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This Prof Is Taking Deliberate Steps Toward Self-Employment

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In this episode, Emily interviews Dr. Leslie Wang, an associate professor of Sociology at UMass Boston. Over the last several years, Leslie has become a certified life coach and secured her niche as a coach for academic women publishing their first book. They discuss how Leslie manages what are essentially two full-time jobs on top of becoming a new parent during the pandemic and how she is using the revenue her business generates. Leslie speaks openly about her plans to take a leave of absence later in 2022 to try out coaching full-time so that she can finally decide whether to stay in academia or pursue her business.

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Teaser

00:00 Leslie: I wanted to leave when I knew that what I was leaving for was much more compelling to me than trying to escape where I was at. I haven’t had that chance yet to a hundred percent devote myself to this. So that’ll start in May when my classes are over, and then I can really test it out, like fly the coop and just see what kind of happens, and still give myself some time to make a decision.

Introduction

00:29 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 10, and today my guest is Dr. Leslie Wang, an associate professor of Sociology at UMass Boston. Over the last several years, Leslie has become a certified life coach and secured her niche as a coach for academic women publishing their first book. We discuss how Leslie manages what are essentially two full-time jobs on top of becoming a new parent during the pandemic and how she is using the revenue her business generates. Leslie speaks openly about her plans to take a leave of absence later in 2022 to try out coaching full-time so that she can finally decide whether to stay in academia or pursue her business. I am requesting your help with something. I’ve developed a new program for prospective graduate students titled Set Yourself Up for Financial Success in Graduate School. It’s a year-long interactive workshop that gives prospective graduate students the tools they need to understand their funding offers, select a financially supportive PhD program, and navigate the financial transition into graduate school. If you’re a regular podcast listener, you’ve probably heard me mention some free live webinars under this title that I piloted this spring.

01:57 Emily: I believe that many of the financial pain points of graduate school could be alleviated or eliminated by helping prospective graduate students develop a realistic financial picture of what their life in graduate school will be like if they choose a specific program. I also believe that PhD programs will take notice when prospective PhD students negotiate their stipends and benefits or decline their offers of admission citing insufficient financial support. If the programs receive the message that the financial support of graduate students is vital to their academic and personal success from yet another source, that can only benefit current graduate students. If you like this idea and wish that you had been given access to such a workshop when you were applying to and interviewing for graduate school, would you please recommend the workshop to an appropriate host? I primarily have McNair programs in mind as sponsors for the workshop, but I’m sure there are other appropriate programs at the undergraduate or postbaccalaureate levels. If you were part of a McNair program or other similar professional development or fellowship program, I would really appreciate you recommending that the director of that program check out this workshop at PFforPhDs.com/prospectiveworkshop/. Please cc me if you do email them so that I can pick up the conversation. Thank you very much! Without further ado, here’s my interview with Dr. Leslie Wang.

Will You Please Introduce Yourself Further?

03:38 Emily: I am delighted to have joining me on the podcast today, Dr. Leslie Wang. She is an associate professor of sociology at UMass Boston, and on the side, she is a certified life coach working with academics. So, I’m really excited to hear about this, you know, balancing the full-time job with the side hustle and how the finances work out with that. So, Leslie, I’m so excited to have you on the podcast. Will you please introduce yourself a little bit further to the listeners?

04:01 Leslie: Of course! First of all, Emily, thank you so much for having me on. Again, my name’s Leslie and I am an associate professor of sociology at UMass Boston. I received my PhD in sociology from University of California Berkeley in 2010. After that, I moved to Vancouver for two years to do a postdoctoral fellowship at the University of British Columbia. After that, I moved to Michigan for a year where I did one year of a tenure-track position at Grand Valley State University. And then since 2013, I’ve been at UMass Boston. And then, so in terms of my research, I am a feminist qualitative researcher who studies issues related to families and work and migration between China and the United States. And so, I’ve published two books with university presses. The first one is called Outsourced Children: Orphanage Care and Adoption in Globalizing China. That was based on my dissertation, and it was published by Stanford University Press in 2016. And then last year in 2021, I published my second book, which is called Chasing the American Dream in China: Chinese Americans in the Ancestral Homeland, and that was published by Rutgers University Press. And then I’ve also been a certified professional life coach since 2019.

Becoming a Life Coach

05:19 Emily: Alright. So, you have the academic chops for sure. Congratulations on your promotion to associate professor! And I want to hear more about the life coaching, because that’s what sets you a little bit apart. So, why did you start down that route of becoming a life coach?

05:36 Leslie: So, I decided to pursue a nine-month intensive life coach training and certification program in 2018. And so at the time, I was going up for tenure, you know, as I mentioned, I had moved three times in four years for this job. And by then I was feeling really burnt out. I felt really overworked. I felt like I didn’t have any boundaries with my job. And I also was tired of working in a fairly dysfunctional, emotionally unsupportive environment. And so, I was initially going to wait until after I got tenure to start my training. And that was always in my head, like, let me just put everything on hold until after tenure.

06:18 Emily: That’s familiar.

06:18 Leslie: Right, right. I attended a weekend-long coaching training program, and this was in Los Angeles. And I just felt so drawn to the work. I felt like there was an immediate impact that I had in making the world better that I hadn’t felt from the kinds of academic work that I had done before.

06:39 Leslie: And I realized I was looking for that feeling all the time through my research and my teaching, but I got it through coaching instead. And so, I changed all of my plans and I signed up for this program. And, you know, it took place in LA, and I was living in Boston. So, I flew back every six weeks for almost a year, and this was pre-pandemic, so all the trainings were in person. And so, you know, my goal as a coach was actually really trying to figure out what I wanted to do with my own career. It was totally like self-focused to start with. I was really unclear whether the problems I was facing and the unhappiness that I was feeling could be solved by moving to another faculty position, or whether I would be happier potentially outside of academia, which is not something I had ever considered before. And I just really needed to figure that out. And I can say now that I’m confident that I will be happier outside of academia. I’m moving towards making that happen in the next year or so, as we can talk about. But you know, that’s essentially why I started down that path, and then I’ve stayed with it because it’s really, really fulfilling. It’s been extremely satisfying and a really interesting new challenge.

Finding a Niche as a Writing Coach

07:54 Emily: Life coaching is quite general, but I understand you have a focus within that broader category. So, what kind of coaching do you do?

08:02 Leslie: So, now I am a writing coach and I work specifically with women scholars who are publishing their first book. And so it’s become very narrow. But it took me a while to get to this point. So I’ve been coaching now for three or four years, and I started out by coaching, like, I think everyone does this, but coaching anyone who would be coached by me. So this could be my friends, my colleagues, their partners. I coached women. I coached men. I coached you know, grad students, postdocs, faculty members, just to get a sense of like just the coaching itself and how does this feel and let me develop my own own style as a coach in the way that you do when you become a teacher. It’s like, you don’t exactly know the first time you walk into a classroom, what your style is going to be, how you’re going to react to things.

08:50 Leslie: So, I just had to build up that skillset. And then over time, I came to realize that if I really wanted to make this a go, so move it from a side hustle into being like an actual career, I really did need to focus on something. Because general life coaching at this point is so common. You know, everyone’s a coach, and you don’t actually need to be certified to be a coach. And I think it’s great that there are so many folks out there that want to help other people. And there are a lot of people looking for help. But in order to have like a message that lands with people, it needed to be more about an issue that I could help them solve that was more tangible than like live a happier life. Because that is really the goal, I think, of all life coaching, but having the goal of like let’s work together to help you create a sustainable writing habit and create an empowered mindset and be able to take the reins of your career and become comfortable being visible and getting your ideas out into the world and changing the world with your ideas.

09:57 Leslie: All of that ended up being easier to package into something when it was around book writing, which I had done already myself. And therefore, I can say like, Hey, this is my experience. I suffered a lot during that because I was so alone. And let me help you not have to go through those things, make it faster and easier. And then in the process you can live a happier life.

10:23 Emily: I think that niche makes, well, first of all, nicheing down, I’m obviously a fan because I have the nicheiest niche ever <laugh> of, you know, grad students and postdocs and early-career PhDs talking about finances, in particular. So, I’m all in favor of nicheing down. And this is an obvious one that has a connection to your current career. So, if you do end up leaving your current position, or whatever, for this side hustle becoming the full-time thing, it’s a little side-step. It’s not like this massive upheaval in your entire career.

Balance and Boundaries

10:51 Emily: So, you mentioned that you, you know, started down the certification route in 2018 and you were experimenting at first, and then you found your niche. Currently, how are you balancing the demands of your full-time position with this side hustle that’s growing into maybe its own full-time thing?

11:07 Leslie: I have to say, it’s not easy. I am essentially working two jobs at the same time. And so, it was fine for a while when, well, so if I back up a little bit, I had to stop coaching for all of 2020, because I had a baby early in the year, and then COVID hit. And so, that time happened to coincide with my sabbatical, but basically, the whole year was eaten up by childcare. That’s what I did. And so I was not working on the business. It was kind of like, I was just thinking and processing. I was listening to podcasts like yours, and I was thinking, you know, what are the next viable steps after I returned to my job, which I did last September. And so, juggling them, you know, teaching and doing faculty work in the time of COVID is hard.

11:59 Leslie: It’s much harder, I would say, coming back in the middle of the pandemic than before. And my life changed completely in the middle of that too. And so, for now I am juggling two jobs, and it is really about you know, can I practice what I preach in terms of what I work with my clients on: setting really strong boundaries, figuring out the things that, you know, inspire me versus drain me, and trying to say no to everything that drains me, if possible. That still doesn’t compromise the quality of my students’ learning, or I still want to fulfill all of the obligations of my job in terms of being a good colleague. But there’s a lot of gray area in there that, if you’re not really strong with your boundaries, you end up taking on more and more and more to the point where you are completely burnt out.

12:56 Leslie: And so, if I did that and I had the coaching, then I would be burning out twice sort of <laugh>. So, I’ve just been like, you know, with my job, like these are the hours I’m working my job. These are the committees I’m on. I know exactly how much time all of those things are going to need. And then there are certain things that I’ve stopped doing because I realized that I didn’t enjoy them all along. So, things that I felt like I had to do, like for example, present at conferences. I attended every conference. I never even questioned it. Except for the fact that when I got there, I didn’t enjoy them that much, especially when there were like 4,000 people milling around. And so, things like that, I’m like, I don’t have to do those things if I don’t want to. So, it’s more about asking myself, like, what do I want to do? And then I can take on more coaching because that’s what I want to do. But it’s definitely not easy, especially when you’re juggling parenthood.

13:55 Emily: I think this is a theme that often comes up when people start a side hustle and/or become a parent, or just have some other thing going on in their life that’s very demanding of their time and energy that they want to be demanding of it, right? They want to devote their time and energy over to that side. It does force you to create better boundaries in your full-time job instead of just saying, “Oh, my entire self is being given over to this job and take, take, take take, take everything you possibly can.” So, it sounds really healthy, although it’s a lot of work, obviously for you, he parenthood and the essentially two full-time jobs. I can definitely see how, and this applies for people in positions other than yours as well, that being forced to create those boundaries is ultimately a really healthy thing to do in all of these different spheres of your life. Is that how you feel about it?

14:42 Leslie: I completely agree. And one thing I was going to add is that I have stopped getting involved in any politics. So, any of the departmental and institutional drama that I used to get really sucked into, out of choice, really, because I was curious and it’s like, what’s going on? And how do I help fix this? And I realize like some of these issues, they are so systemic. I’m not going to be able to change them, especially in the time that I have left. And so, that’s part of it too, is when it comes to, I think more about energy than about time. And my energy, I’m not spending on the things that I used to worry about as much. So, that’s really helpful when you do have actually less time to work with.

Setting Boundaries and Saying No

15:28 Emily: I think that’s probably a lesson we’ve all learned during the pandemic where, suddenly, your time is very, very differently allocated. Maybe you’re not commuting or other things like this, but the energy becomes the key thing of how much can I really devote to this, that, or the other? And I have to, you know, allocate my resources carefully. Do you mind giving an example or two of some like specific boundaries you have with your full-time job? Whether it’s time or energy or, I mean, you already listed I’ve dropped certain kinds of non-required commitments, but do you have any other examples of boundaries?

15:57 Leslie: Sure. I mean, at this point, my schedule books out pretty far in advance. And so, there’s only so much I’m going to take on in a day. So for example, when there are some committee assignments and they want to throw on a meeting in like the next day or like a few days from that, I just say, no. I already have commitments. Even if there’s nothing actually over that time, it was time that I was going to use to decompress or to commute or, right? So, instead of like being like, “Okay, well I’m commuting, let me throw on this call.” I realize, unless it’s like something that I’m in charge of and they really need my input, it’s okay for me to say no. Especially when there’s like five or six people on this committee. And so, these things happen all the time. And normally I would say yes, but I also feel like, you know, people have to respect that folks have a lot of things filling up their schedules, and sometimes you just can’t make it.

16:59 Emily: I think this is another common like pandemic lesson, right? Like you literally cannot schedule me in Zoom calls all day long every day because I will not get any work done, period. So just, you can’t have it happen. You have to block out. I don’t know if you’re actually using time blocking, but you have to block out time in your schedule for these other things that have to fit into your life. So, I love that example.

Commercial

17:20 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at PFforPhDs.community. The Community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, including my recent set of Wealthy PhD Workshops. There is also a discussion forum, monthly live calls with me, and progress journaling for financial goals. Basically, the Community exists to help you reach your financial goals, whatever they are. Go to PFforPhDs.community to find out more. I can’t wait to help propel you to financial success! Now back to the interview.

Financial Side of Having a Coaching Business

18:25 Emily: Let’s turn to the financial side of having this business. How are you using, if you are, the income that you’re generating from it?

18:34 Leslie: Yeah. So, let’s see. I think last year I was coaching only from about May to December because that’s when we got childcare. In that time, I earned about $40,000 from coaching, and all of that went right back into the business. All of it. So, the big things were paying for a business coach who I worked with for half a year to develop an entire huge plan for how I was going to turn this into a full-time sustainable career. Let’s see, I hired a website designer to go along with it. Professional photoshoot. I was also part of a 12-month-long, let’s see, business kind of development program that was sort of like a coaching program. So, that took a chunk. And then all the costs that go along with starting and maintaining a podcast. So, I’ve been like starting my own podcast that hasn’t launched yet.

19:35 Leslie: So, there was a whole financial side of that as well as like the time that it takes to learn all of those skills. So, pretty much everything is back into the business. And you know, somewhere, I heard that advice of, you know, the first $75K of your coaching business should go back into the business. And I’m pretty much kind of following that. But I do think that that investment, when I was ready to make it, because it wasn’t at the very beginning, it was once I felt like, “Okay, I do know what I want to do with this, but I need help doing that,” that was a really good time for me to invest.

20:11 Emily: And I think this points out one of the real advantages of launching a business while maintaining your full-time position. Because your personal budget does not, if you want to take some of that money home into your personal budget, you have the option to, but if you don’t and like you, you want to reinvest essentially 100% of it, you have that flexibility in your personal finances to be able to, you know, the business is funding itself at the beginning and you don’t need to draw a salary from it right away. I have to say, I took completely the opposite approach when I started my business of like, this is my income and I am very reticent to spend any money like on the business. And that’s something I’ve had to unlearn over these years. It’s something I’ve had to like pry out of my brain, this like frugal nature. It is very different when you’re running a business versus running your own household how you choose to manage the finances. So, I’m really interested, you know, to hear about your journey initially. Now you mentioned that was for 2021. What is 2022 shaping up to look like for the financials? Like are you going to start taking any of that income home?

21:13 Leslie: I would say I pretty much have started. Yeah, I’m probably projecting that I would make around 65 to 80 this year. I am going to take a leave of absence this fall. So I won’t have, you know, I’ll have half of my faculty income. And so, basically, I have been slowly easing my way out. I wanted to get to a point where I felt like the risk did not feel like such a huge risk anymore. Like, I had proven to myself that I had a sustainable, profitable business. And also that I wouldn’t have regrets in leaving tenure and leaving, really a job that a lot of people would die to have. And I fully, fully recognize the privilege that I have, you know, come into through my entire career. And that said, I feel still very drawn to having even more flexibility and having even more autonomy and freedom and all of the things that I value so much about academia, I can have even more of once I’m running my own business. But I had to get to a point where I felt confident enough that I could do this. It’s not going to affect my family’s, you know, wellbeing in any way. And so, that’s why it’s taken me a few years.

Making a Final Decision Whether to Leave Academia

22:41 Emily: I really think that, given the particular job that you have, the risk is mostly not financial. It’s mostly the I’m going to leave this position and it’s, I don’t know what you put your personal likelihood on it, but the ethos is you can never get another job like this again, right? Once you’ve gotten the job, you can’t leave the job. And you can tell me if you think that’s actually going to be true for you, if you ever decide to change your mind again. But I’m curious about how you see this plan like playing out, if you’re comfortable discussing it. You’re planning on going on a leave of absence. You mentioned that’ll be at half-salary, so still a little more runway being provided to you. That’s great. At what point will you decide, okay, I am going to go back to this academic job full-time, or Nope, I’m officially out and I’m done and I’m a coach now?

23:29 Leslie: I need to decide by the end of this year.

23:33 Emily: Okay. So you have basically, like the fall semester, essentially, is your leave of absence.

23:36 Leslie: Mm-Hmm <Affirmative> I think that would be the fairest to my department as well. I don’t want leave them in the lurch. And it’s also not even about my position anymore. It’s more, I wanted to leave when I knew that what I was leaving for was much more compelling to me than trying to escape where I was at. It took me a while to get to that place, but now I’m definitely feeling that, but I’m still in the job. So, I haven’t had that chance yet to a hundred percent devote myself to this. So that’ll start in May when my classes are over. And then I can really like test it out, like, you know, fly the coop and just see what kind of happens, and still give myself some time to make a decision.

24:24 Emily: That is so fantastic. I mean, I’m sure it’s based on, you know, your particular position in academia, but I would say that academia generally, once you get to your level does provide these opportunities for flexibility in a way that other kinds of jobs wouldn’t, right? You just have to quit the job. Like that’s it, there’s no leave of absence. There’s no negotiating, you’re done with the job. And I love what you said about, you know, wanting to make sure that what you’re going to is more compelling than just merely the feeling of, I need to escape where I am right now. Because that’s something that comes up in the FIRE movement, the Financial Independence and Early Retirement movement. I don’t know if you’re familiar with it in the personal finance space.

25:01 Leslie: Mm-Hmm <Affirmative> Yeah, a little bit.

Financial Independence, Retire Early (FIRE Movement)

25:03 Emily: So, for the listener, the idea is, you know, especially for the retire early aspect of FIRE, this would be retiring very early, like when you’re 30 or 40 or 50, much, much sooner than the typical retirement age. And a lot of people who join this movement feel very fueled by getting out of their current job. And they think that the way out is to retire early. To just, I’m going to generate this big enough nest egg to give me financial freedom, and then I never have to work this job again. But now that there’s been, I don’t know, 10 or 20 years of early retirees, the wisdom coming back from them is don’t make it about the current job, find a job that you love and it’s maybe worth it to stay a few years longer. Maybe if you took a pay cut or something, but find work that’s compelling to you. You can still pursue the early retirement, but don’t make it about escaping from your current reality. Find a job along the meantime that’s a little bit more fulfilling than the one that, you know, you’re trying to escape from. So, I really love that you pointed that out and that you’re just taking such slow, gradual like deliberate steps toward this, because it is a big deal to leave this kind of a job.

26:03 Leslie: It’s a big deal emotionally, I think, for academics to leave academia, and to still, I’m fortunate to be in a position where it’s a choice, where I don’t feel forced out. And that’s extremely empowering. But also that’s work that I had to do in my own mind around feeling that it was a choice and feeling like I had other options and creating other options, too. So, I think that there’s a lot of grieving that goes along with giving up something that you have invested decades of your life into, your identity is fully intertwined, with your social networks are probably very much dependent on, and especially, you know, we, in our PhD programs, we’re socialized into thinking that the tenure-track position is the way. Like, that’s your way to happiness. And so, that’s why I feel like I did all of the things that I wanted to do.

27:02 Leslie: You know, publishing and getting a job and then getting tenure. I did all of these things so that I could know for myself, like, are these the things that will actually make me happy? And realizing, not so much. It didn’t feel that different. Like once these things happened, like I’m glad I did them. Glad for the experience. And then I also realized that if I really ground myself in my core values, like those weren’t really the things in the first place that I was really inspired by. So, you know, now I’m in a position where I can make a new choice. And that feels really scary. And I think getting used to that fear and still moving forward anyway, is a big part of the work.

27:47 Emily: I think this is such an important message for the listeners to hear if they are still somewhere on this academic track. Grad school, postdoc, first position, you know, as an assistant professor, et cetera, et cetera. It’s okay to reevaluate. You don’t have to accept the messages that academia tells you that this is the perfect position that everybody wants and everybody’s going for. It’s okay to evaluate your own self and figure out anywhere along the way, if something else will be more fulfilling for you. And like you, they can do this slowly and gradually and make sure that it’s the right decision. That’s okay. Or if it’s not your personality, you can do it abruptly, too. Nothing wrong with that.

Best Financial Advice for Another Early-Career PhD

28:26 Emily: This has been such a wonderful conversation, Leslie. I’m sure there are going to be some people who want to follow up with you. Can you tell us where the listeners can find you?

28:33 Leslie: Yes. So my business is called Your Words Unleashed, and that is my website. So YourWordsUnleashed.com, and my podcast has the same name.

28:43 Emily: Perfect. And we’ll end with the last question that I ask of all my guests, which is what is your best financial advice for another early-career PhD? And this can be something that we touched on during the interview, or it could be something completely new.

28:57 Leslie: So, great. I have a couple of suggestions. So, the first thing, people probably hear this all the time, but in terms of tangible things that I’m really glad I did was I hired a financial advisor right when I got my job. And so, it has been this major mental relief to have someone else on my team who just knows a lot more than I do <laugh> about finances and can give me advice or even, you know, sometimes just tell me what to do. It took this huge mental load off of me. So, when I first hired my advisor, her name is Inga Timmerman and she is actually an academic herself. And she specializes in working with academics. So that was important for me. But when I hired her, you know, I was 35, I was single, I had just moved to Boston.

29:47 Leslie: I had almost no savings. I was really afraid to confront my financial future. I had just been sort of ignoring it until I got a job. And so, you know, we looked at my finances together. So, it made it less scary. Rearranged some investments, increased my retirement contributions, and once we did that, like I knew that my financial future was safe. And so, that in itself is like worth every penny. And she’s also helped me figure out all the next steps. So, in the time that I’ve worked with her, I got married, I had a child, she’s helped me plan out next steps with my business. And so, it’s like having, she’s like a friend who just knows a huge amount about what I should do with my finances. And she understands academia. And so, that has been one really great thing. So, hiring a financial advisor.

30:40 Leslie: The other thing I would say is a bit more abstract, and it comes out of my coaching work. And so, I really encourage people to sit down, reflect, and identify your top five core values. And so, these are qualities that make you feel inspired and motivated, and if they’re not present in your life or you’re not sort of living into them, then something feels off to you. And so, you know, my advice is, you know, make sure your career decisions are always in line with these values. And this is the first exercise I do with all of my clients. And people are always surprised at what comes up as their core values. I think oftentimes we think we know what they are, and then you ask people really what they are. And they have like 40 things. It’s not really like the corest of the core values.

