of just turning what I had saved into enough to be able to afford a down payment. Uh, and so when I started the kind of mortgage lending process, um, in the first month of my PhD, so I am a fellowship student, which means my income is not w2 and I’m a NSF GFP fellow, which means that my intimate income is guaranteed for three years. So when I started my mortgage process, uh, that was important to my lender. What I didn’t realize is that when my mortgage rates were locked in, uh, they wanted my three years of employment to be verified from the time of closing. So when I closed six months later, I actually ran into some issues, uh, where my lender wanted some way to guarantee that I would be employed at the same salary that I’m currently making, uh, for three full years, not the two and a half that I could promise based on the time that had elapsed.

05: 43 Hannah S: Um, so I ended up needing to increase my down payment to the full 20% so that I didn’t have to qualify for private mortgage insurance anymore. But ultimately, the main aspect of my home ownership story is truly luck. Uh, I’m very fortunate to live in a very low cost of living city, and the timing of the pandemic honestly played a lot into the house prices being very low and mortgage rates being what they were. So given the current environment, I don’t know that a lot of this advice is incredibly applicable, uh, but advice that does stay the same is the, if you have non W2 income, it is important to learn from your desired lender. What aspects of your income are important to them, and if three years of proof of income will be required from the time of closing, it’s been a fun experience overall.

06:41 Hannah S: Ultimately, owning is significantly more expensive than renting because when things break, I am my own landlord and I get to fix them, and sometimes those expenses are more significant than I would like them to be. Uh, within the first kind of few months of owning my home, uh, both the washer and dryer that came out, the house broke, and so I needed to replace those. Um, and I found out that my non-mobile house had a mobile home shower installed in it, and all the plastic parts were degrading, so I needed to, uh, replace all that with copper piping and plumbers are expensive, and then any electrical issues become your problem, AC issues become your problem. So definitely get the home warranty. Uh, if you can include that in the conditions of closing and ha have it be something that the seller pays for, I would recommend that highly. And then I renewed it for a second year as well, cuz my air conditioning unit was pretty old. Um, and that ended up being the right choice for me just because the, the amount of maintenance that I required on, on that particular utility was, was significant in the second year as well. So yeah, hopefully you have as good of luck on your journey as I’ve had online and yeah, good luck going forward.

H, PhD Student: East Coast

08:00 Emily: This submission is from “H”, a PhD student who lives on the East Coast. Quote. I had a vague plan to buy my place in my second or third year of my program, but it ended up happening in a surprising and rushed way when a house came up right in my neighborhood, I had something like a month to close, which I did in August, 2020 at the beginning of the second year of my program. My income has increased since I got the house, so the monthly payment, including mortgage insurance and property tax, is now a little less than a third of my post-tax income. Initially it was closer to 40%. Having roommates in various configurations has offset between 25% and 65% of my payment at any one time. But there have also been months between roommates where I’ve been covering the whole amount. I’ve had kind of a revolving door of housemates, which has been a lovely part of having my house.

08:49 Emily: So far it’s been friends or friends of friends, almost all grad students because my roommates and I, I have so far always been gone for the summer, I rented out for more like 85% of the mortgage to people doing summer internships. Here it offsets the fact that my July and August stipend payment is lower than my 10 month academic year stipend payment. I charge less than market rent because I’m not a professional landlord and I don’t have a property manager. The house is old and not in perfect shape. When I’ve had water in the basement, a broken water heater or a broken window, people have been understanding and patience since I’m not charging a lot, I’m also able to undercharge because I have a financial safety net. My parents lent me almost all of the deposit and I won’t start paying them back until I finished my program.

09:33 Emily: Their justification was that they had paid the same amount for my siblings law school. We’ll pay them back interest free. I would’ve been able to get a place on my own, but it would’ve been smaller and I would’ve bought later. The fact that I have a financial safety net has made being a homeowner less stressful. I haven’t had to ask my parents for money for repairs so far, but I can sleep at night knowing I’d be able to borrow money from them if I urgently needed a new roof or something. I love having an old house, but because of the upkeep, I think it would be too stressful to own one without that kind of cushion. It was very much a pandemic home purchase. I remember reading all these articles in 2020 and 2021 about people who are desperate for more space when working from home and how they had overpaid for falling apart houses.

10:17 Emily: I was like, oh my God, is that me? Now with the interest rates up, the news is all about people who lucked out with 2% interest rates like me, and now their incentive is just to never sell. Sometimes I think about how my mortgage on the house is twice what I was paying for a one bedroom apartment and how I spent money on repairs and my bills are much higher than in the apartment. And I wonder what would’ve happened if I had plugged the difference into an index fund instead. But if the house has increased in value, as much as Zillow says the house wins out as an investment, obviously you have to take Zillow with a grain of salt. I think only time will tell whether this was a good financial decision or not, regardless of whether it turns out to have been a good investment.

10:55 Emily: I have so many great memories of this house. I love having space to host and being able to provide a gathering place, especially in the pandemic. When I hosted people from out of town who needed a break from being isolated alone in their apartments. I’ve loved becoming closer to my housemates. I’ve had friends stay in the house when their family were visiting from abroad and needed a place to stay. I feel happy that the house has helped people out with somewhere to stay when other solutions were expensive and logistically difficult. I’ve loved being able to host my family, especially at the holidays. A lot of this would just not be possible if I were renting. I know that buying a house is normally seen as tying you down, but for me, I think it’s given me the freedom to be mobile. Having the house has allowed me to be pretty flexible during the latter part of my program, which requires research abroad.

11:40 Emily: I offset the monthly payment by renting it out so I don’t feel like I’m obligated to stay there just because I’m paying for it. When I’ve worked abroad on a job that included housing or got grants that covered my housing while researching, I’ve been able to save a good amount of money, money by reducing my housing expenses, but I also didn’t need to formally move out and I know I can come back whenever because there’s still a spare room compared to having to deal with paying for storage and finding a place during awkward lease gaps. I’m able to be much more of a free agent than other people I know Doing dissertation research abroad, it’s just one of the many ways that being financially secure makes the experience of being a grad student dramatically less stressful. I think it’s important to recognize that my financial privilege and home ownership, along with my citizenship, have given me greater research capacities. I’m not sure what I’ll end up doing with a house after I leave the program. I might rent it out on a more formal basis or if I decide to buy elsewhere, I might sell. End quote.

Courtney Beringer, PhD Student: Corvallis, OR

12:37 Emily: This next submission is from Courtney Beringer, who was previously interviewed on this podcast in season 10, episode 18.

12:45 Courtney B: My name is Courtney and I’m a third year PhD student in civil engineering at Oregon State University in Corvallis, Oregon. Uh, I recorded a podcast with Emily shortly after I bought a house in 21, so I’ll briefly talk about that and dive into what has happened since then. I bought a house with my friend in July, 2021 in Corvallis, Oregon for about $250,000. It’s a three bedroom, two bath with an additional room that we converted into a bedroom. My co borrower and I live in the house along with our two tenants. Our mortgage is about $1,500 a month, and our rental income is, uh, $1,300 a month. Um, we were patient and took months to find a house that met our needs of being within about five miles of campus. Um, had rooms we could rent out and was under our budget of about $320,000. Our loan process was made, uh, a little complicated by having co borrowers who were not related or married.

13:50 Courtney B: And because we were both grad students with changing sources of income throughout the year, we worked with our loan officer through these hurdles and everything actually turned out great. It has now been two years as homeowners and with tenants. Uh, it has been great to have a passive side income through renters. We have enjoyed the freedom that home ownership has provided, uh, but home ownership is always unpredictable. We had a water heater leak in January this year, which caused my co-owner one of our tenants and I to live in a hotel for two months while demo and construction occurred in my room and our shared bathroom insurance covered so much. But this took a lot of time out of our studies and lives to move, make remodeling decisions and coordinate with contractors, and we just got a roof place, which added a $13,000 loan to our joint finances. Owning a house is all about the long game. We hope to see large returns on the remodeling and roofing work once we sell, but for now, we have to be willing to put a decent amount of cash down for deductibles, emergencies, and our new monthly loan payment. Uh, I hope my story gives you a sense of the joys and realities of being a homeowner.

Commercial

15:07 Emily: Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2023-2024 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/speaking/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

Anonymous, PhD Student: Atlanta, GA

16:26 Emily: This submission is from an anonymous contributor. When they mentioned Sam in the course of this contribution, they’re referring to Sam Hogan, a mortgage originator specializing in early career PhDs. And we’re actually gonna hear from Sam next

16:39 Emily: Quote. I purchased a home during the spring semester of my first year as a PhD in Atlanta, Georgia. I closed in April, 2023. I have been debating home ownership since 2020. I would be entering graduate school in my early thirties, so I wanted to try and build wealth so that I wouldn’t be too far behind in retirement savings or net worth. When I finished in my late thirties, my parents were not convinced that buying was the right move. So when I moved back home to Atlanta to start school, I ended up renting a beautiful old studio. But in January of spring semester, when I was informed that rent would be going up $200, I realized that I was ready to buy and that I needed it to happen fast.

17:18 Emily: I tried several different mortgage lenders, but most were rather confused by the stipend structure. I would get pre-approved based upon my credit score and lack of debt, but then would always receive several follow-up emails asking for documents from my university, asking for verification and explanations. I turned to Sam fairly early on, just asked him questions and then ended up going back to work with him after the other lenders didn’t work out. I received my pre-approval from Movement Mortgage with no follow-up questions and began house hunting. In late January, maybe eight or nine bids later, I finally landed on a home, not a condo, which had been my original call, but HOAs kept blowing my budget in late March with a closed date in early April. For a moment, there was a bout of panic because the house has an unfinished primary suite and we, Sam, my realtor and myself, didn’t know if it would pass appraisal the suite, huge bedroom, bathroom closet was essentially a bonus room or a garage.

18:11 Emily: The outside structure was finished, but there was nothing else. No drywall, no electric, nothing. Ultimately, the house passed appraisal, the seller contributed to closing and Sam even managed to get me a few hundred dollars back at closing. Looking back, this story sounds really straightforward, but it was super stressful. I also switched realtors during this process and I wish that I had done so earlier. I was also saving between $800 and a thousand dollars a month between January and April to make the down payment, and also ended up basically emptying my investment account and my Roth ira, both of which had less than $2,000 in them. I put 3% down on a home that was less than $200,000 a total steal in Atlanta. All in all, I’m glad that none of the other bids worked out. This home is spacious, has a lovely yard, is in a great location, and the unfinished primary suite will multiply the value of the home.

19:01 Emily: Of course, the house will need a lot of work, but I have a roommate and we’re both excited to get our hands dirty. My biggest piece of advice is to remember that the people who help you purchase your home need to advocate for you. Sam is a phenomenal advocate and helped me get into my first home and stopped at nothing to make the sale work. The realtor who I ended up working with was also an amazing communicator, and I wish that I had been working with him the entire time. Of course, save money and do your research, but remember that the people on your team matter. End quote.

Sam Hogan, Mortgage Originator

19:36 Sam H: Greetings. This is Sam Hogan. I help graduate students, postdocs and PhDs achieve home ownership in all 50 states. We’ve closed hundreds of loans for PhD students and postdocs. They have a unique, uh, income set and require unique mortgage approval process. Um, having done this for over four years now, we are the nation’s only lender that focuses on your success while you’re getting your degrees in higher education. My team is a longstanding advertiser and sponsor of PF for PhDs, and I am delighted to also be Emily’s little brother. So Emily reached out to me in, um, spring 2019, um, having seen a pattern of difficulties for PhD students, um, closing on home loans.

20:29 Sam H: The issue with PhD income is that the loan officer in the pre-approval stage will either pre-approve them and not do enough work themselves or deny them out the gate. Now, when an underwriter sees the PhD income after loan offer, pre, pre-approved them, them, it might not have enough information about the stability and continuance in history, and you also can be issued a denial because the underwriter doesn’t have to give you a final approval based on those offer letters. Um, after some a few months of investigating, we developed a system to properly document the income, the continuance, and the stability. Um, regardless of how soon or how late you are in your PhD stipend continuance, where I come in is demonstrating that the borrower who’s a PhD student has always been a full-time student, has always maintained a good gpa, has a track record of staying in the same field of science or research.

21:34 Sam H: We do have to over document a file sometimes to demonstrate continuance, but even if we have less than three years, we are able to help the underwriters understand the quality of individual behind this stipend income, which has helped us become successful in closing loans in this space. I will rescue PhD deals every single month. This happens often with, uh, new construction builders and their lender is completely unfamiliar. Or some other companies like, um, loan Depot for example, will just outright never accept stipend income. So those clients will read my reviews or, uh, find Emily’s blog where we give a little bit more of in depth information on how it works. Um, I’ll connect with them and they will become homeowners and protect their deposit, have a more stress-free approval working with us versus a lender. Loan officers. Not, not familiar. When we originally started helping PhD students and post-docs become homeowner, homeowners, we were more comfortable with having three years of continuance.

22:42 Sam H: So at the early years or maybe before your first semester of becoming a PhD student, that was our, um, bread and butter easy approvals with confirming that income. As we’ve done more PhDs and expanding to more states, we’ve actually seen some success helping PhDs who are in their later stipend years, years four, five, sometimes six. Um, so really we just need to make sure that we can show history and continuance. Even if you’re stipend might be ending in a few months, we can still help you. We just like to show the career field that you’re going into and some other details about your career path and your future successes. A lot of home buyers in this market are not excited about taking higher than a 5% rate, and I wanted to just encourage people that it is much more difficult to find the home than to get a mortgage on it. So we say in our industry, marry the house date the rate. Once you’ve found your home and rates improve, you’ll be able to refinance and lower your payments and lower your total interest paid. What you don’t want to do is wait for rates to get a little bit lower and then the market is flooded with buyers and you have more competition searching for that same home.

24:03 Sam H: Having to read originated loans for seven years working with the PhD community just makes my life such a breeze. Everyone is very responsive, calm, cool, and collective. They understand what I’m talking about and they’re willing to listen to me explain a little bit extra about the home buy-in process so they can have a better understanding of it. Unfortunately, there’s not a lot of standard education on how to buy a home or how to get a mortgage, but that’s okay because you have people like myself who are willing to take the time to help you understand and find success in this space. But working with the PhD community has been, um, so wonderful over the last four years. I I wouldn’t trade it for anything. Having to having clients who, um, are attentive to your requests. I, I will say well qualified, a good, good credit scores and goal oriented. If you’re committing, uh, five or six years to a new area and you don’t wanna waste five or six years worth of rent, you know, please reach out to myself. The best number to reach me is 540-478-5803. Um, and I’m looking forward to hearing from you. Happy hunting.

25:14 Emily: I host monthly. Ask me anything with Sam. So if you’d like to meet him and ask a question about mortgages or the home buying process, please register for our next one pfforphds.com/mortgage.

Outtro

25:32 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

Why and How These Graduate Students Side Hustle

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In this episode, Emily presents first-person stories from grad students who side hustle. The volunteers were asked this set of questions: What is your motivation for having a side hustle? What is your side hustle? What are its benefits and detriments? How much do you earn through your side hustle? If someone listening wants to pursue this side hustle, how would you recommend they get started? You’ll hear from eight volunteers in total throughout this episode, and perhaps be inspired to start or expand your own side hustle.

Links mentioned in the Episode

Grad student side hustles

Teaser

00:00 Anonymous #1: Some places might give you entirely free housing. Some places might be like mine where you get like a 50% off for your housing rate. I find it to be beneficial because that’s money that I get to keep for myself that I can invest in my Roth IRA that can be used for my own spending, that can use for a traveling for leisure, because we know we get started as graduate students. So it’s really important that I take breaks and have that extra money so that I can invest for my future and take those much needed breaks

Introduction

00:33 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 15, Episode 1, and today we’re featuring first-person stories from grad students who side hustle. The volunteers were asked this set of questions: What is your motivation for having a side hustle? What is your side hustle? What are its benefits and detriments? How much do you earn through your side hustle? If someone listening wants to pursue this side hustle, how would you recommend they get started? You’ll hear from eight volunteers in total throughout this episode, and perhaps be inspired to start or expand your own side hustle.

01:34 Emily: By the way, there is still time to volunteer for one of the compilation episodes coming up later in the summer, specifically the episode on negotiating your individual grad student stipend and the episode on unions and unionization movements. If you have a story to share on either of those topics from the last few years, please email me at [email protected].

01:59 Emily: I’m beyond excited to announce that I’m offering a brand-new live one-hour seminar titled “How to Not Hate Your Fellowship During Tax Season.” It’s all about how to understand and properly handle your fellowship stipend that will not be reported on a Form W-2, which is what I call awarded income. Awarded income typically doesn’t have income tax withheld from it, which can become an unwelcome surprise and even financial hardship if the recipient is not taught what to do starting with their first paycheck of this type. In addition to teaching about estimated tax and self-withholding, I give pointers for preparing for and navigating tax season with awarded income. This seminar is intended to be taken during orientation or shortly after by people who are switching onto awarded income for the first time, so it will be exclusively available between August and October of this year. If you are starting on awarded income in the fall and your university doesn’t withhold income tax—or you’ve dealt with that scenario in the past—would you please recommend this seminar to your fellowship coordinator, program head, or graduate school? Please cc me [email protected] so I can pick up the conversation. My goal is for every grad student receiving awarded income to be forewarned about this issue before it rears its ugly head during tax season!

03:29 Emily: You can find the show notes for this episode at PFforPhDs.com/s15e1/. Without further ado, here’s our compilation episode on side hustling.

Shan Kutagulla: Technology Incubator

03:46 Shan K: My name is Shan Kutagulla at the University of Texas at Austin. I’m getting my doctorate here. I have a masters and did my bachelor’s at USC in Southern California. I do materials research for semiconductor and energy. Energy topics.

What is your motivation for having a side hustle?

04:08 Shan K: Yeah, my motivation for side hustling, I think like everyone else is to make a little extra cash. But in addition to that, it’s trying to get some skills that I wouldn’t necessarily get in the lab. I think for me as an engineer, I think soft skills are always going to be one of those things that engineers tend to either stereotypically or realistically lack.

What is your side hustle?

04:29 Shan K: So I work for my campus’s technology incubator, so that involves a lot of interviewing people, talking to founders of companies. So that really helps develop a lot of soft skills and then also gives me exposure to the business side of things. So it’s a little kind of rounding out the skill set in addition to making making some cash, which is always, always needed in grad school.

04:54 Shan K: So it’s through the school UT is I think one of a couple of universities has like technology incubator associated with it. So if any, any graduate student or any or founder really has a good idea that they kind of want to commercialize those, take research and spin it out into into the real world. So that the issue with that is a lot of people start applying to those positions or applying to the incubator to have their company incubated and they need someone to kind of bridge that gap between the technical side of things, which is just is this technology legitimate versus the business side of things, which is will this technology survived the competitive landscape.

05:35 Shan K: So this is something through UT that I applied for because I have an interest in going into like technical due diligence in the venture capital industry upon graduation. So it kind of helped you build that skill set. But I got this through just a relentlessly applying. I actually got rejected four times in a row and I got it on my fifth try.

05:53 Shan K: So it’s just an exercise in persistence or knowing someone I don’t really know, but I but either way, it worked out and it’s a really fulfilling position, I would say. And it’s just like a one of a couple of things that I do on the side to get some extra cash.

What are its benefits and detriments?

06:11 Shan K: Yeah, I mean, drawbacks are always going to be like the time, right? Any time, especially in grad school, any time you do a side hustle, it’s time taken away from research, especially if you ask some professors, thankfully not mine.

06:23 Shan K: And then, I mean, benefits always just be like the people you meet. Networking is a huge part of grad school, I would say opens a lot of doors as I would definitely say one of the things people warned me about grad school is that it closes a lot of doors and they can’t do anything else. I don’t necessarily think that’s true. It’s open a lot more doors and I had before and it’s a lot of people I just would not have met without applying to these these side hustle positions like I get to talk to The leader, the technical director of the incubator directly on a weekly basis. I talked to the president at university every now and then a lot of people in industry, academia, I get to help define mission roadmaps. I was invited to do an article on semi analysis. None of that would have been possible without without a side hustle. And so it’s been very, very fulfilling.

07:14 Shan K: But yeah, the cons would just be the time commitment really. So if you can make your own schedule with a side hustle, that’s probably a huge benefit that I didn’t necessarily have. But those are the pros cons that that you’ve got to weigh. So maybe that’s that’s some other advice that I have. Just do something that you really enjoy. Don’t don’t take positions that would just be incredibly bored in. And don’t find any fulfillment in.

How much do you earn through your side hustle?

07:39 Shan: This one actually only pays 15 an hour. I work for a startup too, one of the start-ups that we have right now on pay is much better. It’s like 40 an hour. So yeah, but again, one of those doors that’s open that allowed me to go work at a startup, right.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

07:54 Shan K: Every major city has a technology incubator Los Angeles where where I went to undergrad has Los Angeles and Los Angeles Clean Tech incubator, Austin Technology Incubator in Austin Obviously Boston has a bunch. So like if you’re in one of these major cities where they exist, just go Google who the director is of your respective verticals if you’re interested in energy, semiconductor, whatever. Google them, find their email surprisingly easy to stalk online.

08:24 Shan K: Just email them and be like, Hey, I’m a grad student, especially if you’re trying to do technical due diligence, email them and be like, Hey, I’m a grad student. This university interested in technical due diligence because a lot of times those incubators are staffed with like business people who have a lot of business experience, but they don’t really necessarily do technical due diligence, which is a very specific role that only PhDs can really fill. And then that’s why you see it a lot of like hard tech investing firms like Kleiner Perkins, it’s always staffed by PhDs on due diligence. It’s just to avoid if they’re in a situation and there’s there’s not that many people who can do that. So they’d probably be very willing to take your help and don’t be afraid to work for free for like a couple of months, but then you can kind of push on them.

Anonymous #1: Graduate Housing Community Assistant

What is your motivation for having a side hustle?

09:10 Anonymous #1: So I am a pre doctoral student at University of Rochester. I’m a second year and my motivation is really based on seeing how much my parents were able to save or their parents are immigrants. And so I’ve seen them working very hard on my life and not getting the most pay. But I also want to make sure that I’m setting myself up for financial freedom in the future so that I can, you know, as lofty as it is nowadays on a home one day as well as save my retirement. And so those are my biggest goals. I want to set myself up for a positive future financially.

What is your side hustle?

10:17 Anonymous #1: So my side hustle is working with my university’s graduate housing department. Through them, I work as community assistant, so I get to not only socialize with people that are also going to my graduate school, but I also get a very good deal on my rent. I get about half off for my rent and it really does help considering how much rent has skyrocketed in the past couple of years.

10:44 Anonymous #1: Like all across the country, especially in New York State, it’s just gone up. It used to be that you could get a studio for under 800 across the board in this area and now that is no longer the norm. You have to be outside of the city. And because I want to live as close campus as possible, I decided to go for this position with graduate housing because I knew for me and my schedule didn’t make my commute easy as possible was in my best interest.

