In this episode, Emily interviews Dr. Jenni Rinker, a mechanical engineering PhD currently working as a researcher at the Denmark Technical University. Jenni paid of $62,000 of student loans from her undergraduate degree while pursuing her PhD at Duke University. Her average payment was approximately $1,500 per month on a post-tax income of $2,700-$3,000 per month. Jenni shares her motivation for setting her lofty debt repayment goal and the practical strategies she used to accomplish it. After paying off her student loans, Jenni even saved enough money to take six months off from work post-defense.

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Links mentioned in episode

• Personal Finance for PhDs Membership Community
• Jenni’s Budget Spreadsheet
• Five Strategies to Improve Your Finances Today as a Graduate Student or Postdoc
• Volunteer as a Guest in Season 2

Introduction

Emily (00:08): Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Emily Roberts. The objective of this podcast is to share the financial wisdom of the PhD community. Season one contains two types of episodes, budget breakdowns and money stories. You can find the show notes for this episode at pfforphds.com/s1e5. That’s P-F-F-O-R-P-H-D-S.com/letter S, number one, letter E, number five. On this episode, I interviewed Dr. Jenni Rinker, a mechanical engineer who paid off an unbelievable $62,000 in student loan debt while pursuing her PhD. Jenni applied several classic personal finance principles consistently throughout her amazing debt repayment journey. This story is so inspirational, you’ll be setting your own audacious personal finance goal before it’s even over. Without further ado, here’s my interview with Jenni Rinker.

Please Introduce Yourself

Emily (01:10): Welcome Dr. Jenni Rinker to the podcast. She is my guest today. Jenni’s actually, um, sort of a personal friend of mine and I’ll let her introduce herself a little bit further.

Jenni (01:22): Okay. Well, thanks very much for having me. It’s an honor to be here. I’m really excited to share my experience, to be honest. Um, so yes, as already mentioned, my name is Jenni. I am, uh, a researcher at DTU Wind Energy. So DTU is the Denmark Technical University. Um, I graduated from Harvey Mudd College in 2011, uh, with a bachelor’s in engineering and then I went right into grad school. Um, I went to Duke University and I got a master’s in civil engineering and then a PhD in mechanical engineering. Um, and yeah, and then right after that I came to Denmark for a postdoc at DTU in the loads and control section. And then I liked it so much I’ve decided not to leave.

Emily (02:08): That’s a really exciting story and one not within the scope of what we’re talking about today, but so interesting to maybe follow up with another time. Um, yeah, so Jenni and I have the, I think unusual distinction of having two alma maters in common, both our undergraduate and graduate institutions. Um, although we didn’t overlap actually during undergrad, so we didn’t meet until graduate school. But one of the things that, um, surprised and impressed me about Jenni was that I actually knew a little bit about a debt repayment journey that she went through, which is not something that everybody is comfortable talking about. So when I conceived this podcast, Jenni was at the top of my list for people who I wanted to talk with about a, an amazing financial accomplishment, um, that happened while she was in graduate school. So I’ll let Jenni say really briefly what kind of, at high level what that accomplishment was.

We’re talking today about your debt repayment journey. Can you tell us about this?

Jenni (02:57): Yes. Um, I don’t know if it’s, it’s amazing, but I guess we’ll, we’ll let the, the audience be the judge. Um, so when I graduated from Mudd, uh, we call Harvey Mudd, Mudd. So if I say that, hopefully not to confuse the listeners. Um, it’s a private institution, so the, um, the cost of tuition’s a little high. So I graduated from Mudd with about $62,000 of debt. Um, that was in 2011. Um, and my goal was to repay it during my PhD. Um, and so I paid off $62,000 of debt, um, in a little bit, about three years and seven months I paid it all off.

Can you tell us more about what kinds of loans you had?

Emily (03:34): Wow. That is even faster than I thought it was going to be. Um, I though you might have taken, you know, maybe your whole PhD to do that. Um, ama – wow. Okay. I’m so excited about this story now. Um, yeah. So let’s dive into the starting point a little bit more. Like what kinds of loans were these? Um, maybe what were the interest rates they were at, subsidized, unsubsidized?

Jenni (04:00): Excellent. Okay. So luckily for the both of us, I kept a spreadsheet <laugh> with all of this information.

Emily (04:05): Of course you did. <laugh>.

Jenni (04:06): Yeah, of course. I mean, how else would you track everything? So let me just pull it up real quick. Um, so I had pretty much all unsubsidized loans. So I had, um, both of my parents were generally were an upper middle, upper middle class family, um, which means unfortunately that I don’t really qualify for any unsubsidized, sorry, any subsidized loans. Um, so what I had was kind of a mishmash. Um, I had some government loans that were at 6.8% interest, um, held in Sally Mae and Nelnet at the time. And then I also had private loans. Um, oh yeah. So my government loans, those at 6.8%, that was about 20, almost $28,000. And then my private loans, I had eight and a half thousand that I took out from a program called Alaska Advantage, which I really wish I hadn’t because that was a whopping 7.3% interest rate, which was pretty dang high. And then I had, um, a collection of private loans that I took out from Wells Fargo that because I was taking them out in like 2000, yeah, 2008, 2010, right around the stock market crash, my interest rates were quite low with the private loans. They were like three and a half to 4%. Oh, this one, one of them is higher. But anyway, so I had a collection of private loans that totaled 34,000. Um, and this was an, uh, this is as of September in 2011. And so that also includes that, that total includes the interest that had accrued, um, throughout my, uh, uh, undergrad. So this was like the values basically right after I graduated.