31:32 Leslie: And so, I would consider this to be financial advice because our career decisions are ultimately financial decisions. And having core values as your guide means that you have an internal compass and a way to make decisions that is separate from externally imposed criteria of success that is given to us by academic culture, or by our advisors or, you know, people we see like succeeding in all these ways that are prescribed, right? And we feel like we need to be that way in order to be successful. And so, you know, I think when you’re really grounded in your values, you can feel like you’re choosing your own path rather than feeling like you’re limited to doing only one type of work in one type of setting. And so, really, I just feel like for me, like always being acquainted with my values has let me see other possible avenues.

32:33 Leslie: You know, where I have been able to use my skillset, do work that I care about very deeply while also making a better living <laugh> and being happier, you know, than if I was to stay where I was. And so, I say all of this because I’ve gone through a huge mental and emotional transition to get to this point, and I’ve come through it knowing that I can actually become more fulfilled and more successful running my own business. And that is not something I ever would’ve thought, you know, even five years ago, let alone when I started this journey when I was 24. So, that’s basically financial advice as well as some coaching advice.

33:19 Emily: It’s excellent. And it’s the foundation of financial planning, financial considerations, should be, as you just mentioned, identification of your core values. And it’s something that gets overlooked. I overlook it quite a bit as well because it’s not very like tactical. It’s not like use this app or, you know, something really that you can put your hands around like that, but it’s something that has to be done. It’s the baseline work that you really need to work through to, as you said, have a fulfilled life. And career and finances are very closely tied together in this respect. But you can have, and once you identify those core values, you can see how they play out in your career. You can adjust your career if necessary. You can see how they play out in your finances. And of course, just your adjust your finances to better, you know, be in alignment with those. Because then you’ll really feel like you’re using your money optimally and not, you know, wasting it here or there and not getting value from those dollars.

34:14 Leslie: Yeah. And I think what’s really interesting is that, for so many of my clients, their core values are things like fun and peace <laugh>, calm, self-care. And they’re like, how does that work into work? And it’s like, actually, we can find ways to pull those qualities into your work life so that you can feel, if you’re prioritizing those things, then you’re going to eliminate some things, you’re going to increase other things. And then hopefully be happier and more financially successful along the way, right? It’s always just about like, because you’re attuned to yourself.

34:51 Emily: I have a feeling that the values that you just mentioned, you have at least one of those based on the boundaries that you have mentioned earlier, setting with your work. Because I can see how those boundaries have created that in your own work life. Well, Leslie it has been such a pleasure to speak with you. I really hope the listeners got a ton out of this episode, because I know that I have. It was great to meet you and thank you so much for coming on the podcast!

35:12 Leslie: Thank you so much for having me! It’s been a lot of fun.

Outtro

35:20 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? I have 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/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. 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.

How Grad School Rewired This Student’s Brain for Financial Success

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In this episode, Emily interviews Elise Glickert, a fifth-year PhD student in organic chemistry at the University at Buffalo. Elise got married in the summer between finishing undergrad and starting grad school. Between their student loans and car loan, Elise and her husband were in about $85,000 of debt. With two irregular incomes, they quickly realized they had to change something to do more than just get by with their finances, and they implemented a zero-based budget. Elise compares long-term debt repayment with the process of completing a PhD—both require a long-term mindset, creativity, discipline, and intentionality. Elise and her husband are now debt-free, planning their next steps with their finances, and expecting a baby.

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Teaser

00:00 Elise: Even with that, I think that was helpful. Just even for both of us to see, “Man, like, it is kind of cool how, like, you know, you can increase income just by like approaching or working towards something from a different angle.” And again, I think just like when you’re working on research projects, right? Sometimes you need like a different angle or different thought process to kind of come in and be like, “Oh, cool. Actually, I could approach this problem, look to solve this problem from this angle, instead of just this way.”

Introduction

00:30 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 9, and today my guest is Elise Glickert, a fifth-year PhD student in organic chemistry at the University at Buffalo. Elise got married in the summer between finishing undergrad and starting grad school. Between their student loans and car loan, Elise and her husband were in about $85,000 of debt. With two irregular incomes, they quickly realized they had to change something to do more than just get by with their finances, and they implemented a zero-based budget. Elise compares long-term debt repayment with the process of completing a PhD—both require a long-term mindset, creativity, discipline, and intentionality. Elise and her husband are now debt-free, planning their next steps with their finances, and expecting a baby.

01:30 Emily: Speaking of the transition from undergrad into grad school or the working world into grad school, I am giving away an incredible resource for rising graduate students later this week! The resource is a live webinar on the financial actions that people who will matriculate into graduate school in the coming months need to take right now. It’s really, really practical. We are covering why and how to right-size your housing and transportation expenses, budget and save up for your start-up costs, and investigate your paychecks prior to receiving the first one. I’m really looking forward to sharing this material with you and hearing your questions and concerns. If you are headed to graduate school in the fall, you can register for the webinar at PFforPhDs.com/rising/. If you’re already in or past graduate school but wish someone had sat you down to warn you about the financial pitfalls in your path to the PhD, please share the registration page with the rising graduate students in your life. Again, the URL to register for the free, live webinar on Thursday, April 28, 2022 is PFforPhDs.com/rising/. Without further ado, here’s my interview with Elise Glickert.

Will You Please Introduce Yourself Further?

02:59 Emily: I am delighted to have joining me on the podcast today Elise Glickert. She is a fifth-year PhD student at the University of Buffalo, and we are going to discuss her financial journey, along with her husband, from when she started grad school to this year, when she’s nearly done. And it has been quite a journey. So, I’m very excited to talk about Elise. Elise, will you please introduce yourself a little bit for there for the audience?

03:20 Elise: Yeah, so what’s up everyone? Yeah, just like Emily was saying I’m Elise and a fifth-year PhD student at University of Buffalo. I do organic chemistry research. So that’s kind of what I’m working on right now, synthesizing different compounds. And then primarily as well, the hope is with that to ultimately go on maybe into like academia, do some teaching or some like business type stuff. Especially like I tutor now, we’ll probably talk a little bit more about that with like kind of like side businesses and side hustles as well and stuff, so, yeah, it’s exciting.

Finances at the Beginning of Grad School

03:57 Emily: Okay. Sounds great! Let me know, let’s kind of take it back to the beginning of graduate school. I understand you got married right around that time as well.

04:05 Elise: Yes. Yeah.

04:06 Emily: So, what was going on with your finances and also, you know, your understanding of finances or your outlook on finances at that time?

04:13 Elise: Yeah, absolutely. So yeah, so my husband and I, we got married in May of 2017, and we actually got married the day after we graduated, which I will say made finals week very, very stressful. Very, very stressful. Yeah. And so, you know, because it’s like you still have all your tests and everything and then also double-checking, like, Hey, is the DJ good? Is the catering, all this stuff. But it was also a lot of fun because we went to a small college in Ohio, and so it was cool getting to you know, just like kind of have like a final like celebration per se with all of our friends and everything. So that was really awesome. And then after that, we actually headed out to Buffalo. One of the reasons I even chose Buffalo or UB was because at the time when we had started talking about like getting married and stuff I didn’t really care where we lived at all.

05:03 Elise: My family’s originally from Jacksonville, Florida, and my husband has a lot of family in New York. We had some friends in like this New York area as well. And so yeah, so UB was one of the places I applied to that accepted me. And then, yeah, basically after that got married, graduated honeymooned, and then headed out to Buffalo and I started doing some TAing during the summer, and then my husband was also working in retail at like a DICK’s Sporting Goods. So, yeah, so that’s kind of how we started with that. And then in regards to finances, I will say we are complete polar opposites. I’m a huge spender. One of the like embarrassing stories I share is so like my senior year, so entering my senior year of college, I had this goal. I have no idea why, it’s not even really that great of a goal, honestly, to just like blow a thousand dollars in a day. And I was a college student.

05:54 Elise: I didn’t, I mean, it was bad. But anyway, so I did that, and then I hadn’t actually read my like student bill correctly, so I didn’t even have enough money. So I blew the thousand, and then like three days later went into the admissions office and was like, “Hey, like I, is there any way I can get more money? Like I don’t have.” It was so bad. So very, very, yeah, very irresponsible, I would say, was more of my mindset. And then my husband is the complete opposite. Absolutely hates spending money whatsoever. So yes. Yeah. That’s kind of like, again, my financial background there. Yeah, I would say definitely no financial literacy whatsoever. It was just kind of like, yeah, you know, as long as the bank account’s not zero, enjoy spending.

Combined Debts and Incomes

06:38 Emily: Got it. And what about your like net worth or your combined net worth at that time? Did you all have debts? Did you have assets coming out of college?

06:46 Elise: Yeah. Yeah. So we both had student loans coming out of college. And so I had around like $30,000 or so, and then my husband had around like $46,000. My loans then went in deferment. But for his, right, we were then like six months later began making those payments. And then we also in like the fall, so like fall of 2017, we then also financed a car. And with that again, I will say I’m more so kind led this as a spender, but again, something I would recommend not doing. I remember we both walked into the dealership and I like told the dealer who was there, like the salesman. I was like, “Hey, yeah. So, you know, we’re looking for a car, our budget is $15,000, but we can go up if needed.” So again, not the best, really just not the best lines to use there. So as I said, yeah, I was super yeah, not super intentional with money or anything, so yeah.

07:46 Emily: Okay. Let me know about your incomes as well at that point. So like, what was your stipend when you started grad school? And what was your husband earning?

07:53 Elise: Yes. Yes. So for me, it started out around like basically $26,000 a year, like $26,300. And usually, that would be split up into like $23,000 the full like semester, both semesters, and then $3000 during the summer. So, like $3,200 during the summer.

08:13 Emily: Interesting. So you would have to prepare a little, I mean, in theory, you could prepare a little bit through savings to supplement over the summer, but I’m not thinking that was something that you were trying to do at that point.

08:25 Elise: No, definitely not. Yes. I remember even when we saw this you know, you’re like talking with other grad students, you see the forms and stuff. And yeah, I remember where both of us, as I said, since we were kind of more like opposite-minded, there kind of started to be very much a “Man, something’s going to need to change. Otherwise, this is going to be kind of disastrous.” Right? And even, I know like one of the things that can be like one of the leading causes of divorce, right, is like financial issues. And we didn’t want to have that. So, yeah. Definitely again, that kind of was what even really started, I would say especially for both of us, a passion for finance was kind of realizing, “Man, we are going to, just like what you’re saying, we’re going to have to start planning.”

09:08 Elise: Because like my income’s a little bit irregular. And then as I said, at the time he was working at DICK’s and so that was I think that like first semester or whatnot, that summer again making like $15,000 or whatnot. Or like 12 to $15,000. And then again, that was kind of irregular because he was working at DICK’s part-time and then also had like an internship as well. So, it again was like part-time. So not, yeah, we weren’t bringing in a ton of money. I think those first six months’ gross was maybe like $25,000 or so. And again it was all irregular, always irregular paychecks.

Money Mindset and Strategies in Grad School

09:52 Emily: Yeah. So let’s kind of talk through, you know, we have a good picture of the start. So let’s talk through like how those next few years went, and what you were learning. And maybe what strategies or mindsets you started to use along the way. Because you know, we’ll get to what the current picture is, and it’s a lot rosier than, you know, what the start was. So like let’s talk about that evolution.

10:13 Elise: Yes. Yeah, absolutely. So, I would say the big thing for us was kind of a desire to make sure we were on the same page. Because I will say, when we did first get married, there weren’t I guess like a lot of like financial stressors per se, it was just, everything was very disorganized. But we weren’t having like I will say we were sort of blessed. We didn’t have like any huge thing that kind of like came up where it was like, oh no, it was just, it was like, man, we are, you know, we’re little just organized and stuff, but Hey, you know, it’s good, life’s good. Like you know, I’m doing school he’s working. And then again, I would say is more so because our paychecks were so irregular, it was kind of like a “Man, we’re going to need to be a little bit more intentional with this.”

11:00 Elise: And so that was when I started doing a little bit more research into just personal finances of like, “Hey, you know, how should we like set up a budget?” You know, what’s the best way to do that. And we ended up finding like a zero base budgeting type method. And so with doing that, it’s kind of where you’re like setting up, Hey, at the beginning of the month, this is how much we’re going to spend, which was really helpful for us, especially because of, again, that irregularity. We were then able to be like, okay, well this is for sure, you know, like our expenses. And then you know, even though the incomes are irregular, this is how we can use this excess. And then we also decided that it was like, “Hey, let’s also look to start having some financial goals together.”

11:48 Elise: I would say we both do love setting goals and achieving them together. So it was also a lot of fun kind of setting like one of them was, “Hey, let’s become debt-free.” So again, let’s be intentional with that zero-based budgeting of how can we pay off our debt? And then also like, you know, getting savings account set up, stuff like that. So I would say, but the big start with that shift was really kind of like those again, how irregular the incomes were and kind of almost seeing, “Man, if we’re not intentional about this, sure, it’s fine now. But like five years down the road, this would be just disastrous, right?” It would not, because again, if anything comes up, like it’s going to be really, really bad because we’re just not keeping track of everything thing well.

Debt Repayment Goal

12:34 Emily: I’d love to talk more about the debt repayment goal. And so, you mentioned that you both had student loans, but yours were in deferment. And you had the car loan. And so, did you use any particular like methodology? Or like how did you decide what to tackle first or how much to pay? How did all that work?

12:55 Elise: Yeah, so I will say one of the big things. So we really liked Ramsey Solutions. That was again, when I was doing like the basic Google search, right, for personal finance. I mean one of the top things that came out, and they talk about doing like the debt snowball method, paying off just smallest debt. And it was fun to feel like all of those wins with things. And then, this is interesting because like I would say at the same time as all this is happening, right? I’m also like progressing in my program as a grad student, and it was interesting, I guess kind of the similarities of, I really liked the focus that like they kind of talked about of like delaying gratification. And obviously, I mean that’s a hundred percent grad school, right?

13:40 Elise: You’re constantly delaying gratification. So, I guess as my brain was already being rewired to some degree of going from, I would say like my senior year where it’s just way more you know, kind of like, “Hey, whatever feels good right now. Like let’s just do it” to a “Man, okay. Let’s put you know, kind of submit to a process.” You know, get that like I’m delaying a pleasure, right? And then again, that intentionality. I would say that was kind of the big methodologies, but I’m not going to lie. I don’t actually know if I wasn’t in grad school, like at the same time as we were doing this, that might have been honestly a little bit, maybe too much of a rewiring all at once. But it was cool because you know, at the same time I’m running experiments and I’m learning, “Hey, this is what happens when this doesn’t work.”

14:25 Elise: Then I have to come back in, you know, or “Man, this is going to be like a five to six-year journey.” You know, like my brain’s already getting used to longer journeys than just, “Oh man, I can’t like pay off all the debt in like three months. So what’s the point, you know? So it’s just interesting all the similarities there that I would say really helped both of us, especially as we were going about achieving those goals. But the big one was yeah, just paying off smallest to largest and kind of, for us, it was realizing, “Hey, this is not going to be something that we finish in a year.” But again, it’s like grad school also, right? It isn’t something that you finish in a year. So, it was difficult, but at the same time, I don’t know, like obtaining a PhD is difficult. So I think it was nice to have like those similarities.

15:14 Emily: I love that you brought up this point because this is actually something that I bring up at the beginning of one of my seminars, which is The Graduate Student and Postdoc’s Guide to Personal Finance. And so, what I say because I know that people who attend these seminars are not necessarily, you know, like you are now like, are a super podcast listener would be like, oh, I’m super interested in personal finance. Like yeah, I’m going to really dive in. You know, they may just be like casually like, oh, I probably should learn something about money. So I’m going to show up at the seminar. So what I do to kind of like frame this is like say, you as a graduate student or postdoc, you have already made the decision to commit to this, you know, as you said, five-ish year, at least maybe 10 years, training period to set yourself up for this wonderful successful career at, you know, the start of that.

15:57 Emily: And you making the decision to do that gives you certain like personality, characteristics, like going through it, like you were saying like forward-thinking, planning ahead, committing to a process. And that, I say, if you take this sort of the personality you’re developing by being a graduate student, by being a postdoc and you translate it over to the financial side of your life, you are going to be successful. Because it does take long-term thinking. It does take delayed gratification. It does, you have to think about it as an investment in your future, whether it’s debt repayment, saving, investing, whatever it is, it’s all setting you up for an easier time in the future than you’re necessarily having right now. So, I really love that you, you know, clearly saw yourself going through this process as well. Brilliant.

Student Loans and Savings

16:39 Emily: Well, I want to ask though about, you know, regarding the debt snowball, which is a great method to use, how did you treat your student loans in there? Because they were in deferment. So, they’re a little bit different than the other types of debt.

16:49 Elise: Yes. A hundred percent. So I will say with that I should say, I guess maybe like a caveat should be, we use like a debt snowball hybrid <laugh> because yeah. So, because with the deferment, right? You did have the 0% interest and yeah, basically, the way we did it was, which, I mean, we just kind of thought of all of our debts as together, I will say. But I guess if you technically split them up, we paid off like my husband’s loans first that were broken off into the like, you know, $3000, $1000, $2,000 chunks. And then did the car, and then did like the student loans that I had. But technically the student loans that I had were higher than like our car.

17:35 Emily: So, sort of a combined avalanche snowball method. Because of the 0% due to the subsidy and deferment and so forth.

17:42 Elise: Mm-Hmm <affirmative> yes.

17:44 Emily: Gotcha. And you mentioned also earlier savings. So, how were you thinking about cash savings versus this big debt payoff goal? Like how much cash did you decide to keep on hand and for what purposes? How did you think through that?

17:57 Elise: Yes. So I will say we did use where for us, we kept it a thousand dollars. I will say though, also we did keep our expenses very, very low. And we were like pretty much every month, again, once we started being intentional and doing that zero-based budget, we had usually like $2000, $3000 a month or again, depending on the year. And as I said, our incomes were irregular. But yeah, we had the $2,000, $3,000 a month where like, if something did come up, we would just take like a pause on the debt payment. But we always had with like an emergency fund of, as I said, a thousand dollars. Again, just in case like because when we were looking at kind of like our lives, it was like, “Hey, you know, the like worst thing that could happen would not exceed really like a thousand dollars, honestly.”

18:53 Elise: Because the biggest thing for us would’ve just been the car repairs, and we actually only had, and still have, one car. So, it also kind of worked out that way. And yeah, most of our expenses I will say, and even now, are like under $2,000 a month. So it also makes it again a little bit easier to with that intentionality of okay, cool. Well, you know, I always have this amount of cash flow. And we did have later on like in our marriage, whatnot and in our journey where technically, I will say, which is bad on my part, like I have actually totaled like two cars. So, when that happened, like we did have to press pause on it and we then like saving up money. And so instead of it just going to the debt again, like $2000 or again, depending on how the income varied, it would go into savings or towards yeah getting a car.

19:51 Emily: I also skated through graduate school with a thousand dollars in a designated emergency fund savings account. Because I mean the way that you described it was also sort of similar for my husband, me, like we were renters, we only had one car, not a whole lot of financial responsibilities at that time of life. Now I did have other savings in other, like I’m really big into targeted savings accounts. I had other cash in other places that were like designated for car repairs or like other purposes. So, it wasn’t like that was our only cash on hand, but I like what you said, because you know, you had the thousand dollars in savings, but every month, if something came up, you had a thousand, $2,000, you could devote to that new thing that popped up because you were so, you were cash flowing so much debt, you know, above the minimum payments every single month. So I definitely, I don’t know how much I’d recommend it, but I definitely see how you could, you know, get by with that. Were there any other like strategies or mindsets or anything that you wanted to share from, you know, that time in graduate school?

Intentionality

20:49 Elise: Yeah. I think honestly the big thing is just kind of what we’ve been talking about. Just like the intentionality. Like, I don’t know, even, I feel like just kind of when you’re choosing a lifestyle. Again, that’s another thing that I think for us going straight from like college to grad school and everything we didn’t do a lot of like the lifestyle creep. And I will say a lot of that maybe I should probably should credit as well to like my husband, because as I said, he’s way more like frugal than I am, but it is really nice, I will say. And again, this is kind of similar thinking to like grad school, it’s like once you’re in a process, it kind of becomes the norm, you know, and you don’t even think about it. So even for both us, like when people are like, “Oh man, you guys don’t,” you know, there would be times where people would say like, “You don’t have two cars?” And it’s like, well, you know, yeah, we have one, but actually we’re like good <laugh>, you know, but it becomes the norm.

21:37 Elise: Or same with when I’m talking about like grad school to people, right? And you know, sometimes you get the whole like, “Wait, you mean you don’t just work like a nine to five in grad school?” And it’s like, no, no, but it’s like, that’s the norm for me. You know what I mean? So again, once you’re in these, I think it’s just the same with personal finance. Like you really do get to set and determine, to some degree, you know, “Hey, this is the lifestyle I’m going to have.” And, I would also say with that, it also becomes harder if you like set a norm that’s maybe a little bit higher that you can’t maintain. Because then you, again, you have to like almost rewire your brain, which is one of the huge benefits, again as I was saying, I think of like being in the PhD program and also the personal finance journey. Because there are just so many similarities that can really, really assist you.

22:24 Emily: I agree.

Commercial

22:27 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at PFforPhDs.community. The Community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, including my recent set of Wealthy PhD Workshops. There is also a discussion forum, monthly live calls with me, and progress journaling for financial goals. Basically, the community exists to help you reach your financial goals, whatever they are. Go to pfforphds.community to find out more. I can’t wait to help propel you to financial success! Now back to the interview.

Supplementing Your Stipend

23:33 Emily: You mentioned earlier that you were tutoring. Like what was your, how did you supplement your stipend? I guess I’ll put it that way, during grad school.

23:41 Elise: Yeah, no, that’s awesome. Yes. So I will say, yeah, so for us, again, as we were kind of on like our debt repayment journey. You know, there kind of starts as you’re like going, going, going, it’s like, “Man, like what, are there any other things I can do to like speed up the process?” Again, similar with like grad school, right? Sometimes you might have weeks where it’s like, “Man, I actually, yeah, I’m going to put in more time. Or okay, I’m going to not do this because I want to, you know, I’m so close. I just man, just got to push through.” And so that was kind of how that started. And then I was looking for different like side businesses or side hustles and things to do. And during the pandemic, actually we did a little bit of like DoorDash, you know, just because you’re like in your car and just dropping off.

24:22 Elise: I mean, it was great, you know. You just pick up the food, drop off the food, and then like wave to the person from your car or whatnot. So super safe and everything. And so doing that, it was kind of like, “Oh this is cool. Like we can supplement income, you know, doing this.” And then also, as I said, our incomes have always been very irregular. And my husband, after working in the retail then went into more of like sales, which was still making around like a 30, 35 or again, depending, because it’s very irregular. But even with that, I think that was helpful. Just even for both of us to see, “Man, like it is kind of cool how like, you know, you can increase income just by like approaching or working towards something from a different angle.”

25:06 Elise: And again, I think just like when you’re working on research projects, right? Sometimes you need like a different angle or a different thought process to kind of come in and be like, “Oh cool. Actually I could approach this problem, look to solve this problem from this angle instead of just this way.” And then with that, so then it was like, man, I’m doing all this stuff with organic chemistry. And so, what would be a good like side hustle I could do that’s more related to organic chemistry? Because obviously DoorDash is not really related to organic chemistry at all. And I had always tutored like a little bit, but it was more so like I would help out like you know, like tutor some like high schoolers at like church or whatnot. Or there’d be someone who would recommend like, “Hey, can you help this student?” I’d be like, “Yeah, sure.” But I use a platform called Wyzant.