11:17 Anonymous #1: Coming from a major city, I knew commute can be 45 minutes plus on public transit. I was not willing to do that for my Ph.D. because I need to focus on my studies. So what if I to do this? It’s and it’s very relatively easy. I’m doing an A one event per month and a meeting here and there, introducing people to the right to resources that the university has. So for the money I’m getting off of my rent, it is it’s a very sweet gig.

What are its benefits and detriments?

11:43 Anonymous #1: So the main benefit is the financial discount that I get on a rent, I get half off for my rent charges. So that’s the biggest benefit. I also get to socialize more and meet other people in my community. Moving to a new city. I did not know anyone here, so I was able to use this as a way to socialize with other people at my graduate school. I would say that if you do have the opportunity to be a graduate housing assistant, I would highly recommend it. If you’re someone that likes planning events then and interact with people, I’d highly recommend it. It’s not something that I that I find to be very tedious.

12:21 Anonymous #1: Some places might give you entirely free housing. Some places might be like mine where you get like a 50% off for your housing rate. I find to be beneficial because that’s money that I get to keep for myself that I can invest in my Roth IRA that can be used for my own spending, that can use for a traveling for leisure, because we know we get started as graduate students. So it’s really important that I take breaks and have that extra money so that I can invest for my future and take those much needed breaks. Because I’m on a training grant so I can’t like have a job or an hourly wage. So this is like, ah, this is my way of going around that. So I have to abide by the PhD rules, but also I need to live my life.

13:06 Anonymous #1: Some of the drawbacks are just the logistics of hosting an event, having people turn out thinking and brainstorming new ideas that are both interesting to busy PGD and master’s students, but also attainable for me as a as another busy Ph.D. student to test, to schedule and plan for. So those are like the biggest cons that I could think of.

13:35 Anonymous #1: I really do enjoy like event planning, and if I wasn’t interested in STEM, I might have gone down this route because making sure that I check off all my boxes and doing things in a very organized manner is something I really enjoy doing. And yeah, those are the only those are the only drawbacks. I really enjoy this position and it’s not very difficult for me. I am a social person, so meeting people, introducing them to the to the grad housing area is not something I think of as a hardship.

How much do you earn through your side hustle?

14:04 Anonymous #1: For this year, for 2022, 23, I’m getting a rent reduction of $555 every month. I have a one bedroom apartment and the rent reduction is a flat rate for all graduate housing assistance. And so I think they calculated based off of a to a two bedroom apartment. But I have a one bedroom and I get charged $944. So I’m paying less than $400 for my rent every month, which without roommates, no one that I know has that that charge at all. And I only work about 10 hours per month in total, I’d say in terms of planning, brainstorming and hosting events, the events only last 1 to 2 hours, depending on how many people are there. And so I guess the hourly rate that I calculated based off of that is $55 per hour.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

15:00 Anonymous #1: So the first thing I would look into is if your university does offer graduate housing, not every university does offer on campus graduate housing. So looking into that first and then once you do find out that your university does offer it next thing I would do is look to see if they have any job openings. Usually those job openings will be posted sometimes throughout the semester, but primarily during the move in and move out periods around the summer and winter time, depending on how university work. If you’re on the quarter system or on like a semester system that could also be dependent on when they post those job openings. But because grad students will graduate in December is often going to be opportunities for people to get these positions. And then once you do find out when they tend to post positions, email the contact person so that one they know you’re aware and two that you’re actually very interested in the position and gives a bit more of a of a of an idea. I think when they’re looking at your application, they’ll recognize that, oh, this person emailed me several, several weeks ago saying that they were interested and they scheduled an informational interview with me to go over the, the requirement for the position that’ll sort of put you in their mind, which is something that I did to me to sort of better ensure that I got the position because I very much wanted it.

16:20 Anonymous #1: And then going through the regular interview process. And if you do have any skills in terms of event planning or a previous housing related occupation or internship or or what have you. That will also better you for being chosen for the position.

Ariana: Pet Sitting

16:20 Ariana: My name is Ariana. I’m a fifth year Ph.D. candidate, the University of Virginia, and I live in Charlottesville, Virginia.

What is your motivation for having a side hustle?

16:58 Ariana: So my motivation for side hustling is the obvious one. Money. I’m I was really in need of some supplemental income especially as I my program fifth year the time a lot of applications of preparing for a big move coming up so it was that and also trying to think about what I could be doing as a side hustle for the longer term.

What is your side hustle?

17:21 Ariana: My side hustle is pet sitting. Primarily dogs and cats, but I am open to a range of other animals.

What are its benefits and detriments?

17:28 Ariana: So there are so many benefits, but also some considerations of pet sitting. First is that I love animals and as a person who has a cat not a dog, it’s nice to be around dog energy and just get to meet very sweet animals around my community and honestly see places I haven’t seen before. So I’m walking them around and all that. It’s also a pretty flexible gig. I mean, usually things settle around weekends and on breaks, but as a graduate student, especially in my later years, it’s been nice to be like, okay, I’ll go do a midday walk or something like that. It’s also a job that again, it’s flexible in the nature that if I don’t want to do it for a month, I could not do it and that would be okay. I’m my own boss in that sense, and there are apps that help you to find people and vet them and give you all the support you need.

18:20 Ariana: Drawbacks are definitely that like I’ve been dissertating and even with the flexibility of like it’s been hard sometimes and it can definitely become an unintentional or intentional avoidance strategy to be with pets. It’s also time away from my apartment, my home so a lot of the chores and things that need to get done often have to be delayed because I’m spending weekends with other people’s pets and I kind of like that too. So those are some of the consider.

How much do you earn through your side hustle?

18:54 Ariana: My earnings can really range depending on how committed I am to getting things done. I think it would be possible to get about 25, like if I would just walk, for example, 25 to $50 weekly, it’s only really do 200 a month, but house sitting or pet sitting where I’m staying with them, that can look more like 500 or so dollars a month if I’m doing every single weekend. And that’s another consideration. It’s not the most I’m not flowing in money rather like it is a lot of time. But those like additional benefits, getting to walk outside, having to play with the pets kind of adds to the compensation for me.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

19:41 Ariana: If you want to be a pet sitter, it’s actually easier than I knew. So I was recommended by my cousin who is a lab technician. But there are apps like Wag and Rover which have a really streamlined system for getting you involved. I mean, I’d recommend, of course, having some comfort with pets, but you can get reviews or sort of testimonials from family members and friends and other folks who you may be pet for on the regular. I would say that’s where I started. I was doing more just ad hoc pet sitting for other grad school friends and then really expanded into this, I would say to just be thoughtful about what you’re comfortable with. You don’t have to sit at people’s houses, but I feel pretty comfortable doing that because of all these safety measures are in place and people are really folks who want someone to care for their dog, kind of wants you to feel comfortable as well. So I would say those are the quickest ways. So I’m sure they’re, you know, you can advertise your services on a neighborhood group or something like that and get some direct referrals.

20:48 Ariana: I was going to say that’s another drawback of the piece. So doing the apps I would say is a great starting step because you get screened, you build up your reputation, but they can take about, you know, if I charge $17 for a walk, I’ll probably get 13 of those dollars. So I can’t do the percentages really quickly. I’m not a math PhD, but it’s notable. And so when you do that over time, something like that and it’s not nothing. So but what I found, which I appreciated is after like one successful stay, a lot of folks are okay with going off the app, and just paying me directly. And likewise, like I trust them and I’m comfortable just reaching out. I have all the information that I need. So while I think it’s an upfront cost, it doesn’t have to be a continuous cost. Just you’re trying to get a lot of clients.

21:43 Ariana: I wish I’d started earlier, with the side hustle, I mean, it’s really hard when your schedule’s more packed with things, but I think it’s the type of side hustle that is really relationship and community based and can be a good way to get integrated into a place that as a grad student I know I was like in my room or studying in the building. So that was really nice. And I would say that it’s not it’s actually kind of a nice little mini retreat, You know, I can be in someone else’s home or space with WiFi working on things, and that’s been kind of nice too.

H: College Consulting

22:29 Emily: This submission is from H a fifth year humanities PhD candidate on the east coast whose stipend is $40,000 per year.

What is your motivation for having a side hustle?

22:37 Emily: Quote, my motivation for side hustling is two-pronged. Part of it is to have the extra income. This allows me to save more. I’ve maxed out my Roth IRA every year since I got the job and I get a 7% match into a 401k with a 3% safe harbor. So I effectively save 17% of my pre-tax side hustle income. This is great because my stipend income isn’t eligible for a 401k and wasn’t eligible for Roth IRA contributions for the first couple of years of my degree before they changed the rules to make stipend income eligible. The savings are reassuring for me because I hate the idea of graduating from my program in my early thirties. Seriously behind on retirement savings, especially as job prospects for humanities, PhDs are pretty precarious and usually poorly paid.

23:23 Emily: I find it psychologically reassuring to have savings for when I finish my program, but it’s not just the savings. The extra income also allows me to have a nicer lifestyle than I would if I were living entirely off of the stipend. I don’t feel like I’m missing out because of my income. I’m admittedly a person who likes certain luxuries, like getting my nails done or having a wine subscription or going on vacation a few times a year that are out of step with a typical PhD lifestyle and need some more cash to fund. I like that I don’t have to bow out to plans with my friends who have higher paid jobs just because I’m in grad school, I can go on trips, go to weddings, go to a nice dinner, et cetera. I know plenty of grad students who enjoy living simply and don’t want missing out on those things, but they’re important to me.

24:08 Emily: The second reason is job security. I’m very conscious of how few decent academic jobs are out there. I have witnessed very talented scholars totally flounder on the job market and then panic when they have to rapidly pivot into a new plan with little or no work experience and a lack of obviously marketable skills. Understandably, this leads to a lot of anxiety and depression. I find it petrifying. I don’t want to be in that situation. I hang onto my job so that if I finish my PhD without anything else lined up, at least I have this. I like the job and would be fine to keep doing it while I figured out some other move post-degree. I think having the jobs gives me some security, both materially and existentially along with my main side job. I also have done other fixed term gigs to develop a more diverse skillset.

24:57 Emily: My goal is to make sure that I have recent work experience on my CV after I graduate and talking points for informational interviews. Besides just my research, I don’t wanna be in the position. I see many people in where it’s like they are graduating off a cliff and they have no idea what comes next or how to prepare.

What is your side hustle?

25:15 Emily: For my main side hustle I work in private college consulting. My company provides advice to students applying to university programs, working with clients around the world with a special focus on US colleges. My role involves mentoring students in their final year of high school as they work on their college essays. It’s almost all remote though. We do team retreats once or twice a year.

What are its benefits and detriments?

25:36 Emily: There are a lot of benefits. It involves two of the main areas. I enjoy working in education and writing. I love the colleagues I work with and I love almost all of my students. It’s a pleasure to get to know them and I learn new things about the world from them. I feel like they grow as people throughout the process of us working together, even when they don’t end up at their dream school. That makes it rewarding to me. It’s a great counterpoint to my independent research work because it’s people focused and the impact feels immediate. Unlike an abstract and long-term dissertation project, when I’m deep down a research rabbit hole on my own in the library, getting on a zoom to talk to a colleague or student is a breath of fresh air. Sometimes I feel that having a second job makes grad students more efficient. Anecdotally, I find that up to a point, the ones who have less time seem to manage it better. The drawback is that it’s highly seasonal work and I’m often having to be on email for several hours a day September through December.

26:34 Emily: It’s tough when it overlaps with the holidays and the fall semester crunch time. This was especially true in my second and third years when I was grading finals and writing my own papers and attending conferences simultaneously alongside my job. The nature of the work means that I just have to respond if students are down to the wire on their deadlines and my academic work has suffered in those moments, but not badly enough that my advisors said anything. I’m still on track to complete the degree in time and have been successful in my program. It’s a bit easier now that I’m ABD and more in charge of my own schedule. I have the freedom to organize my time around the busy season. The benefits to me are money and setting myself up for future careers Outside academia, the drawback is the stress and risk of burnout that can come with being over committed and the risk that spreading yourself too thin means not doing as good a job as you could have on your main gig. Personally, I’m okay with that. My approach works for me and my priorities, but plenty of grad students I know would hate it.

How much do you earn through your side hustle?

27:34 Emily: I earn $45,000 annually on salary for the college consultant gig for which I am technically part-time. This is after several raise negotiations. I’ve been at the company six years now and started on 30 k. I get a Christmas bonus of $1,000, also paid for my laptop in the busiest season. September to December. I work 20 hours a week, and in low season it can be four to 10 hours a week to get started in college consulting.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

28:00 Emily: To get started in college consulting I cold emailed a bunch of companies and ended up going with this one, but had offers from others. I’ve heard of someone getting into the same type of role after being reached out to on LinkedIn. My university list serves, sometimes sends out listings for similar roles. I would recommend trying to connect personally with people rather than applying into a black hole, but then applying to a few places. I imagine that experience working with students as a TA or in a writing center would be really helpful, but if you have no relevant experience, try doing it on a volunteer basis first. I know if people getting these jobs after doing pro bono work, finally, it’s a fundamentally credentialist industry. So if you have a degree or two or three from a very competitive school, that will help, end quote

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28:44 Emily: Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2023-2024 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/speaking/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

Courtney: Landlord

30:04 Courtney: My name is Courtney and I am a third year Ph.D. student in civil engineering at Oregon State University in Corvallis, Oregon.

What is your side hustle?

30:12 Courtney: My side hustle is renting out rooms in my house.

What is your motivation for having a side hustle?

30:16 Courtney: I do this to supplement my research assistant income and pay my mortgage.

What are its benefits and detriments?

03:21 Courtney: It’s a study dependable form of income and helps reducing my house, my housing costs dramatically. Besides occasional banking and paper work is a very passive source of income taking care of a house. It’s hard work, but when you have tenants, things have to be done in a timely and high quality manner with their living conditions in mind. For example, we recently replaced the roof and had to include them in the discussions of what the condition of the house would be during the construction.

How much do you earn through your side hustle?

30:52 Courtney: Since I co-own the house, I also split the rental income. So I make $650 a month and I already pay quarterly estimated taxes for my fellowship anyway, so I calculate this income into that as well. But I also use tax deductions for housing costs by following form 1040 schedule E, which actually lays it out really nicely.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

31:17 Courtney: This side hustle requires the purchase of a property which is quite an undertaking. It requires some dedication to understanding rental laws in your state and city. But after that initial setup, having yearly tenants who stick around makes the side hustle low energy input for high rewards. I started this two years ago and I plan to continue the side hustle until I graduate in a few years. At this point I probably spend about 3 hours a month on managing tenants and their needs.

31:48 Courtney: If it feels impossible to buy a house look into co-borrowing or a first time homebuyer financial help in your state or county, and check out Emily’s other podcast on grad students buying houses.

Anonymous #2: Research Assistant

32:07 Emily: This next submission is from an anonymous grad student who is about to start intern year and lives in Texas.

What is your motivation for having a side hustle?

32:14 Anonymous #2: What is my motivation? Having a side hustle. I would say as a graduate student, I just needed money. And while I was grateful for the system that I received from grad school, it just wasn’t enough to be able to travel, to visit family, just to have a little extra cushion. And then now that I’m moving out of state for internship without my side hustle, I would not have been able to afford it at all.

What is your side hustle?

32:40 Anonymous #2: I am a research assistant at a hospital.

What are its benefits and detriments?

32:43 Anonymous #2: Some of the drawbacks of position, I would say, is for the spring semester balancing my schedule. There was a lot to do when it came to doing my internship interviews, wrapping up my final semester, in the state that I live in and just trying to balance my schedule, I would say is one of the drawbacks. Benefits of that are just having money, having a cushion. As I mentioned before, I am moving. I’m single. I’m moving from the states I live in to another state and I feel very fortunate that I’m not worried about affording my move. I am not worried about like the cost of a U-Haul or having to borrow money from relatives or like take out a personal loan. I am solely financing my move from the income I receive from my side job.

33:38 Anonymous #2: I would say in terms of how this will like this position will impact or like play a role in my future career. I’m the type of hospital that I work at is type of setting I would like to work in in the future and this population as well. Also, I can probably request letters of recommendation and from my bosses, and I think it gives me a lot of insight into the type of field that I’ll be working in the near term care.

How much do you earn through your side hustle?

34:12 Anonymous #2: So I’ve been at this job since, I guess like orientation was in December and I make about 25. I make $25.83 an hour and 20 hours a week. And so I would say after tax, before taxes, I take home about 2000 a month.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

34:34 Anonymous #2: If someone’s looking to pursue this type of position or just a side hustle, indeed this a great source when it comes to looking for research assistant jobs that are flexible that are part time. I also recommend especially if you’re interested in research or just want to get some clinical, reaching out to PIs at different hospitals that might. They don’t always broadcast like that they’re hiring. And so reaching out to them and inquire like, Hey, you know, I’m so-and-so, I’m looking for a job, or I’m interested in any position you might have available. And that’s even better. That’s kind of how it worked out for me, where someone put an email out there for, like you said, Assistant Do you know of anyone? I responded back and I know me and I’m looking for a job.

35:28 Anonymous #2: I would say finding that balance in your schedule is really important. I and also having some flexibility. So during the semester I was working like in the middle of the week and now the semester has ended I requested a shift in the schedule so I could work the first Monday through Wednesday, which is helpful for me so that I can get other things done before the end of the week. But also I think just there was some delay. I work for the government and so there’s some delay when it came to my application process and not on my end, but just governments and and I, I very much communicated with my prospective supervisor and let them know like, hey, I filled all the paperwork. I’m just waiting to hear back. It took six months to actually get hired to start the orientation, to start the onboarding process, even though I was hired back in the summer of 2022. But I think for me, patience was a virtue and really just showing up and being present at work. And I’m confident that in the near future when I’m applying for postdoc positions, if I request a letter of recommendation from any of my supervisors here, they will happily write it.

36:43 Anonymous #2: Now that I am no longer contracted at my university as a grad student. The month of June is my last month. I’ll be working here. I’m just working here and I am so fortunate. Like I know I’m not like another. You know, I have peers that are either married or they’re receiving like, Oh, they have a partner or they’re receiving support from their family and like, I don’t know. So financially like, I take care of myself. So and I know for a fact that I would not be able to move 1500 miles from where I am now. Had it not been for this job, because the money I received, the the grad student through my stipend was great. It covered all of my bills and like maybe an extra $100 or two. But over the course of six months it would not have been enough to pay for UHaul to pay for moving boxes and also to and in my case, you know, oftentimes we apply for housing. They want someone who on paper earns three times the rent. And so if I did not have this job, I would have likely had to reach out to a relative to cosign my lease, which is fine. But, you know, it’s a hassle having to ask someone to do that again and again, especially if they’ve been like, So supposedly they’ve done it. You know, for me throughout grad school, it’s nice to kind of feel a little more independent.

DreVon Dobson: Professional Musician

38:08 Emily: This submission is from DreVon Dobson. Quote. I’ve recently graduated with a PhD in pathology from UNC Chapel Hill, studying the genetic regulation of blood coagulation factors. I’m about to start a postdoc position soon in environmental toxicology, studying the effects of ozone exposure on health and disease outcomes.

What is your motivation for having a side hustle?

38:29 Emily: Having a side hustle has been a great way to give my mind a break from my lab work, as well as supplement my income as a graduate student, which was livable but not great.

What is your side hustle?

38:39 Emily: My side hustle is performing as a professional musician. I minored in jazz studies on the saxophone and undergrad and I’ve kept my passion for music alive as a side hustle. I play at churches, country clubs, weddings, et cetera, with a few different bands usually on the weekends.

What are its benefits and detriments?

38:56 Emily: The benefits of this are that it provides a constructive and profitable outlet for my passion and it’s fun. The detriments are that there’s a considerable amount of preparation involved in order to play the gigs well, practicing learning, music, purchasing and maintaining equipment, et cetera. Also, the gigs can consume a good amount of my weekend depending on how far and how long they are detracting from my ability to rest for the upcoming work week. But you can also say yes or no to opportunities to fill your needs and schedule.

How much do you earn through your side hustle?

39:26 Emily: I have worked my way up to earning about $20,000 a year from my side hustle. This is definitely on the higher end for a part-time musician and I had to work my way up to that over the years. This is generated by about two to three gigs a weekend averaging out at around $200 a gig.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

39:46 Emily: Pursuing this side hustle is totally obtainable. If you are musically inclined, you can start by visiting local jam sessions in your area to figure out who might be in need of your musical talents. There are also online avenues to pursue in local Facebook groups and ads and websites like Reverb Nation Beyond Music. If you have a passion for the arts, there’s most likely a way to monetize it. You can sell art, join a dance troop, audition for a theater production, et cetera. I have found artistic passions and scientific studies to be a great combination of financial gain and life balance. I would encourage anyone who is interested to give it a shot. You never know.

Dan Gorman: Chaperone, Podcast Recording, Writing Lesson Plans

40:31 Dan G: My name is Dan Gorman. I am finishing my PhD in US History this summer at the University of Rochester, and I also live in Rochester, New York.

What is your motivation for having a side hustle?

40:41 Dan G: My motivation for side hustling is solvency. Uh, while we had pretty good PhD stipends at my university, it’s still, you’re living in sort of comfortable poverty as a PhD student, I find, and for some people it’s less comfortable. I stay comfortable in my case because I don’t have any dependents. Um, it’s just me in my household, but there’s always wanting to have more than just a little bit of extra money in the bank account, wanting to have something of a cushion. Um, especially as we got towards covid, I was glad to, I had done some side hustling and saved up some extra money. Sometimes the, when I say solvency, I mean, yes, paying the bills also, it’s good once in a while to actually do something fun with your assets, but also I, I think mainly my main reason for wanting to save up money was in case of an emergency. You know, if somebody got sick and I needed to go visit them or, um, you know, during covid when we just didn’t know what else was gonna happen next.

What is your side hustle? How much do you earn through your side hustle?

41:33 Dan G: My side hustle isn’t really one thing. What I recommend to other people is sign up for as many internal newsletters at your university as possible and re and actually read them. Um, I found a number of paying side opportunities within the university just by being on the newsletter feeds for different offices. Um, for example, okay, so the Office of Undergraduate Research a couple years ago they were sending a delegation of students to the National Conference on undergraduate research. And an opportunity came up that they would wanna send a couple staff or grad students as chaperones. Um, it was a pretty easy job. I had to go to Oklahoma City for four days, but they covered all my expenses and there was a small honorarium. It wasn’t a ton of extra money, but it was there and it was an experience that I could say, Hey, this counts as teaching and advising and mentorship.