Emily (05:42): Right. Um, okay. So it sounds like a mix of federal and uh, private and also a wide range of interest rate rates there. Um, and then when you, I guess when you started graduate school at Duke in that, you know, September of 2011, uh, what were you working with at that time? Like what was your income approximately versus your expenses, maybe just roughly for the time being?

What was your income during your PhD?

Jenni (06:08): Yeah. So, um, I had an NSF fellowship for the first three years.

Emily (06:12): All right. Congratulations.

Jenni (06:13): Thanks. So that was, I mean, man, what a way to make graduate schools like you. I tell you what. Um, everyone wants you if you have an NSF fellowship. It’s very nice. Um, anyway, that’s a side, that’s a rabbit hole. Um, so I had this NSF fellowship, but then also, um, Duke offered like an extra package on top. So like for the first year I had like a little bit of an extra loan, not loan, a little bit of extra income. Um, but throughout the course of like my time as a graduate student, my income varied anywhere from about, uh, $2,700 per month to actually up to maybe even $3,000, uh, dollars per month. So anywhere from 2,700 to 3,000 roughly. And that actually held kind of steady throughout the course of, um, my PhD.

Emily (06:55): Yeah. I’m curious. So when your NSF ended, so after the first three years, um, did Duke get, like, help you with a higher stipend after that point than what their baseline was?

Jenni (07:06): Yeah. So, um, my section, not my section, my department, um, civil environmental engineering, it’s quite a nice department because what they do is they guarantee that if they give you admission, you are guaranteed five years of funding, which is very convenient. Um, obviously not at, at like a kind of higher level, but they do guarantee some sort of, you know, baseline tuition, which is nice. So you don’t have to worry about having forced, being forced to master out. Um, that being said, after my NSF ran out, I immediately got, I started applying for a different fellowship. And so my fourth year was basically covered then by this other fellowship, um, by the office of science. Um, and that actually funded a one year external stay at the National Renewable Energy Laboratory in Colorado. Um, so that’s kind of what covered. And that actually was monthly $3,000 pre-tax. Unfortunately they didn’t tax it, which was unfortunate because then you had to like, you know, pay attention to taxes, which is really annoying in my opinion. But, um, so that was $3,000 pre-tax.

Emily (08:08): I’ll just say for the, for the listeners, Duke is unusual in that they actually offer tax, income tax withholding on outside fellowships like NSF. Um, whereas most universities actually don’t do that. So you were actually fortunate that you only had to deal with estimated tax for a smaller period of time during not the entire time. Yeah. Duke is very unusual.

Jenni (08:29): So I was spoiled. Oh man. All right.

Emily (08:31): But they also give us super weird tax forms that cause everybody lots of headaches. So there’s pluses and minuses there.

Jenni (08:37): Like the 1099 MISC and stuff. Yeah. That makes sense now. Hindsight. <laugh>

Emily (08:44): Um, and then your fifth year, was that fellowship as well or was that from funding?

Jenni (08:49): I kind of did. So I actually finished my PhD in like four and a half years. Um, so I defended in like February. And then the way my timing worked out at NREL, I only had like three months gap between my NSF fellowship and then the, the NREL fellowship. So Duke was kind enough to just cover me for those three, um, those three months. And then also, um, I think, yeah, I kept getting income actually <laugh>, um, after I defended as well because I was trying to finish up some papers. Um, but I think that was just, I think that was my, my, um, department being kind and saying like, “Okay, well you had four years of funding. Like we can, we can get you these extra like couple months here and there.”

Emily (09:31): No kidding. <laugh> Yeah. You hustled for much of that stipend. So, um, and then just to kind of clear the board about your starting point, did you have any significant assets at that time that you could, could or ended up putting towards the debt? Or was it just kind of like sort of starting from this point of just having debt? 

Jenni (09:52): No, I didn’t, I didn’t have any assets. I mean, I did do a summer, um, like a summer kind of internship thing. So I got some income from that and I did, I don’t unfortunately have the numbers, but I did earn more than I spent. And so I was able to start paying off my loans over the summer, but things got really chaotic, um, in 2011 because, so I did the summer program, but then I moved to Duke. So there was also like moving costs and then, you know, buying furniture and stuff. So that’s why a lot of my record keeping doesn’t start until September because the whole summer is just chaos. Um, but no significant-

Emily (10:25): I definitely relate to that.

Jenni (10:27): Yeah. Moving across country and stuff. Um, but yeah, no significant assets, no, um, yeah, no house I could sell and no, no, uh, no stock, stocks, none of that.

Why were you so determined to pay off student loans during grad school?

Emily (10:36): Yeah. So you were starting from that negative point that a lot of people coming out of college were starting from and you were going into graduate school. So you knew that that income was going to be capped and quite limited for a large number of years. So the question is why were you so determined that you were going to pay off this debt during graduate school? Why did you set that goal for yourself? Because a lot of people would take the position of my loans can be deferred. I don’t have to make any payments. It’s going to be a challenging time anyway, even without setting that extra goal. Like why did you decide to do that?

Jenni (11:10): Um, I think for me it was, it was kind of like a philosophical choice or like a personal choice. I, I really just don’t like owing loans or people. And the other thing too is like, because my loans were not subsidized, you know, yeah, technically I don’t have to pay during grad school, but the interest is still accruing. Like that’s still more money that I’m going to have to pay back in the end. Um, so it didn’t make sense to me to like, I don’t know, go ahead and buy like 10,000 flat screen TVs or whatever I could have actually bought. Um, it made more sense to actually just get rid of those loans. And then the other thing too is because then if I left, um, if I left grad school then, and I still had all of these loans, I was going to be kind of trapped into paying them. And it really kind of like, if I decided to go, I don’t know, be a bum for a year and travel the world, you can’t do that. Well, you can, but it definitely makes it a lot harder. Um, so-

Emily (12:02): So it sounds like it was a lot about freedom for you, like just there was this burden, um, even though you weren’t obligated to start paying it right away, you felt, um, you know, it hit your gut. Like you felt that you needed to pay this off faster so that you could sort of be unchained from it.