Wyzant Tutoring Income

25:50 Elise: And so I started doing that last year actually. And it was awesome. It was I think really, really cool just because I loved it, because I loved being able to teach. I love being able to talk and like communicate with students and explain concepts. And it was great too, because it’s like an online platform, and I feel like you know, obviously everyone has different like opinions and stuff about online learning, but I think a lot of people have really gotten used to it as well. And so it’s also really cool. Because this platform’s just great. And the students like they’re great, you know, it’s just awesome. Being able to like teach and communicate again that one-on-one. Yeah, so it’s just been really, really awesome and it’s been great too. Because then I get to do like organic chemistry on the side, which is also what I’m doing in lab. So I think that’s been really awesome.

26:35 Emily: Another tie-in with what I teach in many different venues, which is if you can somehow employ the specialty that you’re developing in graduate school in some other arena, you’re probably going to get paid like at a better rate than, well, one staying inside academia, like, you know, maybe tutoring at your university, and also, or just trying something totally different that doesn’t use that skillset, like you were saying with DoorDash.

27:00 Elise: A hundred percent.

27:00 Emily: Can I ask what your like pay rate or how much you’re earning like monthly is from Wyzant?

27:05 Elise: Yes. Yes. So in general, which, I will say I started it last year in June, so it wasn’t actually a huge part honestly, even of like our like debt-free journey per se. But yeah, I make on average around like a thousand to 1200 a month from it. And then I charge with it like $50 an hour for the tutoring. And usually it’s like at the college level. And then there’s a couple of students in high school that I tutor as well. But yeah, it’s awesome because again and just like what you were saying, and even like some of like the articles and things that you have posted as well, right? It’s also nice because, to some degree, right? Especially like you’re becoming like an expert, you know, in a field.

27:53 Elise: And so, it’s very, very helpful for me honestly just continuing to man, make sure I’m really communicating well. And then also it is great when, you know, they can both kind of coincide. Because like I do, you know, organic chemistry at work and I can come home in the evenings, you know, for like a couple hours or so, or during the weekends for a couple hours. And yeah, it’s really, really nice. And then, I will say, it does slow down a little bit like in January and then December as well. Just because, you know, not as many students are taking classes and stuff during those times, but yeah. So far it’s been really, really great. And I’ve really been yeah, enjoying just the one-on-one tutoring and mentoring with students.

Current Financial Situation

28:35 Emily: Yeah. That’s a great pay rate. That’s a great addition to your budget. I mean, you know, you’re on the order of magnitude of like a grad student paycheck. I mean, you’re not quite there, but it’s the same, you know, you’re in the neighborhood. So, that’s awesome. Give us an update then on how, like what your finances are like right now. You know, we went over at the beginning of graduate school, you know, the various debts that you had. What do your finances look like now? We’re recording this in January, 2022.

29:00 Elise: Yes. Yes. So now yeah, we’re a hundred percent debt-free. So got rid of all of that, the $85,500. And as I said, that was a process, right? The 47 months paying that off. But again, like grad school’s a process too. So, you know, I think that’s one of the cool things about processes is like all the stuff you can learn about yourself in them. And then right now we’re working on increasing just like our emergency fund. So, as we were talking about like a thousand, you know, it’s fine for like, in my opinion, it’s fine for a starter emergency fund. Really, I would not recommend, you know, spending the rest of your life with a $1,000 emergency fund and especially you know, we have a baby coming, so that’s really, that of course changes things where it’s like, yeah, a thousand dollars isn’t, you know, we don’t want to have that for like 20 years.

29:47 Elise: But yeah, so we’re looking to increase that right now to, which more would be like four to six months for us, which is like $10,000, just to have that nice and set up. And that should be set up in like early March or whatnot is when we should have that. And then right now, after that, we’re also looking to, we’re going to start investing, so we’re going to max out two Roth IRAs. So just kind of again, which that’s a way longer process, you know, but just getting that money saved up for retirement. And I think for that, we’ll probably I’ll be using Fidelity and then my husband as well, who set his up either with Fidelity or maybe Vanguard, because he works for Geico now. And so with that, I think they have Vanguard.

30:39 Elise: So yeah, we’ll see with that. And then, I mean I suppose we’re not a hundred percent sure what like the next five years will look like for us. And so we’re also in the process of we’ll look to get something, once our daughter’s born, we’ll look to get something set up for her for college or just future educational goals. We’re thinking of it’ll probably just be we’ll just set up a 529. And New York has some nice like tax benefits when you set up a 529. And then yeah, and then it will be like saving up for a house. Right now, our goal is to buy a house in cash, because again, with the current lifestyle that we have, as I said, it’s less than $2,000, but we are very content with that. Obviously, when our daughter’s born, you know, that will increase. That will increase a little bit.

31:28 Elise: But yeah, we think we can probably cash flow, because again, my husband’s income continues to go up and my income, hopefully, you know, will also go up beyond the graduate stipend cash flow, hopefully around like 30,000 so a year and we’re hoping to then buy, I don’t know, maybe like a condo or townhouse or single family. Again, depending what, you know, where we go for like maybe $120,000 or something like that. So we’ll see. Yeah, but that right now is kind of the plan with everything. And right now the biggest focus is just yeah, getting that savings increase from a thousand to the, or like I think right now it’s like $1,800 to $10,000. And then yeah, getting those Roth IRAs maxed out.

32:13 Emily: I really like it actually when, this point that you’ve volunteered to do this interview, at this point of we just became debt-free, and now we are ready to start these next steps. I love it that we’re talking at this point. Because whenever you have someone like you, who’s gone through this very intense, very intentional debt repayment journey, you get all of your, you know, systems and processes and mindsets, everything’s set up. So your cash flowing above your, you know, your expenses a thousand, $2,000, $3,000 a month. And it’s all been going towards this debt. And now you get to the point where you get to switch it, and it’s like this massive, you know, amount of cash flow. Like I think of it as like a huge like fire hose like you now get to direct to other goals. And I love that you have this like order. Okay, first is the emergency fund, Roth IRAs, 529, you know, you have your priorities set out. So, absolutely love that. It’s very apparent, you know, these last years have been preparing you for this state. I also want to add that I went through, again, the exact same process when we were pregnant with our first child, that I was looking at that thousand dollars emergency fund going, “Not going to cut it anymore.”

Preparing for Baby’s Arrival

33:15 Emily: And I think our goal was also something like 10 or $15,000 as that next thing to do, like before the baby comes. Which turned out to be very useful. I actually wanted to talk a little bit more about that. Are there any other, you know, you just mentioned sort of long-term financial plans and of course getting the emergency fund together, but are there any other specific financial preparations that you’ve been making or thinking through for your baby’s arrival? Like, I don’t know, like health insurance or childcare like these other, maybe leave? What other sort of major financial things are you working through right now?

33:46 Elise: Yes, yes. No, that’s a great question. So, I will say in regards to like preparing for our daughter and everything, the big thing was I got to have a fun time. Well actually, yeah, both my husband Kyle and I, but kind of doing stuff where, yeah, like reading those actual like health insurance statements. Not going to lie, when I first got to UB, they gave me the handbook and I was like, “Okay, cool, thank you.” And then did not even glance at it. And so, but just, you know, making sure that we know like, Hey, this is like our deductible, this is the amount we will be expected to pay. And it’s actually kind of cool. I will say I have been very blessed, like the lab I’m in, there’s actually like three other students who have also had kids as well.

34:27 Elise: And so for them, it’s also nice because you know, we all technically have the same insurance, and so yeah. And UB I will say does have pretty good health insurance as well. So it’s nice. So we’re of course planning for that where it’s like, okay, cool. We should you know, that’ll cost us like $200 and then, you know, you have all the visits as well, which we again, since we do the zero-base budgeting, we just budget for like, okay, this month, you know, it’s going to be this much for these visits. And then everything else in regards to just like kind of preparing for like stuff and everything, that has more so come from just kind of like asking other people in our lives and also just like other grad students, “Hey, like how much, you know, do you find yourself like spending for diapers?”

35:13 Elise: And I will say also there is a lot of information that is online as well. So it’s kind of like using a mix of like the online plus, like what, you know, our friends are actually just telling us that, “Hey, this is how much I spend for this.” Which has also been super, super helpful. Or like, “Hey, you need this, you know, this is the cost of this.” And just like adding all of that up, like, you know, car seat yeah, cribs, stuff like that. So that’s good. I would say that’s been kind of how we’ve been primarily preparing financially for that. In regards to leave, I’ll have three months of maternity leave that I’ll be taking. And then I have, yeah, kind of like a fellowship that goes through that. And then, so that’s kind of something like, again, me and my boss talked about like maybe a month and a half ago or so, just about, “Hey, this is kind of like the expectations there.”

36:04 Emily: So that’s paid, just to be clear?

36:06 Elise: Oh yes, yes, yes, yes, yes.

36:08 Emily: Fantastic!

36:09 Elise: Yes. Yes. So I would say that is, that is a nice thing again about like you know, every state’s different, but like New York does have that paid family leave. And then my husband as well is going to be taking, because as I said, yeah, he’s working for Geico now. So they do paternity family leave or like paid family leave as well. For him, his is a month though, is what, yeah, right now we’re planning on for him. And then, yeah, so that’s kind of, I would say those are the big, like financial preparations we’re doing. But again it is something that, especially, I don’t know when we first like kind of found out, I just like Googled like how to prepare for a baby. And it’s amazing how like just many articles and all this stuff that comes up, and it’s all so different again, based on the insurances, which I’m sure even, you know, right? Like there’s, so there’s just so many different variables. So I think it’s very helpful, at least for us, it’s been very helpful, like talking with other people, talking with peers, talking people from church, talking with people from our places of employment. Yeah. And just like to get that information.

37:08 Emily: I agree. I think those, especially your labmates. Same insurance, same advisor.

37:12 Elise: Exactly. Yeah.

Childcare Decision-Making

37:13 Emily: Been through it recently. Like that’s going to be the absolute best resource. Yeah, definitely. And I asked about childcare earlier, so do you have a plan yet for after your leave ends what’s going to go on?

37:25 Elise: Yes. Okay. So I will say so for that plan, we will. Yeah. We’ll kind of see, because right now, again I don’t think, so we don’t have like anything against daycare or anything like that. Like I think, and UB’s daycare actually is supposed to be like fantastic again, like two of my coworkers use it and they’ve been very, very pleased. For us though right now, so since with every, and again, we don’t know everything will happen with the pandemic, but so my husband, technically he does work from home right now. And then for me, I’m man, I’m just not a hundred percent sure if I would just, you know, maybe just have a weird schedule as opposed to like putting our daughter in daycare because one of the things my boss, obviously he wants us to make sure like we’re getting our research and everything done, but with organic chemistry, there’s a lot of stuff where like you set up a reaction for like six hours or you set up a reaction for four hours, you know, and then you’re like doing some writing stuff and like research stuff.

38:22 Elise: And so for me, yeah, I’m not, I think right now the plan is kind of where it would just be I would just kind of have a schedule set up of like, I’m just going to be in lab at weird hours, like from eight to noon and then maybe come back from like eight to 10 or you know, just weird scattered hours. But we’ll see, that could also, you know, we could also start that and then a week in if I’m like, “This is terrible.” And it’s like, okay, well she’s going to go to daycare. So, it’ll kind of depend too, I think that’s another thing with even talking with people in regards to pregnancy, it affects every woman differently. And so yeah, as much as I love to be planner, sadly, I can’t plan out exactly, “This is how I’m going to feel a hundred percent.” So yeah. But right now the plan is just, I would just have kind of weird hours and just stagger things. And again with that, at least right now, it doesn’t sound all that bad because again, it’ll take a lot of intentionality, you know, I would have to like schedule things out, but yeah, I think it would be fine, but we’ll see. We will see what happens.

39:21 Emily: I will recommend for you in case you haven’t listened to it or any other interested listeners, the interview I did back in season one with Dr. Heather. Because she talked about when she had her first child at the end of graduate school, similar timing to you, how she and her husband set up a overlapping “we’re providing our own childcare” schedule. I think he was teaching actually, he had like a visiting professorship, something like that. So like you said, there was some work that could be done from home. There was some work that had to be in person for both of them, but they just kind of worked out the schedule so that.

39:51 Elise: I like that. Yeah.

39:52 Emily: You know, they could each be with their child. I will say that since then, I believe all their children are in all the daycare and all the preschool, like as much as possible after they got out of this grad student phase. But that’s what they did for kind of the finishing up of grad school, like period. Yeah, so that’s a really, really interesting interview if that’s kind of your like philosophy and the approach that you want to take. And it’s actually a little bit similar to what my husband and I wanted to do as well.

Best Financial Advice for Another Early-Career PhD

40:14 Emily: So, awesome! Well, Elise, this has been such a delight to chat with you. Congratulations on becoming debt-free! Congratulations on the pregnancy! I’m so excited to kind of see where, you know, where your new financial next phase of your journey takes you. Because like I said, you, you have all these goals and you’re really ready, right, to tackle them. So it’s awesome. I would like to ask you the question that I end all my interviews with, which is, what is your best financial advice for another early-career PhD? And that could be something that we’ve touched on during the interview or it can be something completely different.

40:45 Elise: Yes, yes. So I would say, yeah, the biggest one I always recommend is just to do a zero-based budget. Again, you can also budget, right, where you just kind of look at the end of the month. But I just think, especially even honestly more so when you’re working on like a stipend, just get into the habit. Because again, you’re already learning how to be intentional anyway. So just go ahead and get into the habit of with finances as well, “Hey, this is how much I’m going to spend” you know, in each of these categories. Or, you know, whatever stuff you have set up, or this is much I want to save. You know, in our case it was like paying off debt and then building up savings and investing stuff. But again, whatever your financial goals are like, it’s just so much, I feel like, yeah, just so much easier and so much more helpful when you just zero-base budget it. And it also just like again with grad school, as you like are disciplined and are intentional, your confidence grows, you know?

41:42 Elise: And so I think that’s another thing too, where it’s awesome to, you know, be confident as you’re like doing experiments and stuff, but also confident in the way you’re handling your money. And when you’re able to create a plan and then, you know, like it doesn’t have to be perfect, but then able to like achieve some of the things within that plan. It’s just awesome. Yeah. To then be able to grow that confidence. So for sure.

42:05 Emily: Great advice. Well, thank you so much, Elise, for joining me for this interview!

42:09 Elise: Yes. Thank you, Emily. Thank you so much for having me on.

Outtro

42:17 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? I have 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/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. 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.

How to Advocate for Financial Policy Change on Your Campus

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In this episode, Emily interviews Dr. Tyler Hallmark, a recent PhD in Higher Education and Student Affairs and a low-income, first-generation college student. Emily and Tyler and discuss the why, what, and how of advocating for improving university policies that relate to finances and benefits. They cover the timing of fellowship disbursements and assistantship paychecks vs. fee due dates, emergency aid funds, reimbursements, prohibitions on outside work, and more. If you want to raise an issue that they skipped, please leave a comment in the show notes, email them, or start a conversation on social media.

Links Mentioned in this Episode

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Teaser

00:00 Tyler: You don’t have to wait for a union to form. You could be the one that is forming it. I did this often informally, you know, I never thought to call us a union, but I would just share my experiences vulnerably with my peers. And they would share theirs with me. And we would come together and we would go approach the chair of our department or, you know, someone that does have power in our school and say, Hey, we’re having this issue. There are multiple of us. Is there anything we could do?

Introduction

00:32 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 7, and today my guest is Dr. Tyler Hallmark, a recent PhD in Higher Education and Student Affairs and a low-income, first-generation college student. Tyler and I discuss the why, what, and how of advocating for improving university policies that relate to finances and benefits. We cover the timing of fellowship disbursements and assistantship paychecks vs. fee due dates, emergency aid funds, reimbursements, prohibitions on outside work, and more. Tyler is quite knowledgeable and experienced in advocacy and shares his story with us vulnerably. I’m confident that our discussion of policies and hearing about Tyler’s approach to advocacy at the end will help enhance your own advocacy efforts on your campus. If you want to raise an issue that we skipped, please leave a comment in the show notes, email us, or start a conversation on social media.

01:42 Emily: April 18th is fast approaching, so in case you haven’t started working on your tax return yet, I wanted to point you to my #1 most popular free downloadable. It’s my tax cheat sheet for graduate students who are U.S. citizens, permanent residents, and residents for tax purposes. You can find it at PFforPhDs.com/student-tax-sheet/. The cheat sheet briefly explains my framework for the categories of higher education income, the three higher education tax benefits that might be available to you, and why students who were age 23 or younger at the end of 2021 need to be extra cautious. Better yet, once you sign up for my mailing list to download the cheat sheet, you’ll receive a free email course explaining in-depth all these concepts and more. Again, you can download the cheat sheet from PFforPhDs.com/student-tax-sheet/. Please share that link with your peers as well! Without further ado, here’s my interview with Dr. Tyler Hallmark.

Will You Please Introduce Yourself Further?

02:59 Emily: I am delighted to have joining me on the podcast today, Dr. Tyler Hallmark. I first met Tyler actually on an episode of Dear Grad Student. We were both featured by Alana on episode 27. And we talked about kind of, you know, high-level issues related to being a graduate student, advocacy topics. And I just really enjoyed that conversation so much, I wanted to invite Tyler on this podcast to dive even more deeply into that topic. So, Tyler, it’s absolutely a delight to speak with you again. And would you please introduce yourself to the audience?

03:27 Tyler: Yeah, thanks for having me. My name is Tyler Hallmark and my pronouns are he/him. I am presently working as a program associate in the higher education program at the Alfred P. Sloan Foundation here in New York City. Before I came here, I was actually finishing my PhD at the Ohio State University in higher education and student affairs. And so, a lot of my background while I was there was focusing on low-income students, first-generation students, students of color, and their journey through higher education and how we can really make the systems more equitable and more supportive for students like myself that has gone through this as someone who is from a low-income household, who was the first in their family to go to college and who is also Cherokee. And so, you know, I’ve written a lot about my experiences. I’ve written for Diverse, I’ve written for the Chronicle of Higher Education, these different outlets, really, sharing some of the backgrounds, some the challenges I faced, and trying to really shift policy, shift practices, on our college campuses for students like myself.

The Importance of Advocacy in Higher Ed

04:36 Emily: Yeah. And we’re partially basing this interview off an article that Tyler sent me in advance, so we’ll link that from the show notes if you want to get even more of his perspective on these issues. So, you know, beyond just what you explained about your own background and about your work with first-gen and low-income students, students of color, and so forth. Are there any other reasons why you think it’s important to advocate for yourself or other graduate students in higher ed?

05:00 Tyler: Well, yeah, absolutely. I think it’s always important as I was going through, I think, you know, students from backgrounds like myself already have so many barriers to face going to college, having to, you know, learn the whole admissions process, having to learn how to, you know, really make it, how to learn study habits. I didn’t really know have good study habits until I just kind of, you know, picked them up as I was going through college. And so, you know, with all those barriers already in mind, there are so many barriers that are just unnecessary that we’re facing as we’re going through college and, you know, it’s really making a big impact on whether we even complete the degrees we set out to and reach the goals we have for ourselves. So, I always try to share my own experiences and be vulnerable with people, not only just to hopefully shift the policy or practice to make it easier on my college journey, but because I know there are so many students coming after me, and I know if I don’t speak up now, then no one’s going to speak up for me. So, that’s what ultimately got me into doing this kind of work.

06:00 Emily: And I think I’ll add to that as well, like of course it’s a necessary and beautiful goal to make higher education more accessible to more people. Everyone benefits from that. But I was also thinking about this idea of like, we do it this way because this is the way it’s always been done. Or like, I had this experience in my PhD program, so that means that you’re going to have to put up with this too, and how like damaging that is and how unnecessary it is. And so, you know, as we have gone through the, you know, decades of graduate students, like we’ve learned some things that maybe don’t need to be the way they are. And I think part of the purpose of me doing this episode is to try to, you know, with your perspective as well, share what policies maybe are being tried out at some places that could be tried at other places.

Earlier Distribution of Financial Aid

06:43 Emily: Like maybe there aren’t as many barriers to changing these policies, as you know, you might assume. So that’s kind of the impetus behind the conversation. So, let’s talk specifically about what are some of these policies that you think, that I think could be changed, should be changed, that we see kind of in many places across higher education. So, I have a list in front of me and we’re just going to bang, bang, bang, go through this list. Again, partially based on this article that you wrote. So, first of all, one of the things we talked about on the Dear Grad Student podcast was earlier distribution of financial aid. Can you tell me more about that issue and how it can change?

07:17 Tyler: Yeah, absolutely. So, as you’ll see in the article that you mentioned, I talk about my experience. As a grad student, I would go into the financial aid office, and one semester, I was going to miss my rent. I didn’t have any money, and they were not going to release the funds until two weeks after classes had started, well after my rent was due. And I went into a financial aid counselor and I was like, Hey, is there any way I can get my financial aid easier? My scholarship had already sent the money to my institution, but my institution just wasn’t releasing it to my bank account until after classes started. And the financial aid advisor basically just said, well, I don’t know why you don’t have money saved up. I don’t know why you are in this predicament. You should just learn to manage your money better.

08:03 Tyler: And I was really taken aback because I didn’t have any money to manage. So you’re just really expecting me to already have the savings account and all this kind of stuff. And I didn’t have any of that. And so, what I’ve been pushing for is for institutions to really release the financial aid before the semester starts. You know, I can’t afford to wait to move until, you know, after classes start. So, you know, federal guidelines say you can release it 10 to 14 days before classes start, even loans, federal loans and that kind of stuff. And so, I’m really pushing for an earlier financial aid distribution on that regard, or in the cases that institutions can’t move the whole distribution up, at least allowing students to take an advance on financial aid. And some institutions, like my first institution I attended, actually let me take out up to $1,500, which was enough to cover me for one month of rent. However, a later institution I attended would only let me have like a $400 advance, which wasn’t nearly enough to make my rent.

09:06 Emily: It’s a little bit rich, right? Coming from this financial aid officer, whoever you’re talking to to be like, “Um, yeah, we’re going to hold your money hostage for like an extra month here. But like it’s really on you. This is your problem.” As you said, the federal guidelines allow that earlier distribution. So like why wouldn’t the universities, as you said, at least release part of it? And specifically maybe for your situation or how this works in general, when you’re talking about financial aid, I think you’re speaking about a scholarship, right? So like awarded income that, you know, had been sent to the university for you, and it was just basically giving you access to that money earlier.

Detrimental Effects of Lack of Early Access to Your Own Funding

09:40 Tyler: And a lot of this falls back to also institutions doing enrollment checks. So, you know, it’s mandated that professors and faculty report attendance to their classes. And so the financial aid office will often wait until they get those attendance records before they let students have any money to make sure they’re showing up. But I think that’s a detriment because especially, I’m in grad school. I know I often showed up to class and I didn’t have my books on the first day of class. And I had a professor saying, you’re a PhD student. How do you not have your books already? You should have learned this, you know, years ago. And I’d say, well, I’m a PhD student, but I’m still poor. I still can’t afford, you know, to get my books before classes start, unless they give me my financial aid.