42:22 Dan G: Another example is that I had joined a professional group for graduate students through our music conservatory, but they’d opened it up to graduate students in other divisions. It was called working PhDs. So they were doing professional readings and interviewing people about how they transitioned into alternative academic jobs. And as part of that, they launched a podcast called Working PhDs. And so by recording interviews for that, I was paid I think $75 per episode and I did three episodes. So then that was, it was over $200 extra. Um, so we’re, I’m not talking about huge amounts of money here, but finding bite-sized projects like these internally, um, if you do enough of them, they do start to add up to some extra cash.

43:04 Dan G: And again, $200 may not sound like a lot, but that could cover, you know, depending where you live, that could be internet, your insurance bill and something else for the month. So it’s not, it’s not nothing. Um, looking beyond the university, I think sometimes it comes down to professional networks and signing up. So again, it’s, I don’t have a very original method, but it’s signing up for the listservs for your professional organizations. Um, an opportunity came up a couple of years ago actually during the pandemic that, during that first pandemic year where some friends of mine were working on a digital library project, um, at Northern Illinois University, which is, you know, 800 miles away from me. But they said there they needed people to write sort of lesson plans for their, for their website. It was pairing archival old books that were scanned with how you could teach it in the classroom. And then you, we would present it digitally and that came with a $600 honorarium.

What are its benefits and detriments? If someone listening wants to pursue this side hustle, how would you recommend they get started?

44:01 Dan G: Um, and again, I don’t have a magic method for finding more of these except, you know, in my case, in my field, in the humanities, get on h net, humanities net, um, sign up for the main feeds which post every day, 10 to 20 calls for papers, podcasters. Sometimes you’ll see independent editing projects and, you know, it can be a little tedious cuz then, you know, you’re, you’re deliberately spamming your inbox both from internal sources and then from external professional organizations. But there are opportunities out there. It’s not a lot of money. Again, these are small, usually project based. The $600 for the, uh, the lesson plan was that’s at the high end of what I’ve gotten, but smaller bite-sized projects that you can fit in without massively impeding your own studies. Or if you have a more prominent work study job that you know you’re doing 10 to 20 hours a week. Um, I think writing that lesson plan and presenting it, I think it took maybe six hours total over the course of a couple weeks. Um, because the book was a dime novel. It was quite thin. Um, so your mileage may vary.

45:07 Dan G: Other challenges, I think also, again, that oftentimes these bite-sized academic projects, whether they’re at your school or somewhere else, they tend not to pay a lot. Um, you know, we’re talking one to $200 US users really. But the flip side is that if it’s a bite-sized project like that, you can do it quickly and it doesn’t really impede on your main work responsibilities at your university. And that was, that was the big thing for me. So wanting to find ways I could use my skillset, um, make some extra money, but also where it wouldn’t become such a massive time sink that people at the university, my supervisors would be saying, Hey, you’re not focused on your main work. Ultimately, I would say that the kinds of projects I’ve described are not ways to make a lot of money, although there are exceptions. Like if you become a writing tutor, you will make a good hourly rate doing that. However, they can give you unique experiences and give you some more in business parlance transferable skills and deliverable outcomes that you can say you have produced when you’re going on the job market.

Outtro

46:14 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

This PhD Student Budgets Manually and Dynamically

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In this episode, Emily interviews Ariel Floro, a second-year PhD student at the Buck Institute for Research on Aging in northern California. Ariel details her budget, from the mechanics of her system to the emotional benefits she experiences. Ariel started budgeting after finishing her bachelor’s while she worked as a research associate, and she was able to adapt that system to still work for her with a lower income in a higher cost of living area. Ariel explains why she believes budgeting is an essential activity for every graduate student.

Links Mentioned in the Episode

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Teaser

00:00:00:00 Ariel: It just gives more control and power overall and not being so, not feeling like we’re like completely powerless to, you know, grad students just make this and that’s just how it is. And I’m poor and I can’t really do anything. And I know it is really hard to live on the income that we have now, but it gives us some control back and some power so that we can really set ourselves up well financially in the future.

Introduction

00:00:27:20 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 14, Episode 11, and today my guest is Ariel Floro, a second-year PhD student at the Buck Institute for Research on Aging in northern California. Ariel details her budget, from the mechanics of her system to the emotional benefits she experiences. Ariel started budgeting after finishing her bachelor’s while she worked as a research associate, and she was able to adapt that system to still work for her with a lower income in a higher cost of living area. Ariel concludes by explaining why she believes budgeting is an essential activity for every graduate student.

00:01:29:22 Emily: If you’ve been getting value from this podcast, would you please do me a favor? This is a perfect time of year to recommend me and my work to a potential host or sponsor at your university or alma mater. In case you didn’t know, I offer numerous personal finance seminars and workshops on topics like financial goals, investing, budgeting, and debt repayment, all tailored for graduate students, postdocs, and/or prospective graduate students. These are in addition to my tax workshops. If you think that you and your peers would benefit from my teaching in the upcoming academic year, please recommend me to your graduate school, graduate student association, or postdoc office. My seminars are usually slated as professional development or personal wellness. These recommendations help me get my foot in the door with new clients or remind past clients of the need for this material. If you choose to recommend me over email, please cc me, [email protected], so that I can pick up the conversation. I really rely on these types of recommendations and appreciate them so much. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! You can find the show notes for this episode at PFforPhDs.com/s14e11/. Without further ado, here’s my interview with Ariel Floro.

Will You Please Introduce Yourself Further?

00:03:04:12 Emily: I am delighted to have joining me on the podcast today Ariel Floro. She is going to speak with us about her budgeting journey during graduate school and prior and all the things that she’s learned and how much budgeting has benefited her. So, Ariel, I’m really pleased to have you on the podcast today. Would you please introduce yourself a little bit further for the audience?

00:03:21:09 Ariel: Yeah, thank you so much for having me here. So, as you mentioned, my name is Ariel. I’m currently a second-year PhD student at the Buck Institute for Research on Aging, which is in NorCal up in Novato in the Bay Area. And it is a joint program with the University of Southern California.

00:03:41:07 Emily: Alright. I can already see that it’s going to be a very interesting conversation because obviously, budgeting is especially challenging in a high-cost-of-living area. So, actually, let’s get some groundwork out of the way first. Do you mind sharing how much your stipend is?

00:03:56:24 Ariel: Yeah, our stipend is $38K per year, which actually just recently got moved up.

00:04:01:21 Emily: Okay, nice. So, we’ll be talking a little bit about, I guess, last year. What was it like prior to being bumped up?

00:04:07:15 Ariel: It was $34K last year.

Budgeting: Peace of Mind

00:04:09:01 Emily: Okay. So, 34 up to 38, sounds decent, but again, very high cost of living area. So, I’m really curious about your strategies here. So high level first, what benefits have you enjoyed in your life thanks to your budgeting practice?

00:04:25:19 Ariel: The first thing that comes to mind and I think is really the key one, is just peace of mind amongst many different fields. So, the main thing knowing that because it’s such a low income, knowing that I’m not spending more than I actually have, because that just like really terrifies me. And along with that, just giving myself the freedom to enjoy time with friends, like going out to eat or do other fun things.

00:04:49:00 Ariel: And so that I know that if I budgeted a certain amount of money for that, then I have the freedom to really just not stress out about it and enjoy it and not like freak out or like, “Oh, I shouldn’t be doing that,” or feel guilty in any way. That’s the main one. I would say the second one is just planning for saving more or like financial goals, and just know that even though again, because it’s kind of like a low income at this moment, I’m still setting myself up well for later, even if it’s just investing a little bit of money or saving a bit of money, like any bit helps and kind of helps to build that habit.

00:05:22:07 Emily: So, it sounds like in your case, a lot of times people have this like kind of avoidant behavior with their finances, like it stresses them out, so they don’t want to look at it. But it sounds like you’re like me, which is that it was it was stressful not to know. And so, it’s easier to look and make the plan and execute the plan as best you can. Is that right?

00:05:41:12 Ariel: Yeah, definitely.

00:05:42:19 Emily: So, how did you get started with budgeting? Did this start in graduate school or were you budgeting in at any point prior to that?

00:05:49:22 Ariel: Yeah, the minute I graduated from undergrad, I worked as a research associate for two years and between, and once I knew that I was having a steady income, I knew I had to budget the first dollar that came into my bank account. And so, I have kind of been planning, you know, since that time and really built up the more efficient process that I have on budgeting now.

00:06:12:23 Ariel: I also saw it as once I knew I was going to go to graduate school while I was working as an RA, I took even more power over my budget at that time and said, okay, I’m making more as an RA right now than I would be as a graduate student. So, I’m going to make sure I know the ins and outs of my entire budget so that when I do move to that lower income, I know where I can cut costs where I want to, you know, what I can sacrifice and this and that.

Gap Years Working as an RA

00:06:40:16 Emily: Give us a few more details about that time you spent as an RA. Like, where were you? You said you’re making more, but how much more?

00:06:48:16 Ariel: Yeah, I was at UCLA working as an RA, and I think starting I made about $40K and then it jumped up to maybe a little over 45. But at the end I was making a good amount. Yeah, so that was all in L.A. and I was just planning out. Rent there is still more expensive. But you know, there are a lot of areas around L.A. that you can find cheaper places. And so, I had a roommate, we lived in a two-bedroom, two-bathroom place, which is a really good spot.

00:07:19:13 Emily: Okay. So, it sounds like your experience going from being an RA to a graduate student, your income is going down a bit. Your cost of living is probably jumping up a bit, but not huge shifts in either of those directions. So probably a lot of what you learned as an RA, that is to say with your budgeting as an RA, was able to apply. Do you want to tell us any more details about you know, you said you kind of took more control of your tightening up and then how you did that transition into graduate school with your budget?

00:07:46:24 Ariel: Yeah, I think I was definitely the main thing is I like to go out to eat a lot with friends and I’m sure a lot of people do. So, I realized that that was probably the first thing I was going to cut down was just eating out and food and being more intentional about cooking meals and like looking at prices and not just like, “What am I going to cook today?” and then just buying things off of the shelves. The other interesting thing about my program is that because we’re at the Buck Institute and USC, we actually spend our first semester at the Buck Institute, and then we have to move to USC for the second semester. This is all within the first year. And so that was another cost that my cohort and I had to think about is moving here and there and then having to do short term leases. So, I would say also the way that I budgeted this past year is different than now because I had to keep in mind just having money to move and my rent actually was even higher because it was a short-term lease.

00:08:42:10 Emily: Yeah, that’s a big financial challenge to throw at a first-year graduate student of living in two different places. And then I understand, so it was like you were living in the L.A. area, then you moved up to Northern California, then you moved back to the L.A. area. Now you’re back in Northern California. Okay. So, at least you had some familiarity with those areas.

Mechanics of Budgeting

00:09:01:04 Emily: Let’s talk more about kind of like the mechanics of how you budget. Like, do you use software? Do you use your own spreadsheets? How often are you looking at or touching the budget?

00:09:11:12 Ariel: Right now, I use an app on my phone, and I know there’s some there’s one called Mint that I’ve tried to use and it doesn’t really work that well for me. I actually use an app called EveryDollar, and I’ve used that since the beginning where they have every line item, you know rent and food for groceries, you can even add certain funds in there maybe if you’re saving up for something. And so normally, like in the beginning, I kind of took a couple of months to figure out what I was spending each month on certain things and realizing I probably spent more on eating out than I thought I did and other things like that. And so, then I kind of started to regulate and now it’s a lot faster where I just kind of copy last month’s budget and I go through and make minor changes. If I maybe have a friend’s birthday or something that I have to buy a gift.

00:09:59:18 Ariel: And the other thing that I really like about the app on my phone is that some of them can connect directly to your bank accounts or your transactions can go directly into them. But the app that I use, I actually don’t have that software for that just because it’s an extra fee for it. But I do have my bank account app on my phone, and anytime I use my debit card that’ll show up as a transaction, as a notification in my phone. And so, I kind of see those notifications build up as like a to-do list to enter into my budget later. So, I end up probably looking at it at least I once every couple of days, maybe once a day even.

00:10:36:24 Emily: Okay, so two things I want to follow up in there. So, one, budgeting, I mean, we’ve been using term budgeting, but I really think of budgeting as two different actions. So, one is budgeting, which is telling your money what to do in the future and the other is tracking, which is making sure that your money did what you told it to do. And that’s like the accountability portion of it. So, you just mentioned both of those, right? So, on the budgeting front, you are creating a unique budget for every single month. It’s based on, you know, roughly templated from what you did last month. But you’re making those individual tweaks for what’s going on in this current month, is that right?

00:11:10:03 Ariel: Yes.

Manual Tracking of Spending

00:11:10:24 Emily: And then the tracking component of it, like you, I’m a little bit familiar with every dollar, so you can pay a fee to have your transactions automatically down a little, but you choose not to. You are manually tracking. And what I love about that is, of course, it does take some time and it takes, again, accountability with yourself to stay on top of it, like you just mentioned, your system of notifications, but it keeps you very, very intimate with your numbers. There’s no like escaping, facing up what you did with your money as long as you are keeping up with the tracking. So, I think that works really, it’s not for everybody, but I think that works really, really well for some people. Can you maybe give us an example of how the manual tracking specifically has helped you? Like in behavior change, for example?

00:11:54:24 Ariel: Yeah, I mean, even just if I stop at a Starbucks or something and get a coffee and then I have to put that into my budget. And since the interface is very easy to look at, sometimes I just kind of end up scrolling through the rest and, you know, I might say, “Oh, okay, I actually only have like $40 left for eating out and it’s only like halfway through the month or something like that.” Then I can kind of keep track and keep an eye out and like, how far into the month I am and versus how much I’ve earmarked for all of the things that I budgeted for.

00:12:29:00 Emily: So, you mentioned that you started with this budgeting practice the minute you graduated from college and had this regular, you know, salary coming in. What was it that inspired you to start budgeting at that point, and maybe why not earlier?

00:12:44:21 Ariel: Yeah, I think my dad was a big influence and wanted to set me up well financially, where even going back to like the 2008 recession, I remember when our house had to go on a short sale. I mean, it was I just always style. My dad really stressed with money and so he was always, especially after that point and kind of getting a hold of his finances, he was always very intentional, telling me, like, I want you to do this. I want you to you know, when you have a steady income, you should start budgeting and kind of encouraging me to do a lot of that. And it made a lot of sense to me. So, I do attribute my dad to helping me a lot in that way.

00:13:19:03 Ariel: Before then, I didn’t really budget that hard because in undergrad I would get some income here and there. Maybe if I was teaching a private lesson for like a hobby or other things like that and I was just so used to saving anyway, it was I would just dump them into my savings. And then if I wanted to go out to eat, and I didn’t go out that often, right? Because college is just so busy, I kind of just knew, I just kept tabs on how much I had in my savings. So, it felt a lot easier once I was getting a steady income. I could say I’m making X amount of dollars per month and I’m going to designate each dollar in that to a certain point. So, I know exactly where my money’s going each month. And I felt like it gave me a lot more control over my finances and again, gave me the peace of mind to know that I’m doing okay.

Looking Ahead

00:14:06:18 Emily: Yeah, that makes sense. Do you think there’s ever a time in the future when you wouldn’t budget or would change the mechanics of how you budget?

00:14:15:24 Ariel: I do see a possibility where, if your income goes up significantly and the way you live your lifestyle stays about the same, you might have that flexibility where, you know, no matter how much you know, if you’re spending and living your normal lifestyle in your normal ways, that you’re always going to have enough in savings. I think that might be a way like a situation where you wouldn’t have to budget. But then I would still think that with the extra money there, you know, there’s a lot of potential other than just dumping it into savings. You know, you can put that into investing. You’d be giving it away to charity. So, I don’t know, I would say maybe rarely at this point, but I wouldn’t know for sure.

00:14:56:19 Emily: Yeah. You’re actually describing kind of the point that I am with my like budget right now, which is the way that I budgeted when I was in graduate school and for a few years afterwards is not necessarily serving me now with a higher income, but also different kinds of goals than I had before. So, it’s like, how do I have the income that I have, meet the goals that I want to meet, not overspend, but also feel more like relaxed about how much to spend and how to balance all that together. And we’re recording this in December 2022. So, like, I’m literally thinking about this of like for the new year, like how do I adjust my budgeting system so it works more with the current realities that I’m living in rather than, you know, kind of a holdover from what I was doing before? So anyway, just a little food for my thoughts there.

Commercial

00:15:42:01 Emily: Emily here for a brief interlude. We’re doing something special for season 15 of this podcast, and as a loyal listener, I know you’re going to want to be involved. Season 15 will be a chance to share your financial experiences, even if you don’t want to give a full episode interview or want to remain anonymous. We’re going to publish compilation episodes around certain themes, and each episode will feature at least a half dozen different contributors.

00:16:12:05 Emily: If you are interested in contributing, check out PFforPhDs.com/season15/. That’s the digits 1 5. On that page, you’ll find a list of the proposed themes and how many volunteers I’ve identified for each episode. Your next step is to email me at [email protected] to let me know which episode you’d like to contribute to or if you have another idea for the list. Once I’m confident that we have enough contributions for an episode to be created, I’ll give the volunteers specific prompts and directions to create their submissions. I hope you will choose to participate in this unique season! I can’t do it without you, so please get in touch! Now back to the interview.

Expected, Irregular Expenses

00:17:06:24 Emily: So, let’s get back to some more like kind of mechanics of budgeting. So, I wanted to know how you handle large irregular expenses. So, by that I mean maybe something that costs maybe a couple hundred, few hundred dollars that comes up very occasionally. And I’m always curious about this because I know irregular expenses are a really tough challenge for graduate students or anyone living on a tight income. So, how do you handle those? I mean, I know you already mentioned adjusting your budget, but let’s say for a really large one, how would you do that?

00:17:33:10 Ariel: Yeah, I think the main, so one of the points that came to mind is that you know, there’s large irregular expenses that might be unexpected and there’s those that are expected. And so, under the expected category would be things like I have a car, so car maintenance is something that’s, you know, large and irregular. I think since I’ve started budgeting, I have that as a fund where I put some money into a fund designated specifically as car maintenance. And then whenever that comes up, I know I have that fund. And I realized probably about this year that I’d put a lot more money in it that I may have needed to. And so that actually gave me a little bit of leeway for other irregular expenses, maybe like, like the current thing right now that I know is coming up is that I might want to buy a pair of skis which can be like a couple of hundred dollars or more.

00:18:20:21 Ariel: And so, if it’s something like that, then I can spend the past few months prior saying, okay, I’m going to put X amount into this fund. And then of course that might have to come out of some other aspect of my budget and just, you know, it’s only just for those three months and then I’ll have the amount needed for the item and then I can purchase that. And then other times maybe if I just, at the end of the month, I will go through my budget. And because some of the times what you actually planned isn’t going to be exactly what I end up planning, or what I end up actually spending. So, I might find that, oh, I didn’t spend as much on gas as I had expected to. I can put the excess there and to just general savings and I’m sure something might come up. But I do like having a good amount, like maybe like a little bit more in liquid savings in cash I have on hand just because I know things can come up here and there.

00:19:12:20 Emily: So, when you say, you know, moving money into general savings or moving in to a certain fund, is this like different bank accounts or is this maybe within your budgeting app, you’re like allocating things differently?

00:19:23:03 Ariel: This is within the budgeting app, so it’s all within my bank account. But just in terms of my like where I’m mentally earmarking them, that’s how that goes. And I also do have some investment accounts. And so, then if I know I want to put more into investing than I actually have to like deposit that into that account.

00:19:43:07 Emily: Okay. But you are operating for all of your cash out of a single account. A single checking account.

00:19:48:13 Ariel: Yes.

Money Mindset of a Saver

00:19:49:18 Emily: What stops you, psychologically, from spending how you didn’t allocate? That was always my temptation and the reason that I don’t use a single account for everything is that I would really be tempted to move things around.

00:20:04:04 Ariel: I think I also have just been a saver since I was little. If I would get like $20 for Christmas, I was like, “Oh, I’m going to save this all so when I get older, I’m going to have a lot of money and be financially stable.” I have with my bank, I have like a checking and savings, and technically my savings I have what my emergency fund and the checking I have right now, it’s just the remainder of my cash. But I think just because I am naturally such a saver, I do kind of get like a, I guess I don’t know if it’s a reward or reward thing when I see a bigger number in my account, but it just makes me feel safer. So, I put more towards savings and not just spending it.

00:20:44:11 Emily: And you also mentioned a moment ago about like if you come in sort of under budget in some categories, you said gas specifically. So, for your variable expense categories like gas, are you usually coming in under budget? Like have you set a generous enough budget that that’s a typical thing that you spend less? Or if not, what do you do in situations where you have overspent the budget?

00:21:06:01 Ariel: Most of the time, I put in roughly about the amount like, I’ve tightened my budget now to where I spend the amount that I plan to. There might be some instances where if I’m expecting to spend say $200, if I maybe carpool with friends to an event that we’re going to and they’re nice enough to not or they don’t ask for gas money or I tend to drive back home because I’m from L.A., so I tend to drive home a lot. And so, I know I’m going to be spending more on gas in those times. And again, that’s just a thing that if I know I’m driving to L.A., then I’ll add it in more money into the gas budget the beginning of that month. But most of the time, I think they stay pretty closely. I mean, if I come under budget on some categories together, that might come up to maybe 100 bucks, but that’s still like 100 bucks more I can put in the savings versus not really planning for that before.

00:22:05:22 Emily: So, it sounds like you’re keeping like you have a dynamic budget, from month to month you do. In the course of the month, do you also update what you budgeted for that current month?

00:22:15:21 Ariel: Yeah, I think there’s times where that could happen. I think that like one of the examples is maybe if I know I want to go out with friends and do another thing or if there’s a concert or something, and then I’m like, “Oh, I really want to go to this concert,” I would take out from my eating out budget to spend more on going out to a concert, for example like that. So, it is very, very dynamic and I think that’s super easy to do being a single person and just having me on the app. So, I really, again, I really appreciate the mobility of having the app on my phone and just deciding wherever and whatever I want. As long as it’s within the monthly income, I still know that I’m still planning where everything is going.

Unexpected, Irregular Expenses

00:22:57:21 Emily: Gotcha. And when I was starting to ask you about irregular expenses, you mentioned four expected irregular expenses. That’s a system that I called targeted savings. What about for unexpected irregular expenses? Are there any unexpected irregular expenses in your life, or do you expect everything?

00:23:14:05 Ariel: I think maybe some unexpected might be medical or something. And I know I always have an emergency fund on hand for that. I just again, I’m such a saver and I’m kind of in a transition period right now because I moved. And so, I do have a heftier amount of cash in my checking than I probably normally would. But for unexpected ones, I could always dip into the emergency fund and take that out. If it was like an E.R. visit, for example, but then the next month would have to be really hunkering down and replenishing the emergency fund back up to what it was before. Then I can go back and do fun things and all that.