Jenni (12:18): Yeah. I think that’s a, that’s a really good, that’s a really good observation. I just didn’t like, you know, exactly like the chain, I just didn’t like having this weight over my head. And then also the, the knowledge that each day that weight is growing. Like yeah, you don’t see it unless you pay attention, but it’s there. So I think, yeah, I think that’s, that’s kind of why I knew I wanted to at least try to pay off my loans. And then to be honest, I think the decision to do it during my PhD was initially just completely like a random goal. I was like, “Yeah, let’s do it.” And I didn’t actually look at like whether or not it was financially feasible. I was just like, “Let’s just make it work.” And then eventually I did some calculations. I was like, “Okay, now, this is feasible. It’s all right.” <laugh>

Emily (12:55): But – Yeah, that was gonna be my next question, whether or not you had sort of thought about whether or not it was even accomplishable. But no, you’re just like gonna dive in. <laugh> I’m gonna just set this audacious goal and go for it. Um, you know, no matter what the logistics of the situation. But they did work out.

Jenni (13:10): Right. Well, so it did end up being a lot more manageable than I expected. And we’ll get into the details, but yeah. So, um, I think that’s, that’s one way in which I got kind of lucky. Like, you know, to the, the bottom line is that in order to pay off debt, like you need to be able to have your income be higher than your expenses, of course. And like, you know, it’s that profit margin that allows you to pay off loans more quickly or more slowly. And I just got lucky enough that the way I was living and the way, you know, I had income and stuff, which we’ll probably get into a little bit later, um, I was able to do that and still also enjoy the quality of life that I value. So it was, it was kind of like lucky in the way it all played out, but there was also some planning as well.

How did you pay off your student loans?

Emily (13:52): Yeah. Sounds like it. Well, let’s get into those details then. So how did you do this? Like how? <laugh>

Jenni (14:01): Magic, no. <laugh> Um, yeah. So I, um, there’s a kind of financial philosophy that I still hold true, which is like, they basically, my money that I earn from my job, um, that’s what goes towards, you know, like rent, utilities, uh, food. If I have loans, then those get paid off. Um, and then, then like, then I can skin off, skim off the top and do stuff with it. But if I wanna do things like, so, so during this time that I did pay off my loans, I also did like several trips actually for fun. Like I spent two weeks in New Zealand on vacation. Um, I went to Montreal for two weeks for a, a competition. Um, I went to Moab, Utah for another like weekend kind of competition thing. Um, so, and all of these, like, these are like, for me, those are the, the quality of life things that I was talking about. And the way that I told myself I had to pay for those is like that money was not generally allowed to come from my income. That had to be something else. And so what I did on the side that I had like my kind of, uh, side job was, um, primarily, uh, technical copy editing. So I would kind of had some private clients and then also I worked for a company called American Journal Experts. So what they do is they just hire you to basically copy edit, uh, technical papers that have been written by people who don’t speak English as the first language. Um, so, so you’re not really editing kind of the content, but you’re just kind of changing the grammar and making the flow sound like a native English speaker wrote it. So that was kind of my side gig that I really enjoyed doing because it kind of allowed me to get this extra income that then I could spend in a way guilt free, right? I didn’t have to feel bad like, oh, this income could go towards my loans. It’s like, no, I did this extra, this is outside. This is what I can do to, this is the money that I can use to, you know, go to New Zealand, go to India, go to wherever.

Emily (15:57): Yeah, this is a strategy that I’ve actually taught about, um, multiple times in the past, which is, um, when you set up a side income, dedicate it to a specific purpose, post-tax, dedicate it to a specific purpose because then you know every time you work, you know, put the hours in towards that side income, you’re saying, I’m working so I can go to XYZ location for this purpose. Like you know what you’re making that sacrifice for. Um, it makes it a lot more palatable to put in that time because you know exactly where that money’s going to end up going. Um, so I love that strategy. Did you do that throughout your entire graduate school experience or like when did you get started with the side income?

Jenni (16:35): You know, I think I started maybe like one year into my PhD or something. There was a flyer up on, on a wall somewhere at Duke and I was like, “Oh, that might be interesting.” So I kind of like, I was like, “I, I think I don’t suck at editing.” So I kind of, uh, applied. And then it’s, it’s actually still something that I do now. Um, sometimes I had to, well, anyway. Um, but yeah. So, so that was, that was kind of one thing in terms of like I kind of adding, augmenting my income that kind of allowed me to ensure the quality of life that I enjoyed. Um, but the thing that I haven’t really mentioned yet that was probably the most important thing, um, is spreadsheets. So I had, um, a budget. I had a, a, you know, each year I had my spreadsheet and then each spreadsheet had a tab where each tab was a month. So I would track like, okay, so this is my income from Duke University each month. And then I would say, okay, here’s my rent, here’s my utilities, here’s my stuff. And then I had like, and my goal, like, and then I, after I kind of did my calculations, I was like, all right, if I want to pay off my loans in four years, my goal was four years because I also wanted to finish my PhD around four, four and a half years. Um, I needed to put away about $1,300 per month roughly. So I was earning around $2,700 to $3,000 and then I was paying around $1,300 a month pretty much.