10:26 Emily: Yeah. I think this is so relatable to anybody who’s been through that transition to graduate school. I mean, at least they can imagine like the difficulties in that. Like, I think back to my own move to graduate school, and like, oh wow. Now I realize how fortunate that was. Because for example, I didn’t have to move very far. Like I didn’t have to buy a plane ticket. I already had a car. So like, it was just like, okay, I’m going to pack up my possessions and go. And actually the apartment that I got into did like a student, like thing where you didn’t have to put down a deposit. So it was like all kind of set up to be like, okay. And I did have little bit of savings from the previous job that I had. So it was like, looking back on that it’s like, it went okay for me, but I can so easily see how it could be really, really difficult if you don’t have some of the things that I just mentioned already in place or like more challenges there.

11:10 Emily: Another sort of way to get at this problem is for PhD programs, in particular, to provide something like an extra bit of money, a moving bonus, a top-up fellowship, something that is specifically sort of earmarked to help students move to that institution. Because as we know, probably most great majority of PhD students are moving some distance to get to their new programs. Now, I’ve seen, like I’ve had heard reports of people telling me that their offers included this kind of thing, $500, a thousand dollars. We talked about this, for example, in the episode with George Walters-Marrah, which I’ll link to in the show notes. It was a $500 moving bonus that helped him decide between his number one and number two choice of PhD programs. Like that was kind of the final clincher was getting that offer. But I understand that you have talked about this with many people before as well, and you’ve been hearing some different things.

12:02 Tyler: Yeah. So first off, I will say I’m a big advocate for applying moving bonuses for students, especially those grad students trying to move to college that often have to go across state lines to find a graduate program that matches their needs. They have to leave home. So, a big advocate for that. And I’ve been talking about that a lot, you know, you’ll see me post about it on Twitter and those kinds of things and my own experiences showing up to college and going $5,000 in debt because I had to move across the country. But then I also had a lot of responses from, you know, deans and administration that read my work and they’ll say, Hey, we looked into doing this moving bonus thing, but it’s just not feasible. Like it’s not possible for us, we’re facing different, you know, barriers to policy that just won’t let us distribute those kinds of bonuses to students. And so I’m not, you know, super familiar with what policies are in place and if those are federal or state or how that’s working there. But I do know some institutions run into trouble when they do try to look into that.

13:02 Emily: Yeah. So this is a little bit of an open question. And maybe it does vary by state. Maybe it varies, you know, public versus private institutions. But I am glad that people, at least administrators, are at least looking into it, at least making the effort. But in places where it is possible, it is a great, great, great, incentive to help with that, as we were just talking about, that early financial crunch that everyone’s going through just to get to school. So thanks for sharing that. I hope that they keep kind of chipping away at whatever these barriers are that they’re seeing.

Benefits of Pro-Rating

13:31 Emily: Okay, another issue that I’ve had people actually on the podcast mention to me before is about the student fees that often have to be paid like really soon before the start of the semester, that can happen, or very soon into the semester. And I know for me, for example, one of the fees that I paid, it wasn’t even necessarily a required one, but I mentioned I have a car, so I paid like a parking permit fee once per year. So I paid that, you know, in one lump sum, it actually changed like how I even budget to like, be able to handle that kind of once per year expense. But I heard from some other people at other institutions that their fees and things like parking permits were prorated like per paycheck. And I thought that was such a smart idea to like spread out that payment throughout the year. Is this an issue you’ve thought about all?

14:16 Tyler: You know, I really like the idea of pro-rating. I think you run into trouble with that when you look at scholarships because you have to pay in a lump sum then. You know, when I was on my PhD, I relied on scholarships and fellowships less so than an actual job and paycheck. So I didn’t face that directly. I will say some of the things I faced, and I would often ask for, and a lot of students don’t know to even go ask for this, was these places that often require fees upfront, you can often ask for them to push that fee back. So for instance, when I would enroll for my fall courses, they would say, well, a certain amount of fees are due in May before, you know, three months away. And I was able to always petition for that and they would say, okay, we can wait until your scholarship comes in in August or September and pay it then. And so just institutions could make that more clear that students can actually ask for that. And on the student side, you should just know that that’s often an option. I’ve done that at multiple institutions so far in that regard.

15:20 Emily: Yeah. I think the basic point here is just like, let’s time the payment of fees along with when the student actually has money to pay. So if it is a monthly or whatever, kind of paycheck, let’s pay the fees with every paycheck instead of, you know, upfront all at once. Or if you’re receiving these like larger scholarship or fellowship distributions, yeah, as you just said, like let’s coincide the date of the fee needing to be paid with that disbursement because that’s when the money is available. So logical. Love it. Thank you so much for, you know, pointing out that you’ve been successful in having that exception made for you.

Emergency Aid Funds

15:52 Emily: Let’s talk about emergency aid funds now, and I’ve actually heard this in two forms, both grants and loans. I don’t know which one you have been talking about the most. But there are sometimes emergency funds available to graduate students. So, can you tell me a little bit more about this issue?

16:08 Tyler: Yeah. So, we see a lot of this coming up, especially over the pandemic. I see a lot of federal funding that is going to institutions during this time. Institutions are then turning that into an emergency aid fund. Of course, I’ve seen a wide variety of funds. Like you mentioned, there’s a loan and the actual grant money that you can just keep and not have to pay back. But also there are some that require different amounts of paperwork in different red tape to even receive. So, you know, some will actually require, and they won’t process it for a week, whereas some will process it within two days in a senior student account and those kinds of things. So, the thing I mainly advocate for is to even have these funds set up, but also have them as easy as possible for students to access.

16:55 Tyler: And the final note I will say is that too often institutions gear these towards undergraduates only. And they don’t even write that. I had one institution where I was struggling and I was going to apply for this emergency grant funding. I actually had a financial aid counselor tell me to apply for it. And after I applied, they emailed me back and said, well, you’re a graduate student. This is for undergraduates only. And even the financial aid counselor wasn’t aware that it was for graduate students only. So, making that clear around those and really targeting it towards all students on your campus and not only certain populations.

17:28 Emily: Definitely. I attended a conference in 2019, the Higher Education Financial Wellness Association’s annual conference. And I remember these like emergency aid, you know, grant and loans programs being a big topic of conversation at that time. More and more universities were implementing them. And so I think, you know, the suggestion here is just yes, more please, and also to more populations of students, please. And Hey, also postdocs. Don’t want to leave out the postdocs here. They have financial stress as well.

17:54 Tyler: Totally. Especially when you think about that it’s often these graduate students and postdocs that are more likely to have families. So they’re more likely to run into these kinds of emergency situations in different regards.

Food Pantries and Subsidized Housing

18:06 Emily: Similarly, another topic of conversation that I heard at that conference was about food pantries and food banks being set up at universities and how they were implementing those programs. Can you tell me about your experience and advocacy around these?

18:19 Tyler: Yeah, certainly. Again, this goes back to having a wide variety of what these food banks look like. The one thing I really advocate for these is really having them in a place where students hang out. You know, when I was at the University of Pennsylvania, we actually had this great intercultural center where students would just come and study, hang out with their friends, have movie nights. And there was a food pantry that was just open. There wasn’t anyone that you had to sign in and get the food. You could just walk in and take the food as you needed it. And you know, a lot of students that are often facing this food insecurity, um, are often, you know, afraid of the shame that comes with it. Afraid of someone seeing that they need help. And so having these, just being open and easy to access for students, I think that’s the best way to really go about setting up a food pantry instead of hiding it, you know, in a basement on campus or somewhere that students don’t even know where to look.

19:09 Emily: Yeah. Or putting up any like red tape or anything like that. I mean, of course they want to know how much it’s being used. But you could just do an inventory to figure that out. Great, great. Another issue that I wanted to raise is something that I’ve talked about in many of my other podcast episodes, which is offering subsidized housing in high cost-of-living areas. This happens sometimes, although we’ve had sort of questions about it on the podcast, whether it’s all it’s cracked up to be. And I’ll link to some of those previous episodes in the show notes, but then also subsidized childcare. And this is something that’s come up in two of my episodes, specifically with grad student parents. Are there any comments that you’d like to make around these issues of being able to subsidize, you know, these big, big expenses for students who need it the most?

19:56 Tyler: Yeah. The one thing I’ll add here is just when we’re thinking about housing on campuses, I know one of my grad schools, the reason I even chose it was because they actually offered a form of graduate student living that was free. I mean, I had to work for the university in their housing department, but they offered me housing. And that just made it all the more possible for me to live it in an expensive city. And so, I think even thinking about jobs and where we could provide, you know, if students do want to take on that extra job, mine was like a 15 to 20-hour job a week and I was able to get free housing for it. So it paid off for me. And that really helped me afford my master’s degree.

20:36 Emily: Absolutely. That’s something that we’ve talked about, really featured, that kind of strategy of serving as a resident advisor in two previous episodes, one with Adrian Gallo and one with Dr. Erika Moore Taylor. So check out those episodes in the show notes if you want to learn more about that. And it is a job, I know, you know because you did it, but it’s absolutely a job. It’s absolutely a part-time job. So we can’t trivialize that, but it can be very, very valuable, you know, to your bottom line, as a graduate student. I guess the other point that I want to make about these, you know, subsidized, um, resources is that they’re always too scarce. And so I think when you’re making a decision about where to attend graduate school and having, you know, the possibility of being in subsidized housing or the possibility of obtaining subsidized childcare is something that you need to have to make the finances work in that particular place.

21:21 Emily: You, you have to be so in-depth about what is the process of getting into this? How long can I have access to it for? So, for example, just recently, it was season 11 episode one, published an interview with Maya Gosztyla who was living in subsidized graduate housing at UCSD. And because she had started it, I think a couple of years ago, she had this like locked-in rent, but rent was being increased for like new people coming onto leases massively. It was like a, I don’t know, a 60% increase or something huge like that. And so, you know, these things can happen. So like you just have to really kind of understand the way the winds are blowing on campuses in terms of how much is being put behind these resources. And if you need it, you need to make sure you’re going to have access to it.

22:07 Emily: I know that childcare is always, always too scarce. I do recommend the episode I did with Lauri Lutes, if you already have a child or are planning on having a child going into graduate school. She was very intentional about choosing which graduate program would be the most supportive to her in her childcare needs and ended up at Oregon State University in terms of what she had to choose among. And they did things like for example, have free childcare, like sort of like afterschool care on campus, up to like four hours a day, completely free for students. So having it on campus and having it as like that part-time flexible option in addition to full-time, you know, daycare or something, that was vital for her, like making her finances in graduate school work.

Commercial

22:53 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients.

23:57 Emily: There are two remaining live Q&A calls for the annual tax return workshop, How to Complete Your Grad Student Tax Return (and Understand It, Too!), which are scheduled for Monday, April 4th and Sunday, April 10th. For fellowship and training grant recipients, please be aware that the deadline to make your quarter 1 2022 payment, if applicable, is April 18th, the same day as your 2021 tax return is due. The 2022 quarter one live Q&A call for my estimated tax workshop, Quarterly Estimated Tax for Fellowship Recipients, is scheduled for Thursday, April 14th. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

Reimbursement Timelines

24:47 Emily: Another issue you brought up in your article was something that every grad student complains about, which is reimbursements after you, you know, outlay funds for conferences or for equipment or travel or other things. Talk to me about that reimbursement timeline issue.

25:02 Tyler: Yeah, definitely. So I think, you know, there’s this dangerous assumption we have probably in society broadly, but especially I’ve seen it in higher education is that students have the money to pay for things up front and rely on a reimbursement that can come sometimes months later, months down the line. And I think that’s really particularly concerning when we think about this professional development and how important professional development is. And even though we’re setting aside funds for students, we often expect them to pay for the conference, the hotel, the travel, everything up front, and then rely on this reimbursement that can often have a lot of red tape that, you know, students can often not be sure if they’re even going to get it back. Or even when they apply for reimbursement funds, they might not hear back until a week before the conference when flights and hotels are already super expensive. So having reimbursement not only, perhaps think about giving that money upfront, having to pay an advanced setup, but also thinking about when we approve students for it and how fast we can approve for that, that they’re going to certainly get these kinds of funds going forward. I think those are some things to really think about here.

26:14 Emily: Yeah. Pay in advance would be ideal. And if not, get that reimbursement back to them as quickly as possible. Even before the event occurs, like you said, the timing of buying flights and so forth, like you can buy these things months in advance. The conference registration fees also can be really high paid months in advance. So like, can we just reimburse them right when they have the expense, you know, one, two weeks later or do we actually really have to wait until after the event occurs? Hopefully not. And like you said, you know, there is the assumption in these systems that students have access to cash, which as we know is usually not the case. And most graduate students, I would say, put these kinds of expenses on credit cards. And then even if the reimbursement does come through, we all hope it does, then they have those months of interest that they’ve paid on, you know, hundreds over a thousand dollars worth of these kinds of expenses. And so that’s like a lot of financial damage that happens in response to this, you know, kind of system. So totally agree with you. I know everyone’s on board with that topic, right? How do we improve this reimbursement system or eliminate it?

27:13 Tyler: Absolutely. One thing I’ll also add there is, we’re assuming all students have access to credit, but I’ve actually had many students, you know, going through my career that were perhaps international students that had just gotten over here and they didn’t have an American credit line, you know, and that kind of access. So they didn’t even have a credit card to put this money on. They really had to dig into their bank account if they ever wanted to participate in these kinds of things.

Prohibitions on Outside Work as a Grad Student

27:37 Emily: Such a good point. Also my assumption. Access to cash, also assuming access to credit. Great, great point. Thank you. Another issue that I wanted to throw in here is about prohibitions against outside work as a graduate student. And tell me about your experience. I think you at least went to a couple different institutions for graduate school. Did they have any explicit prohibitions against outside work?

27:58 Tyler: Yeah, absolutely. It was actually my first year in my PhD. I received a fellowship, and in that fellowship contract, they explicitly stated that I couldn’t take any jobs. That the whole purpose of the fellowship was to fund me so that I, you know, could focus on my studies. And while I understood that it was well-intentioned, still, I had a lot of time. First year was actually the least busy year of my PhD. So that was the one year I did want to have an extra job and try to pay off some of the debt I had, pay off those moving expenses that we mentioned, and really set myself up so I could focus more on my studies in my second, third, etc. years down the road. But that first year, because I had a fellowship, they actually made me sign a contract that I wouldn’t take any other job, whether that was with the institution or outside of it.

28:47 Emily: And I totally understand your impetus for like wanting to clear up, you know, past debts. And as you said, set yourself up for having a good, you know, subsequent second, third, and fourth years. Did you feel like that fellowship was sufficient had you not had those goals? Like if it were just paying for living expenses? Or was it like already outrageous that they were thinking that was enough?

29:08 Tyler: Actually, the fellowship is like the, at that institution, is like the one thing that pays well. So, it was actually enough for me to live on. It was fine there. But to set myself up to pay these rents before, you know, the semester begins and set myself up for those kinds of money management they expect from me and the financial aid office, it wasn’t enough for that. It was just enough to cover me on a monthly basis.

29:33 Emily: It is, I think at a minimum, a great idea for a fellowship to sufficiently support a graduate student. But as we were just talking about assumptions, the assumption there is that every graduate student has the same financial needs and the same financial responsibilities. You had a different situation maybe than one of your peers and you wanted to have that outside income. My kind of stance on this is, the university should stay out of your time, the business of your time, aside from, you know, what you are devoting to your studies. So if that’s going to be whatever you decide it is, but as long as the student is making sufficient progress towards the degree, I don’t think that university, whatever, anyone in your department, your advisor should have any restrictions on what you do with the rest of your time. After all, we were just talking about people at different life situations, for example, you know, people can be parents or caregivers for other, you know, people. Maybe you have a really time-consuming hobby that you engage with.

30:27 Emily: All of that is fine. Why would someone else not be able to work during their free time as you were just talking about that wasn’t taken up with progressing towards their degree? Let students manage their own time, and if it includes making money, that’s okay. As long as they’re doing what they need to do, you know, for the PhD, kind of my opinion on that. I’m not a fan of these outside work prohibitions, especially when they’re really, really broad, like saying you can’t have any outside source of work or income versus saying something like you can’t have a job where it interferes with the hours you’re expected to be in lab. That kind of thing makes sense. Like they don’t want you being pulled away from your primary responsibilities to head to your W2 job somewhere else. But to say that you can’t have like a freelance, you know, thing on the side, that’s totally up to your own time and discretion. It just does not make logical sense to me.

31:16 Tyler: Absolutely. One thing I’ll add here also is thinking about that just because you’re telling students they can’t get jobs and be compensated for their time, that often can lead to detrimental effects in the way that a faculty member might say, oh, Hey, you have this fellowship, and it won’t let you have any other jobs. So you can do this research for me on the side, right? And it puts these weird power dynamics in place that faculty can take advantage of you. I never had that, but I will say I have seen peers struggle with that, that they’re on this fellowship year until faculty see them as someone they can add to their research team because they have extra hours now, and now they’re not being compensated for that research, but they’re still being expected to put work in. And so, those are some things we should really think about in these prohibitions.

Time to Pay Higher Stipends?

32:05 Emily: Yeah. The general problem of unpaid labor in academia coming down to a fellowship recipient. Absolutely. And the final kind of point that I wanted to bring up is just the very, very simple financial solution of pay higher stipends pay, bigger fellowships, just pay people more. Would you like to add anything on this issue as a general solution? Just give a higher stipend.

32:32 Tyler: Yeah, no, I completely agree with it. I think it’s wild that we have, you know, careers in the real world that will raise your salary annually, or supposedly, to keep up with living wages, but grad students are still getting the same stipend they did 10 years ago. And so, I absolutely agree with increasing it appropriately and really taking those things into account.

32:59 Emily: Yeah, I’m especially thinking about this issue right now in a time of, you know, high inflation and wondering, now we’ve experienced rather low inflation for the last, you know, more than 10 years now. And so having no increase in stipend or a small increase in stipend that may have been manageable. But now programs really need to be proactive about responding to these increases in inflation by offering larger annual cost of living adjustments and increases. And I’m just afraid that it’s going to take some of them like three years of studying the issue before they finally like raise the stipend for goodness sakes. And similarly, I’ve seen this issue too with fees increasing. So like sometimes state universities, they can’t increase their tuition. You know, there are certain caps on how fast they can increase it, but there are much fewer restrictions on how fast they can increase fees.

33:47 Emily: And so, fees on graduate students can increase rapidly without there being increases in the stipend to actually pay for those fees. And so that’s something I want, and obviously program administrators to keep that in mind, just like, what are you even charging your students that’s going to come out of their own pocket? And can you then add to what’s going into their pocket to make up for that because if you have this static stipend for five years and the fees increase every single year, you may not know going into graduate school that that could be a possibility, but it has happened.

34:14 Tyler: Absolutely. That’s a great point. One more thing I would like to add is, thinking about how we structure financial aid advisors and having those cater to students. You know, we mentioned the point earlier about really understanding that students have different financial needs and we should be catering these setups towards them. And one of the ways we could do that is really assigning one financial aid advisor to a student. So that one financial aid advisor gets to know you over four years, gets to know your needs. And they’re able to really cater these kinds of policies and adjustments as necessary. I have had that at some institutions. You know, my first institution, I had a really great relationship with my first financial aid advisor. You know, they knew me on a first-name basis. However, later on, I went to an institution that treated me more like a customer. That I would just come in and whoever was at the desk would serve me that day. And they often didn’t have any clue about my needs. They didn’t know how my scholarship worked and how it was, you know, structured, et cetera. And it always led to confusion and made life a lot more difficult for me. And so, that’s one solution I often put out there is for institutions to really think of students as students, as human beings, and not just customers that they can just, you know, serve with a one-stop-shop.

How Do We Advocate?

35:33 Emily: I love that point. Thank you so much for adding that. It makes total sense because once you get to know the students more intimately, and you’re not having those, like I’m meeting you for the first time conversations over and over and over again. As you said, they can better understand your needs, and then they can better advocate for you when they’re talking about policy changes within their own like offices or whatever. And speaking of advocacy, we talked at the beginning of the episode about, you know, why it’s important to advocate on these, you know, financial and benefits-related matters. We talked about what you, you know, the listener could advocate for at their own institutions. By the way, if the listener, if you listeners have other issues you want to raise, please tag us on Twitter or add a comment to the show notes for the episode, anything like that, email us, that would be great. But to conclude this, how do we actually go about advocating? What are the actions that someone could take to, you know, try to enact change on one of these issues?

36:27 Tyler: Yeah, absolutely. So, I think there are a lot of ways to go about this, and you’ve got to really find what fits you. One thing that I often do is I write, I write about my issues. I tell my story, and every story I tell, I try to end it with, you know, asking myself the question, what would make this experience better? You know, you can read the story to the article that we linked earlier. I really just wrote writing to get my frustration out about this financial aid advisor, and then telling me to manage my money better. I started writing about that frustration, and then I turned the question on myself and I said, what would’ve made that situation better so I can really think of recommendations for other people? And publishing them in these kinds of outlets that higher education practitioners read, that’s one way to do it.

37:09 Tyler: Another way would just be going through your own institutional systems, setting up meetings, you know, when you really run into something, meet with your department chair on the reimbursements. Meet with the head of your financial aid department and say, Hey, why is the system set up like this? It’s really causing a barrier for me. Having those kinds of conversations with people on your campus, I think, you know, and maybe it’s a big assumption, but I like to assume that people always have your best intention in mind. And I like to assume that people who are working on these college campuses are trying to help students and trying to listen to you. Just sometimes they might not be aware of that. And so, bringing those issues up to people that are in a position to make change is one way to go about that.

37:52 Emily: And I think, you know, back when we had that conversation on Dear Grad Student, I was listening to you, you know, share this approach of sharing your own story, vulnerably, like opening up to an administrator and saying, okay, this is the policy that’s in place, and this is the effect that it’s having on me personally. And is there something we can do to alleviate this situation? I thought that was a wonderful way to go about it. And it’s actually a theme I’ve heard over and over again as I’ve talked with graduate students about negotiation, for example, there’s, you know, an early point in this, which is like negotiating your offer letter before you even become a student at that institution. That’s a great time for negotiation. But the way that I heard that students were going about this was by sharing vulnerably how they anticipated the stipend and benefits offered by an institution, how they anticipated that would affect their personal finances and their lives and their stress level and their ability to devote, you know, time to their studies and all that kind of thing.

38:45 Emily: And it just is like, it’s not like a hard nose like you have to give me more, you have to fix this. It’s like, Hey, I’m having an issue here. Like what can be done? Like what creatives solutions can we come to that are going to help with this? And as you said, you know, that can happen not just at that early point before you become a student, but over time you can develop relationships and go back to these people over and over again. And they can really learn again how these policies are affecting you. So, I love that suggestion and your approach to it.

Unionization Movements and Collective Bargaining

39:11 Emily: One other topic I wanted to bring up was about unions and unionization movements, or not even like, necessarily like official unions, but just I’ll call it collective bargaining. So like getting together with other people, let’s say in your department, even if you’re not represented by a union and saying to the administrators, Hey, 50% of us are having a problem with this policy. Like what can we do about it? Same kind of conversation, but coming from a group rather from an individual. Do you have any thoughts on these, you know, unionization movements or how this can be a part of advocacy?