00:23:54:01 Emily: Yeah, I think that system makes a lot of sense. And like the way that I sort of define an emergency is an unexpected but necessary expense. It can’t be discretionary, and you should try to anticipate everything that you reasonably can. Yes. If you get into like some sort of major accident or unforeseen illness, of course those things can happen. You may not have prepared for that. I mean, that’s why we have insurance for, right? So like insurance then accessing your emergency fund, that really makes sense. But yeah, under sort of my like system, you would you would anticipate everything like you would really spend some time brainstorming like the things that could happen and setting up either targeted savings or like you, just a general dynamic, flexible budget that will help you meet those expenses when they do come up. And then if something is truly necessary and truly unexpected, hey, that’s what your emergency fund is there for. And like you said multiple times so far, like it gives you peace of mind to have this money in your savings, in your checking, to know that you know you’re spending within your budget and so forth, living within your means.

Regular Expenses: Housing, Transportation, and Food

00:24:54:00 Emily: Zooming out a little bit more like high-level speaking about your budget, how did you set your large regular expenses like housing, transportation, food? How did you set those up so that you are able to live within the stipend provided?

00:25:11:13 Ariel: Yeah, I think even from, so again, going back to once I graduated and started as an RA, even those months prior, it was my dad and I kind of just he was helping me form what a budget is. And so, we were saying, well, you know what would rent be? I’m going to estimate this and maybe get an idea of if it was me going into an RA position, I would get an idea of what RA’s normally make and the rent that was in the area or some of the areas that I wanted to live in and just kind of do like a mock budge then and get an idea. And so, once I had had that, it was actually pretty similar because I set a rent estimate that ended up being pretty much exactly to what I ended up spending for that. And so, that was pretty easy to transition into. And now coming into this program, like the first short-term lease that I had to take for moving up here, I just did the same thing. I kind of mock budgeted on my app and I put in, “Okay, I’m probably going to spend this amount on rent. How is that going to look? Where am going to have to cut? Can I even afford this?” And it really was just kind of trial and error through the app and me taking time and sitting down and manually doing it.

00:26:22:03 Ariel: Because I know that a lot of the general advice for how much you should be spending on rent based on your income is always like, I feel like doesn’t really apply to PhD students because you spend way more. But I was just making the mock budget and when I had moved back to L.A. for that short-term lease, it was also kind of tricky because then instead of renting a place, I did like an Airbnb, and that meant that utilities and everything were included. Plus, it was for a four-month period of time versus sometimes you have to be locked into like a six-month lease. And so, with that one, I kind of had to budget long-term, but it was still amongst the same principles of just trial and error, trying it and seeing if I could do it, where would I have to cut? Is this okay? And this and that.

00:27:08:14 Emily: Let’s put aside the short-term leases because that’s obviously, it’s a big challenge, but it’s a little bit like unique to your situation. Let’s take the example of when you moved back to start, what I presume is you’re now on a year-long lease, right? Currently?

00:27:21:13 Ariel: Right now, my situation’s a little interesting. I came back. I’m actually living with my boyfriend’s parents because of some personal things with him moving back. And so, we had just signed a lease. We’re signing on to a one-year lease now. So, now I’ll be on a 1-year lease.

00:27:38:22 Emily: Okay, so in this process that you’re currently in of figuring out your housing expense for the upcoming year, locked in for a year, how are you like researching the market? I mean, obviously, you’ve lived here prior as well, so like that gives you some insight, but how are you figuring out like what’s reasonable, what is attainable for you to spend on rent in this area so that you can build as your budgeting model?

00:28:00:20 Ariel: I think just getting an idea of if you go on any of the apartment’s websites and saying what the average, you know, one or two-bedroom or three-bedroom places depending on roommates and stuff, I’m getting an idea of that. I also like when I was originally in L.A., I paid about $1200 a month for rent and I was pretty comfortable with that at that time. And even though I’m at a lower income now and knowing that it’s higher cost of living here than it was when I was in L.A., I ran the numbers again and know that looking at that, that if I do $1200, I could still be pretty good with that and feel okay.

00:28:40:16 Ariel: It’s still super tricky to find that around here. And so, my boyfriend and I actually had spent a lot of time kind of like researching like when is rent really low and rent prices are really low in winter. And so, we’re really, really grateful to have his parents nearby and letting us live with them to figure that out. But I think about like around here, I have a friend who has a one-bedroom for $1600. I have three friends that are paying, like two of them are paying $1100 and the other one’s paying $1400. And so, kind of those seemed pretty similar around to the $1200 range that I had thought. And I just realized, you know, if I did end up having to go higher like $1300, that’s just something I have to figure out. Because I really do want like my own room, if I was going to live with roommates and other things I would have to consider and just realize like a lot of things like that.

00:29:34:02 Emily: Yeah, that makes sense. I love that you mentioned that you actually know how much your peers and friends spend on rent. It’s a topic of conversation that is not as taboo among graduate students as it may be at other times in your life to kind of like share that information. So, I’m really happy about that.

Why is Budgeting Essential for Grad Students?

00:29:47:20 Emily: So, kind of to wrap up here, why do you think that budgeting is essential for graduate students?

00:29:54:10 Ariel: I think as I mentioned before, the number one thing is just that we have such a low income anyways, and it’s really vital knowing where all your dollars are going and you don’t run any risk of overspending. Like I know somebody in my program who is like, “Yeah, I kind of just put my card and see what happens.” And hearing that really just did kind of terrify me. And so, you don’t want to accidentally go into debt or you’re just more intentional. It’s more about the overspending that I think really like scares me a bit. And I think that alone is like the biggest goal to come out of a PhD without any debt.

00:30:32:09 Ariel: I was also actually pre-med and I didn’t want to go $200,000 into debt and so if that’s really one of the big things that I went into a PhD, I think that’s a good goal to have. And you’re still able to fulfill some financial goals, even though it might not be as high of a degree as you want to. It still really helps you to facilitate that and just gives more control and power overall and not being so, not feeling like we’re like completely powerless to, you know, grad students just make this and that’s just how it is. And I’m poor and I can’t really do anything. And I know it is really hard to live on the income that we have now, but it gives us some control back and some power so that we can really set ourselves up well financially in the future. Even if it’s not putting, you know, $300 into savings every single month, if it’s just building a habit of saving or building a habit of investing or building habits of this, this, and this, that’s really going to help you financially.

00:31:26:13 Emily: I love those points. Thank you so much for articulating that. I also think that budgeting is a really powerful and essential tool and especially because of not only like sort of the tangible benefits that we’ve talked about of having control of where your money is going and awareness and so forth, but also the intangible ones that just help you sleep better at night and everything.

Best Financial Advice for Another Early-Career PhD

00:31:45:03 Emily: So, I’m so thankful that you volunteered to come on the podcast to talk about this subject in detail, Ariel. And I want to finish up here with the question that I ask of all of my guests, which is what is your best financial advice for another early-career PhD? And it could be something that we’ve talked about already or it could be something completely new.

00:32:01:12 Ariel: Yeah, I would say my best advice, I mean, I’m also an early-career PhD, is having to do with investing. And I would say it’s best to start investing monthly, even if it’s something that seems kind of small and you’re wondering, is this even worth it? Again, it’s still just building that habit and building that, you know, like muscle memory and plus one is bigger than zero. So, I think anything is good. And I’ve heard some people, like a lot of people say a bunch of different things, like, “No, you should just save a lot.” And maybe it’s different for, you might be in a different situation. But I find that even just starting to invest at this time will help you get the habit once you graduate.

00:32:43:13 Emily: And to add on to that, I mean, the habit formation alone is a great reason to start investing or start budgeting or start doing other kinds of financial practices. But specifically with respect to investing, I think it’s really powerful just to get your systems like off the ground. Like with investing, you have to make a bunch of decisions, like especially with an individual retirement arrangement or an IRA, you have to decide which brokerage firm you’re going to house it at, you have to decide what funds you want to invest in. So those are like big, like they don’t have to take necessarily that much time to make those decisions, but the decisions have to be made and it’s really easy to procrastinate them. And so, if you aren’t, you know, determined to start your investing now, it could be something you end up putting off for years just because of the annoyance of like starting this system, right?

00:33:27:01 Emily: So, not only the habits but just getting like your account set up is like a great thing to do and it’ll facilitate, you know, continuing to invest going forward. Yeah, really easily. So, I’m really glad you brought that up. And I think you also want to give some advice about those two years you spent as an RA, right?

00:33:43:14 Ariel: Yeah. Those two years that I took in between undergrad and grad school were some of the best, like really was probably one of the best decisions that I’ve ever made. I was pre-med, I graduated and was a little bit unsure if I wanted to do a PhD because I was kind of not wanting to do med school at that point. And I thought, you know, what’s the rush? Let me work. I like research. Let me work in research and just figure things out. And just realistically, in terms of a PhD, it helped me figure out what I wanted to research for a PhD, what I wanted to get out of it, why I’m even doing it. But even after that, just taking the designated time for working and kind of settling into a bit of adult life and gaining an income, I really learned a lot and matured a lot mentally, emotionally, and as we’ve talked about financially.

00:34:35:07 Ariel: And so, I think those two years were really key for me to set myself out well for the rest of my time in grad school. And I can’t imagine like going straight from undergrad into grad school. I feel like that would be a complete whirlwind. So, that’s another thing I like to tell a lot of friends thinking about whether they want to take gap years or not, I think that’s like a really good time to kind of just figure things out on your own and plan out, you know, everything across the board or just, you know, just figuring out what you want to do.

00:35:02:17 Emily: And I know we already talked about you like starting your practice of budgeting that period of time, but were you also able to come into graduate school with some savings? 

00:35:12:11 Ariel: Yeah, I saved good chunk just because again, the habit. So, I think going into graduate school, I would save just general savings monthly however much I wanted to. I hadn’t invested at that point because I knew I wanted a little bit more of like a safety net coming into grad school to have on hand.

00:35:32:03 Emily: Yeah, that makes so much sense. And it’s, Ooh, it’s a lot easier to build that emergency fund when you are making a little bit more rather than, you know, having to build it up once you start graduate school. Of course, there’s no time like the present. So, start if you haven’t started already with that emergency fund, but it’s really giving yourself a leg up to have done it when you had a higher income before. So, that sounds awesome. Ariel, it was such a pleasure to talk with you. Thank you so much for volunteering to come on the podcast!

00:35:55:22 Ariel: Yeah, thank you so much. This was really great!

Outtro

00:36:02:23 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

The Motivation and Strategy Behind Biology PhD Stipends

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In this episode, Emily interviews Shelly Gaynor, a fifth-year PhD candidate in botany at the University of Florida. After learning of the possibility of a stipend decrease in her department last year, Shelly dedicated herself to raising the stipend in her department at UF. She and a partner even launched an app to collect stipend information from other biology departments around the US. Shelly shares everything she’s learned about the factors that influence how stipends are set and her advice for other stipend advocates. The interview concludes with a round-up of all the stipend and benefits advances Shelly has witnessed in her department, through her union’s negotiations, and at other institutions.

Links Mentioned in the Episode

Image for S14E10: The Motivation and Strategy Behind Biology PhD Stipends

Teaser

00:00 Shelly: I think that the conversation has to focus on how competitive the stipend is. I think that is a focus of admins, at least here at UF. That is a big focus, is, you know, they want to compare themselves to other institutions and they want to look good. So, I think that comparison’s really important.

Introduction

00:25 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 14, Episode 10, and today my guest is Shelly Gaynor, a fifth-year PhD candidate in botany at the University of Florida. After learning of the possibility of a stipend decrease last year, Shelly dedicated herself to raising the stipend in her department at UF. She and a partner even launched an app to collect stipend information from other biology departments around the U.S. Shelly shares everything she’s learned about the factors that influence how stipends are set and her advice for other stipend advocates. The interview concludes with a round-up of all the stipend and benefits advances Shelly has witnessed in her department, through her union’s negotiations, and at other institutions.

01:40 Emily: There are some free recurring opportunities to meet with me that I’d like you to be aware of. First, my Office Hours are back! I set aside 30 minutes once per month to chat with up to 4 early-career PhDs about whatever money-related questions or topics you’d like to bring up. I’ve set the dates for these sessions through August 2023. Register for any of them at PFforPhDs.com/officehours/. Second, through at least September 2023, I’m hosting a monthly Ask Me Anything on mortgages and being a first-time homebuyer with Sam Hogan. Sam is a mortgage originator specializing in early-career PhDs, an advertiser with Personal Finance for PhDs, and my brother. If you are considering or embarking on the home-buying process and have a question about any aspect of it, please join us! Register for the next session at PFforPhDs.com/mortgage/. I hope to see you in one of these calls in the coming months! You can find the show notes for this episode at PFforPhDs.com/s14e10/. Without further ado, here’s my interview with Shelly Gaynor.

Will You Please Introduce Yourself Further?

03:07 Emily: It’s really a special day on the podcast because today I get to interview Shelly Gaynor, a fifth-year PhD candidate in botany at the University of Florida. You may recognize Shelly’s name because she is one of the people behind an advocacy campaign and research campaign around raising stipends in her department and across the field of biology. And that’s gotten a lot of attention in the past year. So, Shelly, thank you so much for agreeing to come on the podcast. I’m really looking forward to speaking with you today! Will you please introduce yourself a little bit further for the audience?

03:40 Shelly: Well, thanks for having me! I study evolutionary biology of flowering plants here at UF and hopefully will be done in about a year.

03:49 Emily: Yeah, that’s great. So, regarding the project that I just mentioned, is there a name? How should we refer to the project?

03:56 Shelly: We call it Biology PhD Stipends.

Biology PhD Stipends

03:59 Emily: Okay. Biology PhD Stipends. So, what motivated you to start to advocate around raising stipends in your own department, which ultimately led to Biology PhD Stipends?

04:11 Shelly: So, I started advocating more formally during my fourth year of grad school. I was starting to plan out my timeline and figure out when I was going to finish my PhD, and it became very obvious that I really should take six years. We had always planned for me to take six years, but I hoped not to because I really didn’t plan for the cost of living to increase so much in Gainesville. Every year, it seemed that rent went up about a hundred dollars, but the cost of living increased even more as we moved through the pandemic. And, you know, friends everywhere were struggling, not just here, but it was very noticeable here that people were starting to struggle to afford to live. So, at first I put together a document with about four other students that outlined what the current salary meant in Gainesville, what was the take-home after taxes, tuition, fees, and health insurance, and how far did that money actually go in Gainesville.

05:05 Shelly: And the conclusion was that it doesn’t cover the average cost. Students are expected to be rent burdened and spend more than 30% of their income on rent, and they could also be health burdened and spend more than 7.5% of their income on health costs due to our really high out-of-pocket maximum. At the same time as we put together this document and distributed it through our department, at the college level, there were discussions about how to deal with the decreasing teaching assistants’ budget. And they had decided that a group of faculty were the ones who had to decide how to decrease this budget, how to deal with those decreases. And one of my dissertation committee members was a part of that committee, and he let me know about discussions regarding cutting the graduate teaching assistant pay and standardizing it across the college. And this is when I started to collect data.

06:05 Emily: That’s a bit shocking. What was the reason behind the overall budget decreasing? Is that enrollment decreasing or something further than that?

06:14 Shelly: I think it had to do, based on the documents that I’ve read, with just general flow of money, there was a line that used to go into OPS budget, which is what the teaching assistants come from, and that had been diverted elsewhere. So, they had to deal with this ongoing decrease, and the provost gave them funds for a few years to help them cover this change, but the decrease was still coming because that revenue flow wasn’t supposed to be there originally. And they just had to start to account for that.

06:48 Emily: It’s not that I don’t appreciate the budgetary strains that I think universities and schools and departments and so forth are dealing with, but it seems to me that making the budget balance seems to be too often placed on the shoulders of the graduate students and it becomes their responsibility. And the effects on them are real <laugh>. They don’t eat as much or they don’t get the type of food that they want. They don’t live in safe housing, et cetera, et cetera. Instead of being a more, I don’t know, academic exercise <laugh> to cut it elsewhere. I think it’s so unfortunate that the budget is balanced on the backs of teaching assistants, for example. Okay. So, you heard that this was a possibility of there’s not even less work to go around, it’s just the same amount of work and potentially for less pay. You started doing the research route, the actual cost of living, what the stipends were.

07:50 Shelly: And there is a happy ending to at least that part is that they did not cut, you know, graduate TA stipends. That was not the end result.

07:58 Emily: So, what happened? What did they do?

08:01 Shelly: They did allocate differently and they cut the overall amount of TA lines rather than individuals’ pay.

08:07 Emily: Okay. So, the work was just distributed among fewer people, but those people were not paid less than they were before. Is that right?

08:16 Shelly: Yes.

08:17 Emily: Okay.

08:17 Shelly: From my understanding.

Building an Argument

08:19 Emily: So, when you started collecting this information and to make this argument for not just maintaining but increasing the stipends, what elements were you looking at to include in this argument?

08:31 Shelly: So, since we put together that document about, you know, how does the pay go in Gainesville, how far does that go? I focused on what would convince those who weren’t swayed by student conditions, what would the admins want to see? And I talked to a ton of faculty and leaders at my institution, but mostly others. And what I learned from that was, you know, you need to know who controls the budget and you need to focus on the importance of hierarchy. So, there are different budget systems at universities, and from my understanding, at the University of Florida, the budget is determined by our provost and our board of trustees. Now, to get to that provost and board of trustees, the faculty members need to convince the department chair to then go to the college and the dean who then can go to the provost and board of trustees.

09:22 Shelly: So, that was part one, is that, you know, it’s a hierarchy that people need to be talking up the list so that everyone cares and is pushing for this agenda item. Now, the second part is that benchmarking is really important. At the college level, and at the university level, the main administration offices should be doing benchmarking. And what I mean by that is two parts. So first we have internal benchmarking, which is just assessing the current status of students. For example, within our department, we found we have 19 different pay rates for the same work. So, are TA positions are at 19 different rates. We also looked into the yield rate, which is the percent of students who accept our offer to come to our program. And we found that in three years, we went from 80% to about 55%. The next step is external benchmarking, and that’s pure institution comparisons, and that is what my database was made for.

10:25 Emily: So, the internal and the external benchmarking, you targeted these as areas that you could, I guess, assist with or bring your own data to. But were the administrators and you know, this hierarchy, people in this chain of command, they were already doing this, right? Or were you bringing different data to them? How were you supplementing the process that they were already engaged in?

10:49 Shelly: So, supposedly they were doing benchmarking and they have presented data at the board of trustees meetings, but it doesn’t match my data. And even if I cherry-pick my data, I can’t find a way to make it match. And one of the reasons is because they’re combining med programs with college of liberal arts and science programs and calling that biology. So yes, we do look a lot better when you take the students who are funded by the med school versus colleges that only fund based on liberal arts and graduate TA ships.

11:22 Emily: So, in your mind, they weren’t really comparing apples to apples, they were conflating a couple of different groups together?

11:28 Shelly: Exactly.

11:29 Emily: Okay. So, the process that you were engaged in was, you were thinking, presenting higher quality data than the ones that they were using in their discussions to hopefully go up this chain to the decision makers. Is that right?

11:42 Shelly: Kind of. I also wanted the data to be accessible at the faculty level. So, when we talked to other faculty, they would ask me, you know, what about the other institutions? Like, that was actually a conversation that we already started having. So, it made sense to collect our own data so that we had something to show.

11:59 Emily: Gotcha. So, it seems like the conception of Biology PhD Stipends was to be able to compare, do this external benchmarking from the University of Florida, but also many other universities would be able to use this data as well to do this external benchmarking. And you mentioned my database, PhD Stipends, which is self-reported and a starting point I would say, but you approached things a little bit differently with Biology PhD Stipends. So, can you explain to us how you were collecting this data?

12:33 Shelly: We should rewind a bit. So, originally I just made a plot of 40 or so departments and realized they didn’t meet the living wage. And once I tweeted that and got a lot of feedback from other departments, that’s when we made it public. The reason why it’s different than PhD Stipends and not self-reported is because admin don’t always want to believe that data. And so we got a ton of pushback saying, well, you know, these are self-reported, they’re probably less, they probably account for taxes already and fees, and that’s not, you know, what we’re looking at. So, we don’t trust this data. Bye. You know, they would push it away. So, my goal was to have something that an admin couldn’t push away, couldn’t discredit, to do as much due diligence as possible. We even have an option on our website to only look at nine-month salaries versus 12-month, even though those nine-month agreements are the only money you’re getting for the whole year. We still allow those divisions so that if that’s where the pushback comes from, you can already see the data that way.

Phases of Data Collection

13:44 Emily: Okay. So, I guess I’m asking maybe two phases. So first phase, when you were collecting data and you created this chart that then later got more attention, where did that data come from?

13:55 Shelly: So, part of that data came from my undergrad institution and from faculty members there who had collected internal or external benchmarking measurements for their own efforts. And the rest of it came from searching the internet or there was this one Google sheet with a couple links in it for EEB stipends. So ecology and evolutionary biology stipends. And I worked from there. So, I just started searching biology PhD stipends to see if I could find reported stipends online.

14:26 Emily: Okay. So, this is what departments themselves say about what they’re paying their students, is that right?

14:31 Shelly: Yes.

14:32 Emily: It’s interesting that, and I understand it, but that the administrators didn’t want to trust the self-reported data in PhD Stipends, for example. But I don’t trust what they put on their websites. You know, you have to get both sides of the story. Right? Okay. But you went with the self-reported in terms of the administrative self-reporting side of things for that initial set of 40 schools. And then you said you tweeted, it got lots of attention as <laugh> I’m sure anyone would be interested. And then how did you expand the data from there?

15:01 Shelly: I started talking with faculty members at a lot of different institutions as a student rep for the Botanical Society of America. And that gave me a lot of connections within my field. And so I knew faculty members at lots of different institutions and I made a Google form and had different faculty members test it out to see if they could report data accurately and if it made sense. And I, in some cases, sent it to two people at one university to see if they would report the same thing. And then we made the shiny app. Part of the reason it was a shiny app which is just a version of R, it’s an interactive R-based plot, that you can put on a website was because my significant other had just launched another shiny app. So it was like, okay, I’m going to learn how to make a shiny app with this data to make it accessible. So, we made the Google form, we put up the shiny app, and we went from there.

15:57 Emily: I guess I’m still wondering a little bit about this data collection process. It doesn’t seem too dissimilar actually from what we’re doing at PhD Stipends, but you mentioned like internally within, I can’t remember if it was your department, you said there were like 19 different pay rates. So how, if you approach a faculty member at a different department, at a different university and say, what are you paying your graduate students? How do they know which pay rate they’re supposed to choose?

16:20 Shelly: So we asked for the minimum, what is your lowest paid PhD student in your department at this time? Not in the incoming class, but in the class that still exists. Who is your lowest paid? What is that rate? And that’s what we’re looking for. We make that very clear on our Google form. And that’s why I sent it to many faculty members was, Hey, does this make sense? Do you know what you’re reporting? Yeah. And the cool thing is that a lot of faculty or a lot of different departments have been reported more than once. So we can go through, compare the wages, figure out what’s going on, and a lot of times it’s the same, which I think is really important to see.