Emily (17:54): That’s an incredible ratio. I mean that, that’s a lofty goal to set for yourself. Um, in terms of the percentage that it works out to be, and especially because of that sort of lower, not for a graduate student, but for the general population, lower, um, starting income. Yeah, that’s really incredible that you put away that high percentage.

Jenni (18:13): Well, there were, there were a couple things I had going for me. Um, number one is I had some low rent. So my rent or like my uti – like rent utilities and all of that was around eight or $900 per month. Um, like and that includes, you know, car insurance, I think gas as well. I don’t remember 100%. Um, so I, then that left me kind of enough to spare over. And then I also, I wasn’t really one for like going out to dinner very often. I didn’t really go out to bars very often. Not because I felt like I was restricting myself, but because I would rather spend that money, um, you know, traveling, for example. Like that’s, that was what I enjoyed. So that’s what I did. 

Emily (18:50): So it sounds like you had a solid calculation of what, what’s called like your monthly nut, like what absolutely has to go out the door to pay for your basic expenses. And then you had this large, um, you know, amount of money that you, you wanted to put towards your loans to, to finish within the timeframe that you said. And then you had some other discretionary spending, but it wasn’t really, sounds like you’re sort of a naturally frugal person, um, not wanting to live an extravagant lifestyle. Or rather, like you said, knowing where your priorities were, which was in travel rather than going out sort of on a day to day or, or week to week basis.

Jenni (19:25): Yeah. I think, um, and the other, the other strategy that I employed that actually helped a lot was like every payday, like right after payday, I made my loan payment. Um, so like once, you know, you have that big bank account, that’s when I was like, “All right, $1,300, it’s going away right now.” Um, that did kind of put me into like, it did mean that like my emergency fund wasn’t quite as big as it should have been. Um, but luckily like I managed to, like I did at one point like have my car break and so I did have to pull from my emergency fund, which like completely tanked it and then I never built it back up. Um, but I got kind of lucky in that respect. Like I didn’t have any massive emer – um, financial emergencies. Um, and I’m trying to think. Yeah, but all, yeah, at least for me, like the trick of like getting paid and then immediately sending your loan away so you basically don’t see the money, that’s really, because then at the end of the month you’re like, “Oh, I would love to buy for me, like I love buying cake. I love cake.” So I was like, “Oh, I’d love cake.” And I was like, “Oh, I, I don’t have money to buy cake.” I’m like, “All right, that’s fine. I didn’t need the cake anyway.”

Emily (20:30): Um, yeah, that strategy is more, is commonly known as paying yourself first. And I, I agree it’s totally amazingly powerful. Um, did you, when you were making that $1,300 month payment, did you have that auto pay or was that something you did manually every single month?

Jenni (20:45): Yeah. So that’s something I did manually. And the reason that I did it manually is because, um, so my ultimate goal, of course, was paying off the loans in, in part as quickly as possible, but also in paying as little back as, as little, um, overall, like in, in total. So that meant that I needed to pay off the highest interest loans first. Um, and so I would have to like go through my spreadsheet, my, uh, my other spreadsheet that tracked my loans and say, okay, so what do I have that’s left? Um, which of these has the highest interest rate? And like, okay, let’s, let’s pull that. And then I would just like, and I had this like list of all my loans and then every time I paid one off, I would like gray out the text. So then when I copied the tab for the next month, like that one was basically, it was gone. Um, and it got a little tricky when I got to like Wells Fargo, for example, because I had like four different private loans from them. And if you just like make an online payment, they won’t let you pick like, I want my money to go to this loan. They’ll just, they’ll distribute it accordingly and probably in whatever fashion will allow them to make the most money. So what I had to do was like, I think I had to send a check in, I had to send in multiple checks, like if, or like, and you have to like specify on the check, like this check goes to this loan. Um, so that part, yeah, that part required a little bit more, again, bookkeeping and spreadsheets.

Emily (22:09): Yeah. It sounds like that was a really, um, as you were saying, a crucial tool for you is these spreadsheets, keeping track of everything. And this, um, I want to dive a little bit more into this particular strategy of paying off the highest interest rate loan first because I think this is really more widely applicable. So as you noted, lenders do not always, uh, cooperate, make this easy for you to do. Um, so you had to really go in and figure out for each different lender how you were going to prioritize paying off one particular loan. How to communicate with them. That’s what you needed to do. Um, so I’m wondering, did you, um, because your loans were deferred at the time, I suppose you could have literally just paid on one loan at a time. And it sounds like you were prioritizing to some degree, but did you also make payments kind of across all of them or it was really just one at a time?

Jenni (22:59): Yes. I completely prioritized. I was like, so for example, that Alaska Advantage loan that was like 7.3% or something like that. I was like, okay, that’s the worst one. And also that had a pretty hefty balance too, because I originally took out 8,500 on it. In fact, it was my biggest loan, both in principle and then it had the highest interest rate. So I was like, well, that one’s going to get paid off first. So I just attacked that one, so to speak. And just every, every month I was like, this is all it’s going to. And then when that one died, then I was like, okay, next up is this one. And like you said, because I was in deferment, I was able to completely, uh, prioritize my own way, like which loans could be paid. Um, and I don’t even think I sent, um, and I can check, let me look at the spreadsheet real quick. Um, I don’t think that I even bothered. I think everything was like this month goes to, yeah, for example, yeah, my first, first month of payment paid $1,800 to Alaska Advantage and then Alaska Advantage. And then, and then I have a list of like, okay, now I’m paying to Wells Fargo, now I’m paying to Wells Fargo, now I’m paying to this. So everything was basically only on, I would only pay to multiple loans if I had enough to like pay off one loan and continue with another one.