39:42 Tyler: Yeah, absolutely. I think the big thing to say here is like, you don’t have to wait for a union to form. You could be the one that is forming it. I did this often informally, you know, I never thought to call us the union, but I would just share my experiences vulnerably with my peers and they would share theirs with me. And we’d have these conversations back and forth in private until we finally, you know, just, oh, you know what, I’m having the same issue. And we’d come together and we would go approach the chair of our department or, you know, someone that does have power in our school and say, Hey, we’re having this issue. There’s multiple of us. Is there anything we could do? And that’s how I often would position any kind of argument or, you know, any kind of advocacy that I would take to someone else. I would say other students are having it, too. This is a problem that we should really, that warrants addressing. So, yes.

40:35 Emily: That’s a perfect example. I’m so glad that, I mean, just as you said, like if a union is in place, go through that channel. If a unionization movement is in place, you know, join up with that and make your issues like heard to that larger group as well. Even if not, as you said, you don’t have to wait for it, you can go as a group and express your, you know, desire for something to change. So, love that so much.

Best Financial Advice for Another Early-Career PhD

40:55 Emily: Tyler, it’s been great speaking with you again. Wonderful to have you on the podcast and have all of your insights here. I’m really glad you agreed to do this episode, and I want to ask you the standard question that I ask of all of 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 in the course of this interview, or it could be something completely new.

41:15 Tyler: Yeah. Well, the big advice I’ve been telling people, even people starting at my current position at my, you know, Foundation has been asking for, you know, some moving expenses and a signing bonus. You know, for instance, not all jobs will let you negotiate the salary. You know, my position wouldn’t actually let me negotiate the salary. But my way of negotiating was saying, Hey, I’m a low-income student coming out of a PhD program. I could really use a moving stipend and, you know, it was, again, going back to this whole being vulnerable. I could do that in my career as well. And, you know, they really wanted me, they understood my situation and all these things I’d advocated and wrote on. They knew my experiences. And they were able to provide me a moving expense. So that was one thing. The second thing I will say is, just making sure you really understand and read deeply on your benefits when you do sign, you know, what’s it mean to start a retirement fund? Those are things important to think about when you’re starting a new job and to pay in as much as you can, when you’re still young. As much as you can afford, you know, as someone who might have loans or whatever it might be to pay off.

42:20 Emily: Love that advice. I love being able to speak with people who are already past the grad school experience and can give us a view from the other side in the world of proper full-time employee stuff. So, that’s great.

42:32 Tyler: The grass is greener over here. I promise that.

42:35 Emily: Yeah. Good to hear. Good to hear. Thank you so much for coming on. It’s been great to talk with you again!

42:40 Tyler: Yeah. It’s been great talking with you. Thank you for having me!

Outtro

42:48 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? I have 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/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. 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.

This Veteran Receives External Funding for Her PhD Program

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In this episode, Emily interviews Emily Knitter, a PhD student in counseling psychology at the University at Buffalo and US Army veteran. After being medically discharged from the military, Emily funded her undergraduate degree with the GI Bill and subsequently received five years of PhD funding through the Vocational Rehabilitation program. This external source of funding has given her a greater degree of autonomy in her research and enables her to serve as a spokesperson for advocacy efforts in her department. Emily also gives her insights into the mental load of home ownership and being a landlord based on her experience of owning two homes.

Links Mentioned in this Episode

This Veteran Receives External Funding for Her PhD Program

Teaser

00:00 Emily K: It’s five years. Like it’s such a long piece of our lives, that the thought of kind of putting everything else that you want to accomplish in life, in addition to this degree, on hold, just that feels like an opportunity cost to me.

Introduction

00:22 Emily R: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 6, and today my guest is Emily Knitter, a PhD student in counseling psychology at the University at Buffalo and U.S. Army veteran. After being medically discharged from the military, Emily funded her undergraduate degree with the GI Bill and subsequently received five years of PhD funding through the Vocational Rehabilitation program. This external source of funding has given her a greater degree of autonomy in her research and enables her to serve as a spokesperson for advocacy efforts in her department. Emily also gives her insights into the mental load of home ownership and being a landlord based on her experience of owning two homes. If I may say so myself, this would be a great time to join the Personal Finance for PhDs Community at PFforPhDs.community for a monthly price of $29.

01:25 Emily R: With Tax Day coming up on April 18th, several of the included resources are quite timely, such as: 1. How to Complete Your Grad Student Tax Return (and Understand It, Too!) and/or How to Complete Your Postdoc Tax Return (and Understand It, Too!), which help PhD trainees prepare their 2021 tax returns with respect to their higher education income and expenses. 2. Quarterly Estimated Tax for Fellowship Recipients, which helps people who aren’t having income tax withheld from their paychecks figure out their estimated tax payments. 3. Open Your First IRA, which walks you through the seven boxes you have to check to confidently open, fund, and invest your first retirement account and provides in-depth resources to support you. The deadline to open and fund a 2021 IRA is Tax Day, but you won’t want to wait quite that long.

02:19 Emily R: You’ll have access to numerous evergreen resources, such as my Wealthy PhD webinars on financial goals, investing, debt repayment, and cash flow. Your membership also includes invitations to monthly live calls with me and other Community members; you’re welcome to bring your own questions and topics of interest to these calls for discussion. Our next live call is on Wednesday, March 16, 2022. You can learn more about and join the Personal Finance for PhDs Community at PFforPhDs.community. Without further ado, here’s my interview with Emily Knitter.

Would You Please Introduce Yourself Further?

03:04 Emily R: I have joining me on the podcast today Emily Knitter. She is a third-year PhD student in counseling psychology at the University at Buffalo, and she is a veteran. And so her path to the PhD program that she’s in is a little bit different from most of the people that I interview and her funding course has been different. So I’m really excited to talk to her about that. So Emily, welcome to the program. And will you please tell the listeners a little bit more about yourself?

03:27 Emily K: Thank you. Very honored to be here. Especially since we both have great names. So yeah, like you mentioned, I was in the Army. I served as a journalist for five years. I joined straight out of high school. I was medically retired and thought I was going to go kind of down that same path, but I knew that journalism didn’t pay really well in the real world, quote unquote. So I decided to go to school for marketing. So I rolled out of school. I did one year in a marketing program down in Georgia, despised it, dropped out. And then I ended up getting a job opportunity and I moved to New York. And so I worked for a year at a YMCA doing membership management, insurance billing, a lot of office work and also despised every single minute of that. But, you know, learning kind of what pieces I liked, what pieces I didn’t.

04:21 Emily K: And at the same time I started going to therapy myself. And so, because I was in the military, I had access to therapy through the VA at no cost, which was huge at the time. And that was life-changing for me personally and professionally. It really kind of helped me start solidifying who I wanted to be and who I thought I was, which was something that I had lost when I left the military. I really didn’t feel like I identified as being a soldier with every fiber of my being while I was in, you know, I just kind of thought I was Emily who happened to wear a uniform. But then once I lost that uniform, it was like I was completely lost. And working with her, she really helped me kind of start to understand myself better, understand maybe where I would want to go with my life and the influence that she had on me combined with kind of really realizing that I liked helping solve problems at the Y and I liked helping people with that.

05:32 Emily K: You know, I started thinking maybe I should go back. I didn’t have an undergrad at all, besides my one year in marketing at the time, that maybe psychology would be a cool path to go down. And, you know, I figured if I could make a third of the difference in somebody else’s life the way that she helped me, that that would be a worthwhile way to kind of invest my life and my time. And so with not a broken heart at all, I put in my notice at the Y, and I went back. I did my undergraduate at St. Bonaventure University, which is down in Olean, New York. A really, really cool private university down there. And so I spent three years, graduated there, and then I rolled right into the PhD program that I’m in now. So that’s kind of my brief background there.

Funding Undergrad: GI Bill

06:23 Emily R: And can you tell us how you funded the undergraduate degree? Because I understand your status as a veteran played into that.

06:30 Emily K: Yes, absolutely. So I used the GI Bill, which is a program that anyone who served at least 90 days of active duty in the military qualifies for. There are a couple exceptions to beyond that, but that’s kind of the standard is basically anyone who served, made it through basic training, qualifies for this. And so it gives you 36 months of benefits where it pays all your tuition, it pays all of your fees, you get a living stipend, and you also get money for books and supplies. So it’s really an incredible program. And so I used the year of it in the marketing program. And then, so that one, I was in state in Georgia, so I didn’t have any problems there. And when I moved to New York, I had residency because I’d been there for a year. So I applied, but St. Bonaventure is private.

07:26 Emily K: And so, there was an additional program for there because the GI Bill only covers public in-state tuition and fees. And so anything above and beyond that, in theory, you would have to take on. But St. Bonaventure there’s a program that schools can buy into called the yellow ribbon program, which they end up splitting the difference with the VA of whatever is above and beyond their cap for the state. So because they were yellow ribbon program, I was able to attend this program completely at no cost to me, with the living stipend, which, you know, really was quite a luxury. Because it’s not a school I would’ve gone to if I was accruing debt at all, but it was a really, really great experience for me. And the class sizes, I mean we were usually like one to eight, one to 12 for the ratio.

08:18 Emily K: So it was just a really, really great experience. But a big thing that I’ve noticed in my experience is like how much the culture of the school really makes a difference. You know, because that was a big reason why I stopped in my marketing program is because they didn’t have any veteran support and I didn’t really feel like they cared whether I was there or not. And so like when I left, I don’t think they noticed, whereas at this school they were very responsive and it made a big difference in my experience of the program and also kind of set the bar for what I looked for when I was looking for my PhD programs.

Transition to Grad School

09:04 Emily R: So let’s talk about your transition to graduate school. We’ve already heard the motivation from your work with a counselor previously, and we’ve also heard that, you know, you’re a bit selective about the institutions that you want to apply to you because you want to be supported. How did you end up in the particular program that you did? And then we’ll talk about how you’re funding it.

09:22 Emily K: Sure. Yeah, absolutely. So the big thing actually while I was in undergrad is I met my now ex-husband at the time, but he had roots in this area. And so one of the big things that I was looking for on top of making sure it was going to be a right culture fit, because I had experienced what that doesn’t feel like in the past, was I was relatively landlocked. And so, I was entertaining the possibility of doing both master’s degrees and PhD programs. I’m kind of a like shoot for the stars and see where it lands type of person. And so this particular program that I’m in now, the counseling psychology track, was the one that stood out above and beyond everything else as what I was looking for. They seemed receptive. I was able to set up some informational interviews with some of the faculty, even before applying.

10:18 Emily K: They were getting back with me, they seemed interested. For all those reasons, this was actually the only PhD program I applied to. Like I put all my eggs in this basket and I was like, if I don’t get accepted here, the deadlines for the master’s programs were later on. So I knew I could kind of fall back and apply somewhere with that. But the big thing that I wanted to do is I wanted to make sure that I had the capability to do therapy, that I was going to be able to work with veterans afterwards on a one-to-one level, as well as doing research. So, my program is actually in the department of education, it’s not in the department of psychology, but because at the University of Buffalo, the psychology department is exclusively research focused. So if you’re getting the clinical psychology degree, you’re not doing direct intervention work.

Vocational Rehabilitation

11:13 Emily K: And so that was really important to me. And also, just the personality of the professors that I’d met and kind of the vibe I’d gotten from the program really felt like it was going to be a better fit for me. So that’s why I chose them. And then as you mentioned, so my funding, while I was an undergrad, I got really involved with the SVA, which is the Student Veterans of America club on campus. And so I’m talking to other veterans and I’m kind of, you know, getting to know like what they’re doing. And one of them who was also medically retired asked me if I had heard of this Voc Rehab program, which is the Vocational Rehabilitation and Education I think is the full title for it. And I thought that you could only use one or the other with the Voc Rehab or the GI Bill.

12:07 Emily K: And so I said, no, like I’m using the GI Bill. You know, I don’t qualify for that. And he goes, no, I use the GI Bill, too. And then I switched over. He’s like, you should at least apply and just see what they say. And it was a pretty simple online application. So I was just like, doesn’t hurt anything. And the requirements for it, which it’s a little different than anybody who served, who qualifies for the GI bill. So the Voc Rehab, you do have to have a disability rating of at least 10%, which on the spectrum is a pretty minimal bar to entry there. And so they agreed, let me come in for an interview, and then they do a face-to-face evaluation is really what they call it. And it’s looking at what jobs you’re trained or skills that you have currently, and where you would like to be.

12:59 Emily K: And one thing that I really appreciate about the program is it’s not just getting you a job, it’s making sure that you’re going to be fulfilled in what you’re doing. So even if in theory, you know, because I had the journalism background, I could have gotten a job doing something with that. But I knew that really wasn’t what I wanted to do. And so, because of the disability that I had, I can’t do something really, really physical. And so, we were able to kind of navigate that, and I got qualified to be in the program. And another thing that I really appreciate about the program is they’re very flexible, I would say. Like there are the requirements that are listed on the website as like, okay, it’s, it’s two years of funding, it’s dot dot, dot, dot dot. You have to do this, you have to be this, you can’t be out for longer than this time, but basically there’s an asterisk next to every single thing on the website that’s like, but it depends.

14:00 Emily K: And so again, with the whole shooting for the stars thing, once I got accepted into the program, my counselor who I was assigned to said, well, do some research, figure out, you know, look at salaries, talk to people, you know, really figure out what you feel like is going to not just get you a job that’s going to put you where you want to be, but you’re also going to feel content doing it. So again, I came to her on the day that I was supposed to kind of propose my path and I said, clearly I’ll be most fulfilled with a PhD, you know? And for whatever reason, again, stars aligned. And she said, okay. And so I got a waiver that instead of the two years, they covered an entire five-year program. So that was May of 2018. And that was the single best Christmas gift I’ve ever gotten in my life. I walked out of there crying, like unable to believe that that was the reality, like I felt so fortunate.

Timing with PhD Application

15:12 Emily R: So how did the timing of applying for the Voc Rehab program dovetail with your application to the PhD program? Like, were you already admitted to the program or were you then going to apply after getting the Voc Rehab, you know, funding?

15:25 Emily K: I got accepted to Voc Rehab first, and then I applied to the program. And so, and that’s what she said. She’s like, well, you know, this is all well and good that we will fund you. She’s like, but now you have to get accepted. And so, that’s where, because between the program, the Voc Rehab requirements, and then being landlocked because of my personal life, it was very much all my eggs in this basket, you know, and that’s why I had the backup plan of the master’s. Because I was like even getting a master’s funded is incredible. And I can still be a therapist and I can still counsel with the master’s. And if I were going to have to pay it out of pocket, that’s what I would’ve done was go the master’s route just for the opportunity costs, but between the two. But it’s all paid for, and I’m graduating completely debt-free. So, I couldn’t say no.

How Are Your Peers Funded?

16:23 Emily R: Yeah. So, as you said, that’s an incredible gift to be not just admitted to the program, but given, you know, 250% of the funding that you kind of were asking for initially, or thought you would get. So tell me a little bit about how your peers are funded. Because, I’m not really sure. You’ve said, you know, in the school of education, counseling psychology, so like, are your peers doing assistantships? Are they in fellowships? Are they paying out of pocket? How are they funding their program?

16:50 Emily K: Yes. So, I’m 100% the atypical weird one. You know, everybody else in my cohort is for the most part, either in an RA or a TA position. And it’s been a blessing in a number of ways because unfortunately, and I’m not sure if this is kind of the case across all of academia right now or just in my program, but most of my cohort members who came in with funding, it was promised for a year or two years. But then they were told it would be really easy to find other TA positions, other RA positions, you know, and it wouldn’t be a problem. And half of my cohort right now has unfortunately had to switch to actually taking on student loans because they just don’t have positions available. And so, it’s been so stressful for them. And it’s been kind of a different, I want to say like, a different bag than what they were sold originally.

17:52 Emily K: But it’s tough to watch, and it makes me even more thankful being in the position that I am in because it’s very secure. You know, if I take longer than five years to finish the program, then it’s on me. But as long as I stay in the timeline, then at least that is really, really consistent. I’m not worried about it. Grad school is stressful enough that I’m very thankful that it’s not also adding that burden on. And it’s been interesting, too, that because my funding is not coming from with in the program, and I don’t really have a, beyond being accepted in the program, I have an advisor who’s helping me with my research, but it’s almost more of a consultation role because I’m not doing any RA work for her or anything like that, that I have, I want to say, a lot more autonomy in a way than everybody else. You know, because there’s nothing in a contract that says I can’t work part-time, you know, and, you know, I’m not committed to doing 20 hours of whatever it is for a professor, you know, or grading, anything like that.

19:04 Emily K: And it’s been a blessing, especially because I’m coming into the program as a non-traditional student, you know, being older. My ex and I, we bought a house, you know, I had full life bills. And although it does provide a housing stipend, you know, it would be enough if I wanted to live the starving grad school life. But I’m thankful to be able, because I don’t have to work for the program, so I do have a part-time job as well. And so the supplement between that income with the stipend I get through my funding, you know, I’m able to kind of live my life a bit more comfortably than a typical grad student. And I think that that’s, I mean I’m busy, we’re all crazy busy, and it’s navigating 150 hours of work and you know, not that much time in a week. But there have definitely been points during the program, not related to funding, where I’ve taken the lead with my cohort advocating for different things, because I think there’s less of a power dynamic in my situation than there is in some of those. So it’s easier for me to kind of say, Hey, we would actually really like this or this isn’t, you know, working deadlines, timelines, different policies that they’re implementing. And so, I’m thankful that because of my funding situation, I am able to kind of stand much more confidently in myself throughout the program.

20:46 Emily R: So, I’m so glad that you’re like articulating this this way because I think this is actually much more widely applicable than just for your particular “I’m funded, you know, because of my veteran status,” like kind of situation. So because what I’m hearing is one, your peers are unfortunately experiencing this, you know, drying up of available assistantships. I’m assuming this is due to COVID, right? We’re recording this in January, 2022. So that sounds about the right timing?

21:10 Emily K: Correct. Yes. That’s the story we’re getting.

Autonomy and Advocacy

21:14 Emily R: Yeah. So because they were not, now, it’s interesting because when I talk with prospective graduate students, I don’t put a lot of emphasis on whether or not funding is guaranteed for five years or whether it’s like pretty much every one has funding for five years. It’s not explicitly guaranteed, but like the pattern is that we get people funded. It sounds like in this, you know, program, there’s been a big difference between those two, right? The expected path was not what turned out to happen. And because there was not a guarantee, you know, in writing whatever, your classmates were kind of left out to dry. Now, the advantage that you have because you know, the way that your funding, because it’s coming from a total third-party source, it sounds very much like having an external fellowship, which gives you, as you were saying, a lot more autonomy.

21:56 Emily R: You’re not beholden to like, you know, the grants or whatever that your advisor’s working on to have to do that particular kind of work. You can choose the work that you want to do. It’s more of probably more of a collegial relationship than like a, you know, boss underling kind of relationship with your advisor. And so I think that this just goes to emphasize the utility of having that kind of funding going into a graduate program. Yours is a little bit of a different source than most other people might have it, but I think the benefits are very similar. And I love that you’re, you know, you said you’re using this position of having a little bit more independence to advocate, to be the spokesperson, right? To kind of advocate on behalf of everyone. Because as you said, the power dynamics are a little bit different for your peers than for you. So, I’m really pleased with everything you’ve said, and it just sounds like yeah, that the benefits you’re articulating are also available to people with external fellowships, usually.

22:45 Emily K: 100%. Yeah. And that would be like, if you have the possibility to have any sort of external funding, that from my experience alone, I can’t speak for anything else, it seems very much the way to go.

Commercial

23:00 Emily R: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. The next live Q&A call for the annual tax return workshop, How to Complete Your Grad Student Tax Return (and Understand It, Too!), is this coming Sunday, March 20th. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Post-PhD Career Path: Working with Veterans

24:27 Emily R: So, yeah, I’m really glad to hear about sort of your experiential difference in your program because of this funding. Do you see this having an effect on your career later? I think you mentioned earlier that, you know, you either currently work with veterans or want to work with veterans, what do you see your future career path with this PhD?

24:45 Emily K: Yeah, that kind of has always been my bigger picture is wanting to give back to the veteran community. Especially because, you know, I could not have known making almost a slight impulse decision at 17 years old to join the military, all that I would’ve gained from it, you know. It’s really been the best dumb decision that teenage me ever made. But there’s also such a small percentage of veterans who have higher education degrees. And so being able to, you know, in the same way that right now I’m able to kind of help out and advocate for my other cohort members is being able to take that and advocate for the community by, you know, having that lived experience, but also having the legitimacy, I guess that comes from having a PhD. And through all of my pivoting to get to this point, you know, the first three years really after I got out of the military were tough, and I didn’t realize that everybody else kind of also struggled with the transition because I wasn’t talking to other veterans at that time.

26:09 Emily K: And I thought that I was the only one who was failing, you know, especially after I’d done quite well in the military. I got promoted really quickly. You know, I’m really good at kind of knowing what the expectations are and meeting them which does translate really well, I think into the PhD program too. So yeah, it’s very much my hope to continue working with veterans, particularly as they’re transitioning out, you know, and it’s figuring out the why of what they want to do, and who they are, and kind of what does that path look like for them, independently. And so I think, like I said, you know, being a veteran is definitely going to help with that path. But you know, even now, and I think if life takes me in a different direction than kind of what I’m expecting right now is, you know, on a very pragmatic level, there are hiring preferences in a lot of organizations for individuals that have a veteran’s status, especially in the VA, which is where I’m hoping to go.

27:08 Emily K: But most places there are kind of incentive programs for that. I’m not sure if the way in which I was funded per se will make a difference afterwards. But I think what we were talking about before with, you know, when you have that external funding and you’re able to kind of be more collegial with people and kind of work on, okay, how do I navigate this situation? How do I advocate here? How do I make change? I think I’m going to be going into the job market maybe with a little bit more confidence than I would have otherwise where like, okay, now I know what I’m bringing to the table. It’s not thank you for offering something to me. It’s like, this is what I’m providing. Okay. How can this be an equal relationship for both of us? So I think that more than I’ve maybe even thought before, until we’ve had this conversation, is definitely going to help, kind of, regardless of what that picture might look for me after I’m done.

Homeownership Eperience

28:09 Emily R: Beautiful. It’s very exciting! So, I want circle back to, you know, you mentioned earlier homeownership, and real estate is one of my favorite topics right now, especially for graduate students. So, I think that your path to homeownership is probably different and informed by your experience in the military. I just know sort of, I guess my stereotype impression is like people in the military sort of buy houses much more readily than people not do because of the easier funding mechanism through, you know the VA, just cultural differences, right? So, can you tell us briefly your experience with homeownership, and then how you think like someone, for instance, in your program, what would be the circumstances that would make homeownership a good idea for another PhD student, given your kind of different perspective on it?

29:03 Emily K: Sure, absolutely. Yeah. And you know, again, going back to all of the amazing things that have helped out from little teenage Emily’s decision to join the military is, so I do qualify for VA home loans which are amazing, because it’s a 0% down payment. And the whole process is pretty simple. And like you said, there is, I didn’t own a house while I was in the military, but many of my friends did, and it’s, you know, not a thing at all to kind of buy when you’re stationed here, you move a couple years later, you sell it, you rent it. You know, it’s very, very common to own a home. So there’s not, I didn’t have a big story built up in my head, I guess, of this being like a really major, big deal that I need to put five years of effort into before I do it.