16:59 Emily: Do you get back zeros? Are they reporting that there are unfunded students or is that something that you explicitly exclude?

17:08 Shelly: So, if you don’t have an appointment, a 0.5 FTE, then no, we’re not including you. It’s only if you have a work appointment. In biology, it’s very rare to enroll in a program and not have an associated research assistantship or teaching assistantship. And if that’s the case, run, like don’t be part of that program

17:33 Emily: Yeah. In that field for sure. And then I’m also wondering about people who are not employees, but who rather are paid from what I call awarded income or fellowship income. I’m assuming they’re not included in this survey?

17:47 Shelly: No, they are not.

Commercial

17:51 Emily: Emily here for a brief interlude! We’re doing something special for Season 15 of this podcast, and as a loyal listener, I know you’re going to want to be involved. Season 15 will be a chance to share your financial experiences, even if you don’t want to give a full-episode interview or want to remain anonymous. We’re going to publish compilation episodes around certain themes, and each episode will feature at least a half-dozen different contributors. The contributions can be audio clips or written text that I will read aloud for the episode. If you are interested in contributing, check out PFforPhDs.com/season15/. That’s the digits 1 5. On that page, you’ll find a list of the proposed themes and how many volunteers I’ve identified for each episode. Your next step is to email me at [email protected] to let me know which episode you’d like to contribute to or if you have another idea for the list. Once I’m confident that we have enough contributions for an episode to be created, I’ll give the volunteers specific prompts and directions to create their submissions. I hope you will choose to participate in this unique season! I can’t do it without you, so please get in touch! Now back to the interview.

Reallocating Funds for TAs

19:14 Emily: So, what happened as the database gained traction?

19:18 Shelly: Okay, so nothing happened here at UF Biology in response to the database gaining traction. Eventually, maybe seven months later, I ended up presenting at faculty meeting and our faculty signed a letter saying they wanted to increase salaries, but then they had voted against every option to increase salaries at the department level. Within a department, there are many ways other institutions have been able to successfully increase TA salaries. It might not be by a lot, but things that other institutions have done include converting faculty hire lines into teaching assistantship salaries. Many have reevaluated the teaching assignments and decreased their TA needs to then reallocate funds. Many admit fewer students. One cool one was fundraising to top up students, which is kind of fun to see. And then another that’s more controversial is that programs have required principal investigators to cover summer pay.

20:21 Emily: Okay. So, all of these options were sort of in the mix. Maybe this could happen, but specifically none of them were agreed to.

20:29 Shelly: Yeah, not so far. We’ll see over time how that changes. I hope that they you know, look at the TA allocations. I think that’s something in the works, but it just hasn’t started yet.

20:42 Emily: So, that’s what was happening at UF. Have you seen other reactions or other effects at other institutions?

20:50 Shelly: Yes, and so I think that’s the more positive side. I’ve seen about 50 salary increases in biology departments across the country this year. We’ve had a lot of users on our site, about 12,000 unique users and a lot of submissions and corrections. It’s always good to hear that it’s been helpful in discussions in other departments and successful in some cases.

21:16 Emily: Yeah, that’s awesome. And you’ve had people like directly attribute like, Hey, we use this data to make this argument. Yeah. That’s amazing. Well, thank you so much for doing this work, and I’m so glad it has had some positive effects for some other people not necessarily at your institution.

Behind-the-Scenes Factors for Administrators

21:32 Emily: Okay. We touched on this a little bit earlier but let’s expand. So, what have you learned about the behind-the-scenes factors that administrators are weighing when they set stipends? And in learning that, do you have any advice for people at other institutions who are advocating for stipend increases?

21:50 Shelly: I think that the conversation has to focus on how competitive the stipend is. I think that is a focus of admins, at least here at UF. That is a big focus is, you know, they want to compare themselves to other institutions and they want to look good. So, I think that comparison’s really important. From that and from behind the scenes, I think the biggest thing I’ve learned is advocacy has to happen at every level. You need to be having conversations about pay with your faculty members, and they need to have those conversations with the chair. And the chair needs to be pushing. Everyone has to push for change to happen. And not only that, the money needs to come from somewhere. We just saw that with the UC system, that in some cases in response to this amazing bargaining agreement, departments are cutting the FTE to be able to afford the pay. So, identifying where the money can come from would also be something important to administrators.

22:55 Emily: So far, these levels that you mentioned, I suspect would’ve stopped at the university president, but how about going up to the state level or federal level? Have you given thought to advocacy at those levels yet?

23:08 Shelly: To an extent, yes. In Florida, our universities can submit funding requests in order to raise stipends. And so, Florida State University was actually able to do that. So, they got that from the state, but I haven’t thought about advocacy at that level because I’m in Florida. And I don’t think it would be successful at this time. They would rather have the war against academia than work with us. So, I don’t think that’s a conversation we’ll have here.

23:39 Emily: Yeah, I was thinking about it, because I live in California, when the UC strike was going on like that again, the responsibility for balancing the budget should not be on the backs of the graduate students. It needs to be at the state level, it needs to be at the federal level. And I agree it’s a much harder road to hoe in Florida than it is in some other states. So yes, thank you for those comments. So, I understand that you have a union at UF for graduate students. Is that just for TAs or is it for research assistants? How many people does it cover?

Graduate Assistants United 

24:10 Shelly: So, it is called Graduate Assistants United, and it covers teaching assistants. So, as a fellowship recipient right now, it doesn’t technically cover me.

24:20 Emily: Okay. And so what work is the union doing on campus, and how does your Biology PhD Stipends project fit into that?

24:31 Shelly: So, our union is currently bargaining, and in the past they have won tuition waivers, health insurance coverage, and some increases including about a thousand dollars increase to the minimum last year. Biology PhD students are paid more than the minimum. So my data really isn’t helpful for our union because they’re really focused on that minimum and bringing the minimum up.

24:56 Emily: Okay. So the union has made some strides, but your biology department already being above those minimums, it’s a little bit not so relevant. But is there anything else that you want to say about how your work can complement the union efforts?

25:11 Shelly: So, our union is still currently bargaining and they have made past wins, like I mentioned. One thing that makes it really hard in Florida is we’re a no-strike state. So, that puts a lot of burden on what advocacy can be done. As we’ve seen strikes have been, you know, really successful in unions across the country. And with that off the table, I think it’s really difficult to bargain here.

25:36 Emily: Yeah, as I’m learning more and more about this topic of unionization, and because I work nationally, that’s something I need to keep in mind. That not everything operates the same in every single state. It’s really kind of a heterogeneous map. So, then what is the current status of the minimum stipend in your college?

25:56 Shelly: So, at our university, it’s now $17,000, but in the biology department, we found out that our master’s students are actually paid $18,000 while our PhD students are at $20,500 as the minimum. So, this is the same minimum we started at when we started the biology stipends database, but new students who are incoming, there’s a slight win that for the next four years in their degree, the first four years of their degree, they’ll be paid $24,000. So that we see as a win, even if it doesn’t really help the rest of us. There was also an increase in the maximum research assistantships that our faculty were allowed to write into their grants, so that now has increased as well. One other, I would say exciting increase partially because my dissertation advisor was a part of this, our biodiversity institute was able to increase their nine-month fellowships to 30,000, which is a big win.

26:58 Emily: Yeah, I’m so pleased about those things. I’m a little bit surprised actually that the raises that were given didn’t apply to current graduate students and only incoming. Do you know any more about the reasoning behind that?

27:11 Shelly: That has to do with how the university allocates funds. So, in order to, you know, recruit good students, they have funds that are only earmarked for recruitment and incoming students, and those are only four-year fellowships. So, that’s what the funds come from and sadly, they cannot be applied to current students.

27:33 Emily: I guess this is the dangerous downside of using that external benchmarking specifically as a comparison in terms of recruiting other students, is that they can then use that logic of, well, we already have students enrolled, we don’t need to worry about them leaving, we’re just going to focus on recruiting that next class with this extra money. So, a little bit sorry to hear that, but good for them. And thank you again for doing the work that you do to at least benefit those incoming students and really your department overall, if not the older classes. Okay.

Advice for Prospective Students

28:05 Emily: So, what advice, you know, speaking of prospective graduate students and being recruited and so forth, what advice do you have for prospective graduate students in light of everything that you’ve learned through this process?

28:15 Shelly: Yeah, so I just had two undergrads I mentor apply to PhD programs. And one thing I kept telling them was, know your worth and ask for more, and actively discuss pay. Ask students in your potential lab and department how much they get paid now and what opportunities exist at their institution after you’re enrolled. Just because we know that these, you know, top-ups to get you there exist in those only last four years when our programs could last much longer. So, having those conversations as you interview at institutions is really important. I just think that we really have to open the door to conversations about pay and financial wellbeing during that recruitment process, make it not taboo, really just open that dialogue. So yeah, if your prospective, I definitely say talk about it.

29:07 Emily: That component of your answer was about gathering data, right? As a prospective graduate student, what are you being paid? And I would add onto that, of course, the qualitative, how does that feel, <laugh>, are you able to live well enough? Right? But you mentioned when you first started answering, ask for more. So what do you think about that process?

29:24 Shelly: So, I’ve never done it myself, but when I was applying to grad school, a current PhD student in my lab told me, you know, apply to multiple places and then tell them how much the other institution’s gonna pay you. He said he did it successfully, and that is the only time I’ve ever heard of that working. But, you know, if an institution really wants you, they’ll find more funds if you need, like, if they really truly do or at least I think they will.

29:51 Emily: Yeah, I fortunately in my line of work have come across many examples of people using that kind of strategy and also the strategy of, I won this external fellowship. If I bring it to your institution, you know, what are you going to do for me? Et cetera, et cetera. Those kinds of strategies, I mean, they’re not universally successful, but some people do have success with it. Your comment of if they really want you, then they’re going to find more money. I don’t know, I don’t know if that’s true, but I think they should at least respond to you very respectfully and understand why you’re asking for this and explain to you at the kind of the things that you’ve learned. Well, you know, our hands are tied in this way and we have to standardize this and this and this, but we do really want you. And you know, they, they may be able to find another way to make up for it that’s not financial, at least with verbal affirmation, we hope, alone. So yes, these strategies can be successful sometimes. Any other advice for prospective graduate students?

30:42 Shelly: I think on that same line read the fine line print, like if a fellowship is only gonna be four years, ask for the other for what’s left over to be covered. If you’re on a research assistantship that pays more than your teaching assistantship in the department and that research assistantship only asked x number of years, ask to see if there are funds available to make it equivalent. In some cases there won’t be, you’re completely correct, but if there is, it’s good to know about them going in and if there isn’t, it’s good to know about them going in.

31:16 Emily: And I just think this process of asking, even if you don’t get anything from it, which I certainly hope that people will, and I think they do sometimes. I think just the process of asking signals to the DGS or whoever is you’re asking that they can go up the chain as you were saying earlier, this is an issue that is important to the graduate students that we are recruiting. And even if they can’t do anything right then for that student who’s in front of them, it goes into, you know, the anecdotes and the data that they’re collecting to make those arguments for more fellowships or higher stipends or whatever the case it is going forward. So, even if you don’t see an immediate yes result, that doesn’t mean it’s not going to have a positive effect downstream. And really that’s kind of the lesson that we’ve seen from your work overall, right? Like there have been some, you know, gains here, gains there, marginal gains here, and it’s certainly helped a lot of other people quite a bit. So, like you never really know what the end result is going to be from that ask or from that data that you collect.

32:13 Shelly: Yeah, I definitely agree. Even having the conversations about if someone brings a fellowship, we should top them up is important and something that GRFPers who received that award while they’ve been here, have been having with the department here. So, I do think just asking can have a lot of impacts.

32:35 Emily: Yeah, I literally gave that advice to someone I was speaking to last night. A current first-year graduate student won the NSF GRFP, her stipend’s going to go up by $10K for those three years. And I said, just ask, just ask for that fifth year, sixth year, whatever it’s going to be at that 10K bonus or closer at least, and it really does no harm. Just ask.

Best Financial Advice for Another Early-Career PhD

32:56 Emily: Well, Shelly, I so appreciate you coming on the podcast and sharing this information with us, and I really hope that the listeners will take some of these strategies and lessons that you’ve learned and certainly the database itself if they’re in your field, and use those for a positive effect on stipends at their own universities. And then to wrap up here, I want to ask you the question that I ask of all my guests, which is, what is your best financial advice for another early-career PhD? And that could be something that we’ve touched on already in this interview, or it could be something completely new.

33:26 Shelly: Yeah, so I went back and forth with my family about what makes sense, and one thing that I live by, save when you can and try to live within your means. And I know that’s a really hard thing to do when we’re talking about stipends not meeting the living wage. But as you move through your career, I think it’s important to keep that in mind.

33:49 Emily: I had an experience in my own life where, you know, sometimes the opportunity to earn money can be there and sometimes it cannot. And I just told myself, make hay while the sun shines <laugh>. when you have the chance, earn the money that you can, put away the money that you can because at some point that sun will stop shining. Whether that’s because of something, you know, decided for you by your university or other personal circumstances and it’s just such a peace of mind that you could have something to fall back on in those cases.

34:17 Shelly: Yeah, I definitely believe in a rainy day fund and having funds saved up.

34:23 Emily: Well, Shelly, thank you so much again for coming on the podcast and giving this interview. And for anybody wondering, you know, where to find all the great work that you’ve been doing and there’s been articles about your database and so forth, we’ll link all of that stuff from the show notes. So, thank you so much again for coming on and sharing your insights!

34:39 Shelly: No problem.

Outtro

34:45 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

This Grad Student Saved and Spent $60,000 for a Year-Long Seabbattical

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In this episode, Emily interviews Michael Spano, a fifth-year PhD student in chemistry at the University of California, Irvine. After seeing his stipend offer from UCI and securing university-subsidized housing, Michael resolved to save and invest as much money as he possibly could throughout grad school. Michael shares his financial philosophy of keeping recurring expenses low, splurging only on high-value experiences, and finding joy and fulfillment in inexpensive activities. Over the course of graduate school, Michael saved up approximately $60,000 in cash, which he has spent—listen through the end of the episode to find out on what. His post-graduation plans include a year-long sabbatical and pursuing financial independence.

Links Mentioned in the Episode

Image for S14E9: This Grad Student Saved and Spent $60,000 for a Year-Long Seabbattical

Teaser

00:00 Michael: I talked about how I minimized all of my recurring costs so that I have a lot of ability to save, and that allows me to make these one-time purchases that I put a lot of value on. Things that I only have to buy once. For instance, you know, a wetsuit, it’s maybe a four or $500 investment, which, you know, if you don’t have savings, it’s a lot of money. But because I had this, you know, money saving up as I’m watching it grow, I’m like, Hmm, yeah, I’ll take a little bit off the top and I’m going to buy this equipment. And it gave me hours and hours and hours of joy.

Introduction

00:36 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 14, Episode 9, and today my guest is Michael Spano, who at the time of this interview was a fifth-year PhD student in chemistry at the University of California, Irvine. After seeing his stipend offer from UCI and securing university-subsidized housing, Michael resolved to save and invest as much money as he possibly could throughout grad school. Michael shares his financial philosophy of keeping recurring expenses low, splurging only on high-value experiences, and finding joy and fulfillment in inexpensive activities. Over the course of graduate school, Michael saved up approximately $60,000 in cash, which he has spent—listen through the end of the episode to find out on what. His post-graduation plans include a year-long sabbatical and pursuing financial independence.

01:59 Emily: I have a personal update for you all today. The last six months or so have been pretty hard for me and my family. Starting last fall, my husband and I had some extra caregiving duties for one of our parents pop up. And the conclusion of that journey a couple of months ago was the death of that parent. So, it’s been a very trying season of course managing all of our regular life plus these extra caregiving responsibilities. Plus it was tax season, which, you know, is like the busiest time of year for me. And then of course grieving and the funeral and all these associated things. So, it’s been a lot, and I just wanted to say thank you to you all. To everyone who has supported my business in any large or small ways through this period, I’m especially appreciative. I could not do any marketing for my tax return workshops outside of like this podcast and my own mailing list because I didn’t have the time and energy for it.

03:05 Emily: So, I super appreciate all of you who recommended that workshop, whether that was to an individual or to a potential sponsor at your university. It really helped me get through this season without a huge hit to the business revenue and so forth. And I also want to say, you know, thank you for your patience with me. Some of you may have emailed me during this time and I may not have gotten back to you or gotten back to you weeks or months later. And I’m really sorry about that. It had to happen. And one more, very special thank you needs to go to my team who works with me behind the scenes on the podcast and on other aspects of my business. Jill, Lourdes, and Meryem, I appreciate you so much. It is really, really all to their credit that things have been happening in the business. That your emails have been getting answered, that podcast episodes have been coming out, that transcripts are getting done, all of those sorts of things especially over the last few months. Literally, the business would have ground to a halt without you. So, thank you.

04:03 Emily: Now that we’re near the beginning of May, I have turned my thoughts to summer vacation. I am looking forward to a change of pace and hopefully some rest and recuperation over the summer. My kids are out of school from about early June to like mid-late August, and we have a couple of vacations planned. I’m going to a couple of conferences as Personal Finance for PhDs. My kids are enrolled in fun summer camps. I’m just really looking forward to a change of pace for the summer. One exciting thing about the podcast is that we’ll be doing something different with episodes over the summer and I really want you to contribute. So, please keep listening to this episode to find out how you can be part of the special set of episodes we’re doing over the summer.

04:50 Emily: What this experience has to do with finances, let’s see. I am really grateful to myself and my husband in the past for working very diligently on our finances and especially automating as much as we can. Because whenever you hit an emergency of any type, and we’ve been through a couple, having those finances automated is just a huge peace of mind that the bills are getting paid and you do not have to do anything to make that happen. I’m also really grateful that we, you know, have aggressively saved in the past because we did have some extra costs associated with the caregiving we were doing. And we didn’t have to worry about overdrawing the checking account. We had savings that we could rely on. And this experience of losing a parent and, you know, reflecting on the life that that person had and the relationship that we had with them, it makes you realize that <laugh> life is for living, you know?

05:38 Emily: And money should be in service of that. So, I do think that we are going to be adjusting our strategy going forward. We’re not going to be saving quite so aggressively for retirement. We’re really good on that front, and we’re going to be using our money a bit more in the here and now to upgrade our lifestyle and create, you know, lasting memories with our friends and family. So again, thank you so much for bearing with me through this time period. I’m really grateful to you. Thank you for listening. Thank you for sharing these episodes. If you’d like to join my mailing list to keep up with new episodes coming out and other announcements from Personal Finance for PhDs, you can do so at PFforPhDs.com/advice. And why don’t you give your loved ones a hug or a phone call today? You can find the show notes for this episode at PFforPhDs.com/S14E9. Without further ado, here’s my interview with Michael Spano.

Will You Please Introduce Yourself Further?

06:27 Emily: I am delighted to have joining me on the podcast today, Michael Spano. He’s a fifth-year PhD student at UC Irvine in chemistry, and he was actually recommended by past guest Sam McDonald from season eight, episode three. So, Michael, thank you so much for volunteering to come on the podcast, and will you please introduce yourself a little bit further to the audience?

07:05 Michael: Yeah, sure. Thank you for the warm welcome, Emily. I’m really happy to be here and talk about my story. Sam and I are domestic partners, so we share a lot of things in common. A little bit about my background. I’m actually a dual citizen with Brazil. I spent half of my life in Brazil. I had all of my primary education there, so middle school, high school, and college. And then I got lucky in college to have a Science without Borders fellowship. So I came to North Carolina and I got exposed to what like a science lab was in the United States, and I was hooked. So I knew I had to do my PhD here. So, ever since then I’ve been working to get back to the United States. And here I am doing my PhD at UC Irvine in chemistry, and I’m, yeah, stoked.

07:49 Emily: So, I understand that when you started your PhD, well, tell us what your stipend was. And tell us how that struck you. Having, you know, recently or let’s say for college, you were in Brazil and so obviously there’s currency and, and cost of living differences there. So like what were you thinking about that stipend when you first saw that offer letter?

08:05 Michael: Yeah, absolutely, right. So, the stipend was right around $30,000. And that was an enormous amount of money, like you said, having been coming straight from Brazil that was more money than any of my professors made at university in Brazil. So, it struck me as like an opportunity. Like if I play my cards right and I’m frugal about living, I could save a ton of money and be really well off. And mind you, if you go to a federal university in Brazil, it’s free. So, I didn’t have any debts from college. And I was going into a PhD where not only was I not accruing debt, they were paying me. So I could actually build net worth if I played my cards right. So, $30,000 a year was the largest amount of money I had ever seen at the time. And I think we can agree I kind of played my cards well and built something for myself.

Cost of Living Expenses

08:56 Emily: Yes, that will be revealed through the course of the episode. I know where the exciting conclusion is here, but the listeners don’t yet. But okay. I mean, you see the number $30,000 per year, I understand how that could strike you, but we also are talking about Southern California, which is incredibly expensive. So I don’t know if you had like the context for that at that time. Like when you lived in the U.S. before, was it also in a high cost of living area? Or like how did you, before you actually got on the ground in Irvine, did you have a concept of how much your basic living expenses would, you know, account for as part of that stipend?

09:27 Michael: That’s a fantastic question. Because no, I didn’t, I had no idea. You always hear like, you know, California’s super expensive. So, kind of to back up, I applied only to three grad schools because it costs money to apply. And, you know, at the time I didn’t have it. So, I applied to three schools, got into two of them, Chapel Hill and UCI. And UCI had this really cool deal where they guaranteed you student housing if you signed up for it in your first year. And it’s common in graduate programs, at least in chemistry, for them to fly you out to see the school and you get to meet the faculty and everything. So on that trip, you know, I took a quick look at all the facilities. I was like, great, yeah, everything checks out. It’s a top-notch school.

10:08 Michael: Let me go to Aldi and buy, you know, enough groceries for a week. Let me see what that costs. Let me go fill up the rental car that I have. Let me see what it costs to actually live here. And I talked a lot with the students about housing, and I saw that the rent varied a lot. The cheapest housing units at UCI were around $550 a month, which is like fantastic. And some of the more expensive ones were around $1,500. So, that’s a difference of a thousand dollars every month. That’s 12 grand a year. That’s a $60,000 difference over the course of your PhD. So, it was essential that I got one of those cheaper units. And because I got accepted into two programs, I was willing to walk away from UCI and go to Chapel Hill because the cost of living there is much cheaper if I didn’t get the housing assignment. Did that answer your question?

10:57 Emily: Yes, it did. So I think we’ve already, if there are any prospective graduate students listening to this, we’ve gotten some lessons there already from just what you said was going on during this admission season of you actually having the opportunity to be on the ground at the university. You were checking out what are the costs that you can observe, what are the costs that you can speak with other graduate students about? And like you said, housing is number one, the most key expense to identify and make sure that it’s going to be able to fit within your budget. So, this sounds like this was a point of negotiation with your program, that you said, I must have this guaranteed housing spot, or else I have to decline the admission. Is that correct?

11:33 Michael: Not quite. I didn’t quite have the power to enforce that requirement upon the school. But I did know the date in which they would tell me if I got the housing was still not too late, that I couldn’t turn down the offer and go and join the other school in North Carolina. So it was kind of like a plan B, if I didn’t get the cheap housing, I was willing to just say, okay, I’m out. I quit and I’m going to go to this other school that’s cheaper.

12:02 Emily: Yes. Okay. Maybe not for your situation, I don’t know, but for other prospective graduate students listening, don’t be afraid to try to use this as a point of negotiation. For you, it sounds like it was just a boundary. If I get this, I’ll go here, the numbers are going to work out. If I don’t, I’m going to go with my next top choice. And that’s totally fine to have that boundary for yourself. But other people could maybe go the next proactive step and just inform the program that that’s what you’re thinking and that is going to be a boundary that you’re setting for yourself. Okay. So, you have your $30,000 per year statement. You have your guaranteed lowest cost housing. You mentioned $550 per month. Is that what this has been during your graduate career, or has that changed?

12:45 Michael: Yeah, it’s been that and it’s gone up 15 bucks every year. So, I’m still in the range of like $600 something per month. Yeah.

Money Mindset in Grad School

12:53 Emily: Okay. Amazing. So, you know, you spoke earlier about, you know, being impressed by the amount of money and that you were interested in saving as much as you could of that stipend. Can you say anything more about what motivated you to think in that direction? Because it’s definitely not a typical goal for a graduate student.

13:14 Michael: Yeah, I think I just realized at some point, you know, like this money is freedom down the road, right? Like we exchange our life for money to do things we want. And if you’re not born into wealth, all you have to work with is your salary, right? If you’re not, if you don’t get an inheritance of, you know, $500,000, a million dollars, all you’ve got to work with is, either you come up with a really good idea, you start a business, you get rich, or you work with what you have. So, that was basically me realizing like, hey, this is a really good opportunity. I’m going to work with what I have. I did the math and you know, as we’re going to get into shortly, making some really severe like austerity measures, you can save a lot of money during grad school. It’s guaranteed income for five years, and if you play your cards right, you can save it. So, I think that’s where my head was at. You know, I realized, yeah, I wasn’t born into like a lot of wealth or anything. And this was what I had to work with. So, this was my shot I was going to take it and work with it.

14:19 Emily: So interesting again, and so unusual. I think I did something similar when I was in graduate school, though not to the same extreme as you in terms of the mindset that you had. My mindset was more like, I am an adult and I need to do adulty things with my money, even though I am also a graduate student. And so that involved like saving 10%. So I’m not thinking like, oh, I want to save every single dollar I possibly could, but like having a savings rate of some kind is something that, you know, I wanted to do. And so we had a similar thought process, but you’ve taken it a little bit further than I did at that time.

Minimizing Recurring Costs

14:53 Emily: So, let’s talk about the budget that you’ve had during graduate school, and later on we’ll discuss what you’ve, you know, decided to put those savings towards. But in terms of living expenses, what have those been aside from the rent, which we’ve discussed?

15:06 Michael: Yeah, so my philosophy on living expenses was to really take a hard look at everything that I was spending money on and asking, is this absolutely necessary? Do I really need this recurring cost? And I’ll be clear, I’m trying to minimize all of my recurring costs, like rent, like insurances, like cell phone bills, all these things that you have no choice. They get billed to you every month and you have to pay them, right? If you minimize those and you can save a lot of money, then you can choose to buy things when you want them, right? Like one-time payments for an object that will bring you lots of joy in my mind was better than subscribing to things over and over. And then, you know, wasting my salary because that, like I said, that was my only leverage is building up that savings.

15:53 Michael: So, my rent, I’m going to give you some numbers here annually, but my rent equates to about $7,200 annually. So for 12 months, I decided that, you know, in California you absolutely need a car. So I had a hand-me-down little car but it needs insurance, and that’s a recurring cost. So, even if my car is parked, it still costs me insurance. That was around $348 per year. And that’s another thing, a lot of people pay way too much for car insurance. Call the competitors and haggle. Say, Hey, I’ll switch to your company if you beat this price by 50 bucks. And when they do, call up the other competitors, like six companies. Just keep doing that until you drive the cost down.

16:34 Emily: I do have to say I’m very impressed by that number. Because I hear other people talk about their expenses for car insurance but I’m assuming you have a car that doesn’t have much value, right? And that mostly you have liability insurance is mostly what it’s there for.

16:48 Michael: Exactly. It’s just liability. A car is a tool. It shouldn’t, I’m sorry, this is my opinion, it should not be your pride and joy. That’s silly. It’s a trap. It’s a financial trap. If you’ve got a new car, sell it. Go buy a junker. Anyone giving financial advice would tell you that. Buy a junker, drive it until it explodes, fix it, and keep driving it. So here we are, rent $7,200 car insurance, $348 a year. My cell phone bill, I prepaid a whole year with Mint Mobile. They were doing this promotional. $109 for the whole year. And that’s for a four gigabyte plan, unlimited talk and text. The car needs a smog check in California, it’s $36 every year. Can’t get around that. It also needs to be registered, $128 a year. So right there, those are like my basics. Living and transportation. Mind you, I don’t have to put fuel in my car.

Retirement Saving and Discretionary Spending

17:36 Michael: So that’s not non-discretionary, that’s definitely discretionary. And then one thing that I put in my budget that I was not going to skip on was maximizing my Roth IRA. Now that’s a retirement account, it’s tax leverage. So you put money in that account that you’ve already paid taxes on and it grows tax-free and you can withdraw it under certain circumstances. But typically when you’re about to retire. So I max that out, it was $5,500 and it’s grown to $6,500 now. They might even change it this year or next year to compensate for inflation. So, when you add all those up, my non-discretionary spending, things I have no choice to pay. It’s $14,321 per year as you know, the criteria there. So my gross income is $30,000. You subtract those two and I now have a discretionary spending of $15,679.

18:31 Michael: So now, what do I choose to spend my money on? How am I going to live my life, live a fulfilled life, travel, see the world, be happy on $15,679? Well one, I buy California state park pass. So, that’s $200 a year and that gives me free parking to any of the state parks. So, I live six miles from a beach and that’s my go-to place. That’s my happy spot. I also bought some, well I’ll talk about that later, but groceries is a big one. I’ve got this supermarket called wholesome choice. I mostly eat vegetables, really healthy food. It’s $35 a week. So, that equates to $1,680 a year. I choose to have beer. I like my beer money. So, you know, having two or three beers a week, that’s, you know, at the grocery store. So, it’s six bucks a week. That equates to $288 a year.

19:25 Michael: Gasoline, let’s say $60 a month to go travel, see things that really opens up your horizons. That’s $720 a year. And then finally the National Parks Pass, which is a hundred dollars a year. And that, you know, just opens your world, right? And then California, we have so many national parks. That was, you know, hands down worth it. A hundred dollars a year. So now, add up my discretionary spending, that’s $2,983. Subtract that from my discretionary spending, and I’m left with what is my saving ability. So, I’m able to save $12,696 every year if I stick to this or roughly these numbers. So, that’s about a thousand dollars a month. So, multiply that for 12 months over the course of a PhD, five years, that’s $63,480. That’s not accounting for, if this money is in a savings account or invested in the stock market growing with the market, it’s actually more than that. It turns out to be like 70, 75,000 over that five-year span. So, that was the math I did. You know, if I can be happy putting gas in my car, going, seeing national parks, doing natural things, I don’t have to spend money on movie tickets or these other things or buying clothes or whatever, right? Whatever brings people happiness. Mine was cheap quality, good happiness, and I’ve lived a very fulfilling life.

20:50 Emily: That does bring me back to kind of a note or a point or a question that I wanted to make regarding what you said earlier about, you know, like not getting trapped into like high rent or like high transportation costs in terms of what you’re calling your recurring expenses. The expenses that have to go out the door every single month. It sounds to me like you do not value those things. So, you are going to spend as little as you possibly can. And thankfully, you know, UCI has given you a good deal on housing and so forth. So, it’s not like you have to go to market rent and everything like that and compete in Irvine for that. But I just wanted to point out that other people can have a different opinion about this.

21:29 Emily: The listeners, for example, might not want to follow your example of spending the absolute minimum possible amount of money on things like housing or transportation. And that’s okay. It’s just that you have determined, what I think is really fantastic about this story is that you have been very clear about what is important to you and what is not. And minimizing the spending on what is not important to you. You know, you’ve been very intentional about that and I fully agree with, advocate for that strategy of decide what’s important, decide what’s not. Spend as little as you can on what’s not important so that, like you’re doing, you can free up money to spend on the things that are really adding value to your life. Like you mentioned the National Parks Pass and the state parks parking and all that sort of thing. The gas to get to these, you know, wonderful natural, beautiful places. You’ve decided that’s what you value. Now you’re, I don’t know if lucky’s the right word, but in your worldview it happens to be that those things are not that expensive, right? <Laugh> in the grand scheme of things. So adding a lot of value to your life for just a little bit more spending has really increased your quality of life dramatically.

22:33 Michael: Yeah, I think you nailed it. That’s a great summary of my perspective on this.

Commercial

22:39 Emily: Emily here for a brief interlude! We’re doing something special for Season 15 of this podcast, and as a loyal listener, I know you’re going to want to be involved. Season 15 will be a chance to share your financial experiences, even if you don’t want to give a full-episode interview or want to remain anonymous. We’re going to publish compilation episodes around certain themes, and each episode will feature at least a half-dozen different contributors. The contributions can be audio clips or written text that I will read aloud for the episode. If you are interested in contributing, check out PFforPhDs.com/season15/. That’s the digits 1 5. On that page, you’ll find a list of the proposed themes and how many volunteers I’ve identified for each episode. Your next step is to email me at [email protected] to let me know which episode you’d like to contribute to or if you have another idea for the list. Once I’m confident that we have enough contributions for an episode to be created, I’ll give the volunteers specific prompts and directions to create their submissions. I hope you will choose to participate in this unique season! I can’t do it without you, so please get in touch! Now back to the interview.

Spearfishing

24:02 Emily: You brought up something else in our prep for this episode that I thought was really illustrative of your kind of philosophy around spending, which was spearfishing <laugh>. So, please tell me how spearfishing fits into your financial philosophy?

24:18 Michael: Okay, so I talked about how I minimized all of my recurring costs so that I have a lot of ability to save, and that allows me to make these one-time purchases that I put a lot of value on. Things that I only have to buy once. For instance, you know, a wetsuit. I still bought a pretty cheap wetsuit, so don’t think like spearfishing, super expensive, but you know, a spear gun, a wetsuit, gloves, it adds up. It’s maybe a four or $500 investment, which, you know, if you don’t have savings, it’s a lot of money. But because I had this, you know, money saving up as I’m watching it grow, I’m like, Hmm, yeah, I’ll take a little bit off the top and I’m going to buy this equipment. And it gave me hours and hours and hours of joy. I’ve just fallen in love with the ocean and I’m so fortunate that I got to go to school here.

25:04 Michael: I’ve never been an ocean person, but by going to the ocean, I fell in love. One day when this lady, she took her goggles and put it on a kid, her daughter shoved her head underwater and she’s giggling and screaming. And I went over, I was like, can I see what’s underwater? She put the goggles on me and I was hooked, instantly hooked. I wanted everything to do with underwater. So, spearfishing actually allows me to catch quality fish, be sustainable, and save a lot of money on groceries. Like I only buy fruits and veggies at the supermarket. Most of my protein comes from the ocean. And quality protein. Lobster season just opened up. It’s legal to catch lobsters here with your bare hands. So, I’ve had fantastic lobster dinners, lots of sea bass. I make ceviche, I jerky my fish. I mean, I have a really good quality of life from spearfishing. So, it brings me joy and it reduces my costs even further by providing me quality protein that I don’t have to spend money on, or at least the cost is very little.

26:03 Emily: Yeah, what a virtuous like cycle there that you have set up. Like something that you enjoy doing with your free time, brings you some, you know value to your mental health and so forth. And oh, what do you know? It also happens to help you reduce your expenses at the same time in terms of the grocery spending and, you know, the healthful diet and all that lovely stuff. So, I think the, maybe the broader lesson to take from that for the listeners is, maybe you won’t be able to find such a hobby that will actually help you reduce your expenses after, you know, an initial investment. But finding an inexpensive hobby that really brings a lot of value to your life is wonderful during grad school. Obviously, when you don’t have, have tons and tons of money to be having a very, very expensive hobby, it’s great to find things that are just low cost. Like I know for me during graduate school I went to Duke, so I got like really into Duke basketball and like, it’s free essentially to like watch a game with your friends, right? Like, and to have that be like your social activity. So yeah, I just love that point of finding these low cost activities that you just really, really enjoy.

Self-Sufficiency and Knowing What Makes You Happy

27:05 Emily: Is there anything else that you’d like to add regarding your expenses or how you find joy and happiness at this like, lower spending level?

27:16 Michael: There are two things I might want to talk about. So one is unexpected things happen, right? We own things that might break, like our cars or laptops, whatever. I’ve gotten very good out of necessity at fixing those things myself. So, if you think about, you know, the hourly cost to bring your car into the mechanics, it’s outrageous. If you have to do that very often, because you’re driving a junker like me, it actually defeats the purpose. So I’ve gotten phenomenally good at fixing my own car. And I’ll often try to purchase equipment that will allow me to fix the car multiple times. So that thing could break, like for example, I bought a welder from Harbor Freight for a hundred dollars because I had a hole in the exhaust of my old Subaru that rusted all the pieces. So when I got a quote from a welder, it was $150 to fix it.

28:09 Michael: And I thought, well I could buy this welder for a hundred and fix it two or three more times because another hole’s going to show up. So, it’s that kind of mentality of like, I’m going to do it myself. I’m going to fix these things, I’m going to drive the cost as low as possible. And you know, for some people it might just seem like work, but you end up learning so much in the process. Like, I can fix anything now and it’s great. I mean, even like in my next steps in life, it comes in really handy to achieve those dreams because I know how to fix things and I’m good at it. So, and another thing that I would like to drive home is like when you’re trying to find these cheap hobbies, it can be hard because we live in such an environment where we’re being advertised to all the time or we compare ourselves with other people. Try and declutter everything and, and ask yourself what really makes me happy? For me it’s nature. I love nature. And the beauty is nature’s free, right? You can just walk outside, go to a park, and yeah, when you get in tune with the things that really, really make you happy and you pull back away everything that’s clouding that, not only does it make for a much more fulfilling life, but you can save a lot of money too.

29:19 Emily: Do you think that you would have gone on that same kind of journey of understanding yourself and what makes you happy had you not had the financial constraints of the stipend slash wanting to save as much as possible? Like if you had gone a different route and not gone to graduate school, had a different kind of job, do you think you would’ve ended up in the same place?

29:41 Michael: Probably not. I think another beauty of grad school is it gives you a five-year span where you can think about things, right? It’s kind of our job is to, well the Ph in the PhD is philosophical, right? So, we have this time to think. I think, I can’t quite say if things would’ve panned out the same way if for instance, I had declined UCI and gone to Chapel Hill. My life would’ve been totally different. I probably wouldn’t have discovered the ocean. I might not have had a reason to save so aggressively my stipend, who knows, right? But all I can say is that, the way it happened, I wouldn’t change it. I wouldn’t have it any other way. It’s been a fantastic experience.

Sailboat and Seabattical

30:24 Emily: I think the listeners don’t yet fully appreciate how fantastically you are setting yourself up. Because we talked about, you even talked about Roth IRA contributions as like a recurring thing that you have to do, but you’re saving on top of that around $12,000 per year. You have that opportunity to save around $12,000 per year. So, the big reveal, what are you doing with that money <laugh>?

30:50 Michael: Right. So, to everyone that pulled out their calculators and was adding up all my expenses you know, five years of saving a grand a month, that adds up to, you know, over $60,000. I’ve purchased a sailboat here in Southern California. And more importantly, sailboats actually are kind of cheap. I bought the parking space for the sailboat that was twice as much as the boat. So, it’s called a mooring system. It’s lead weights at the bottom of the harbor, and you get to park your boat on it, and it’s kind of like a lease. So, when you buy that, you buy the rights to use that indefinitely, so long as you pay a small tax. So, that’s what I’ve done with my stipend. I’ve saved up all this money. I’ve bought the mooring and the sailboat. And my view for it in the future is, you know, it’s a little place that I can call home.

31:40 Michael: I’ll always have a place to come back to in California, wherever my life might take me. And you can actually live on them for very cheap. Now, some people have all the amenities of a house on a boat and then you completely skip rent. So, in a future where perhaps I get a job somewhere here in southern California, I have a place where I could live virtually for free and that will allow me to save, repeat this process and save even more, earning six figures. And then, you know, together with Sam, we both are like-minded. We can do whatever we want. We’ll be financially free. We can take whatever job we want because we don’t have to have a job. We’ve saved up enough money and we could do this in a relatively short time-scale.

32:22 Emily: You are the first person I’ve interviewed who has purchased a boat during graduate school. And as you said, not even just the boat, but the place to house the boat even more important. Incredible.

32:33 Michael: Thank you.

32:34 Emily: Why are you living in your campus arrangement right now? Is the boat that you have right now not suitable for living in full-time?

32:41 Michael: Yeah, it’s not suitable right now. I need to do some work on the plumbing for the sewage. Now, trying to juggle a PhD and working on a boat that’s floating in the middle of the harbor is kind of difficult. So, I’ve prioritized my education right now. But also, if you look at the house around me, this is a really nice deal. It’s beautiful. I call this place home and it’s lovely. I wouldn’t want to get rid of it. So, the rent, even though I could cut that and live on the boat cheaper, the joy that this apartment brings Samantha and I for the cost is worth it. So, we’re going to stick with this until I can no longer live here when I graduate.

33:21 Emily: And so, I see how now, you know, the skills that you mentioned developing from working on your car, I’m assuming some of those are at least the same learning mindset is translating to being able to fix up the boat and maintain the boat and and so forth. So like you found a new way to apply the skills that you were trying out and practicing on maybe a lower stakes endeavor with the car?

33:42 Michael: Yeah, absolutely. Anyone that knows someone that owns a boat, they are financial nightmares unless you do the work yourself, in which case they’re a time commitment. But it’s kind of what I’m going for here. I want to have the ability to slow down and take life at a slower pace. And that means that I do the work myself on the boat, even if it takes me a little bit longer. And I’m planning as soon as I graduate to spend a whole year on the boat traveling around the world with Sam before we go into our next endeavor. You could call it a “seabbatical”. And in that time, you know, I really want to slow down, kind of refind myself again before I just jump into the next opportunity and, you know, spend the rest of my life in a career. I really want to make sure that I get that time for myself. And slowing down learning how to fix things yourself on a boat, it’s a good way to make that dream happen on a budget.

34:36 Emily: I am so amazed by this, this idea of doing the seabbatical after you finish. Now, you’re a fifth-year, so this is in the relatively near future, right? Can you tell me what the plans are for finishing up your PhD, for doing the seabbatical, for, you know, what you’ll do after that for your next job?

34:53 Michael: Yeah, absolutely. So, I’m quite, I’m right in between opportunities here. I’m trying to finish up my thesis work and get that published and submit my thesis and defend. I’m trying to do that in the next, let’s see, we’re in November. I’m trying to do that in the next three months, and then be graduated sometime in January. And I’ve already written a grant that will fund my postdoc at a National Laboratory. So, that money is already, you know, in my hands at the National Lab. So, I’ve got a guaranteed postdoc after the seabbatical. So the idea is graduate, take the boat down to Baja, explore Baja, California, cross the Pacific either to Hawaii or straight to French Polynesia. And it’s my lifelong dream. I want to see the Pacific atolls. There are these beautiful rings of coral in the middle of the Pacific Ocean. That’s my dream. If I see that in this upcoming seabbatical you know, I’ve made it, you know. Anything else can come and I’ll happily go and join a national lab and do work there and produce science.

35:57 Emily: I love the strategy of securing the funding before, like knowing really what that next step is going to be. Because it’s a little bit of a risk, and especially I think with academia type stuff. People say, oh, you know, you take a break, you get out, you can never come back and so forth. But I really like this that you have the money, which is kind of the most important part. Having that established so that you know, you have a place to land when you’re done with this lovely break. And I’m so excited for that. And I definitely want you and or Sam, both of you to come back on the podcast after you’ve taken this year break and tell me, you know, all the shifted, you know, perspectives that you have. Maybe your life won’t even be going in the same direction that you thought at that point. That would be wonderful.

National Laboratory Postdoc Funding

36:37 Emily: But I want a little bit more detail now, if you don’t mind. I understand you’re already working with this National Lab that you had then, you know, applied for the grant for and so forth where you’ll do your postdoc. So, can you talk about that like relationship between, you know, yourself and your current advisor, your current program, and that National Lab?

36:55 Michael: Yeah, absolutely. So, you know, when you join grad school, they tell you that you’re guaranteed a stipend, right? $30,000 in my case. What they don’t tell you is what you have to do to earn that $30,000. Most people find out kind of the rather harsh way that they need to be a teaching assistant their entire PhD. Or some people write NSF grants and they get a fellowship which funds them. My case was neither. My case was, you know, a fellowship that came from Los Alamos National Laboratory. They were looking for a person that had my skillset. And my advisor at Los Alamos, my current advisor now at Los Alamos, reached out to my advisor at UCI looking for this type of individual that I kind of fit the bill. And that was that they already had built up a relationship in the past.

37:38 Michael: And, you know, that’s kind of how the world works. You call up, do you know anyone that’s good at this? And yeah, I do, here. So, that’s how I got selected for this. But that didn’t quite solve my financial problems once that connection was made. Just because I was the person for the project didn’t mean the money was there yet. So, we went through multiple rounds of applying for grants to fund me in this new endeavor, this partnership collaboration between UCI and Los Alamos. And it took us three years to actually get the funding. And then finally it came through internally from Los Alamos. My advisor at Los Alamos kind of pulled through and got that funding. And it was meant to be more of like a summer internship funding. But the way that we’ve structured it is we’ve kind of spread that money out over the whole year.

38:22 Michael: And then we, it’s not enough to fund me for the whole year. So then we have to supplement it with additional funding that my advisor from Los Alamos is able to get internally there at Los Alamos. And it’s kind of the first of its kind, but there are going to be many more of these types of fellowships. So kind of like a plug to anyone that’s in the southern UC school systems. It might not be known, but the UC system is actually a third owner or administrator of the National Laboratory. So, they’re trying to build a pipeline of students from the southern UC, you know, UCLA, UC San Diego, UC Riverside, UC Irvine to go to Los Alamos because all of the Northern UC system schools already have that pathway to the National Labs in Berkeley. So Lawrence Livermore, Lawrence Berkeley, Sandia, they already have that pathway. So, their students kind of go there. And so they’re looking to build that. So, there are actually going to be more opportunities like the one I have for students in the Southern UC school system.

39:20 Emily: Yeah. And so the way that I understand this is structured is you are an employee of the National Lab, but since you’re still a student, your education expenses are still outstanding. And your department, your program has agreed to pay those on your behalf, even though you’re not, you know, a teaching assistant or you don’t have a fellowship that’s being administered by the university, they’re still covering that part of things.

39:43 Michael: Yeah, that’s correct. It’s kind of messy, right? Because once you get external funding, the school doesn’t get its cut and then it requires you to pay for tuition. But in the way that this is, because there is this unique kind of like part-ownership of the UC systems with the National Labs, they’re trying to make this work, right? They’re trying to get students from the UC systems into the National Labs. And so, you know, some kind of conversation had to occur between Los Alamos National Lab and my department where my department agreed to pick up my tuition costs.

Financial Independence, Retire Early (FIRE)

40:19 Emily: I’m so glad we got that into the interview because it’s a structure that I had not heard before. So, it’s really just interesting and good to hear that there are creative solutions to how graduate students can be funded in various ways. And thanks for letting the other, you know, UC students know about this upcoming pipeline. Surprise second-to-last question, Michael. There are some ways that you’ve been answering questions in this interview that indicate to me that you might be part of the financial independence movement. Is that the case?

40:51 Michael: I mean that’s the dream. Yeah. FIRE, right? Financial independence, retire early. And I think it’s funny because a lot of people have a negative connotation with the word retire, but it’s focused more on the financial independence, right? If you have saved enough money, built enough wealth, created passive income streams to the point where you don’t have to take a job, it means you can work on whatever you dream, whatever you wish. And because we’re humans, we’re always evolving. What we picked to do in school might not be the thing we want to do for the rest of our lives. So, having that ability to say no to that job, say no to maybe perhaps corporate America or something and say yes to entrepreneurship or whatever floats your boat, right? That’s the beauty. So that’s what Samantha and I are both trying to achieve together is that financial independence so that we can dedicate our lives to whatever we want, whatever we think has value, not necessarily the big corporate, you know, pharma company or this or that, whatever pays the bills.

41:46 Emily: Do you see this pursuit of financial independence as enabling you to continue to do science in the way that you want to? Or are you thinking of it as a way of stepping away from that vocation entirely when it might, you know, please you to do so?

42:01 Michael: Hmm. Both <laugh>. Yeah. To do science, it’s a very costly endeavor, and it’s really funny the way that we structure, you know, professorships. You get paid to teach, you don’t really get paid to do the science. You need to get that grant money kind of independently from your position as a professor. So it’s kind of like, they hire you for one thing but expect you to do the other. If you have the financial independence, you can do whatever you want. You can do research, maybe you go and pursue opportunities in science that you wouldn’t have thought of otherwise. Like perhaps joining an antarctic exploration boat or something like that, right? It means you have the flexibility to pursue what you want. That might be continuing science, that might be doing something entrepreneurial, but it’s nice to have the flexibility and the financial security, or at least striving towards the financial security, to do whatever I might please in the future.

42:59 Emily: I’m so glad we got to this point of understanding this even bigger picture. Because we’ve been talking about, you know, the expenses during grad school, the savings, saving up for the seabbatical and everything, which is not full early retirement, but it’s certainly a mini-retirement as it’s called within the FIRE community. I’m glad to see that this is a vision that you see playing out over your entire lifetime. Not something you’re doing, you know, temporarily just during grad school, just for whatever reasons. You’re going to be sort of fluidly moving in and out of different employment opportunities and maybe some other sabbaticals or mini-retirements and maybe other, you know, unusual work arrangements and so forth because you’ve already started to build up this financial capital. Even though you’re not fully FI at this point, you have enough financial wherewithal to have a lot of control over how you spend your time and everything.

Best Financial Advice for Another Early-Career PhD

43:51 Emily: And so, I’m just so pleased that we can see how, you know, that started with the seed of an idea at the beginning of graduate school and how it’s going to be blossoming over the coming years and over the coming decades. So, so glad that we got to this point in this interview that we could understand that. The question that I ask all of my guests at the end of interviews is, what is your best financial advice for another early-career PhD? That could be something that we’ve touched upon already or it could be something completely new.

44:18 Michael: Hmm, that’s good. I’m going to try and answer this as best I can. Because as we’ve established, I’m kind of an exception to this, right? So my advice might be a little bit extreme for others, but I would advise to those whoever may resonate with my story, minimize your recurring costs, advocate for yourself, whether that’s, like you pointed out, the necessity for a certain accommodation at the university. You can also advocate for a higher stipend for yourself at the university. Most people don’t know that. So, minimize recurring costs. Advocate for yourself. Those are my two big ones.

45:00 Emily: I love that. That’s sort of how I see my, you know, even business going forward of like advocacy and also doing really well with what you have, such as by minimizing those not important to you, recurring expenses. And Michael, where can people find you if they want to reach out?

45:17 Michael: Yeah, so if you want to follow me, my sailing adventures are all published on YouTube under my channel Sailing Ambrosia. So if you want to, you know, unplug and unwind, you can follow me there on YouTube.

45:30 Emily: Michael, this has been such a fascinating interview. I’m so glad that Sam recommended you. And thank you so much for taking the time to give it!

45:37 Michael: It’s been my pleasure. I really hope that someone out there resonates with this story and perhaps I’ve enlightened someone to follow in my footsteps.

Outtro

45:49 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Budgeting for the First Year of Grad School Even with Financial Anxiety

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In this episode, Emily interviews Georga-Kay Whyte, a first-year graduate student in history at Brown. Georga-Kay is a first-generation college student from Jamaica who grew up with financial insecurity, which spurred her to set a high bar for the financial support she expected from her graduate program. Georga-Kay was just as forward-thinking as she evaluated her housing and transportation options for her first year at Brown to set them at a reasonable level for her stipend. However, once she started living the grad student life, she realized she was overspending, especially on groceries and Amazon. She shares how she worked through her financial anxiety to confront her spending and start to budget. Finally, Georga-Kay details her financial goals for her 20% savings rate going forward. This episode is a must-listen for anyone with an upcoming career transition or move, especially if it’s your first!

Links Mentioned in the Episode

Image for S14E8: Budgeting for the First Year of Grad School Even with Financial Anxiety

Teaser

00:00 Georga-Kay: There’s so much like financial literacy that we don’t have as graduate students because it isn’t prioritized. And so, the best way to sort of break that barrier is to talk to other people who are in similar situations. And that’s how it’s helped me to approach a lot of the things that I do now and how I think about creating a budget or how I think about my lifestyle. So, I highly recommend just reaching out to your community and starting those conversations. It helps a lot.

Introduction

00:31 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 14, Episode 8, and today my guest is Georga-Kay Whyte, a first-year graduate student in history at Brown. Georga-Kay is a first-generation college student from Jamaica who grew up with financial insecurity, which spurred her to set a high bar for the financial support she expected from her graduate program. Georga-Kay was just as forward-thinking as she evaluated her housing and transportation options for her first year at Brown to set them at a reasonable level for her stipend.

01:28 Emily: However, once she started living the grad student life, she realized she was overspending, especially on groceries and Amazon. She shares how she worked through her financial anxiety to confront her spending and start to budget. Finally, Georga-Kay details her financial goals for her 20% savings rate going forward. This episode is a must-listen for anyone with an upcoming career transition or move, especially if it’s your first! If you’re listening to this episode the day it’s released, you know that tomorrow is the filing and payment deadline for your 2022 tax return as well as the payment deadline for your quarter 1 2023 estimated tax. If you haven’t yet cracked the code for your grad student or postdoc taxes, there’s still time to receive my help! Go to PFforPhDs.com/tax/ and sign up straight away for the appropriate workshop for you. The workshops are asynchronous, so upon registration you’ll have immediate access to all the video modules with transcripts, worksheets and/or spreadsheets, and recordings of previous Q&A calls. Best of luck finishing up! You can find the show notes for this episode at PFforPhDs.com/s14e8/. Without further ado, here’s my interview with Georga-Kay Whyte.

Will You Please Introduce Yourself Further?

03:04 Emily: I’m so excited to have on the podcast with me today, Georga-Kay Whyte. She’s a first-year graduate student at Brown, and our subject today is budgeting and what she’s learned as a first-year graduate student about that topic. So Georga-Kay, would you please introduce yourself a little bit further for the audience?

03:20 Georga-Kay: Yes! First, thank you for having me. My name’s Georga-Kay, I’m a first-year history PhD student at Brown University. I study 20th century African American labor history and I’m actually first-gen Jamaican. My parents are immigrants. We all migrated to the U.S. And so, I sort of like had to figure out not only personal finances in terms of like living in a new country but also personal finances because like I didn’t grow up with a lot of personal finance talk in my family. So yeah, that’s just like my background.

03:51 Emily: Okay, so you get the multiple first-gen labels, right? Like you get first-generation American, I don’t know about first-generation college, necessarily.

03:58 Georga-Kay: I am first-gen in college as well. <Laugh>, first-gen graduate student, first-gen everything.

04:02 Emily: First-gen grad student, we got it all. Okay, that’s wonderful! And what age did you come to the U.S.?

04:08 Georga-Kay: I came to the U.S. actually right before I turned 18. So, I was pretty, yeah I was, I was much older.

04:13 Emily: Very new.

04:14 Georga-Kay: Very new to the U.S., yes.

04:16 Emily: Yes. And where did you go to college?

04:18 Georga-Kay: I went to college at Agnes Scott College in Decatur, Georgia. It’s a small women’s liberal arts school.

Money Mindset at the Start of Grad School

04:24 Emily: Yeah. Okay. So, wow. Okay, this first question that we have, what was the state of your finances and your financial background and money mindset coming into graduate school? So really we’re talking about what you grew up with in Jamaica, and then also just that short time you had in college. Yeah. So what was going on both in your finances and your like money mindset by the time you entered graduate school?

04:47 Georga-Kay: Yeah, so I grew up, I would say like relatively low income. In Jamaica, like I would be considered mostly like middle-class but in the larger scheme of things I grew up with a lot of financial insecurities. So, I had like an anxious sort of relationship with money from like childhood. And so, once I was coming into grad school I was super anxious about it because I had just started like looking online and seeing like the discourse around grad school and grad students being like they’re underpaid and they’re not like happy with their financial situation. And coming from someone who’s first-generation, I didn’t have a lot of financial safety nets. Like I just know that if anything, I’d have to figure it out on my own. And so yeah, definitely once I was like deciding to go to graduate school, this was before I found out about like what schools I’d be going to when I was thinking about like applying, I was like, “Oh my god, is this going to be the worst financial decision of my life to do this right at this time?” Because I came straight from undergrad, so I didn’t have a lot of time to like build up savings and stuff like that. But I really knew that I was passionate about the topic so I was like, I’m going to do this, hopefully it works out. Hopefully I can get a stipend that’s like livable. And that was my number one concern. I wanted a stipend that I wouldn’t be in a financially precarious situation just because I’ve already experienced so much like financial turbulence that I wanted some sort of safety net.

Role of Finances in School Selection

06:04 Emily: Absolutely. That makes so much sense. So, I want to talk a little bit more about maybe application and admissions process. You, I mean as anyone would be, were very nervous seeing the discourse currently going on, rightly so, about how difficult graduate school is financially. And all the unionization movements and so forth. So like, tell me about like the schools that you chose to apply to, were finances on your mind? Let’s talk about that. Like the selection process of where to apply.

06:31 Georga-Kay: Yeah, so I was super selective about the schools that I applied to, and I sort of feel like I was really naive in a way, but it worked out right <laugh>? I was like I’m going to apply to mostly private schools because they tend to have higher stipends, unfortunately. I started looking, I actually used, I forget what the platform is called, but they publish stipends for students. I think you might know what it’s called.

07:01 Emily: Is it PhDstipends.com?

07:03 Georga-Kay: Yes. Is that a website that you run?

07:05 Emily: That’s mine, yeah.

07:06 Georga-Kay: Yes. Okay, okay. Yes. So, thank you for that because I actually used that website a lot. So I looked at the PhD Stipends and I was really serious about, “Okay like is this a stipend that’s livable?” And then I would go ahead and like look at the livability calculator to see like, “Okay, is this going to work?” And I ruthlessly took schools off my list if they weren’t in that like situation of like they had a decent stipend for the area. So even if the stipend on its face was like, you know, almost $40K and the livability like it’s in New York, it’s like okay that’s still not going to work. So I was very serious about that, and I ended up applying to nine programs. And those nine programs I felt like had really strong stipends and they had other benefits like health insurance and stuff like that that I was looking at, too.

07:52 Emily: So, you’re the first I think interviewee I’ve had on the podcast who answered that question in that way. Because a lot of people I talk to, of course by the time they get into admission season they’re thinking about the financial offers and so forth. But to back that up into application season, I mean this is actually what I teach in my workshop for prospective graduate students: Set Yourself Up for Financial Success in Graduate School, is it starts way back the summer before you apply even earlier than that, understanding the funding models, just like, I mean you said you were naive, but that is a very advanced strategy that you’re applying. So that’s awesome. Yeah to really think through like why bother applying to a place that you are pretty confident already is not going to support you sufficiently? And so to just, if you have programs that you know, make your list, that’s great. You don’t need to bother with the other ones who aren’t. If this is a priority for you, which it was for you. It’s not necessarily going to be a priority for everybody, but for you it was. So, I love that process.

08:48 Georga-Kay: It was really just my financial situation, like coming in with so much student loans. Like I felt a lot of guilt over the amount of student loans I had, and I knew I didn’t want to get any more student loans in graduate school. And so I was like, I need to find a situation that’s going to work out. And the reason why I say naive, just because talking to people about like the admissions chances in graduate school. So I was like, okay, I’m going to be selective but these schools are going to have higher competition. Because they do like, they have high stipends and people know about them and stuff like that. So that’s why I was like, okay, well hopefully I get it <laugh>, you know?

Considering Other Factors

09:19 Emily: Yeah. But applying to nine schools, that’s a pretty good number. I think that’ll give you a lot of chance. Anyway, it has worked out. So let’s talk about admission season. I don’t know how much you want to share about how many offers you got, but like, you know, did your expectations bear out? And the offers that you did get, yes, they were decent stipends? And then maybe you could share how much more finances, if at all, played in the decision of where to go or if you’d already done that filter early on, maybe it didn’t really have to.

09:46 Georga-Kay: Yeah, so I got three admissions out of the nine that I applied to. I got admitted to Penn, Brown, and Maryland. University of Pennsylvania, Brown University, and University of Maryland. And those offers were pretty good offers honestly. Especially looking at like the averages for stipends. So, I got $38,000 from Penn and then I got $45 from Brown. And I think Maryland offered like $32. I don’t remember specifically, because I knew almost immediately that Maryland had the lowest stipend. So I was just mainly considering Penn and Brown. And yeah, those were like comparable in some sense. Obviously like there’s still a discrepancy there between the amount that I got from Penn and the amount I got from Brown. It was actually a hard decision for me because the programs were both equally great, but then also the cost of living was relative. And I knew that like if I wanted to, I could have probably negotiated with Penn, which I didn’t end up doing, but I definitely still considered finances when I was thinking about it. But it was like close enough where I felt like, “Okay, well what else do I want from graduate school?”

10:51 Emily: Based on how you’ve talked about your thought process so far, and I’m pretty sure I know the answer to this question, but were you only considering your first-year stipend and like the source of the funding? Or were you also looking forward to like, were you being funded for five years or were there guarantees or you know, was it a TAship versus a fellowship? Like did you factor all that stuff into?

11:12 Georga-Kay: I factored everything in. When I got my offers, I reached out to the like DGAs of each department and I was like, okay, explain to me how this works <laugh>? I was just like, I wanted all my bases covered. So I talked to both schools and I was like reading through the offers and sort of seeing, okay, like first year, they were very similar. So it was like first year would be fellowship and then you would TA for some years and then you’d go back on fellowship. And both schools offered like five to six years of funding. Brown guaranteed six years, Penn basically they’re like, you basically will get six years but we’re guaranteeing five. And so, I knew that like throughout the program I would be funded for the entirety of it.

11:53 Emily: I’m so glad that you shared that as well. This is another thing that I encourage in my workshop is following up with the directors of graduate studies or maybe the admin in the department to like explain to you anything that’s not really clear, or maybe they’re only talking about the first year but they’re not talking about subsequent years. Like they’re recruiting you, okay? They want to convince you to make good on that offer that they just made you and convince you to come there. And so they should have pretty solid answers to these questions. And they might say, like Penn did, “Okay, you know, we’re not officially going to guarantee that sixth year, but you know, in nine cases out of 10, like we do find funding for you know, that sixth year or whatever.” Like they should be able to give you those really well-thought-out answers to those questions. So I’m so glad that you went through that process as well of really investigating.

Financial Expectations in Grad School

12:35 Emily: And you chose Brown, and that’s where you are now. So, let’s kind of talk I guess about now that you knew the stipend, you knew that maybe had some degree of confidence that the precarity was not going to be as much of an issue for you. What were your expectations then about how your finances would look in graduate school once you had that offer in hand?

12:56 Georga-Kay: Yeah, once I had the offer, I sort of felt a lot more secure just because like I feel like $45,000 is like a relatively, it’s not like anything crazy, but it’s average enough where it’s like, okay, in Providence I could live on that. And I think I could save on that, which was like a big deal because I know that like a lot of times in graduate school people talk about not even being able to save. And I wanted to be able to save and like achieve other financial goals. So, once I got that offer in hand, I started to think about, okay, well now what do I want to do? Like I know I’m going to make this much money. How much do I want to spend on rent? Do I want to keep like my costs low? You know, how much am I willing to compromise for the next few years–because I’m in my early twenties–to sort of set myself up for a good financial foundation?

13:39 Georga-Kay: And so those were just sort of all the questions that I had in my head. And then also, I started to think about like the realities of graduate school and what in cost that would incur as well. So, I like when I was going through my stipend and sort of backtracking a little bit, going through my offer, I would see that, oh I had like research funds and these funds, but I didn’t know until I sat down with the DGS and asked about it. I was like, “Is this money that would be like deposited into my account?” And they’re like, “No, it’s reimbursements.” And I was like, “Oh okay.” So then I had to learn about this whole reimbursement thing. So I was like, I have to actually have to have a safety net, like some sort of savings because if I want to pay for something I have to pay for it first before I get the money back. And so I started to think about that and just, yeah, just a lot of wheels turning now that I know that okay this is how much I’m going to make, how can I make this work in order to like pay for my day-to-day living expenses?

Housing and Rent

14:29 Emily: And one other thing, again, I’m talking about this workshop so much because this is the process you just went through. One other thing I talk about in this workshop is about the big decisions you need to make in your budget that happen probably before you even arrive at graduate school, right? You mentioned housing, so like did you commit to a lease for example, in advance of moving? Or is that something you were able to arrange once you got there? It’s very different, you know, different housing markets.

14:50 Georga-Kay: Yeah, so housing for me was one of the biggest things that I thought about because it was going to be my first time paying rent because I came from undergrad where I was like paying tuition and that would like cover, you know, my expenses. So, I wasn’t paying anything monthly. So moving to Providence and then also having to pay for moving expenses. I knew that like housing was going to be a big deal and I knew that it would probably be my biggest expense. And I had to make a decision about whether I wanted to live with roommates or I wanted to live alone and what does that mean? So I decided to live alone. I’m currently in graduate housing and the housing is somewhat subsidized. I don’t know if they say it’s subsidized on their website, but it’s like a lower cost of living apartment than I typically would be able to find in Providence, essentially.

15:32 Georga-Kay: And that was great. I started that <laugh>, luckily I started the process early so I was able to sort of like compare housing situations. I looked at the average cost if I wanted to live with a roommate in a house or if I wanted to live in a studio. I currently live in a studio and my rent is like, I feel like it’s on the high end of what I would want to spend, but I knew that I would appreciate that more having that sense of like security and that sense of not having to worry about if I have a roommate that maybe I don’t mesh with or you know, like there’s things that you have to think about lifestyle stuff. So I was like, okay, I know that I’m willing to pay a little bit more to live alone and keep my other costs low.

16:10 Emily: What I love about this model, I mean you’ve listened to the podcast, you know, I’m always like roommates, roommates, good idea. But what you did was you worked with your numbers and you knew that it was feasible, especially making that you know, decision to go with the on-campus option and so forth. I’m curious now we’re recording this in March, 2023, if you’ve already made a decision for housing next year? Or like are you going to keep the same situation? Do you think you’re going to do something different?

16:34 Georga-Kay: Yeah so I’m definitely, unfortunately the housing at Brown, they only guarantee it for two years. So I’m going to keep those two years. So I’m going to keep going until next year because I really love the area that I live in. I love my apartment, and so I feel like I really lucked out with housing. So, I’ll keep it and I probably will have to move after my second year since it’s not guaranteed and that it’s a really high interest area. Like a lot of students want to live here. So, I feel like after the second year I’ll be more comfortable in the area I can find somewhere else.

17:02 Emily: Yeah, and you might have met someone you really like enough to live with <laugh>.

17:06 Georga-Kay: That is true.

17:07 Emily: So, a roommate might be more feasible.

17:08 Georga-Kay: I’ve also considered that. Yes, I’ve thought about that too.

Transportation and Other Expenses

17:10 Emily: Yeah. So, we’ve already talked about kind of what I call the biggest rock in your budget, which is housing. And I’d like to know about your transportation choice. Like do you own a car or do you think it’s necessary? What is your choice there?

17:24 Georga-Kay: So, I decided to actually sell my car <laugh>. I sold my car before. When I was living in Atlanta, I bought a car used and it was a great car. It carried me to my like last two years of undergrad. But then I was like, I’m moving to the northeast. The transportation here seems a little bit easier. There’s a lot of public transit and there’s also trains and stuff. So, I talked to graduate students and they said that it would be fine to live without a car. So I was like, I’m going to use that money to move. And now I currently don’t have one and I rely on public transit, walking, and Brown has a university shuttle that’s actually really, really good and I’m able to basically spend like less than $50 a month on transportation costs.

18:06 Emily: Love that. Whenever it’s possible to live car-free, especially if when you’re pairing that with the campus housing, it’s like, I’m sure it’s really convenient and everything, you can just, not eliminate entirely, but dramatically reduce the costs associated with transit by getting rid of your car. Ugh, I have a car but I’m such a like anti-car person. <Laugh>, I live in Southern California.