Emily (24:16): Gotcha. Yeah. So this, um, technique is called the debt avalanche method. I don’t know if you’re familiar with that term.

Jenni (24:22): And the snowball is the other one? Is that right?

Emily (24:24): Yeah. So for the listeners, what Jenni’s describing is the debt avalanche method. And this is as opposed to the debt snowball method. And so with each one of these methods, and they’re both really powerful and sort of in different ways, um, with each one of these methods, you make a list, a prioritized list of all of your different loans. And something like student loans, we often think of as one line item, student loans, balance. But actually in this case, you need to do, you need to break it out into every single individual loan that you’ve taken out, uh, every different lender, all the different years, et cetera. So, you know, Jenni, you had a large handful of loans, it sounds like.

Emily (24:59): Yeah. So nine different loans, not just one, nine different line items and prioritize them. And so with the debt avalanche method, you prioritize based on, um, interest rate and you would pay the minimums on everything if required, which in your case it wasn’t. And then just attack, attack, attack, like you said, that top priority loan with the highest interest rate first. This is as opposed to the debt snowball method where you would prioritize based on loan balance. And that, but in that method, you pay off the smallest balance first. So with this debt snowball, it’s sort of like, um, a psychologically motivating process to get one debt paid off completely before moving on to the next. Start with the smallest one because that gives you the easiest win. But in your case, you did exactly the opposite because you just said you went for your largest loan, which had the highest interest rate first. Um, but I, I’m a little bit partial to the debt avalanche method as well. It sounds like as a fellow spreadsheet lover, you are too. And so you were really motivated by the math and imagining, you know, that debt accruing a larger and larger balance every single day that went by with that high interest rate.

Jenni (26:03): Yeah. I mean, bottom line was just I wanted to pay back in the end as little as possible. And so then mathematically it made sense to get rid of the highest interest loans first. So I was like, all right, well, let’s, let’s do that, you know, so.

Emily (26:15): Yeah. Well, you’ve already illustrated like so many great, um, sort of techniques and strategies for debt repayment or, you know, sort of in general for money management. Was there anything else that you did? Any additional strategies?

Jenni (26:29): I don’t think there’s anything that I really employed, but that’s because, you know, in general, like I wasn’t in such a tight financial situation that I needed to be, needed to be very careful. Um, I’m actually in a situation now where I do need to be a little more careful financially, almost more careful than I was in grad school. So some things that I employ now include like, um, kind of identifying my weak points and like where I tend to overspend. Um, it’s, there’s like a certain, I’ve noticed there’s like a certain, uh, case where I’ll be like, oh, I’ll just buy, like I tend to spend a lot more now like going out to eat, for example, um, or like getting fast food kind of thing. So I’m trying to be more careful on being aware of that. And then if even being aware isn’t enough, then actually what I’ll do is I’ll take out cash and I’ll say like, this is what you have, you’re not allowed to use your card, because definitely when I, when I use my card is when I don’t realize how much I’m spending. Um, so that’s one thing. Um, I still stick to the paying myself first, um, each month because that’s, um, again, if I don’t have, if I’ve already paid myself, then I can’t, uh, I can’t use the, uh, use the money later in an unwise decision. So I think, um, yeah, I think between the budgets and then also just, you know, trying to be more care – be more aware of what I’m spending and what I’m spending on, um, that’s probably my main, my main weapons, so to speak.

Commercial

Emily (27:50): And now, a brief break from the interview. If you want to have conversations about money with other PhDs, like the one I’m having in this interview, I invite you to join the Personal Finance for PhDs membership community. Inside the community, we encourage and equip one another to make meaningful financial strides no matter what your income. Please go to pfforphds.com/membership-community to find out more and sign up. Now back to the interview.

Did you have any speed bumps during your debt repayment journey?

Emily (28:23): So you already mentioned once that you had like a car breakdown that you had to access your emergency fund during graduate school. Was there any other time where you kind of came upon something that was a bit of a speed bump in this journey or was it pretty much, “Nope, I’m paying myself first. It’s my top priority,” and nothing kind of, um, you know, derailed you from that?

Jenni (28:43): You know, I think I got really lucky and I, I didn’t have any big financial setbacks. Um, in general, like I had some, like occasionally, if anything, I have kind of financial help, like weird, unexpected help. Um, in, in the case, like, for example, like I went to a conference and then I got a per diem and then I didn’t spend all the per diem, so then I had like a little bit extra money kind of thing. Um, just a couple small things like that kind of came along and that really, really helped kind of send the loans, send more money to the loans or be a little more aggressive, which is why I ended up paying it back faster than I expected.

Emily (29:19): Yeah, so you had this schedule where you were supposed to pay $1,300 a month, but it sounds like sometimes you threw something more at it.

Jenni (29:27): Yeah. I calculated the average and it looks like I was actually paying about 1,500 per month overall. On average. So that’s, that’s cool. <laugh> I didn’t even realize that till I calculated that number today.

Emily (29:40): Yeah. So not only did you set up this, in your own mind, regular payment schedule, but in addition, you threw whatever else came your way towards those loans. Yeah, it was clearly, clearly a high priority, um, for you. So when you got to three years, three and a half years into this journey and you made the last payment on your loans, like what happened? Like how did you feel or, or, you know, did anything change in your life?

How did you feel after paying off your student loans? Did anything change in your life?