29:54 Emily K: For better or for worse, frankly. You know, I think I now am much more intentional with kind of my financial journey than I was back then because, I think it’s getting better from what I’ve heard, but the military covers everything. And so you have this very strong sense of security. So you don’t have to think about your finances as much because it’s not not going to be there. And so now, you know, I’ve really kind of taken myself on a journey, and I’m much more intentional about the decisions I’m making and how I’m spending my money now. But I am thankful for that, I guess, lack of stigma of buying a house that I did see there. Because when I first moved to New York and I was working the job at the Y, the one reason I love the Buffalo, New York area is the cost of living is super low.

30:47 Emily K: And so, the year that I was there, it was substantially cheaper to buy than it was to rent. And because I didn’t need to have the down payment saved up, it was really accessible to just make that happen. And so, I bought a little renovated hunting cabin. It was 800 square feet. It was beautiful. I loved it. When I was working at the Y for that year, and it was only 20 minutes from St. Bonaventure. So it just worked out really perfectly to kind of transfer during my undergrad. And so, I lived there my entire undergrad degree time. And then when I met my ex-husband, I moved in with him and we rented it out for a year. And for me, because the financial component of it was actually not super impactful. Like, the mortgage was very affordable because it was so small. Repairs were affordable, too, when they happened.

Emotional Labor of Landlording

31:50 Emily K: And it was just, it was perfect when I lived there myself. But when I moved into the city and we rented the house out for a year, although the tenants were amazing, nothing happened terribly wrong with the house during that year, but that was also my first year of grad school. And I found I was just constantly worried when the shoe was going to drop. And when I was going to get a phone call that, you know, the roof had blown off, who knows. I don’t know, anxiety, that was my fear. And so, after that year, even though nothing happened, but it just, it added so much emotional labor that I was now needing to invest in grad school and everything else I was doing with my life, it just wasn’t worth it for me. You know, I’ve very much decided, you know, I have no desire to be a landlord in my life.

32:44 Emily K: And so I was able to sell it. I owned it for five years. So, it worked out as far as all of that. I didn’t make a lot of money off of it because I hadn’t put any money down. And the housing market had been kind of steady that whole time. But I didn’t lose any money. And so it really was kind of a wash for me in a positive way. So I loved the ownership, and then we purchased a second house, right as the program was starting. And it was great because we were dual income, you know, he’s been in the trades for 15 years, so he’s very, very successful there. He had roots there. We had planned on remaining in the area forever. So it wasn’t a matter of being concerned about, okay, what if I move for internship?

33:35 Emily K: You know, it doesn’t make sense to buy if it’s only a couple of years like that. And so it really was nice. I actually surprisingly got a lot of pushback from my program when I mentioned that we were house-hunting, just like, well, do you have time for that right now? Like how is that going to fit in with a PhD program? You know, like that’s, you know, people just seeming in awe, I guess, that we were going to buy a house, even though we owned two houses at that time. So I think there’s, at least in my experience, there’s kind of a stigma that when you’re in your program, you should not even consider anything outside of the program. It’s the blood, the sweat, the tears, and that is your life, and everything else just kind of should be on hold until you’re done.

Letting Go of Limiting Beliefs

34:29 Emily K: And I think that maybe it’s coming in from kind of later in life starting this program, maybe it’s just my personality. I don’t know, but it’s five years. Like it’s such a long piece of our lives that the thought of kind of putting everything else that you want to accomplish in life, in addition to this degree, on hold, that feels like an opportunity cost to me. You know, and that feels, there’s always going to be something that’s going to keep you, you know, make you feel like it’s not the right time to do something. And so if you can responsibly, you know, financially do it, I think it’s just all managing your priorities. And so, it worked out really great for us. We have since separated, and I will say now though, I rent an apartment and talking about the, you know, emotional labor of owning.

35:26 Emily K: It’s great. I don’t want to be a landlord. Renting right now, all my utilities are included. I get to come home. I don’t have to worry about house chores. Like, I mean, beyond cleaning, but repairs, anything maintenance, I don’t have to worry about any of that. My landlord lives next door. We have a great relationship, and it’s taken a lot of weight off my shoulders. And you know, I’m spending actually more money renting than I was when I owned on kind of a month-to-month level. But I think it’s just what you value, and what you want your life to look like. And then, you know, making sure that you are intentional about the financial side of it too, but not having that be the only piece of the puzzle, if you will.

36:17 Emily R: What I really liked about that, your perspective on this is, that it takes into account your personal preference on whether or not owning and like doing the maintenance and upkeep and blah, blah, all that other stuff, whether that is going to be exciting and fun for you or whether it’s going to be like a burden and you don’t want to have it on your mind. And I think, of course the financial component is part of it, but when you’re in a, you know, lower cost of living area and your stipend is sufficient, or you have a dual income or whatever, that owning is a financial option at all, then you get to get to that question of, do I think this will enhance my life, especially emotionally during this program? Or do I think it’s going to detract from what I have going on? It sounds like, you know, your peers or the faculty, whoever you’re hearing messaging from, they had the perspective that this is going to detract from your life and it’s going to detract from your effort in the program, whatever. But I think it very much comes down to your personality. And you’ve enjoyed it both ways, and you’ve experienced it both ways. So yeah. I just think it comes down to yeah. What your preferences are and not so much, of course the financial question is there, but the preferences matter as well.

37:20 Emily K: Yeah. And I think it’s really kind of leaning into that what do you really want versus what do you feel like you should do? You know, and I think that it’s easy to get in that trap of like, okay, right now I should be bleeding for this program, or I should be doing X or Y or Z. But then really taking a step back and being like, oh wait, is that, where am I getting that belief from?

37:48 Emily R: Perfect. Absolutely. In terms of like money mindset, and you would know a lot more about this than I do, but that’s one of those limiting beliefs, right? Like I can only do one thing well during this five-year period of my life. It has to be my program. I can’t, you know, have relationships. I can’t be working on my own physical and mental health. I can’t be a homeowner. I can’t work on my finances, all limiting beliefs. Don’t have to be true for you. You get to decide, as long as you’re, you know, cognizant of what’s going on in your own mind. So, love that.

Best Financial Advice for Another Early-Career PhD

38:18 Emily R: Let’s wrap up with the final question that I ask 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 touched on during the interview, or it could be something completely different.

38:30 Emily K: Yeah, so when I was thinking about this question, and I was thinking about it, obviously, because I’m still a student, so, you know, advice for other students per se. And the two things that came up, one is really kind of what we just wrapped up in right now is, you know, don’t be afraid to own your journey. And that it doesn’t have to be the stereotype you think it should be for being a grad student. You know, it’s making sure you’re asking questions. It’s recognizing that you are also like competent and capable, and you’re here for a reason. And so, realizing that we’re also bringing something to the table and like it’s okay to advocate for yourself. And that can be for, you know, financial things. It can be for anything that you might need. But I know, you know, even it’s shifted for me, even though we’ve talked about how much autonomy I have in my program, compared to some of my peers, it has been a slow shift over the last three years to kind of like feel comfortable being my own advocate in that way.

39:38 Emily K: Financial advice, like just flat out, I would say have a budget. Like I use the You Need a Budget software online. I’ve been using that for the last couple of years, and that has entirely changed my life is just being able to kind of give your every single dollar that you have a job. And make sure that it’s not just, yeah, just budgeting alone, knowing what you’re actually spending. And then, because you can use that once you have that knowledge, to then start deciding, okay, what do I value and how do I want to make this money work for me in whatever capability that I have at that time? And I think the other thing financial that, I don’t know, maybe, I think it’s because I’ve had to kind of go through teaching myself finances the last couple years and that I think about it a lot.

40:30 Emily K: I talk about it a decent amount, and it’s still taboo in most kind of societal circles. Just like, don’t be afraid to talk about it. Like, almost every single person that I meet, all of my advisors, all my supervisors and my practicum students, like I know how much they’re making, I know what their benefits are. Like, just because if you ask, people usually will tell you. And I’ve been using it to get more of a gauge of like, okay, what does this really look like if I were to pursue this position, you know, in this type of career, because there’s so much we can do with our degree? So having that knowledge of, okay, I kind of know how lifestyle-wise I want to live. And so, figuring out, you know, time, all the different components, but also is this going to fund how I want to be moving forward?

41:27 Emily K: And so, having that knowledge has made me feel much more confident in being able to eliminate some paths, and also kind of lean more into thinking about some paths. And all of my friends in my cohort look at me like I have two heads when I say I ask people about their finances. So that would be definitely my advice is, you know, like ask questions, do your own research. Don’t just always take at face value you know what maybe you feel like is the right answer with that.

42:04 Emily R: Yeah. Well, thank you so much! Thank you so much for giving this interview. I really love to have this like different perspective for anyone else who is considering a career in the military, has come outt of the military. Maybe, like you, it’s just through chatting with people that you find out about this fantastic, you know, funding source for graduate school. Thank you so much for giving this interview!

42:21 Emily K: Thank you so much!

Outtro

42:29 Emily R: 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? I have 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/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. 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.

Financial Advice for Prospective PhD Students

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In this episode, Emily shared the financial advice for prospective and rising graduate students that she collected from current graduate students and PhDs. This financial advice can be applied all the way from when you are reading a grad school offer letter to when you’re matriculating into your PhD program. The topics covered include evaluating cost of living, side hustling prior to or during grad school, saving up cash, purchasing a home, and investing.

Links Mentioned in this Episode

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Teaser

00:00 Courtney: I really highly recommend using Emily’s savings bucket strategy throughout grad school to cover irregular expenses. About halfway through grad school, I started using the savings bucket strategy, which helped me feel a lot less stressed about money and my finances because when large expenses came up, I had a plan in place.

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. This is Season 11, Episode 5, and today I’m sharing with you the financial advice for prospective and rising graduate students that I have collected from current graduate students and PhDs. This financial advice can be applied all the way from when you are reading a grad school offer letter to when you’re matriculating into your PhD program. The topics covered include evaluating cost of living, side hustling prior to or during grad school, saving up cash, purchasing a home, and investing. This episode is kind of a sequel to Season 5 Episode 2, Healthy, Wealthy, and Wise: Choose a PhD Program That Will Support Your Personal and Professional Development. That episode was also designed for prospective graduate students and included advice from invited contributors on finances, grad student unions, professional development, mental health, and work-life balance.

01:28 Emily: If you’re already in or beyond grad school, would you please share this episode and/or the previous one so that it can reach its target audience? I’m sure once you listen through it, you will agree with me that the advice is invaluable. If you planning to start a PhD program in 2022 and would like to learn even more about the financial side of this process, I invite you to attend a couple of upcoming free webinars, part of my series Set Yourself Up for Financial Success in Graduate School. The March webinar is for prospective graduate students, and you can find more information at PFforPhDs.com/prospective/. The April webinar is for rising graduate students, and you can find more information at PFforPhDs.com/rising/. If you’re not sure what I mean by prospective vs. rising, listen through the remainder of this episode. I hope that you will join me for these webinars. I will show you how to start graduate school on the right financial foot.

Do You Even Need to Go to Grad School?

02:33 Emily: The advice in this section is for prospective PhD students, by which I mean people who have already applied to programs and perhaps received some acceptances and/or started interviewing, but who have not yet committed to a program. We’ll start with the advice collected from your fellow graduate students and PhDs.

02:53 Emily: Our first topic is do you even need to go to grad school? And this is the advice from Elyse K: “Figure out if a PhD is absolutely necessary to do what you want to do, and only go if it is absolutely necessary. It is worth delaying school to be absolutely sure–don’t get a PhD to figure out what you want to do! This is financial advice because there is a substantial opportunity cost to going to school full time for 4-6 years–even if you have a full stipend and tuition waiver you would probably make more working full time. If a PhD it isn’t going to serve you after you graduate, you’ll be financially better off without it.”

03:37 Emily: This advice from Elyse K is spot on, and it is something that you must listen to as a prospective PhD student, even if it’s unpleasant, because you’ve already committed a lot to this process of getting into a PhD program, I’m sure. Not just the application cycle, but the years leading up to that. But don’t be trapped by the sunk cost fallacy. It’s only going to get worse and worse if you enroll in graduate school and it’s not the right path for you. So as Elyse says, and I agree, be absolutely sure that the PhD is the right thing for your career, the right thing for your personal life and that this is the right time for it. Much better to bail now than halfway through a program or even all the way through your program if you realize that it wasn’t the right choice for you. If you want to hear more discussion of the financial opportunity cost of getting a PhD, please listen to my interview with Dr. Jen Polk from season seven, episode 14.

Reading Your Offer Letter

04:37 Emily: Our next topic is on reading your offer letter, your funding offer letter, from a graduate program, and Elyse K again says: “Don’t go into debt for a PhD. Find a program that will pay you or save up and cash flow school.” Again, I totally agree with Elyse. I am very hard pressed to think of a field in which you would get a PhD, but not be paid to it. Very difficult to come up with that. So of course, almost certainly you’re going to be receiving offers of funding along with your offers of admission. But to put a little bit more nuance on Elyse’s point, just because someone is offering you full funding, doesn’t mean you wouldn’t incur debt by going into that PhD program, because the offer of funding might not be high enough or consistent enough to keep you out of student loan debt, or alternatively having to side hustle. So I want you to really keep your eyes wide open when it comes to evaluating whether this program will actually keep you out of debt. Next up, we have a clip submitted from Shana.

05:42 Shana: Hello, Personal Finance for PhDs community. My name is Shana Slebioda, and I’m a staff member at a research university who works with graduate students. My advice for rising PhD students is to ask about summer financial support. Summer support packages may be different from during the academic year, especially if your support comes mainly from being a teaching assistant, also known as a TA. If your funding letter does not contain specifics about the summer months, be sure to ask. Talk to a faculty or staff member in your prospective program to get additional information. You can also talk to current students in the program to find out how they spend their summers. Do this early. Your first summer session will be there before you know it. And good luck.

06:36 Emily: This is absolutely vital advice from Shana. And again, I completely agree. Your offer letter, ideally, should tell you how you’ll be funded for the entire first 12 months of your program. So, if it doesn’t include details about your summer, as Shana said, you need to inquire about it. Both from, you know, the DGS [Director of Graduate Studies] or whoever’s offering you the funding package, and also with current graduate students to find out how funding typically works in the summer, or if it’s funded at all. But I want to extend this advice to say that it’s also very important to get an idea of your entire funding path through the PhD. Not just through the first summer, but your second year, your third year, fourth year, and all of the summers as well. Your program might or may not be able to give you super specifics about your situation. Maybe they can, maybe they can’t, but that’s where current graduate students come in very handy because they will tell you what from their experience and what they’ve observed among their peers about how people are funded or not throughout their time in the PhD program.

Evaluating Cost of Living

07:37 Emily: Our next topic is on evaluating cost of living for, I would say all of the programs that you are seriously considering attending. Julia’s advice is: “Ask current students about living expenses and estimate your budget. In some cities, to rent an apartment you might need to pay three to four months worth of rent upfront (first and last month of rent, broker fees, security deposit). You might need to consider having a roommate.” Again, the advice to talk to current graduate students is the best. They are going to be the people best positioned to give you the picture of how finances are working on the ground in this PhD program.

08:14 Emily: And I love the specificity of how much you might be asked to put up to rent an apartment. This is very, very city-dependent. I’m guessing Julia may live in Boston or New York. Certainly there may be other cities that operate the same way, but yes, it can be very expensive to get into your first apartment. In some cases, up to four months of expenses, in some cases less, it’s just going to be really city dependent. So it’s something you need to investigate possibly before you commit to a program, but definitely at the point that you do commit to a program.

08:44 Emily: We also have some advice from Ben: “You can pretty much have a successful research career anywhere you end up. So don’t let thoughts about potential research advisors overshadow comparisons of cost of living and stipend when considering programs.” I wish that I had heard this advice from Ben when I was in this phase of being a prospective PhD student, because I absolutely number one was picking my program based off of the potential research that I could do there. The advisor that I would have, the resources that the program had at its disposal, these kinds of things. So I was really not giving any thought to finances or other personal considerations that I now know are very, very important to have you know, in the mix in your decision-making.

09:29 Emily: And so I now definitely agree with Ben that yes, the research considerations are very important, but so is understanding what your lifestyle is going to be financially during your time in graduate school. And so are a lot of other things you might call personal factors. So they all should have a place. And don’t forget that your finances and these other personal factors will affect how successful you are in your program. So these are not, you know, disconnected from one another. If you are super stressed about money, or if you have to go into debt or side hustle, it’s going to affect how well you perform in your research career and potentially how long it takes you to graduate. So, as I said, all the factors should go into the mix.

Working Before or During Grad School

10:13 Emily: Our next topic is on working, either in this period of time between now and when you matriculate or after you matriculate. Our first piece of advice is from Gillian Hayes: “Work as much as you can in paid positions before returning to graduate school to save money to bridge the difficult times during the PhD. You may also make connections that will allow you to do side hustles or internships during your program.” Coming into graduate school with cash savings sets you up as best as possible to have a strong financial position. When I think about people who start graduate school without cash savings, or maybe even with, you know, incurring some credit card debt because of those moving expenses, you’re sort of thrown onto your back foot financially, like you’re off balance.

11:03 Emily: It’s not a strong position to start in. And of course it’s necessary in many cases, but I like Gillian’s advice. I agree with it. If at all possible, work before getting into that PhD program to generate cash savings so that you have money for moving, so that you have money for start up expenses. And so that you don’t have financial stress at the same time you’re trying to get started in your program. I also totally agree with her that working certain kinds of jobs will help you in your career that you’re trying to pursue during your PhD, and things like internships and side hustles can be part of that. If you’d like to hear more from Gillian, and I know you would, you can listen to her full interview in season six, episode six.

11:45 Emily: And here’s some advice from Nell: “Consider having another job. When I went to grad school, I went part-time with my previous full-time job. I’ve done it during school for 4 years now. I’ve noticed among my friends and colleagues that it’s the grad students who have second jobs who seem happier and mentally healthier, and have less trouble meeting their deadlines and keeping grad school anxiety in perspective. Obviously, you should keep monitoring yourself to see if it’s sustainable or the right choice for you. I have moments where I feel overwhelmed. But I have a lot less anxiety about grad school since it’s not my entire professional identity and I’m not taking a huge pay cut to be here. I see people who have never held another job applying for academic jobs and facing the possibility that they will not get anything permanent or well-compensated, even though they are excellent at what they do. They don’t know how to pivot and are doubting all their choices. It’s not their fault; it’s the market. But I see having a second job as a hedge against the kind of personal and financial crisis that comes in those circumstances.”

12:46 Emily: I think it’s really going to depend on your program and your field, whether holding a concurrent second part-time job is feasible, and also of course your personal responsibilities as well. So it seems to be working for Nell. And of course, she has great advice by saying keep monitoring yourself to see if it’s sustainable. So I don’t know if like a full like part-time job, like 20 hours a week or something is going to be right for everyone. But I do agree with her that it does lessen anxiety related to graduate school when it’s not, as she said, her whole professional identity or even identity generally. And so I do think it’s really healthy to have a side hustle or some kinds of side pursuits during your time in graduate school, because it does give you a break from all of your focus on your PhD.

13:33 Emily: It may give you another source of income, which can help with financial stability. So there are lots of positives to it. The drawbacks being of course, the time management aspects, the energy management aspects. So, you have to know yourself in this respect, but I do think it’s well worth considering. So if you have currently a full-time job that it’s possible to keep working for that employer part-time, either on still an employee basis or maybe a contractor basis, I think that’s worth having a conversation, it’s worth a tryout, of course, given that it would be allowed by your graduate program. Now, some graduate programs do bar outside work or outside work of a certain type or above a certain hourly commitment. So you have to be careful about that, but I do like the suggestion. And alternatively, if you’re not in a full-time job that you would, you know, consider taking with you in some capacity into graduate school, the next suggestion is to develop some kind of side hustle during these months between now and when you matriculate that you’ll be able to take with you into graduate school.

Emily’s Best Advice for Prospective PhD Students

14:28 Emily: My best advice for prospective PhD students is to 1) interrogate your offer letter, and 2) compare your actual salary to the local cost of living. What I mean by interrogate is that there’s a set of about a half-dozen financial questions that you need to have answers to regarding your funding package to fully understand what your finances will look like during your PhD program. One example is how much of what is listed as your stipend in your offer letter will you pay in tuition, fees, and/or your health insurance premium. You need to subtract those mandatory fees from your stipend to see what you’ll actually be paid before taxes. If your offer letter doesn’t provide all the answers, you’ll need to ask the questions of the program’s administrative staff.

15:12 Emily: However, the absolute stipend numbers are not the whole picture. Obviously, $30,000 is going to go a lot further in West Lafayette, Indiana than Seattle, Washington. You need a way to normalize the stipend to the local cost of living. The first-pass way that I suggest you do this is to use the numbers in the Living Wage Database from MIT at livingwage.mit.edu. You can divide each stipend by the local living wage to get an idea of how much purchasing power the stipend will actually provide.

15:48 Emily: I suggest making a spreadsheet to keep track of all these factors, and in fact I will provide such a spreadsheet in my upcoming Set Yourself Up for Financial Success in Graduate School webinar for prospective graduate students. In this webinar, I’ll expand on what I stated above and cover additional timely topics, including one that is almost taboo in academia. The webinar is free and you can find more information and how to sign up at PFforPhDs.com/prospective/.

Commercial

16:19 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Cash Savings for Rising PhD Students

17:35 Emily: The advice in this section is for rising PhD students, by which I mean, people who have committed to attending a particular PhD program, but have not yet matriculated. We’ll start with the advice collected from your fellow graduate students and PhDs. Our first topic is the necessity of cash savings. Our first piece of advice is from Elyse K: “Adjust your budget now to your stipend income and save up to make sure you have a substantial emergency fund (more on the 6 months of expenses side than 3 months). Many universities only offer students crappy or expensive healthcare plans. Hopefully, you are healthy over the next four-to-six years, but knowing you can cover a high insurance out-of-pocket maximum without additional debt is comforting.” This is definitely great advice, especially if you’re currently working and living on a salary that’s higher after adjusting for cost of living than the stipend that you will be on in just a few months. So, it’s great advice. Live on that future stipend and save everything you can in between now and then. I also love that she points out the importance of having an emergency fund and yeah, knowing your insurance benefits. So knowing what your deductible is, what your co-insurance responsibilities are. You can find out this information now to start preparing. Next, we have a clip from Courtney.

18:57 Courtney: Hi, my name is Courtney, and last year I graduated with my PhD in microbiology. My biggest piece of financial advice for grad school is to set up an automatic transfer after you get your stipend payment to a separate savings account for paying taxes if you do not get income taxes withheld from your paycheck, which I know many graduate fellowships do not. This way, the money is already allocated when it comes time to pay quarterly estimated taxes, or when you file taxes in the spring. And jumping off of that, I really highly recommend using Emily’s savings bucket strategy throughout grad school to cover irregular expenses, such as large purchases, maybe medical deductible payments, or friends’ weddings. Also, it’s important to save for an emergency fund, maybe a pet fund if you have a pet, and planning for fun thing as well, such as vacations. About halfway through grad school, I started using this savings bucket strategy, which helped me feel a lot less stressed about money and my finances because when large expenses came up, I had a plan in place. I used this strategy to save for a month’s worth of living expenses to cover a month gap in between when I finished my PhD and when I started my new position, and I also was able to save up for a vacation to celebrate my graduation and really treat myself after completing my PhD.”