18:26 Georga-Kay: No, I love living in a walkable city and that’s something I considered too. I was like, I wanted to, I knew that like if I’m going to be paying a little bit higher rent then at least if I don’t pay transportation, it kind of evens out.

18:37 Emily: Yeah, absolutely. So, we’ve talked about these major, major components of your budget, the housing and the transportation. And so I’m curious like how you formulated the rest of your budget, maybe more with the other smaller fixed expenses and other variable expenses? And then kind of what you’ve learned through living with that budget for the last, you know, six, seven months?

18:55 Georga-Kay: Really the things that I thought about was rent and transportation and then the rest of it was just sort of like I was going to do trial and error. So I was like, I don’t know what’s a reasonable grocery bill? I don’t know how much I should expect to, you know, spend, I also have a pet. And so that’s also a part of my budget. So I was like, I don’t know how much I’m going to be spending for vet bills. And so, I really just was like, okay, like this is less than half of my, like my total living expenses is less than half of my stipend. And so I was like, whatever the rest is, I’ll play around with the numbers. So when I originally started, I realized I was overspending because I just sort of didn’t want to look at it to be honest.

19:32 Georga-Kay: I was like, I’m going to take care of the big stuff. And because of my financial anxiety, I sort of had a lot of avoidance about money, especially when I just moved because I was like, “Oh my god, like am I going to, you know, completely throw off my budget or something like that?” So I was like, okay, I have this wiggle room essentially and we’ll figure it out. And so I started just shopping without caring. And then once I started looking back at my budget, which is something that I’m really happy I did, I started actually looking at my money. I was like, oh, maybe I’m spending a little bit too much on groceries. Like, and talking to other graduate students as well. I’ll get to this later, but talking to other graduate students and realizing, oh this is like an average cost for, you know, a meal for a single person, like a grocery bill for a single person, or this is the average cost for electricity or something like that. So I at first was avoidant, but then I started slowly having those conversations, started slowly thinking about it and then I started actually setting price markers like, oh I want to spend $300 on groceries. Oh, I want to spend this much on electricity. And then actually going in and doing those numbers and keeping track of that.

20:38 Emily: I think this process that you’ve gone through is so relatable. Absolutely. You don’t know how much you’re going to be spending on all these little variable expenses that aren’t like a contract that you’re entering into.

20:48 Georga-Kay: Yes, <laugh>.

Financial Discussions with Other Grad Students

20:49 Emily: When you first get to a new city and you have a new lifestyle different than the one you had before. So it definitely makes sense to just kind of work it as you go. And really, I’m actually very impressed you’re talking about having financial anxiety around this just six months ago and six months later you’re coming on a financial podcast? Like that’s a lot of progress in a short period of time. So I’m very impressed. How did you start having these conversations with other graduate students? Like, did you just come out and say, what’d you spend on groceries last month? Or like, what was it?

21:15 Georga-Kay: No <laugh>, no it wasn’t like that. I feel like I just started getting closer to the people in my program, but also just to people that I’ve met through school. And I like to think I’m a pretty forthcoming person. So if like we’re talking and everyone’s like, how’s your week been? And it’s like, you know, if there’s something on my mind, especially now that I feel like I have a close relationship with some of the people in my program I’ll mention like, “Oh my god, like I feel like I’m overspending on groceries,” which is literally something I did. I was like, I feel like I’m overspending on groceries, but I don’t know. And then all of a sudden everyone starts chiming in, like, oh, I think I spend this much. And then we all start comparing. We’re like, oh. And so I sort of like, I guess instigated the conversation, but now I feel like there’s so much more financial transparency between us all, like within my history cohort and we’ll share things now where it’s like, okay, do you guys think this is a reasonable amount to spend for this or something? And yeah, so I just feel like luckily I’ve always been open to sharing and I feel like sharing invites other people to share.

22:09 Emily: Absolutely. What you did there was like, you were a little bit vulnerable, you said, oh I have a little weakness or like something I’m unsure about, can you help me?

22:19 Georga-Kay: Yes.

22:19 Emily: And you like invited that feedback. And that allows the other person to like be the expert for a second, because they’re the expert in their own budget, right?

22:25 Georga-Kay: Yeah.

22:25 Emily: So like then they can help you and everybody feels good about it and like, oh man, that’s a wonderful like sort of pattern that you have established. I think that’s going to help you so much throughout your time in graduate school. I remember for example, not necessarily about groceries, but like just asking other people how much they spend in rent. Like, oh I really like your place. Like do you mind me asking because this is what I spend and like how much do you have? And that was a way that I found like a really great deal on housing. My friend was like, you wouldn’t believe it. I only pay such and such for this great place. You know? And so just having that, those open conversations, I feel like it’s easier among people who are all paid the same <laugh>, which I suspect probably everyone in your cohort is more or less like being paid the same, at least at the moment, right?

23:05 Georga-Kay: Yeah, we’re all paid the same. I do have an additional fellowship just a little bit, but yeah, we’re relatively all on like similar pay scale. And I also with the rent thing, like that was also a thing that we talked about was like, okay, well this is how much I pay for rent. This is how much we all pay for rent. And having those conversations, like especially for someone I think because I’m first-gen and I’m also like the youngest in my program that I’m like the baby and I’m like, I want to ask because like you guys have had a few more years of like, people have been in master’s programs, so I know like I feel like accepting that like I’m still figuring it out and not having any sort of pride about it of being like, oh I’m not going to share because you know, maybe someone will judge me. Just being like, hey, like you know, I’m figuring out and you’ve had some experience like what is your take on this? As you said, like they’re the expert in their budget and so people like to help in that way.

Commercial

23:55 Emily: Emily here for a brief interlude! You’ve heard me mention several times during this interview how Georga-Kay perfectly lived out the principles and strategies I teach in my year-long asynchronous workshop, Set Yourself Up for Financial Success in Graduate School. If you would like to take a deep dive with me into financial tutorials designed for prospective and rising graduate students, please check out PFforPhDs.com/setyourselfup/. The workshop modules that relate to the topics in this interview are:

  • Stipends vs. Cost of Living
  • Decipher and Compare Offer Letters
  • Right-Size Your Necessary Expenses
  • Prepare for Your Start-Up Expenses

To learn more about these modules and the structure of the workshop, visit PFforPhDs.com/setyourselfup/. I hope to see you inside the workshop and to help you set yourself up for financial success in graduate school the way Georga-Kay has! Now back to the interview.

Tracking and Budgeting

24:53 Emily: Okay, so you’re on the ground, you’re figuring things out, you’re using your cohort to kind of bounce ideas off of. I love that. Tell me about your actual practice of budging. Because you said at first you didn’t want to look at the numbers, but does that mean that you were actually tracking? Like there were numbers there that you were avoiding looking at? Like practically, what was happening with those numbers?

25:14 Georga-Kay: Yeah, so once I moved, I sort of had a little nest egg to move because I knew that I would need that money. Luckily, we did get a transitional amount. We got $2,200 so I knew I was going to get that as well. So I had like a number in my head, okay, this is how much I’ll need to move. And once I paid for my moving costs, there’s a lot of things I didn’t think about. So like how much furniture costs, buying a trashcan, buying a trashcan is so expensive. Like all of these little things I’ve never paid for before. And I quickly went over budget and had to put some of those things on a card. And that was the first time I’ve ever done that, which is like put expenses that I couldn’t afford on a card, and that gave me a lot of financial anxiety as well.

25:52 Georga-Kay: And so once I did that I was like, I don’t want to look at this, I don’t want to know how much I have to spend because some of this stuff was like necessary expenses and I knew that once I started getting like regular stipends I could like then start thinking about it more critically. But in the first like month or two I was just like, I knew I was spending and I knew I wasn’t overspending, but I was definitely spending very close to like the borders of my budget I guess. My budget being the amount that I know that I make per month, that’s sort of like what I had in my head is like this is how much you make, this is how much you have to spend on your actual, like as you said, like the things I have to spend like contractually.

26:30 Georga-Kay: But everything else I was like okay, I’m going to spend and hope I don’t go over. And so I wasn’t looking at it. I wasn’t looking at it. I was just spending and not looking. And then after I would say about October, I downloaded Rocket Money, which is this app, I don’t know if you’ve ever heard of it, but it’s just like, it’s sort of like a Mint. If anyone’s familiar with Mint and they do like roundups, essentially. They tell you this is how much you spent on restaurants, this is how much you spent on Ubers this month and whatever. And so that was my first step into like, okay, what am I actually spending per category here? And then I saw the numbers, I was like, oh God, you know? And once I saw those numbers and I didn’t have to do a lot for it, I feel like that also is like something I would recommend if you’re scared about it and you don’t want to actually sit down, like go line by line, having some sort of like app that does it for you. It’s just like all I had to do was open, put my bank account in, open it and then just be like, okay, what is here? And so I looked at it and I was like, this is how much I’m spending per category. And then I started to think about changes that I might want to make in the future.

Frugal Measures

27:30 Emily: Yeah. Can you give some examples of what those changes were having realized that you were, your spending was a little bit too high? Like what were some, I would probably call it frugality, but what were some frugal like measures you started taking?

27:42 Georga-Kay: Yeah, so the spending that I saw was like mainly Amazon, which is <laugh>. I feel like people can relate to that. I was overspending on Amazon because I was constantly being like, oh I need to get this for my apartment because I had just moved and I realized, oh I don’t have like you know, I really want a toaster or something like that. Things that I didn’t need in the moment. And so I was like spending this much on Amazon, but I was doing it like in singular expenses, so I was never tracking how much I was actually spending and I wasn’t thinking about the cash flow of like, maybe I should wait a week or two until I get my next stipend to pay for this as opposed to like buying everything at once. And so I was just like not paying attention to it.

28:20 Georga-Kay: So once I saw it I was like, oh, I’m spending like $500 on Amazon, that’s like so much money. And then I was like, okay, I need to plan out what are the essential things that I need right now for my apartment since I just moved. Everything else will have to wait. And then also I looked at groceries, which I’ve mentioned a few times before and I was like, oh, I’m spending this much on groceries. I was spending like over $350 on groceries and I’m a single person and I wasn’t even eating that much. And I was like, that seems like a lot of money to me. And so I asked people and people were like, oh, like I actually spend like $300 or a little bit less than that on groceries. And then I realized it was because I was shopping at the more expensive grocery store. And I didn’t know, because I didn’t like shop around. I was like, this is the closest grocery store to me, so that’s what I’m going to go to. But literally if I just went in a like one that’s like a little bit further away, I found cheaper groceries and so I was able to get the same amount of groceries for a little bit less. And so yeah, those were the things that I realized once I looked at the numbers.

29:13 Emily: This is so relatable to me personally. And also I think the audience generally just, yeah, it’s a transitional time when you’re starting grad school and you don’t know the place to shop yet. And you do need, well need is a relative word. You want to have some things for your new place. And so it sounds like it was a combination of like finding some more frugal tactics to apply, and then also just really the proactive aspect of budgeting. You know, you were doing the reactive, the retrospective aspect, which is like looking at where your money had gone. And then you started adding in the, okay, well I only have, you know, available this amount of money for you know, discretionary Amazon purchases so I’ve got to keep it to that limit and anything else will have to wait for the next pay cycle and you know, we refill the coffers. Is there anything else that you’d like to add about that practice of budgeting?

30:02 Georga-Kay: I would say once I started doing like the automated where it was like the app was tracking it for me, then I actually sat down and like made an actual budget. Like I was like okay, this is how much, not like what the thing is telling me that I should spend based on my previous expenses, but based on my goals, like my savings goals, how much should I reasonably spend? And then that actually made me cut back a little bit more because I was like, oh, if I want to save up an emergency fund, then I can’t be spending this much on you know, eating out or something.

Resources for Budgeting

30:31 Emily: Yeah, I want to get back to those financial goals in just a minute, but before we do, so you said that you had some resources that you’d like to share about, you know, how you’ve learned about budgeting, how you’re practicing budgeting. You mentioned, I’m going to say Rocket Mortgage, that’s like the ads that I hear for them, but Rocket Money, is that the name of the budgeting app?

30:49 Georga-Kay: Yes, Rocket Money is the one that I started with. I’ve actually, in college I tried to use Mint because everyone was like, oh, Mint is a great app and I think it is a great app, but I quickly realized the interface just wasn’t like super user-friendly to me it was just, it was a little bit clunky. So I stopped using that and mainly also because I was just scared to budget at that point as well. It’s taken me a while to get into proactively looking at my money. And so Rocket Money has helped me to do that because it’s been like a really simple interface and once I put in my stuff it just sort of gave me all the numbers that I wanted to look at. And I would say also a lot of personal finance podcasts, which obviously this one I listened to, which I think is really, really helpful because there are just some things as an academic that like other podcasts will be like, oh you need to focus on, you know, negotiating for a raise or things like that.

31:37 Georga-Kay: And it’s like, okay, that’s not super practical to the life I’m going to be living for the next few years. But in terms of podcasts, I love The Financial Confessions. I feel like it talks a lot about like the social life of money, like money with friends and money and relationships, which I think helps a lot. I also like the Her First $100K podcast, which is like, I feel like that’s a pretty popular one, but it’s like Women in Money and thinking about how we perceive money, which is a lot of these podcasts are actually thinking about like how we think about money, how we use money on a daily basis. And then books. I love books I feel like as academics, like of course like my first sort of introduction to finance was through books. So I Will Teach You To Be Rich, which is a very popular one.

32:19 Georga-Kay: But also Jen Sincero’s, How to Be a Badass With Money [You Are a Badass at Making Money]. I think that’s the title of the book.

32:26 Emily: Yeah, I’ve read that as well.

32:27 Georga-Kay: That one really, yeah, that one is really good. I know people have mixed opinions on it, but the reason why I personally enjoyed it is because it’s sort of like allowed me to think about the ways that I talk about money to myself in ways that I didn’t really think about before. Because as I mentioned a lot that I’ve had anxieties around money and so I would just sort of be like, oh, like in college, like I’m so broke or I’m so this and like a lot of negative money talk and I’ve stopped doing that and I think having done that for a few years now and sort of reframed the way that I think about myself and my relationship with money has allowed me to make these like larger steps towards being like more financially competent.

33:02 Emily: Yeah, I noticed in those books that you listed, there are a lot of money psychology, like aspects there. It’s not, and that’s the hard part, right? Like the hard part is not necessarily the math <laugh>, like it’s not like the addition, subtraction, multiplication. It’s not the facts of like, okay, do I have access to an IRA or not? I mean I talk about that because it’s a little wonky, but like once you know, you know. The psychology part of it is the one that you need to work on over a time and it’s like you’re never really done with it <laugh>. You’re always evolving to like a new level with it. So, I like that you mentioned those like for that reason specifically. Yeah, any other resources that you’d like to add to your list?

33:41 Georga-Kay: I would say, I don’t know if this really counts as a resource, but what I mentioned previously, which is talk to graduate students. Like talk to graduate students, preferably graduate students are in a similar department to you or in a similar field to you because then you can get like ideas about, you know, the decisions that you can make that might help you in the future. Like just like daily living expenses. As you said, like maybe talking to them about apartments you might find a great deal or something. So I found that actually some of the best like resources have been like the other students in my department and students at Brown.

34:14 Emily: What I love about that suggestion is just that you’re going to get the most relevant information from the other people who are living that similar life to you. Like for me, like I work on a national level, so I do not get to be an expert in every single different state in every single different city. And so, sometimes when I go to speak at certain universities, I ask the people who are living it, like for their suggestions, like I can say some things that work generally, but like they’re going to know like the exact, like you mentioned earlier, the right grocery store to go to for like this specific thing. Like oh this farmer’s market is really wonderful for blah blah blah, whatever. Or like, oh, have you heard about this city-specific subsidized resource? Things like that. Like that is not what you’re going to get from from books and and national podcasts and so forth.

34:57 Emily: It’s really, you have to get it from the people who are living through it with you. So it’s an amazing resource. I’m so glad that you’ve been tapping into it. I hope people listening to this episode will follow that model as well.

Financial Goals

35:08 Emily: Okay, so I want to turn now to talking about the future. We’ve talked about how diligent and thorough you’ve been with like investigating your finances and becoming more comfortable with them in the past. But now I’m wondering like have you set some financial goals for the rest of your time in graduate school?

35:26 Georga-Kay: Yeah, so my biggest goal is to save three to six months of expenses so that I can have just like a little cushion if I need to so that I don’t end up incurring more debt in the future. I would love to be able to, you know, occasionally be able to go back home, go to Jamaica, go visit extended family or even having a pet. Like I am scared that if something happens and I need to cover like a really big vet bill, I don’t want to have to put that on a card. So my immediate immediate goal is to save three to six months of living expenses. And then my second goal is really a way to like manage my financial anxiety, which is just to automate a lot of the big picture stuff that I know that I want. So, automatically like saving 20% of my income.

36:09 Georga-Kay: And then also once I’ve done that, moving on to automating retirement and investment. So, that’s something I see as more like a building sort of building block sort of goal where I’ll be working on that for the next year or two of just slightly changing things within my account so that the money goes where I need it to go. My third goal is to increase my income, which is not something I hear a lot of graduate students talk about and I get why. But I really do feel like especially for me, I want to be able to help with family stuff and just feel more secure. And so I feel like the best way to do that is to increase my income. And the way that I sort of see myself doing that is through additional teaching responsibilities. So, I can teach in the summers and I can also do like proctorships that pay a little bit more and those will pay up to like $10,000 more per year. So, that’s just a small way that I can increase my income so that I can have a little bit more flexibility.

37:01 Emily: So, with your first two goals of building up that emergency fund and then you know, starting to invest and starting to save for like other types of goals as well, you mentioned a 20% figure. So, I’m wondering are you currently saving 20% and is that going towards your emergency fund? Or is 20% something you’re like working up to over time?

37:22 Georga-Kay: Yeah so I’m currently saving 20%. I have my account set up where once I get my stipend, it automatically takes off that 20%. I am not going to lie, I’ve had to dip into it a couple times. Mainly for my dog. She’s had some stomach issues and so I just had to pay a huge vet bill. But I will continue to save that as much as I can and do that 20% minimum. And in the future, I would actually like it to be more, but for now I feel like 20% is a good amount to save.

37:52 Emily: Definitely don’t feel any guilt about spending on emergencies. I mean that’s what it is when you have like a medical situation, whether it’s yourself, your family member, your pet, if it has to be done, it has to be done. That’s what, I mean you’re saving the emergency fund, that’s what the emergency fund is for, so you’re saving it and yeah, you spend down but you still have the 20% savings rate and it’ll, you know, not every month is going to have, you know, one where you have a big expense like that. So, that’s awesome. That’s an amazing savings rate for a graduate student. So, just congratulations to you and I’m really excited for, you know, when the emergency fund is filled and when the other, you know, cash savings goals are filled and you get to turn to investing, it’s going to be so exciting.

38:25 Emily: And I love this idea of, you know, of course increasing income as a graduate student but also that you’ve thought through what your options are. And sometimes like it seems like you identified in your case there are opportunities even at your university that you can sort of easily pivot to and just add on to the responsibilities that you know you’ll have in the moment that’ll allow for that additional income. And I like that because you know, side hustling is sometimes frowned upon, sometimes disallowed, but when it’s an opportunity that comes through your university, it’s like oh you’ve kind of already like been approved for this because it’s something they offer to you, you know? So it doesn’t have to be like hidden or you know, anything like that.

39:00 Georga-Kay: Yeah, and that’s something I thought about. I’m very much a work smarter not harder person. And so I was like I keep my, now we’ve gotten like emails about like, oh if you want to teach in the summer, I’m actually going to be teaching this summer. And that’s an additional $4,000. So I was like, actually this is great. Like if I teach every summer or if I try to, then I can make a couple thousand dollars and then if I take on like an extra TA assignment, I can make another couple thousand dollars and that’s like money that I can put towards savings because right now I feel like pretty good in my base living expenses that I don’t need to like, you know, upgrade apartments or anything like that. So, it’s like all that money can go towards my larger goals.

39:39 Emily: Yeah, and you’ve just identified another great strategy there, which is base your, you know, your typical budget, your contractual living expenses, your necessary expenses around the minimum amount of money you can expect to be taking in the course of the year so that you know, anything you’ve taken above that could be used for savings, or also other discretionary purchases. Like you mentioned, you know, going like back home to Jamaica, and so like that maybe you could do an extra trip, you know, and still have money to put like into savings as well. So, I love that balance and it’s a great strategy for pretty much any stage of life, not just graduate school.

Best Financial Advice for a Fellow Early-Career PhD

40:09 Emily: Well, Georga-Kay, this has been such an amazing interview. I’m definitely going to be pointing to it for all the prospective graduate students as a model for how to handle this. And even especially, you know, even like your self-awareness around the money anxiety and so forth and how you, you know, faced it and like trying to work through it and everything. Again, super relatable I think to so many people. So, I’d like to finish up here with the final question that I ask all of my guests, which is, what is your best piece of financial advice for a fellow early-career PhD? And that could be something that we’ve already touched on in the interview or it could be something completely new.

40:41 Georga-Kay: Okay, so I have two, but I’ll make it quick. I would say the first one is one that I’ve mentioned a few times, which is that you should talk to the people around you. Like I would say not even just graduate students but also if there are any postdocs in your department or even early-career faculty. I have just like had such great conversations, and it might be hard at first to sort of like bring things up, but I feel like you don’t even have to ask about specific numbers, but just how people make it work in graduate school because there’s so much like financial literacy that we don’t have as graduate students because it isn’t prioritized. And so the best way to sort of break that barrier is to talk to other people who are in similar situations. And that’s how it’s helped me to approach a lot of the things that I do now in how I think about creating a budget or how I think about my lifestyle.

41:28 Georga-Kay: So, highly recommend just reaching out to your community and starting those conversations. It helps a lot. I would also say the second thing is to look at your money <laugh>. I think that’s harder than it seems especially for people who maybe struggle with being scared about what they’ll see, but it really, really helps because you don’t even have to make any changes. Like I just start looking at it and like being cognizant of like, okay, this is how much I’m spending. And I feel like that automatically leads to you making some slightly different decisions.

41:59 Emily: I agree. Totally, totally agree. It could just be you don’t even have to do, like you sort of went very quickly from the looking at the numbers to the starting to budget stage. But even staying at that, like I’m just looking, I’m not intentionally making any changes, but as you said, it kind of works in the background of your mind and you’ll automatically most likely start to make at least a couple of changes and you don’t have to be too like forceful with yourself about it, just having that awareness. So that is great advice. Thank you so much for sharing and Georga-Kay it’s been an absolute pleasure. I’m so glad that you volunteered to come on the podcast and you know, I hope you’ll come back in a couple of years for an update.

42:31 Georga-Kay: Thank you! I’ll be back anytime you want me <laugh>.

42:35 Emily: Okay, lovely. Thank you so much!

42:37 Georga-Kay: Thank you for having me!

Outtro

42:43 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.