Jenni (30:07): Um, I felt amazing first thing. I was, it was so nice to be like, wow, that’s, that’s done. That’s, that’s something that not a lot of people do. So it’s always kind of cool when you’re just like, wow, I’ve, I’ve done something kind of unusual. Like in a good way, right? Like if you do something unusual and it’s because you fell down the stairs, then you feel bad. But, um –

Emily (30:27): I remember actually that I think you posted on Facebook at the time. Um, and you got so many congratulations, which is like wonderful to see.

Jenni (30:36): Yeah, I did. I, yeah, that was definitely, I was like, all right, I’m gonna brag on Facebook. <laugh>.

Emily (30:41): Yeah. Very, very brag worthy.

Jenni (30:43): Yeah. It was, it was just, it was just so nice to have that off my, off my brain, off my chest, I guess. I, it just, yeah. And, and like I said, because remember the whole, the whole thing was kind of motivated by my mental image of this being like a weight over my head. So, so it really was freeing, like you’ve noted. I was then free to be like, wow, okay. So, and I wasn’t done with school either. I still had this income. So I was like, okay, so now instead of spending $1,300 each month on my loans, I can do anything what I want with it. And then naturally me, I was so used to just like taking that money and just throwing it into a, into a hole. I was like, well, let’s keep doing that. But instead of it being like a hole owned by the man, quote unquote, let’s have it be my own like pot of money. And so I, what I did is I started saving up for travel. And so I planned, I was like, okay, well, you’re going to defend in February and then let’s plan in a six month gap where I can just travel and use this pot of money to go somewhere, anywhere, places. So that’s what, that’s what I did. Um, I started saving up like every month I would take my $1,300 and I would put it away and I had a separate spreadsheet that’s like, here’s how much money you have for this month, um, for this, uh.

Emily (31:57): Must have felt so amazing to be in the black instead of in the red at that time and watching that balance just accumulate so fast.

Jenni (32:04): It was, it was, it was so cool. Yeah. And then it was, and then also it really then allowed me so much more like stress free travel the whole next, you know, six months after I graduated. It was like, great, I graduated. I went to Patagonia for two months. I like drove around the US for a month and then I went all around Europe for another two months, two and a half months, something like that. And I didn’t have to worry about like, oh crap, where’s this money coming from? Because I had it. And then I also knew that I had a job waiting for me in September or August. So I knew like I would again have income. It was perfectly fine to spend all this and just enjoy myself. Um, so it was, it was amazing. It was really cool. <laugh>

Emily (32:44): Yeah. I can’t, I mean, I, I would imagine there are very few people who end a PhD program and have the means to take such a significant amount of time off. Sounds like you got all your ducks in a row with your employment and everything set up and it was a true vacation, um, you know, to celebrate finishing, to celebrate your, you know, debt repayment accomplishment, uh, all of that. I mean, just that’s incredible that you were able to do that.

Jenni (33:11): Yeah. I got, I got pretty lucky with my financial situation and then I just started, started, uh, planning early, I think. And I just tried to keep like, keep looking two steps ahead because normally I’m actually not very good at that. So I was like, all right, let’s just get things kind of lined up down the road and then we can figure everything else out, um, a little bit later. So it, it ended up working out really well.

Emily (33:32): And was that a rejuvenating time off? Like did you, when you started your full-time employment, you know, resumed it did you feel ready? <laugh> More ready than you would have been if you had taken, you know, one week off?

Jenni (33:44): Words cannot express. <laugh> Um, yeah. I’m also like I, I kind of like during grad school was, I actually didn’t even really realize that traveling was so important to me until like partway through grad school. I was like, man, there are places in the world that are beautiful and I have never seen them. So it started to become kind of more and more important to me. And so that’s kind of how like in the back of my mind, I think it was like, oh yeah, let’s, let’s, let’s plan in some traveling. And so the fact that I was able to do that, um, I think it, it just put me in a whole different frame of mind when I, you know, kind of got to Denmark finally and was like, all right, let’s try this postdoc thing. It was just, um, yeah, it was like completely resetting my brain and it was, it was very nice.

Is there anything you wish you had done differently?

Emily (34:30): Is there anything from your whole debt repayment journey that you, in retrospect, wish you had done differently?

Jenni (34:38): Let’s see. That’s a good question. I think I probably, I probably should have kept a little closer eye on my emergency fund. Um, like I already noted, I did kind of tank it at one point and then I didn’t build it back up again. Um, and I got lucky in that I didn’t have a substantial financial emergency, but I probably should have kept that a little fuller. Um, but I think overall I’m, I’m mildly satisfied. I’m not mildly. I’m, I’m satisfied <laugh> with, um, with how the whole thing played out. Um, I can’t think of a way that I could have like shaved off some income, you know, and maybe paid it off more quickly. I think I was, I was toeing the line for me what’s acceptable between like being frugal but also having a good quality of life. So I, I don’t think I would actually have changed too much of, of how I, how I handled it.

Emily (35:33): Yeah. It sounds like it. I had a similar, um, view of my small emergency fund during graduate school, like, yeah, that probably should have been bigger, but nothing, nothing bad happened, you know, nothing, nothing that, that, uh, put me in, you know, credit card debt or anything like that. So it’s kind of like Well, I got away with it.

Emily (35:55): Yeah. And I guess in your case, I mean, it sounds like you maybe didn’t even consider this, but in your case you could have just not made that month’s, you know, $1,300 payment if something had come up because you had that cash flow, uh, because you weren’t required to make payments. Sounds like it didn’t happen. Did you even consider that, like not making your full payment at any point?