20:34 Emily: I love that Courtney gave us these specific examples of how targeted savings buckets can be used. For her, it was paying her taxes and also saving up to cover an income lapse and saving up for a vacation. I love that she said it made her less stressed. If you’d like to learn more about this savings bucket strategy, I devoted a whole podcast episode to it. It’s season seven, episode 15: How to Solve the Problem of Irregular Expenses. It goes beyond just having an emergency fund to preparing through saving for other large irregular expenses like taxes, like having to buy flights, like having to replace your computer or buy furniture or any other large purchases you might have to make. Specifically on the topic of taxes, it’s very important for you to know sometime before you matriculate that it’s pretty likely that at some during graduate school, you are going to be funded through a source of what I call awarded income. It might be called a fellowship or a training grant or a scholarship or some other kind of award that pays your stipend.

21:38 Emily: And if that is the case, most universities will not withhold income tax on your behalf the way they do for employees. You may be an employee at other points in your graduate career, like having an assistantship. But if you’re ever not an employee, then that income tax withholding may not be offered to you. And if that is the case, you will be responsible for making your own tax payments manually, whether that’s up to four times per year through the estimated tax system, or in one lump sum when you file your tax return each spring. So as Courtney said, it’s really important to save up for those tax bills. I like to call it, setting up a system of self-withholding. So you’re sort of simulating the withholding that would be done by an employer if you had one by doing, as she said, these auto-transfers. Every time you receive a paycheck, set up an automatic transfer to go into your designated tax savings account for an appropriate amount of money. If you’d like more detail about how to do these calculations around taxes or the system of self-withholding, I have a whole workshop devoted to it, which you can find at PFforPhDs.com/QETax, that’s for quarterly estimated tax. And this is something that I wish every matriculating graduate student was told during orientation that estimated tax is your responsibility, potentially, if you are on one of these non-W-2, non-employee sources of income.

23:03 Emily: And our final piece of advice regarding cash savings is from Julia: “Try to save even a little bit and put the money away for savings and/or retirement investments. Learning about investing can be overwhelming, but you can start with passive investing in a couple of general ETFs (e.g., tracking S&P 500 and international stocks for diversification) and learn more as you go. To avoid overwhelm, allocate fixed time slots to learn about finance, e.g., 1 hour per week. Eventually, you’ll become more comfortable.” I mean, of course, I totally agree with this advice from Julia. It’s kind of everything I do in my business teaching about personal finance, and I especially love talking about investing with graduate students and postdocs. It’s very easy to get started with passive investing. It’s very easy to manage investments passively. So it’s something that can be completely compatible with your journey as a graduate student, as long as your finances are ready for it. I would say it’s more important to build up some of the emergency and buckets we’ve been talking about and pay off high priority debt, like credit cards, before getting involved with investing. But once your finances are ready for it, it does not have to be a big time suck for you. So that’s great advice from Julia.

Homeownership

24:17 Emily: Our next topic is homeownership. This is one of my favorite new topics to be talking about with graduate students and early-career PhDs. Here’s the advice from Nell: “Seriously consider home ownership EARLY in your program. Emily and her brother have covered this on the podcast, but you ideally need 3 years of funding remaining. I bought a place at the beginning of my second year. The second job and the 5 years of continuance made it easier to get a mortgage. Meanwhile, I have a friend in his 5th year, now in the process of buying a place, and he found out about the 3-year continuance rule very late, causing an extremely stressful family situation and problems with his department, who he had to beg for a letter promising him more funding. While there have certainly been stresses with my place (roof, plumbing) which I am privileged to be able to deal with, the fact that I can go away for research and rent it out rather than have to pay two rents or put all my stuff in storage means that I am able to be much more mobile and flexible as I design how I will spend my time researching and writing the dissertation. Again, this is about peace of mind and mental health as much as financial security.”

25:23 Emily: This advice from Nell is so valuable. Now, I have to say, first off, many graduate students are not in a position to buy. The vast majority of graduate students are not in a position to buy a home, because several factors have to come together kind of perfectly. You have to live in a housing market where the home prices are not very, very high. You have to have a stipend that is high enough to manage to, you know, qualify for a mortgage in that market. And you have to have some savings place for the down payment and the closing costs, moving costs, these kinds of things. And you have to have good credit. So these things all have to come together. But for some graduate students, it is possible.

25:58 Emily: And if you think you may be in that situation, you should definitely investigate it early on. I have done several podcast episodes with my brother, Sam Hogan. He is a mortgage originator with Prime Lending (Note: Sam now works at Movement Mortgage) who specializes in graduate students and PhDs. And he knows all the ins and outs of qualifying for a mortgage, even when you have non-employee income fellowship income, which for some lenders is unfamiliar. The podcast interviews that I’ve done with Sam in the past are season five, episode 17, How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income, and season eight, episode four, Turn Your Largest Liability into Your Largest Asset with House Hacking. Those are really exciting episodes to listen to, but I do want to tell you there have been some updates, especially to the content that Nell just talked about. So, we used to think there was this necessity to have three years of guaranteed funding when you had a non-W2 type position as a graduate student or postdoc, but Sam has actually found a way kind of around that in some cases.

27:00 Emily: So, I would say it’s very helpful to have three years of continuance, but not strictly necessary for everyone. So the best thing to do is to talk to a mortgage lender like Sam, or like someone else who’s familiar with PhDs and graduate students, and get their perspective on your income type and your whole like picture to see whether or not you would be able to qualify for a mortgage. Check out the Personal Finance for PhDs’ YouTube channel for some of those like short updates. I’ve been publishing clips from the live Q&A calls that I’ve been hosting with Sam for first-time home buyers. If you’d like to learn more about that, go to PFforPhds.com/mortgage to find out when the next live Q&A call will be. By the way, if you want to reach out to Sam directly, the best way is probably to text or call his phone number, which is (540) 478-5803. Or you can email him at [email protected].

27:59 Emily: I really love Nell’s perspective in this advice of having it be an ease on her mind and her finances to own a home versus renting when she has to be away for research purposes. Like I never thought about that before. So I’m really glad to get Nell’s perspective on this. I’m really glad that it’s worked out for her. Elyse K also added this advice: “If you’ve been working full time and it is the right time for you, consider buying a home you can afford on your stipend before your full-time income is gone because it will be easier to get financing.” Again, you can hear a lot of concern about qualifying for a mortgage as a graduate student. It is an area of concern, but Sam can help you with this specifically if you want him to. But Elyce’s advice is really good. If you are going from a full-time job into graduate school, and especially if you’re not moving cities, getting that mortgage and the home purchase done before starting graduate school is a good idea. But as she said, make sure you can afford it on your stipend, not just your current salary.

Working During Your PhD

28:54 Emily: Our next topic is working while you’re pursuing your PhD. So, Gillian has this advice: “Intern. No matter what your field, there are internship opportunities. This will provide insight into non-academic career paths as well as extra money during your studies.” I could not agree with Gillian anymore about this. Internships are becoming much more widely available and acceptable to do during a PhD, which is wonderful. And they often pay more than the, you know, stipend that would be getting during that time anyway. Again, listen to that previous episode that I did with Gillian and also check out season seven, episode seven, where I interviewed a current PhD student who did a very well-paid summer internship with a tech company, and that worked out very nicely for her finances.

29:42 Emily: But really, Gillian’s point about gaining insight into non-academic career paths is the invaluable part of this. Like, yes, the money is nice, but while in graduate school, you are setting yourself up for your future career, and doing internships and other kinds of work opportunities do serve that goal just as much as your PhD studies do. And this advice is from Elyse K: “Consider finding or starting a side hustle within your university’s boundaries (many allow <20-hour per week part-time positions). Part-time income can make or break PhD students; I’ve seen some have to drop out because they need money.” Again, really solid advice. It should not be the case that graduate students need side hustles or need student loan debt to financially get them through graduate school. Yet this is the reality for a lot of people, or if not strictly necessary, sometimes side hustles can just enhance your lifestyle and make things a little bit better for you during graduate school. Whatever the reason, I think side hustling is a great idea, but of course you have to make sure that it’s not interfering with your progress towards your degree. That is primarily what you are in graduate school to do.

Financial Assistance as a Grad Student Parent

30:54 Emily: Next, I have some great comments from an anonymous contributor who is a graduate student parent. “Even if you think you do not qualify, consider applying for income assistance programs such as SNAP, Medicaid, and other DHS programs for needy families. Generally, students enrolled over half-time do not qualify for SNAP, but if you have any of these exemptions, there’s a chance you’ll qualify. Some exemptions include: Are under age 18 or are age 50 or older. Have a physical or mental disability. Work at least 20 hours a week in a paid, on-the-job training program. Work at least 20 hours a week in paid employment. Participate in a state or federally-financed work study program. Participate in an on-the-job training program. Care for a child under the age of 6. Care for a child age 6 to 11 and lack the necessary child care enabling you to attend school and work 20 hours a week or participate in work study. Are a single parent enrolled full-time in college and taking care of a child under 12.”

31:50 Emily: “With children you may also qualify for state funded childcare, children’s health insurance, and possibly even income supplementation. These are often wrapped into the same application at your state’s Department of Health and Human Services website, making it much simpler to apply for all at once. You never know until you apply, and you just might be surprised. Every dollar helps! Every so often you will need to reapply or get re-certified so you’ll be asked to update your information periodically, so always look for these very important mailings once you’re involved in any assistance programs or you could risk losing coverage for not responding in time.”

32:22 Emily: Super appreciative to anonymous for submitting these comments. This is not something I had personal experience with during graduate school, so I really appreciate, you know, the community member stepping up to speak to this situation. In season two, episode one, I published an episode with Lauri Reinhold [Lutes] who was a single parent during graduate school. And what came through in that interview was how intentional Lauri was in choosing her graduate program, choosing one that would be supportive of her needs as a graduate student parent, and then also applying for every single benefit she possibly could on behalf of herself and her daughter once in graduate school. So that’s another great interview to follow up with to learn more about this topic if you are a parent or are planning on becoming a parent.

Final Pieces of Advice

33:05 Emily: And for our last topic, we have a really quick piece of advice from Ben, which is: “Read The Simple Path to Wealth by J.L. Collins!” So this advice is on investing again and how relatively accessible it is. I read The Simple Path to Wealth myself about a year ago, really enjoyed it. J. L. Collins is a really easy person to read and understand all about index fund investing, passive investing. So, highly, highly recommend that book as well. And thank you, Ben, for that advice.

33:34 Emily: My best advice for prospective PhD students echoes some of what you just heard, and it’s to work between now and when you matriculate to save up cash for your move, startup expenses, emergency fund, et cetera. If you’re already working a well-paid full-time job or have existing cash savings, that’s awesome, and you’re on a great track. If you are currently a college student or have a not-so-well-paid job, like I did before grad school, it’s time to think about how you can increase your income over the coming months so you can save. Can you do a paid internship? Can you get a full-time temporary position with a good pay rate? Can you start a side hustle, ideally one that you can take with you to graduate school? I love flexible self-employment side hustles for graduate students, such as consulting, freelancing or teaching, but it can take time to build up a client base, so start laying that groundwork now, or at least over the summer.

34:31 Emily: We’ll expand on this topic in my next Set Yourself Up for Financial Success in Graduate School webinar for rising graduate students. We’ll also go deep on the financial decisions you’ll have to make this spring and summer that can literally make or break your finances during grad school. And I’ll give you some guidance on those. The webinar is free and you can find more information and how to sign up at PFforPhDs.com/rising. Thank you for listening through this episode, and a special thanks to those who contributed their best financial advice. Before you go, don’t forget to share this episode with a prospective PhD student, and if you want to join me for the upcoming webinars in my Set Yourself Up for Financial Success in Graduate School series, you can find more information at PFforPhDs.com/prospective/ and PFforPhDs.com/rising.

Outtro

35:28 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? I have 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/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. 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’s Side Hustle Is Trading Options

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In this episode, Emily interviews Min Sub Lee, a 4th year PhD candidate in Molecular and Medical Pharmacology at UCLA. Over the past year, Min Sub has developed a side hustle in options trading, which is selling or buying the option or right to sell or buy stock. Min Sub teaches us what covered calls, put options, and put-credit spread options are. He shares how he learned this technique and why he thinks it’s a good fit for a graduate student’s budget and schedule. Min Sub keeps this strategy low-risk by limiting it to only a small fraction of his investment portfolio and making small, consistent bets. This content is not advice for financial, legal, or tax purposes, and if you are interested in options trading, please do extensive research before you begin!

Links Mentioned in this Episode

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Teaser

00:00 Min Sub: You know, as long as you’re consistent, as long as you are committed to your goals, I really think that in the long picture, right, the money will compound on its own. And you know, I am a very strong believer that anyone can, you know, achieve great wealth, no matter what kind of income you’re making. I personally think that as long as you have the right mindset, as long as you have the right strategy for it, then anyone can do this. That includes grad students.

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. This is Season 11, Episode 4, and today my guest is Min Sub Lee, a 4th year PhD candidate in Molecular and Medical Pharmacology at UCLA. Over the past year, Min Sub has developed a side hustle in options trading, which is selling or buying the option or right to sell or buy stock. Min Sub teaches us what covered calls, put options, and put-credit spread options are. He shares how he learned this technique and why he thinks it’s a good fit for a graduate student’s budget and schedule. Min Sub keeps this strategy low-risk by limiting it to only a small fraction of his investment portfolio and making small, consistent bets. This content is not advice for financial, legal, or tax purposes, and if you are interested in options trading, please do extensive research before you begin! I have a new little project that I’d love for you to participate in! I’m crowdsourcing information on what tax forms are being issued for various fellowship and training grant funding sources. I’ve published an article with the data I’ve collected so far at PFforPhDs.com/taxform/. So if your stipend or salary was from a fellowship or training grant issued from the NIH, NSF, Ford Foundation, DoD, DoE, Hertz Foundation, Paul and Daisy Soros Fellowship Program, Life Sciences Research Foundation, American Association of University Women, etc., or an internal fellowship source, please fill out the survey linked from PFforPhDs.com/taxform/ to help out other people with the same type of funding who are confused about the tax form they received or lack of tax form. Thank you! Without further ado, here’s my interview with Min Sub Lee.

Will You Please Introduce Yourself Further?

02:32 Emily: I am delighted to have joining me on the podcast today Min Sub Lee. He is a current graduate student at UCLA, and we are going to discuss options trading, which is a form of investing that I know nothing about. So it’s very exciting for me to get to learn alongside probably many of you listeners. So Min Sub, would you please introduce yourself a little bit further for the listeners?

02:51 Min Sub: Yeah. Hi, Emily. Very nice to meet you. It’s very good to be here. My name is Min Sub. I’m currently a fourth year PhD candidate. I’m currently studying molecular and medical pharmacology at the University of California, Los Angeles. And I am very passionate about financial education, financial literacy, and hopefully I can provide some good value to my audience who may not be familiar with how options work and you know, all that good stuff.

What are Trading Options?

03:17 Emily: Yeah, sounds great. I am definitely in that audience. So, as longtime listeners know, I am a dyed in the wool passive investor. I set up my investments a decade ago and have not touched them since, because I’m very happy with how things are going. So, actively investing is not something that I do and it’s not something that I teach, but of course I want to learn about it, and I’m happy to share the information with the listeners as well. So, Min Sub, let’s start with what are options, and how does this differ from what we might otherwise think of as like stock trading?

03:50 Min Sub: Yeah, absolutely. So basically most of us are probably familiar with the concept of buying shares of a company. So essentially when we purchase, let’s say 100 shares of, you know, your favorite company, you know, let’s say McDonald’s or something, or, you know, Walmart or Target. Well, that basically means that you are essentially part owner of a company’s equity. Now, options are something that I honestly never considered doing until this year. Because you know, you might hear in the media saying that, well, you know, people have like based lots of their money on options, right? People basically, you know, put their entire life savings into options. They basically lost it all. So options really have a very negative sort of like vibe on overall market trading. But I actually wanted to, you know, change that sort of like sentiment today because options training can actually be very profitable and very, very safe if you do it correctly.

04:46 Min Sub: Right. So, essentially what options are is that options are basically a right or some kind of a contract to buy or sell typically 100 shares of a company. So here’s an example that I usually tell my friends whenever they ask me, you know, about options. So, let’s say that you are a home buyer, and I am a home seller, right? So, I currently own a house that is currently selling for about $500,000 right now. And you are interested in buying my house. However, you currently do not have the full $500,000 in cash, but you are willing to essentially have the right to buy my house. So, let’s say that you pay me $100,000 of quote unquote premium, and what the premium states is that you basically ask me if you can buy a $500,000 house for $200,000 with a $100,000 premium.

05:49 Min Sub: And essentially how that works is, you know, typically when we have those contracts, we set some kind of a contract date and some kind of a strike price. So essentially let’s say in three years, even if my house let’s say appreciates to 1 million dollars, because you have a contract with me stating that you have the right to buy my house for $200,000, essentially you could buy my house at a total of $300,000 if you add up your initial premium plus the amount that you want to pay for. So that is, in a nutshell, how options work. And, you know, obviously things can go wrong both ways because you know, my house can easily collapse to, you know, $0, right? So in that case, you know, then your premium might be deemed worthless. But at the same time, you know, like if my house appreciates to, you know, 10 million, right, then you can technically, you know, buy my house for the premium price that we’ve sort of contracted for.

06:44 Min Sub: Now, the truth is, for the most part, people who buy these call option contracts, many of these premiums expire worthless. And what that means is, typically what happens is, you know, like either the price did not appreciate in value as they wanted, so basically their contracts become worthless, right? Or, you know, the other concept is that sometimes over time there’s a concept called data decay, which means even if you hold an options contract for, let’s say three years, if you do not exercise that contract for some time, the data decay essentially can actually wear off part of your option contract on a daily basis. So, essentially people’s contract just becomes worthless, one because the actual security price doesn’t appreciate, or because of the fact that data decay has essentially just devalued the entire contract on its own, and your premium is just deemed worthless at that point. So, there are different ways how people can exercise options. But typically, you know, I say about 90% of the time, you know, people who own call options typically are on a losing streak, but you know, in the end they’re not losing a lot of money because they’re only paying a small premium to essentially have the contract, if that makes sense.

07:55 Emily: I see. Yeah. So, it does actually, and I’m not sure how familiar the listeners are with this, but I don’t know the stats on this exactly, but it turns out that like over the many, many decades, you know, 90 plus percent of the value that’s been created in the U.S. economy is coming from like the tail end of stocks that have done like incredibly well. Whereas the vast majority of companies either like break even, or lose money like over the long-term. And so it sounds similar to that. So like a lot of the bets that you’re going to make if you enter into this are going to not turn out in your favor, but because you’re making small bets, you only have to win big a certain percentage of the time to overall come out ahead.

08:35 Min Sub: Exactly. Yes. Which is why, you know, when people typically buy options, they only, you know, play with a very small percentage of their portfolio because it is money that people can live without,k right? But, you know, if the country goes well, then people can make lots of money in that sense. Right.

Safer Ways to Approach Options Trading

08:50 Emily: Okay. So I think we have the basic idea of what options are. So then how do you approach options trading in such a way that you think you’re going to come out ahead mostly?

09:03 Min Sub: Right. So, I mean, there are different ways to win in options trading. So how about this, let me start with actually some of the safer ways to start options? Because I think, you know, most people still think of options as a fundamentally evil thing, and they just sort of, you know, fear losing a lot of money. And that is, you know, not wrong. You know, if you play options really incorrectly, if you really think that you could sort of win big with options, right? You’re not thinking in the right mindset, right? Because in the end, options should be only about 20% max of your total portfolio. For me, you know, I only play with maybe 10% of my total you know, security asset portfolio, mainly because I know that if I lose that 10%, you know, I’m not going to lose my sleep on that, right?

09:46 Emily: If I heard you correctly, what you’re saying is that about 90% of all the money you have available to be invested is not invested under this strategy. You’re doing maybe a long-term diversified index situation, probably?

10:00 Min Sub: Correct.

10:01 Emily: Okay. Good to know. Okay. So we’re talking about this fraction of your portfolio, and the strategy that you’re using in that. Please continue.

Strategy #1: Covered Call Option

10:07 Min Sub: Correct. Yes. Yeah. So there are actually three sort of strategies that I adopted on options. And I really think that these strategies are very, very useful for anyone to get started. Mainly because, first of all, they’re risk-free, right? Technically, there are still some risks to options. So, I mean, don’t think that this is actually something that’s guaranteed to make money, because if you do it incorrectly, you will lose part of something. So, the first strategy I’m going to talk about is actually a strategy called a covered call option. So, how this works is, the one requirement that you have to have for this strategy is that you must own 100 shares of some security, some stock class. And basically, here is what’s happening. So let’s say that you have these 100 shares of a company or of some stock, and this stock has not been moving for the past year, or this stock basically has been trending sideways.

11:02 Min Sub: You know, maybe it’s been swinging up and down, but maybe like plus or minus two to 5%, you know, on a flat basis, right? And you know, like you’re looking at your other, you know, stocks like Tesla, you know, and like other big stocks and, you know, you’re jealous because you kind of want to, you know, like start liquidating some of this and start to, you know, maybe consider putting your money into asset classes that actually do appreciate more value. So instead of doing that, right, which I don’t recommend, you should never just jump and just liquidate your cash just to jump on a hot stock just because it’s moving up like 20%, you know, on a weekly basis. But essentially how cover calls work is you can basically kind of say that I think that the current stock that I’m owning is not going to go above 10% of value in the next certain time. Right?

11:55 Min Sub: So let’s say that, you know, by next month, by December 3rd or something, right? You know, my hundred shares, I do not expect these shares to go above a certain price. So what we can do is we can actually sell a covered call and receive a premium. So, basically I am kind of betting that because I sort of know on a high trends basis that I don’t think that these shares will go above a certain strike price, I am willing to sell a covered call option on my current shares. And with that, you can actually earn roughly between about two to 3% of your current assets. So let’s say that you own about 100 shares worth of, you know, your favorite stock. Pinterest, let’s say, right? And, you know, you currently have about, let’s say $5,000 worth of Pinterest.

12:46 Min Sub: And, you know, you can sell a covered call option and receive about, you know, two to 3% of your current holdings. And if your bet is correct, right? If you’re correct in a sense that Pinterest did not go above 10% in value, then you’re basically going to keep that premium, right? You’re basically going to keep your current shares, and you’re also going to keep the premium, and we can actually do this on a weekly basis because we can actually sell a weekly cover call options on your securities. So essentially, you know, for stocks that you believe that you don’t really expect them to move on a really volatile basis, then this is a very good strategy to actually sort of earn passive income. It’s kind of like earning dividends, you know, on your stocks, right? To an extent. Now, the downside, you know, of course, is Pinterest might all of a sudden skyrocket, right?

13:38 Min Sub: You know, there might be really good news, you know, something, let’s say there’s an acquisition purpose. And, you know, like Pinterest might literally go up 30%. Well, in that case, you’re kind of screwed because you promised to sell 100 shares of your security at a specific strike price. And if the price of Pinterest has gone up way over your strike price, then there’s a high likely chance that you’ll be called out, which means, you know, you will still get your premium, but you’re forced to sell your 100 shares of a company at a target price. So typically selling a cover call is a very good viable option for stocks that typically don’t move too much. You know, stocks like Apple, like Microsoft, you know, these stocks that tend to have a very low volatility and, you know, stocks that typically have very low, you know, like ups and downs are very good ways to actually utilize cover call options as a strategy. I’ve been using this option for quite a while, and I’ve made pretty decent income. And so far, I have never got called out yet. So hopefully I can, you know, stay that way for next, you know, whatever years I continue to do options.

14:50 Emily: With that example, is the price that you agree to sell that stock for what you’re calling the strike price? So like, in your example, it was that like 10% above wherever the price was when you made this bet?

15:02 Min Sub: Correct.

15:02 Emily: So I guess what I’m thinking is, for you as the person who is, you know, currently owning these hundred shares, basically you get money if your stock doesn’t move that much, or if it goes up quite a lot, you still get more than you had in the first place, because you’re selling at that slightly higher price. It’s just not as high as it could have gone had you never put that, you said it’s a covered call, right?

15:26 Min Sub: Exactly. Perfect. Exactly.

15:28 Emily: Yeah, so I see the attraction here.

15:31 Min Sub: Yeah. So like I said, right, it’s very good for stocks that don’t really have a high volatility because you know, if your stock goes, let’s say down, right? That, you know, it still sucks because your stock went down, right? But you’re not going to be called out. But you know, if your stock let’s say suddenly goes up to like 20%, then you know, it’s an opportunity cost that you sort of gave up because of a premium in that sense. So that is one down side, but overall, like, you know, if you feel like there is a security that you just want to hold for a long time, but want a little bit more passive income, then this is one really good strategy to do so.

Feasibility for Grad Students

16:04 Emily: I guess a further follow up question about this, this a little bit relates to like, how feasible is it for a graduate student to do this. To own a hundred shares of a stock, the stock has to be fairly low in price, right? For that to be manageable for a grad student kind of income. So like for instance, when you have done this strategy, what is the stock price or some examples of stock prices that you’ve done this for?

16:26 Min Sub: Yeah. So, you know, I mean, I’ve been trading for some time, about two and a half years now. And honestly, like when I first started this strategy, I didn’t start with covered call options. I actually started with another option trading that I slowly, you know, started to accumulate a little bit of cash on the side. And I’ll actually get to that strategy, which is actually much more feasible and practical for grad students. But right now I currently only, if I were to be transparent with my portfolio, I currently own 100 shares of Lemonade right now. So, Lemonade is actually an insurance company that I really believe that there’s a good future growth to this, but Lemonade also has been trending sideways for a long time. Right now, Lemonade is trending for about $62 if I’m looking at it correctly, and it’s been like this for about the past three months. So, like I simply just used the strategy to, you know, essentially like gain a little bit of passive income on a weekly basis to at least, you know, get something out of it.

17:23 Emily: Hmm. Okay. So the way that you’re using this strategy is you have what you want to be a long-term holding, but you don’t expect it to take off anytime soon or do much movements anytime soon. So you’re making, as you said, some income from it in the meantime.

17:38 Min Sub: Right. Right. Exactly.

Strategy #2: Selling a Cash Secured Put Option

17:39 Emily: Very interesting. Okay. Well, I think you said there were three sort of approaches that you wanted to cover for options trading. So what’s the second one.

17:45 Min Sub: Yeah. So the second one is actually a little bit similar to the covered call option. So the second one is called selling a cash secured put option. So how this works is basically you are obligated to, this time instead of sell, you’re obligated to actually buy one hundred shares of a company that you like. Okay. So, I currently do not have many sold puts going on right now. But let’s say that you have a company, okay? I don’t know, let’s say that you really want to buy Costco or something, right? But you know, you currently don’t like the price right now because Costco is trending for about, you know, $350. I don’t know, I haven’t checked, but let’s say it is. But you know, you really want to own Costco at a lower price. So what you could do is you could actually sell a put option.

18:42 Min Sub: And how that works is for a put option, you actually need a collateral this time. So in the case of a cover call, your collateral was your 100 shares of a security, but for a put option, your collateral is actually cash. That’s why it’s actually called a cash secured put option. And because an option contract typically, you know, moves 100 shares at a time, you know, and maybe Costco is not a good example in this case, but basically we need to have, you know, so if you’re willing to buy Costco at $320, then you need to have a cash security collateral of about $32,000 in your account, which might seem impractical for grad students. But that’s kind of like how put options work. And basically what happens is you also get a premium on that. So you can basically put your collateral up, and then you also receive a premium based on that collateral.

19:34 Min Sub: So if Costco let’s say never goes down to $320, let’s say, right? Let’s say Costco just moons and let’s say it just stays at $350. Well, then the good news is that your premium is still yours. You get to keep that premium, and you actually get to keep your collateral, right? Because you know, basically in a put option, you’re obligated to buy the shares. But if your strike price has not reached below your expectation, then you know, after a week, right? Essentially your put options will expire worthless and you get to keep your money and you get to keep your premium, potentially. Now, I really like puts because here’s, and, you know, put options, I think is really never a losing strategy. Let’s say that Costco actually does go down to $320. Let’s say. Well, remember the reason why you’ve done it in the first place is because you are actually willing to pay that much money for Costco, right?

20:28 Min Sub: So, in a sense, it’s not a losing game because that was your original bet, right? You have an entry strategy and you wanted to basically buy a hundred shares. So even if Costco, you know, falls after earnings or something, you know, let’s say it falls down to $319. Well then yeah, you’ll be called out, right? You will lose your collateral. And actually you’re forced to basically buy 100 shares. But the good thing about that is, let’s say that, you know, you just don’t like Costco anymore all of a sudden. You can always, you know, sell those hundred shares back in the market, right? And essentially, you know, if that happens, then technically you get your collateral back, and you also get to keep the premium that you originally settled for. So I really think that put options is a very attractive strategy.

Risks of Selling Puts

21:10 Min Sub: The only downside course is that, you know, you need to have a lot of collateral depending on what kind of security you’re trying to buy. But other than that, I really think that selling puts is very lucrative. Especially if you have some cash that you really have no idea how to spend it, but you know, you’re going to at least keep your cash as collateral, then you can sort of receive some passive income premiums, in that sense. I sold puts quite often, you know, during this spring, when the market was very red and you know, I made pretty good income from that. So I’m very happy about that choice. Right now the market is doing really well. So put options are not very attractive right now, but you know, the next time we enter a barren market, I’m hoping to, you know, like consider selling more puts, if I have some more cash on the sideline.

21:54 Emily: So one follow-up question, again, I’ll use your example, and thank you for giving one. So in your example, you agree to buy Costco at $320, but you mentioned, let’s say it fell to $319. What if it falls to $200? So are you still agreeing to buy at $320?

22:10 Min Sub: Exactly. Yes. So that is a risk of selling puts, right? So essentially you know, again, which is why you should not do a put option contract on stock with a very high volatility. You know, Costco has a fairly low volatility. It’s deemed a very safe stock. You know, its P multiple is very low. So, you know, I personally don’t think that Costco will drop that much money unless there is some kind of a really bad earnings report, a really bad guidance or something. But, you know, usually with either your cover calls or selling puts, you should not do these strategies on really volatile stocks because, like I said, we know for fact that if it goes in both ways, we are kind of screwed. So that’s a very good follow up point. And thank you for mentioning that.

22:57 Emily: Okay, thank you.

Commercial

23:00 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Strategy #3: Put Credit Spread Option

24:15 Emily: And what’s a third strategy?

24:18 Min Sub: Great. Yes. So this is a strategy that I really, really like, because I think this is a great strategy for all grad because, unlike covered calls or, you know, cash secured puts, you don’t actually need a whole lot of security or, you know, a whole lot of, you know, collateral. Basically this is called a put credit spread option strategy, and how this works is essentially, you have a put option that is going both ways at the same time. So essentially, you are selling a put, but you’re also simultaneously buying a put at the same time, right? So here’s an example that I thought of yesterday, right? So, let’s say that you are selling a put option for Apple, right? So Apple is, you know, let’s say trending around $147 as of now. And remember what that means is if you’re only selling a cash secured put, you are basically putting $14,700 as a collateral because you’re willing to buy apple at that strike price, right?

25:23 Min Sub: But what if you don’t have that much money? What if you actually don’t have that cash? Well, then you could actually, you know, take that advantage and actually do the opposite. You could actually buy a put option for the same company, but at a lower strike price. So essentially let’s say you sold a put for $147, but you’re actually now going to buy a put option for the same security, but at a lower price, let’s say $146, right? And then remember, when you’re selling a put, you are receiving a premium, and when you’re buying a put, you’re actually paying a premium for that security. So essentially you’re actually receiving the difference on the premium between your sold put and your bought put. So if your sold put was, let’s say $37 of credit, but your bought put is $23 in credit.

26:14 Min Sub: That means your net credit on this put credit spread strategy would be $14, right? Because you’re basically receiving a difference between your sold put and your bought put, right? And you know, of course, you still need to have some collateral, and how the collateral works is basically, it’s the difference between your strike price of your sold put and the strike price of your bought put. So if you sold your put for $147 and you bought your put for $146, the difference is $1, right? But remember, because options operate for 100 shares, your total collateral that you’ll be paying for is $100, right? But you’re actually receiving a premium of $14. So if you put it that way, so if your collateral was $100 and your net premium was $14, that’s about a 14% profit from your collateral.

27:12 Min Sub: And, you know, if you’re correct that Apple basically did not go below your put price, then you know, you can actually keep your premium and your collateral. And the beautiful thing about this put spread strategy is that, unlike the cover puts, unlike the cover calls, you don’t need to have 100 shares, you don’t need to have, you know, basically a lot of cash as a collateral. So I really think this is a really good strategy, and I’ve actually been doing this for quite a while sometime in January of this year. And you know, I’ve been doing this on a weekly basis. And also the one good thing about this strategy is that there are actually ETFs that you could do this. So ETFs, like SPY and QQQ, those two are the two, you know great ETFs for this strategy.

28:00 Min Sub: Mainly because these ETFs actually have three different strike dates per week, right? So basically Monday, Wednesday, and Friday, they have a different strike expiration date. So essentially if you do this correctly, you can actually do this three times a week. And if you, you know, let’s say you sold about, you know, three contracts per, you know, like every two days. And if you make about, let’s say to be conservative, let’s say about $8 per contract. Well, that’s still about $24, you know, on that expiration date. But if you multiply that by three days, that’s still about, you know, $74 of just profit that you’re making from just the strategy. And, you know, like, I think I kind of can figure out your next question. Is this actually a very, you know, like good time commitment for grad students? Because, you know, it might sound like this is very long, very time lucrative and, you know, very, very time sensitive.

28:58 Min Sub: And the truth is, when you first learn how to do this, it does require a little bit of, you know, time to sort of like learn this. But honestly, like once you get more comfortable with these strategies, all you really have to do is simply just wake up in the morning and then, you know, just open your brokerage account, and like on your phone, or it could be on your computer, and just trade these options for, you know, maybe like the first, like 15 minutes of the market open. And that’s it. As long as your security is sold, then you can just, you know, put down your computer, go on a hike, you know, get your breakfast, go to lab. And, you know, like not worry about it until the next expiration date, which is, you know, typically in two days. So I really think that this is a very good tangible strategy that anyone can actually utilize, whether it’s grad students or whether you’re just trying to get started with options.

Recommended Resources for Executing Options Trades

29:47 Emily: If someone is listening and is really interested in pursuing this strategy, but they have no idea where to start, where would you recommend they go to learn more about how to execute these options trades, but also, you know, the research into like, you know, which particular stocks should you be doing which particular, you know, option trade for? So like, what are some really great sources that you’ve learned from in the past few months and years?

30:09 Min Sub: Right. So here’s the thing. So when I first learned about stocks in general or options in general, I actually started with paper money. Because I personally don’t like losing money, and you know, like learning something new like this, even if it’s like a hundred bucks, I mean, even if, you know, that might be a small percent of my portfolio, I don’t like losing money. I mean, so like I would rather be somewhat of an intermediate expert on this field before I actually use real currency. So, you know, there are actually, you know, like online, you know, sources, you know that you could use. I think that the one that I used was actually called the Stockwatch, I think, but basically there are a lot of paper trading platforms where you can sort of like play with fake money and see if this strategy works for you.

30:56 Min Sub: And once you are comfortable with trading fake money, and once you have profited, maybe even become a millionaire with the paper money, I think by then, you know, maybe to me, you know, it took about maybe a good three weeks to be more comfortable with this. So it was a very good learning period for me. And, you know, I’m very glad that I took that time to actually learn about this because now, you know, again, like I said, the time investment, you know, initially might be a little painful, it’s just sort of a big climb, but once you are comfortable with the level of, you know, risk-free training, then honestly this becomes a very routine task for me. So, I started using, you know, a paper training currency, but, you know, there are a lot of YouTube videos out there nowadays, right?

31:43 Min Sub: If you just, you know, look up, you know, how to sell covered call options, how to sell put options, right? How to do a put credit spread. There are many, many sources that people actually use. And there are actually, you know, plenty of day traders online who actually record their, you know, online, you know, videos on live. And they actually show how to execute different trades and they actually do tutorials of this. So there are actually endless amounts of resources that anyone can get started with this strategy. So if anyone is really interested in actually starting, you know, to learn a little bit about options, you know, how to actually trade options in a risk-free way, then I really think that those two ways are a very good start. And you really must make sure that you have enough collateral cash that, again, you are comfortable losing potentially. Because, you know, like I said, I’m only doing this for about 15% of my portfolio, right? Because you know, like I will not lose my sleep if, I mean, it would still stuck, but I will not lose my sleep, you know, if I potentially, you know, lose everything the next day.

Fairly Low Time Commitment

32:46 Emily: Yeah. So I want you to make some comments now about how compatible you think this strategy is with like a grad student lifestyle. And we’re talking both income, like available money to be invested, and of course, again, we’re only talking about a percentage of that total portfolio. And also the time. So like you mentioned earlier, I think there was a little bit of time invested to learn the strategy and you were, you know, playing around with a simulation. And then you actually start doing it. But once you are familiar and comfortable, it sounds like it’s a fairly low time commitment on like the daily or weekly basis, right? To actually execute the trades.

33:25 Min Sub: Yeah. It really is. I mean, you know, honestly, like the actual, like trading itself takes, you know, maybe less than three seconds. You know, like as long as you set your own strike price that you’re comfortable with, and as long as you are, you know, like consistent with what you want to sell it for or buy it for, then it really just, you know, like usually, you know, like I do multiple options on Monday because, you know, technically Monday is when the new market opens, unless it’s a holiday, and then the option contracts expire usually on Fridays. So usually selling a weekly put or cover call on the same week, I think is a very good, consistent income. Now sometimes, you know, like I do a little bit of longer calls. I make longer contracts if I feel like, you know, I can get more premium because you know, the longer your contracts are, the more premium you will get.

34:13 Min Sub: So sometimes if I feel like a stock, you know, might not potentially move for maybe another like two weeks or so, right? Then, you know, I could consider doing that for a longer time, which means the next week I’ll just take a week off or something because I don’t actually have to worry about you know, like losing maybe a premium in that sense. Yeah. So like, honestly, like once you sort of reach that phase of, you know, I learned how to do options, I kind of know what I’m doing, right? Once you sort of like, I think pass that barrier, I think from there, it becomes a very, very passive thing. And that’s the reason why I chose to participate in this podcast because, you know, when we talk about, you know, like passive income, you know, and side hustles. Most side hustles that we are familiar with, you know, usually requires some kind of a time commitment.

35:01 Min Sub: You know, we spend about, you know, an hour or two tutoring, we spend an hour or two, you know, maybe, being a tour guide or something. Or, you know, like you could be some kind of a, you know, participant in some, you know, case study, right? But I think with options, you know, it’s very great because it doesn’t require you to actually exchange your active time for money. Because once you sort of like, you know, have a system, right? It’s kind of like, you know, you are generating your own, you know, machine that gives you your own passive income. Now, you know, don’t get me wrong. Like, again, there are risks to options trading. So, you know, don’t think that everyone’s an expert, because I definitely lost some money during this. You know, but for me, like, you know, because I was very consistent over time and I was very keen to what I believe, and I was very committed to my purchases and other stuff. I was able to make a slowly but substantial income that I still have today. And I’m still looking forward to, you know, keep on doing this, you know, hopefully until I graduate. And by then, who knows what’s going to happen.

Choosing the “Right” Stocks

36:00 Emily: So kind of one more follow-up question on that. Like, I understand that, you kind of said once you set up this like system or like machine, you know, consistently. Yes, there are risks, but you have generated a fairly consistent passive income from this. But I guess I’m more wondering about how you’re figuring out, like you’ve mentioned several individual stocks as examples so far in our conversation, like there’s whatever thousands of stocks to choose from. Like how do you actually figure out which ones you’re going to be making these bets on? Like what resources do you use?

36:30 Min Sub: Yeah, that’s a very good question. So when you talk about like stocks that are deemed considered safe, so there are actually many measurements you can actually learn about this. So, basically when I first got really into investing, I actually read the book called The Intelligent Investor. I actually have it here. Let me pull it out right now. So it’s called The Intelligent Investor by Benjamin Graham. If you see this right here. And basically this is a really good book because it actually really shows you a lot about how to, you know, pick the stocks that are right for you. Essentially, you know, there are two like great measurements of a stock that you consider, right? Because remember, when we do a covered call, you want to choose a stock that has a fairly low volatility that does not tend to move up and down in price too much, right?

37:15 Min Sub: So, you know, a good example would be Google, right? Google or Apple, right? Those two, you know, are very big, you know, big blue chip stocks that have already performed very, very well. Right? So, these are called, you know, large market cap stocks because these companies have already grown, and you know, the amount of growth that they are projecting forward is a lot less compared to, let’s say new SPE companies that have just, you know, IPO’d and you know, these companies have a lot more, you know, potential to grow, right? So I mean, you know, if you’re looking for, let’s say this growth stock investing, then you should not do options on them, personally, because you know, these, like I said, these growth stocks can either go both ways and, you know, because of the high volatility. You might receive more premium, but you have a much higher risk of losing all your money.

37:59 Min Sub: So I would personally stay away from any of those companies that have a very small market cap, right. And, you know, market cap simply means it’s the total asset of a company. So you can basically multiply the share price times the number of shares, that’s how you get market cap. The other measurement is actually a measurement called beta. So I don’t know if you’re familiar with beta, but beta is basically a comparison to the S&P 500 index. And for those who are not familiar with the S&P 500, the S&P 500 basically is a way to think about the U.S. economy as a whole, right? So if your S&P 500 sort of grows on this path, then we can kind of expect that the U.S. economy also follows that trajectory, essentially. So if your beta for a stock is one, that means that stock essentially aligns parallel to the S&P 500.

38:48 Min Sub: So an example of a stock that would have beta one is actually Google, right? Basically, if you actually look at the past chart of Google versus the S&P right, we can actually see that they actually largely overlap together. You know, mainly because, you know, those two companies, they sort of flow in the same trajectory, right? So if I were to, you know, recommend a stock to do options on, I would choose a stock with a very low beta, or with a beta that’s as close to one as possible, mainly because we know those stocks are a lot less volatile compared to other stocks, right? You know, please don’t do, you know, options on, you know, like stuff like Tesla right? Because we know Tesla goes like up and down, in like so many ways.

39:30 Min Sub: So, it’s really, really risky to you know, do those kind of options, you know, unless you have a lot of money to lose, right? And the third measurement that I also look at is something called the PE ratio. So that’s called the price to earnings ratio. And typically I mean, some people say that PE ratio is a measurement of companies’, you know, future performances. But usually I like to basically use a metric where the PE ratio for a company typically should be around 20 or lower. And basically with that measurement, that usually means that the company has already grown, you know, has a lot of built-in growth. And there is a lot less growth potential possible in the future. So, it’s kind of like Google.

40:13 Min Sub: So Google also has a fairly low PE ratio because, you know, they also have grown so much these past, you know, couple decades that you know, we don’t expect Google to, you know, become like a master large cap stock in the future. So, you know, like you could actually search up these stocks on Yahoo finance, and actually look at their charts. And, you know, these charts will actually display all the parameters that I talked about. Beta, PE ratio, market cap, all that stuff. And, you know, if you are interested in learning more about this stuff, there are plenty of resources out there online. The one source that I really like is a source called Investopedia, actually. So Investopedia is basically like an encyclopedia with all the investment terms.

40:54 Min Sub: So, you know, like if you want to know more about, you know, what is a large cap company versus a low cap company? What is a PE ratio? What is a beta? You know, what are call options? You know, you will be able to find individual articles on all of these. So, again, it takes a little bit of time and practice to be familiar with these, but I personally think that as long as you are comfortable and as long as you are interested in making money, then I think these are very good strategies that we could potentially incorporate in our daily lifestyle. Especially if you like investing.

Portfolio Growth in 2021

41:26 Emily: Sounds really attractive. So for your personal portfolio, do you mind sharing how long you’ve been doing this for, how much money you’ve made or how much your portfolio’s grown, and how much time you think you’ve put into the research and the execution?

41:44 Min Sub: So this year alone. So if I were to, you know, just add up all of my total put credit spreads that I made from January 2nd to now. I have about $7,322. And that is because I was able to do this on a weekly basis. You know, I was selling SPY put credit spreads on three times a day, and eventually, you know, those money has been accumulating and compounding. And quite frankly, that’s the reason why I was actually able to accumulate a little bit more capital to start, you know, selling puts. Remember to sell put options, we need cash collateral. So because now I had a little bit of cash, now I’m able to, you know, use these put option strategies to actually sell puts on companies that I’m willing to buy. So basically, like, you know, I think you can see what I’m getting at here, you know, as long as you’re consistent, as long as you are committed to your goals, I really think that in the long picture, right, the money will compound on its own. And, you know, I am a very strong believer that anyone can achieve great wealth, no matter what kind of income that you’re making. So, I personally think that as long as you have the right mindset, as long as you have the right strategy for it, then anyone can do this. That includes grad students.

43:01 Emily: I love the way you put that. I don’t have anything to add to that, except to just say that $7,000 in, let’s see we’re in November now. So almost a year of what is essentially like a side hustle. You know, not that active, you’re not spending a lot, a lot of time on it. It’s a very decent rate of return, especially for a graduate student. So yeah, this is very exciting.

Best Financial Advice for Another Early-Career PhD

43:21 Emily: It’s been really a pleasure for me to learn more about this. So thank you so much for volunteering to be on the podcast. I want to conclude with the question that I ask of all my guests, which is what is your best financial advice for another early-career PhD? And it can be something related to what we’ve talked about today or something completely else.

43:40 Min Sub: Yeah. So this is actually not financial advice, but this is actually, I think, a very good personal habit that everybody should employ, and that is to wake up early. So the reason why I started waking up early was actually frankly, because the stock market in California opens at 6:30. And, you know, like, you know, if I’m trying to get the best bet out of this, right? You know, usually I like to do most of my trades in the morning. But honestly, you know, quite frankly, like after I started to have very prosperous morning habits, I realized that I feel like I have a lot more time in my day, right? Because, you know, when we wake up at let’s say 9:00 AM or 10:00 AM, right? You know, like we tend to feel I think more lazy because the sun’s already out and, you know, we already hear people outside. So, I really feel like fostering this kind of like early morning routine is a very good habit, I think for really anyone, right? Because not only do you feel like you have more time, but I think that, you know, in the morning when people are, you know, mostly asleep typically usually like I get less distracted and I tend to get more work done in the morning, personally.

44:50 Emily: I have to say that I concur, and it’s even a surprise to me. Well, it was so good to meet you Min Sub! Thank you so much for coming on and sharing about this topic. New to me, new to probably many of the listeners, but really exciting to learn about. So thank you! It was great to have you on!

45:05 Min Sub: My pleasure! Thank you so much for having me!

Outtro

45:12 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? I have 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/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. 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.