Jenni (36:15): There’s definitely, there’s a couple months I was looking, there are a couple months where like I paid less, but then somehow, and I, I have to admit, this is where I, I wasn’t like completely fully prepared, um, or I didn’t prepare as much as I would have liked because I was looking and I was like, because I know I did that at some point, like there would be one month where I wouldn’t pay as much or like I would skip a month or something. Um, yeah, like here this month I only paid 600, but then somehow the next month I paid like almost double. So I’m not really sure in the end how it all worked out. Um, but yeah, I think I just tried to –

Emily (36:53): It sounds like you were, you were being a little bit flexible because some months you were paying quite a bit more than your goal. And so on the occasional month paying a little bit less than your goal was not, ultimately it did not, you know, add up to extending the repayment period. Uh, because you were also focused on paying more when you were able to.

Jenni (37:10): Yeah. I think that’s the main thing is like, because in the, for the first year, um, I had, um, I had kind of an extra income. So I was like closer to 3,000 than I was to like 2,700 post-tax. So I think that kind of allowed me the chance to kind of front load in a sense and I was able to pay off kind of more aggressively in the beginning and then it kind of, kind of evened out. I think also to be honest, I also had the image in my head as like if something financially drastic happens, like my parents are kind enough that they will temporarily bail me out because I know that I will pay them back at some point. Um, so it was never, it was never to me so such a concern. Like if something were to happen, I knew that it wouldn’t be like the end of the world. I was like, okay, my mom won’t like it, but she’ll be able to help me out short term and then I’ll pay her back kind of thing. 

Did this experience affect how you approach personal finance?

Emily (38:00): So you had some sort of plans, even if they weren’t, you know, cash in your bank account, you had some, well, I can turn here, I can turn here. Yeah. I think that’s, that’s quite common. Um, okay. So you’ve already touched on this a little bit, but like I would imagine that this debt repayment process was transformative for you in how you dealt with your personal finances. And so is there any, have there been any lingering kind of effects on how you manage your money due to this experience?

Jenni (38:32): Yeah. I think, um, well, I did, I think it was, it’s almost more interesting to ask like once I got to Denmark and then no longer had this debt, kind of how I handled it. And I would, I would say it was interesting because I, like I stopped tracking income basically. I stopped tracking expenses and I definitely could tell that I got a lot more sloppy with how I was spending things. I was just kind of like, I’m going to buy this thing that I don’t need and this thing. And for me, a lot of my extra incomes are on food because I just like, I have trouble resisting fast food, for example. So I’ll go and be like, oh, that’s a good looking cinnamon roll. And then things in Denmark are expensive. So if you buy like a cinnamon roll like each day, it surprisingly adds up really quickly <laugh>. Um, right. So <laugh> I think now that I’ve kind of gone back to being a little more, um, cognizant of where my expenses are going, I think the, the, the budget spreadsheet that I ended up using is probably my most useful tool, um, for keeping an eye on, okay, so what do I have? What can I spend and what am I spending? Um, because I think then that, that tracking and that ability to kind of reflect upon how you’re spending things is probably the most valuable thing. Um, so I think probably the first like practice that I’m, that I’m engaging again now that I think was super valuable was the use of the budget sheet. Um, and then kind of how I would categorize like different expenses and then keep track of like multiple things. Um, that’s been super useful. 

Emily (40:04): Can I ask a small follow up question about this spreadsheet system that you’ve set up? Um, did you grab these templates from anywhere or is this something completely of your own creation?

Jenni (40:13): No, I ended up making one of my own creation. Um, maybe it was inspired by someone else’s, but, um, it definitely has turned into something that’s like, I have like the columns that I like, like I have food in one column and then I have like kind of utilities in one column. Um, and it just, for me, it, it kind of makes sense, um, how I track it. So I’ll happily share that if, if, uh, people think it’d be useful. I don’t mind at all. Um, but yeah, so that’s –

Emily (40:41): Did you also ever consider using software or look into it?

Jenni (40:45): Yeah, I did. I was, I heard really good things about Mint, uh, mint.com I think it’s called. And so I did look into it at one point, but I couldn’t, like there was something about at the time it couldn’t access all of my loans, I think. Um, and then I’m also, I’m a little bit, I don’t want to say analog because obviously I was still on a computer, but, um, I like a little bit more control. And then I think I just didn’t take the time to learn it properly. Mint, mint.com or perhaps some other financial software probably could have done exactly what I did and perhaps even in a more, um, efficient fashion. Um, but the thing that I did like about actual, actually actively, um, putting it into the spreadsheet is it kind of like at, increased my engagement with like the debt tracking process because I actually started asking for receipts all the time and then I would keep the receipts in my wallet and then I would take them, take the receipts and I would manually like put them in, which this is definitely not something everyone will want to do. Like some people will find that way too much work. But for me, it was a very eye opening process because it was like, okay, so I have these like five receipts and they’re all from the cafe and they all have like four different items. Obviously I’m spending a little bit too much at the cafe. Maybe next time I go, I’ll like bring a sandwich and just buy a coffee. Something like that. Um, it was kind of like the actual act of like putting it into the spreadsheet and watching the numbers change that really kind of made me actually think about how I was spending my money.

Emily (42:12): Yeah, that’s something that I really like about these manual tracking methods, um, or budgeting or, you know, the debt repayment, you know, tracking or whatever it is, um, is that it does force, if you’re, if you’re committed to it, it does force that higher level of engagement and awareness, um, which is wonderful. So I, when I, uh, first started out, I was also using spreadsheets and loved it. Um, and it was only after I got married that, um, my husband and I started using software because he was not willing to put in that kind of time to doing the manual tracking. Yeah. So like the whole joint finances thing, uh, made software a better solution for us, but I still kind of lo – you know, have a soft spot for the manual tracking and, and the, uh, the benefits that come from it.

Jenni (42:58): Yeah, yeah. For sure.

What advice would you give to someone starting graduate school with student loans?

Emily (43:00): So let’s move on to kind of like final thoughts here. Um, is there any advice that you would give someone else in your, you know, going back to 2011 when you graduated from college, you had this high debt load. What would you say to maybe another person starting graduate school in a similar situation?

Jenni (43:18): Yeah. I think, um, I think first off it’s going to be kind of go ahead and like evaluate your financial situation and figure out like what your income is and then, um, was it the nut you called it? Like the core things?

Emily (43:30): Monthly nut. Yeah.

Jenni (43:31): The monthly nut, like, is that like what you have to spend?  Is that what – Okay. Yeah. And I would say like start by just figuring out what your income is, what your monthly nut is, and then seeing what the difference is, because if that difference isn’t that large. Okay, let me, let me say first rule of thumb, realistic financial expectations. Um, you know, I, I had a situation where I was able to do this, but it’s because of course my income was this and my expenses were that, yada, yada. So, you know, it’s, you know, you can’t take exactly what I did and apply it to scenario if you have a different income, if you have a different monthly nut. So I think the first thing is going to be kind of look at what you have and figure out what is realistic for you and what will also make sure you have an adequate quality of life. Um, and kind of evaluate and see like where are your problem areas? Do you tend to overspend in electronics? Maybe why do you do that? Can you buy refurbished? Do you necessarily need the new iPhone? Or if you want the new iPhone, then supplement your income through a different way so that you say, okay, so each month I’ll do this, I’ll earn extra $100 and then after 10 months or however long, uh, you can then buy your fancy new iPhone. Um, I would say just kind of, kind of, yeah, identify your problem areas, realize what is actually realistic. You know, if you’re saying like, I’m going to live off of baked beans the whole month and then I will pay off my loans. I mean, perhaps if that makes you happy, go for it. But if you try that for a month or two and it’s not working, I think it’s time to reevaluate your strategy. Um, so I guess there’s, then that’s two things. Number one is realistic goals. And then number two, don’t be afraid to reevaluate your strategy. Um, because we all make mistakes and this isn’t something that we’re born learning and it’s not even something that we’re really taught in schools. So we kind of have to educate ourselves, which makes it different, difficult. Um, and then we have to learn from our mistakes.

Emily (45:25): Yeah. And to me, you know, the, the PhD is such a long journey. Um, if you start off with a strategy that doesn’t end up being sustainable, like that’s okay. Like you have more time. Um Exactly. You can learn from even not necessarily your mistakes, but the successes that you’ve had, the mistakes that you’ve made, all of that. And there’s a lot of time to keep applying that, um, even before you finish graduate school. And I know that I, at any rate, um, evolved in my practice of personal finance quite a lot over the time that I was in graduate school and ended in a really good place, but didn’t, you know, started in a totally different place. And there was a lot of time for that learning and application to happen. Yeah. Um, but I love that you emphasize kind of figuring out like what your priorities are. And you can’t do everything, right, on your limited grad student income. So if one main priority is debt repayment, then maybe you can have one or two like other priorities like for you, travel, but you made that happen through your extra income. Um, yeah, just having that awareness of what is really important to you because you can’t do everything and you don’t, and you don’t want to. Like there are some things that are going to be more important to you than others. Um, so yeah. Any more last comments?

Jenni (46:40): Um, no. I think, um, this has been really fun to, to chat. So I, I hopefully, I guess, I guess I, my comment would just be I, my heartfelt hope that, uh, this is useful to people and perhaps make some kind of look at their financial strategy and see if there’s something they want to change.

Final Comments

Emily (46:58): I think it will be. Um, you know, you have a very inspiring story, but it’s also clear, I think this, you explained very clearly the strategies that you used that are going to be applicable to anyone really in any kind of debt repayment scenario whether that’s during graduate school student loans or, you know, any other time, uh, any other type of debt and time of life and so forth. So yeah, thank you so much for, um, sharing those strategies so, so well and, and also for accessing your meticulous records <laugh> so that we can have, you know, an, an accurate conversation here. Um.

Jenni (47:29): Well, I get to thank previous, previous self for that. <laugh>. Previous O- OCD’s help.

Emily (47:35): Yeah. Um, well thank you so much, Jenni, uh, for coming on the podcast today. Um, I think it was a wonderful conversation.

Jenni (47:42): Thank you, Emily. This was super fun and I very much enjoyed it.

Outro

Emily (47:47): I want to send a huge thank you to Jenni for being my guest on the show today. Jenni has graciously made her budgeting and tracking Excel spreadsheet available for download. You can find a link to it in the show notes or go directly to pfforphds.com/s1E5-budget. If you would like to learn more about and apply some of the principles discussed in the episode and a few others, go to pfforphds.com/subscribe and register for my mailing list. You’ll receive a PDF that details five strategies you can employ today to improve your finances. The steps are designed to create maximum effect with minimum effort. I’m currently looking for guests for season two of the podcast. So if you’d like to volunteer to break down your budget or share a money story, please visit pfforphds.com/podcast. Please subscribe to the Personal Finance for PhDs podcast on iTunes. During season one, I’ll release episodes on the second and fourth Monday of each month between July and December 2018. See you in the next episode. The music is Sounds of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC.