saving

How to Save Money as a Funded Graduate Student

June 15, 2026 by Emily Leave a Comment

In this episode, Emily explores how to save money as a funded graduate student so that you aren’t in a constant state of financial stress. The first step is to open a savings account and establish a regular savings rate, even if it’s only $5 per month. Second, you must either increase your income or decrease your expenses. Both may seem impossible in your current circumstances, but Emily introduces numerous accessible options that grad students have used in the past for each approach, including the unique opportunities available to you as a graduate student.

Links mentioned in the Episode

Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance.

This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others.

I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

This is Season 24, Episode 1, and today’s solo episode, I explore how to save money as a funded graduate student so that you aren’t in a constant state of financial stress. The first step is to open a savings account and establish a regular savings rate, even if it’s only $5 per month. Second, you must either increase your income or decrease your expenses to increase that savings rate. Both may seem impossible in your current circumstances, but I introduce numerous accessible options that grad students have used in the past for each approach, including the unique opportunities available to you as a graduate student.

The day this episode is published—June 15, 2026—is the estimated tax payment deadline for quarter 2 of 2026. It’s a sneaky deadline because it comes a month earlier than you would expect it to. The whole estimated tax requirement is a sneaky process in itself because your university might not be super proactive about telling you that it might be required of you. But I will right now: If you’re a graduate student, postdoc, or postbac and you’re a US citizen, permanent resident, or resident for tax purposes and you’re not having income tax withheld from your paychecks, you might very well be required by the IRS and your state tax agency to make manual income tax payments throughout the calendar year. This is very common for PhD trainees who are funded by fellowships or certain federal grants. Basically, since your university is not withholding income tax on your behalf, you are required to send in those payments yourself unless you fall into an exception category. If this is the first you’re hearing about fellowships and estimated tax and you need help understanding whether you’re required to make the payments, in what amount, and how to do so, join my asynchronous tax workshop, Quarterly Estimated Tax for Fellowship Recipients through PFforPhDs.com/QEtax/. I’ll show you how to fill out every single line of the Estimated Tax Worksheet from IRS Form 1040-ES and address common scenarios like how to handle switching funding sources midway through the calendar year. I also answer your questions during live calls and via written submissions. For more information and to join the workshop, go to PFforPhDs.com/QEt ax/. I would be happy to help you with this process today or whenever you’re hearing this episode.

You can find the show notes for this episode at PFforPhDs.com/s24e1/.

Without further ado, here’s my solo episode on how to save money as a funded graduate student.

Introduction

If funded graduate students want to be financially healthy during training, they must have access to cash savings to pay for unexpected expenses and emergencies. It’s all too common for graduate students to rely on credit cards or frantic, last-minute cuts to discretionary expenses to pay for unexpected expenses or emergencies when they arise. How many times have you heard of graduate students charging conference expenses to credit cards and paying a high rate of interest for months until they are reimbursed (or not)? And that’s only the tip of the iceberg when it comes to these kinds of expenses. In the course of a year, you can expect to encounter at least a few, such as university fees, car repairs or maintenance, tax payments, travel, medical bills, annual or semiannual insurance premiums, electronics replacements, and home furnishings purchases.

The financial chaos I described is due to managing finances reactively instead of proactively, which itself is a natural result of graduate students’ low income. When most of your income goes toward paying fixed and/or necessary expenses like rent, transportation, and food, you’ll almost certainly find yourself living paycheck-to-paycheck or accumulating credit card debt unless you put serious intention behind saving money and exerting control over your finances.

In my opinion, the real motivating reason to have healthy finances during graduate school is to keep your stress low and minimize the time you need to spend on making decisions about money. Your focus during your PhD needs to be on your research, publishing, and professional development. Experiencing financial stress impairs your ability to perform at the highest level in your scholarship. It’s in the best interest of your advisor and program to pay you enough to make healthy finances possible, but it’s also incumbent upon you to manage your money in such a way that you experience low stress. And that means saving money—both so that you have access to cash in the case of unexpected expenses and emergencies and so that you have flexibility and agency over how you use your money. Saving moves you from reactive to proactive in your finances.

How do you actually start to save as a graduate student or increase your savings rate? First, you must establish a location to house your savings that is separate from where you manage your regular cash flow. Second—and this is the reality of the math of personal finance—you must either increase your income or decrease your expenses to free up money to be saved. Neither is trivial for a graduate student, but one or both is necessary. When it comes to which to tackle first, I suggest exploring how to increase your income before trying to decrease your expenses. Frankly, most graduate students don’t have a spending problem, they have an income problem, and attempting to spend less is like getting blood from a stone. Therefore, in this piece, we’ll discuss increasing income before decreasing expenses.

Establish a Savings Rate

This first point may seem trivial, but don’t skip past it. Your first step is to open a savings account if you don’t already have one. If you try to save money inside your checking account, into which your paychecks are deposited and from which you pay all your expenses and credit card bills, you will find it almost impossible. Vanishingly few people who earn at the level of graduate students will see their checking account balances gradually increase with time no matter how good their intentions.

Your new savings account could be at the same bank as your checking account or not, but it is imperative that the bank does not charge any fees for it. You cannot afford to pay banking fees on a stipend, and in my opinion the mental load required to avoid potential fees is also too taxing. The most common type of fee on a savings account is a maintenance charge that is waived if a minimum balance is maintained. However, if you’re just starting to save, you are unlikely to be able to maintain a minimum balance. The purpose of the cash savings is to be available to you in its entirety when you need it. And if you’re only able to save $5 per month, as I’m about to suggest as a starting point, that savings rate will be more than negated by typical banking fees of $5 to 25 per month. (If you’re currently paying banking fees for checking or savings, you have an immediate opportunity to change banks and establish your savings rate!)

Once you have your savings account open, create an autotransfer between your checking account and savings account for near the start of each month (or right after your paychecks are deposited). This is the ‘pay yourself first’ principle: Before you send your money to everyone else—your landlord, your debtors, the grocery store, the gas pump—set aside money for yourself in your savings account. If you’ve never saved before and you’re currently spending all of your income, start with an amount you don’t think you’ll miss, such as $5 or 1% of your income. It may seem like a trivial amount of money, and that’s kind of the point. Right now we’re focused on setting up the infrastructure for you to save and training your mind to believe that saving is possible. By following the tactical suggestions in the rest of this piece, you can increase that rate over time, but you have to start somewhere.

When you successfully increase your income or decrease your expenses, you have to actually save that money. In our culture, we often use the term “save” to mean “spend less,” such as “I saved $10 using that promo code!” In that scenario, you spent $10 less than you could have, but the money wasn’t saved unless you moved $10 into your savings account. If you set up a recurring revenue stream or decrease a fixed expense, follow through on the process by increasing your autotransfer to your savings account by the same amount (or a fraction of it). If you receive a one-time influx of cash or decrease a non-recurring expense, make a manual transfer to your savings account.

Emotionally prepare yourself that you will need to draw down your savings account from time to time. The purpose of the money is to be available to you for emergencies or irregular expenses to reduce your stress and mental load, which means you should actually use it if the circumstances call for it! Over time, hopefully the balance will grow, but there will be some ups and downs along the way, and that’s to be expected.

Increase Income

The necessary first step to increasing your income is believing it is possible. Graduate students face more obstacles to increasing their incomes than the average person, but it is virtually always possible to do so: where there is a will, there is a way.

I want to first acknowledge some of the barriers to increasing income:

1) Student visas. International students are incredibly restricted in the manner in which they may work or generate income in the US. Violating these restrictions puts your status in the US and your degree at risk—not worth it!

2) Contractual prohibitions. Sometimes the terms of a graduate student’s funding, whether an assistantship or fellowship, prohibit or limit outside work.

3) Departmental or advisor expectations. Some advisors and mentors seem to believe that any income-generating activities would detract from your ability to pursue your graduate degree, and therefore implicitly or explicitly ban them for their students.

4) Workload and other obligations. Some graduate students have little to no time or energy available to increase their income between the demands of their programs and the demands of their personal lives.

I know that sounded like a lot of barriers, but I’m naming them explicitly because I want you to take an honest look at the barriers you actually face or don’t face, and those are going to be different for every individual. When I was in graduate school, I had the general impression that outside work was ‘frowned upon.’ And maybe it was frowned upon, but frowning does not create a contractual obligation. As I went through graduate school I discovered more and more of my peers who had side hustles or businesses or otherwise found ways to increase their incomes. A lot of these were kept quiet from advisors, but sometimes advisors were aware and supportive.

At a high level, you can pursue increasing your income within the academic system or outside of it. The more of the barriers that I just listed that you have in place in your life, the more you should lean into strategies for increasing your income inside the academic system or outside the academic system via passive income. The fewer of the barriers there are for you, the more options there are for you outside of the academic system. I’m going to take each of these categories, within the academic system and outside the academic system, in turn.

Within the Academic System

I sometimes call methods of increasing your income inside the academic system ‘advisor-approved’ because it’s quite likely that your advisor will have either no objection to you pursuing these methods or will actively encourage them. These methods are usually quite compatible with student visa restrictions, although you must verify that before engaging in them.

The following are ideas for increasing your income inside the academic system.

1) Apply for fellowships, scholarships, and grants, everything from multi-year full funding packages down to poster awards and travel stipends. Regularly applying for funding should be in the official job description of a graduate student. If you end up winning an award, your advisor will definitely be pleased and you can add it to your CV. Honestly, even when you don’t win awards, the experience of writing the applications is great professional development. However, if your primary goal is to increase your income, you should selectively apply for awards that will actually affect your bottom line. Some awards will go to your advisor or program and simply replace the funding they were already providing to you. It’s worth an extra few minutes of investigation to figure out whether an award will actually increase your stipend or be sent directly to your bank account. You can ask your advisor while applying or after winning an award to provide you with a real increase in pay so that you can share in the benefit of receiving the award. I’ve discussed increasing income by this method many, many times with podcast guests, and some great interviews to listen to are Season 8 Episode 3 with Dr. Sam McDonald, Season 10 Episode 4 with Dr. Alana Rister, and Season 4 Episode 3 with Dr. Vicki Johnson.

2) Increase your pay rate for your assistantship. Setting aside the prospect of being funded by a fellowship, you might have the option to change the type or amount of your assistantship work to increase your pay. You have to look into your own university’s policies carefully here. Sometimes different assistantship titles have different pay rates, so 20 hours of work as a research assistant might result in a bigger paycheck than 20 hours of work as a teaching assistant. You might also be able to increase your overall appointment percentage, even going above 50% with special permission. Podcast episodes that discuss these matters include Season 5 Episode 6 with Dr. Sarah Frank, Season 5 Episode 16 with Dr. Kelsey Wood, and Season 19 Episodes 5 and 6 with Elle Rathbun.

3) Do an internship or professional fellowship, either a classic full-time summer internship or a part-time internship in any season. This method also has the added benefit of augmenting your CV and making you more competitive for post-PhD jobs. Like with the suggestion to apply for funding, if your primary goal is to increase your income and you are going to forgo receiving your stipend for a season, make sure that the internship pays more than your stipend plus your extra incurred costs for that period of time. Podcast episodes that discuss internships include Season 6 Episode 6 with Dr. Gillian Hayes and Season 7 Episode 7 with Anonymous.

4) Negotiate—collectively or individually or both. I’ve been so pleased to see the increases to minimum stipends that have been won by graduate student unions and unionization movements across the US in the last handful of years. If there is a union or unionization movement at your university, please lend your support. This is the best way to achieve permanent and widespread improvements in stipends and benefits, especially for your less privileged peers. Even informally banding together with other grad students in your department and asking for a stipend increase can sometimes be effective. In terms of individual negotiation, which I also encourage, this is most effective when you have a point of leverage. The first point of leverage is as a prospective graduate student when you are being recruited. After committing to a program, your remaining point of leverage is when you win outside funding. Grad students often receive stipend increases above their previous level or the level specified by the fellowship, a one-time bonus, or agreement to pay the higher fellowship stipend in non-fellowship years. Effective arguments I’ve seen for both collective and individual negotiation include affordability or cost of living in the university’s city and comparisons with what peer institutions pay. Podcast episodes that discuss collective negotiation include Season 12 Episode 7 with Dr. Alex Parry and Season 20 Episode 6 with Garrett Dunne. Podcast episodes that discuss individual negotiation include Season 2 Episode 2 with Dr. John Vsetecka, Season 19 Episode 7 with Dr. Wen, Season 11 Episode 1 with Maya Gosztyla, and Season 8 Episode 7 with various contributors. I also have one crossover episode that discusses both approaches with various contributors, which is Season 15 Episode 4.

Outside the Academic System

There is a great deal more variety in methods for increasing your income outside of the academic system. Broadly speaking, you can 1) have a side hustle that involves working for someone else, 2) start a business, or 3) generate passive income. I’m quite partial to the latter two options, but I’ll go through them in turn. No matter which method you pursue, try to chase either high pay rates so that you can minimize hours spent or activities that will do double duty to enhance your CV or resume.

1) A side hustle working for someone else. In this scenario, you would be a part-time employee of a business. The advantages of working for someone else are that the work is teed up for you to perform and the pay rate and hours are most likely reliable. The disadvantages are possible rigidity in schedule or volume of work, which might be incompatible with your role as a graduate student, and that the pay rate is not set by you and probably on the lower side.

2) Your own business. This is not as intense as it sounds. It basically means that you determine the work that you perform, with whom you work, and your pay rate, of course depending on what the market is for your skills. Think freelancing or the gig economy to start out and perhaps becoming more formal with time. The advantage of having a business as a grad student is that you can set your hours and modulate them to complement your workload at the moment. The disadvantage of this route is that you have to spend time attracting and landing every client or customer. Honestly, a lot of academics are self-employed on the side of their main appointments, so this is not an unusual model. Selling services is the fastest way to get started. Season 3 Episode 12 with Dr. Toyin Alli is a great primer.

3) Passive income. This is a very popular method among graduate students, even those facing the most extreme barriers to increasing their income. You may be able to generate passive income without working at all through credit card and banking rewards. Of course, perfect behavior with your credit and finances is a prerequisite for this method. Podcast episodes that detail credit card and banking rewards include Season 2 Episode 9 with Seonwoo Lee, Season 7 Episode 8 with Dr. Julie Chang, Season 20 Episode 8 with Brendan Henrique, and Season 20 Episode 3 with Kyle Smith. A crossover method with business ownership is generating passive income within your business, such as by selling digital products, which Dr. Toyin Alli and I discuss in Season 11 Episode 8.

The most ideal way of increasing your income outside of academia, in my opinion, is to be paid at a high rate to work what I call a career-advancing side hustle. This is a side hustle that you can put on your CV that helps you gain new skills or demonstrate the skills you already have, expands your network, adds a new mentor or recommender to your circle, or otherwise increases your employability post-graduate school. You’re most likely going to be paid a high rate if you take the rare and valuable skills and knowledge that you are developing inside academia and apply them in a non-academic setting.

Let’s assume that you’ve found a way to increase your income. Fantastic! How do you actually translate that into an increase in your savings rate? I suggest creating a rule that you automatically save a set percentage of your net income—that’s your income after business expenses, if applicable, and taxes. It could be 100% if you’re quite aggressive, or perhaps 50% or another compromise fraction if you would like to both save and reward yourself for your great efforts. It’s going to be really tempting to just let your extra income go into your checking account and mix with everything else, but this is a recipe for lifestyle inflation. That money will be spent before you know it! Instead, if possible, automatically deposit all or a fraction of your additional income into a savings account or set up an autodraft that moves the correct amount of money from your checking account into your savings account. If your additional income varies, you’ll probably need to carry out these actions manually, so add it to your task management tool or tie it habit-wise with another action that happens around that date.

My Season 1 Episode 5 podcast interview with Dr. Jenni Rinker illustrates a different approach that can be quite effective. Jenni set a goal to pay off her undergraduate student loans during grad school. She used her stipend income for her necessary living expenses and student loan payment and paid for discretionary expenses with her side income. By funding her discretionary expenses with her side income, she incentivized herself to work more so she could spend more but did not put her basic expenses or financial goal in jeopardy if she was not able to work on the side for a period of time.

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Emily here for a brief interlude.

Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, budgeting, or designing your financial life, each tailored specifically for graduate students and postdocs? I offer live workshops, asynchronous online courses, and cohort-based programs on these topics, and I’m now booking for the 2026-2027 academic year.

If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, medical school, postdoc office, or postdoc association? My workshops are usually slated as professional development or personal wellness. Orientations, postdoc appreciation week, or close to the start of the academic year would be a perfect time for tax education or general personal finance content. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process.

I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation!

Now back to our interview.

Decrease Expenses

When I was in graduate school and trying to increase my savings rate, I turned to decreasing my expenses through frugal tactics. Certain of these tactics made a big difference and greatly increased my savings rate, while others had only a small effect. In retrospect, I realize that the most effective tactics were the ones that took relatively little time and effort, while the tactics that were most time-consuming and tedious to carry out tended to only have a marginal effect on my savings rate.

With your limited time and energy as a graduate student, I want you to generate the greatest effect possible. To that end, you should focus your expense decreasing efforts on 1) your large, fixed expenses, 2) the remainder of your fixed expenses, 3) your large, variable expenses, and 4) the remainder of your variable expenses. Your budget game is honestly won or lost on your large, fixed expenses. If those are not properly scaled for your income, it’s going to be incredibly difficult to save much of anything, so definitely evaluate those first.

However, before we dive into various frugal tactics that you can implement personally, I first want you to check into any benefits you might be eligible for as a graduate student and/or low-income individual or household. Getting a product or service for free or at a reduced rate that you otherwise would have paid for fully is the first and best way to decrease your expenses. These benefits might come through your university; the local, state, or federal governments; or your community.

I won’t exhaustively list all the benefits you may be eligible for, but I will mention the most common ones that graduate students use:

Subsidized housing from your university. If it’s offered and you’re not already in it, get on the list ASAP. People already in such a lease may need a roommate, so search for that opportunity. It can be life-changing.
Resident advisor positions and similar titles. This is a combination of a benefit and a side work opportunity. Basically, you help facilitate housing for the university and in exchange they reduce your rent. Among my podcast interviewees, I’ve commonly seen a 50% rent reduction, but Dr. Adrian Gallo in Season 1 Episode 3 received completely free housing and a meal plan from a fraternity.
Childcare subsidies and grants from your university or the state or free drop-in childcare. I have a forthcoming podcast interview with Madeline Hebert in which she details how she receives completely free daycare for her two children thanks to subsidies from a state program and a grant from her grad student union.
The Supplemental Nutrition Assistance Program aka SNAP or food stamps and Women, Infants, and Children aka WIC.
Free food at seminars and events on campus. Not a joke. You can replace multiple meals per week if not daily if you keep your ear to the ground.
Food pantries on campus and in your local community.
Emergency grants and loans from your university.
Subsidized personal travel when you pair it with work travel, such as paying to stay an extra couple of days after a conference when your airfare was paid on your behalf.

If you’re not sure what benefits might be available at your university and in your state at your income level and household size, please make an appointment with your university’s financial wellness office. They can point you to relevant resources and perhaps even help you apply.

I trust that you will look into all these possible benefits and more as your first step toward decreasing your expenses to increase your savings rate! Having done that, we can discuss the more conventional method of decreasing your expenses through your own decisions and efforts.

I’ll go through in the priority order that I mentioned earlier the various strategies for reducing each category of expense:

Your large, fixed expenses. For virtually everyone, that means housing. If you have a young child, childcare qualifies. If you own a car, your car payment, if applicable, and car insurance likely also qualify. This is the most difficult and daunting category to make changes in, but like I said earlier, it’s pretty much the ball game right here. If you are looking to increase your savings rate by reducing your expenses, do not skip this category unless the sum of all of your necessary expenses is already less than 50% of your after-tax income. Yes, it will take time, research, effort, and probably money to reduce one of these large fixed expenses, but if you manage to reduce one, that is money that stays in your pocket month after month in perpetuity without you needing to expend any additional effort. So for each of these large, fixed expenses, research its market thoroughly and re-evaluate your needs as they may have changed since the last time you made a choice. There will of course be reasons to stick with the status quo, but if you truly want to increase your savings rate by reducing your expenses, you owe it to yourself to honestly evaluate your current options. Almost invariably, when I interview someone on my podcast who is paying below market rent or owns a very inexpensive car, they cite the legwork and patience they put in up front when deciding on that purchase.

Your other fixed expenses. That’s everything from renter’s insurance to fixed-price utilities to your memberships and subscriptions, and don’t forget those that are paid less frequently than monthly. The first question should always be whether the expense is a need, and if it’s discretionary, if it’s more valuable to you than increasing your savings rate. The second question is whether what you’re receiving exceeds your need or want and how to downgrade if so. For example, on your insurance policies, check that you’re not over-insured and consider raising your deductibles. The third question, if you’ve decided to keep the expense and have right-sized it, is whether you can get a better price through another provider.

Your large, variable expenses. The trouble with variable expenses, and the reason I want you to address your fixed expenses first, is that the amount you spend on your variable expenses depends on your consumption behavior. Yes, it is easy to reduce spending on certain variable expenses. It is even easier to resume spending at the higher level, because nothing contractual or structural changed to lock in the lower spending rate. To sustainably reduce your variable expenses, you must change your habits, which takes consistent and conscious effort at the beginning. Your largest variable expense is likely your groceries, especially if coupled with other household consumables. There are many ways that you can reduce your grocery spend, and I suggest picking one method at a time to test out and develop into a habit before moving on to the next one. Here are just five ideas of dozens: 1) Shift where you primarily grocery shop to a lower-priced alternative like ALDI, Costco, Walmart, BJ’s, or a local discount store. 2) Meal plan and meal prep to reduce waste, buy in bulk, and save time. 3) Eat less of the highest-cost food items, typically meat, seafood, dairy, and/or nuts. 4) Shop sales and use coupons. 5) Buy less processed foods and do more processing and cooking in your own kitchen, for example buying base ingredients instead of a partially or fully pre-made meal. If you have other variable expenses that come close to your grocery category, such as travel or a certain utility, search up ideas for how to spend less in that category and try them out gradually, making the most effective ones into habits.

Your other variable expenses. The smaller variable expenses tend to be categories like eating out, certain utilities, transportation aside from what I mentioned before, home furnishings, entertainment, clothing and shoes, personal care, etc. Honestly, if you’ve done the work to reduce or try to reduce all of your fixed expenses and your largest variable expenses, you will have transformed your perspective on your expenses and built the skills to adjust your spending in these categories, if you think you need to. Examining your behaviors and creating new habits will be the key. Frankly, though, these expenses by definition don’t make a big difference to your overall spending, so it’s fine to not really consciously address them unless they sum to more than 25% of your after-tax income. If you’ve moved in with roommates, changed your cell phone provider, negotiated all your insurance policies, and become a Costco member, you’ve either created enough room in your budget that you don’t have to worry about your spending in these categories or you’ve so thoroughly changed your mindset about your spending that you will naturally adjust it down in these areas. I do not recommend attempting to reduce your spending by focusing only on this category and neglecting the others, although that is the most common approach.

How do you actually translate decreasing an expense into increasing your savings rate? If you decrease a fixed expense, you can increase your automated savings rate by exactly the amount of the expense reduction or a fraction thereof. For example, if you reduce a fixed-price utility by $25 per month, increase your savings rate by $25 per month. If you are developing a new habit to reduce a variable expense, try it out first to see what the consistent expense reduction is and then increase your savings rate by a conservative reflection of that amount. For example, if with a new frugal habit you have decreased your grocery spending by $10-20 per week, increase your automated savings rate by $40 per month. Another option is to increase your savings rate by a certain amount and challenge yourself to stay within spending limits across a few categories to facilitate that savings rate—basically, stick to a budget. However, if you challenge yourself in this way, do so by choosing a few categories in which you can effect immediate change in your spending like eating out, entertainment, personal care, and shopping. Don’t do this for categories like your utilities for which your actions only affect your next billing cycle.

One final strategy I’ll leave you with, and this applies to increasing your savings rate whether through increasing income or decreasing expenses, is to pay yourself first and last. I emphasized pay yourself first in the first section of this piece. Pay yourself first is great for the savings that you can absolutely for sure commit to on a monthly basis. However, sometimes your month or budgeting cycle goes better than you think it will—you bring in more income or decrease your expenses further than your baseline expectations. This is where pay yourself last comes in. You still pay yourself first with an automated transfer from your checking account to your savings account at the beginning of the month. Then, at the end of the month, when you have a higher balance in your checking account than you expected, you make a second, manual transfer from your checking account to your savings account. You can’t necessarily commit to that higher, combined savings rate, but it definitely helped in that month. This strategy is pretty intense, but if you’re working on an urgent financial goal like saving up the first few thousand dollars in an emergency fund, those extra dollars at the end of the month can really speed your progress.

Conclusion

Graduate school is too long a period of time to try to skate by without access to cash savings. Unexpected expenses and emergencies will crop up, probably a few times per year, and if you don’t have savings ready to meet those expenses, you’ll quickly find yourself in credit card debt or scrambling to reduce your spending in other ways. This cycle is stressful and will detract from your performance in your coursework, research, and professional development. Instead, intentionally cultivate a savings rate so you will have cash available to you when you need it. To do so, open a savings account and set up an automated transfer for the beginning of the month and then increase that savings rate by deliberately increasing your income or decreasing your expenses.

Listeners, thank you for joining me for this episode!

I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/.

Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/.

See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps!

Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual.

The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC.

Podcast editing by me and show notes creation by Dr. Jill Hoffman.

Campus Resources to Improve Your Finances

July 28, 2025 by Jill Hoffman Leave a Comment

In this episode, Emily shares the microinterviews she recorded at three conferences this year. The conference attendees, all of whom either work at universities or have PhDs themselves, responded to this prompt: “What resource on your campus could graduate students and postdocs access to benefit their finances?” You’ll hear the responses in order from the attendees of the National Postdoctoral Association Annual Conference, the Graduate Career Consortium Annual Meeting, and the Higher Education Financial Wellness Summit. You should be able to detect the transitions among the conferences as there are strong themes within each set. As a bonus, listen for a two-time contributor! While these are all real examples from individual universities, you can search for, inquire about, or request similar resources on your campus.

Links mentioned in the Episode

Campus Resources to Improve Your Finances

Teaser

Tharangi F (00:00): Our Gamecock Community Shop, which is our basic needs school supply closet. It does food meals, it does clothing, um, basic needs of any type, like hygiene, and I think that really does help our graduate student population and they’re actively using it.

Introduction

Emily (00:24): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (00:53): This is Season 21, Episode 5, and today I’m sharing the microinterviews I recorded at three conferences this year. The conference attendees, all of whom either work at universities or have PhDs themselves, responded to this prompt: “What resource on your campus could graduate students and postdocs access to benefit their finances?” You’ll hear the responses in order from the attendees of the National Postdoctoral Association Annual Conference, the Graduate Career Consortium Annual Meeting, and the Higher Education Financial Wellness Summit. I think you’ll be able to detect the transitions among the conferences as there are strong themes within each set. As a bonus, listen for a two-time contributor! While these are all real examples from individual universities, you can search for, inquire about, or request similar resources on your campus.

Emily (01:52): At the start of every academic year, fellowship recipients need to know that if they are not having income tax withheld from their paychecks, they should start self-withholding and possibly make a payment by September 15th. Otherwise, they are in for a nasty surprise when they file their tax returns next spring. If your university is not providing adequate messaging and resources regarding estimated tax, would you please recommend me as a workshop facilitator? I offer both live and asynchronous versions of a workshop that guides US citizens and residents in filling out the Estimated Tax Worksheet in IRS Form 1040-ES and managing their money to seamlessly meet their tax obligations. These workshops are typically considered professional development or personal wellness. I would very much appreciate you cc’ing me when you recommend me so I can follow up with additional information for the potential host. Thank you very much! You can find the show notes for this episode at PFforPhDs.com/s21e5/. Without further ado, here’s my compilation episode on financially beneficial resources for graduate students and postdocs.

Harvard Medical School: Credit Union, Financial Advising, & EAP

Jim G (03:22): I am Jim Gould, director for Postdoc Affairs at Harvard Medical School, and a resource our postdocs could use to help with their finances are, are a couple that we have a, a credit union at Harvard that they could use for banking and, and credit cards and savings, as well as, uh, a retirement benefits like TIAA CREF offers financial advising. We also have an employee assistance program that our postdocs and many of our, um, employees could actually use for finances and many other things.

Oklahoma Medical Research Foundation: EAP

Joel S (03:48): My name is Joel Solís. I’m with the Oklahoma Medical Research Foundation with our HR team as an HR associate. And I think one of the resources that is highly beneficial to everyone at our foundation is our employee assistance program. Where basically the employee has the ability to contact, um, uh, free, uh, assistance when it comes to health, uh, uh, mental health or even financial, um, awareness or legal assistance. Um, it’s basically six free counseling sessions that occur every year, and it’s not only open to them, but also to their families. Um, and like I said, it’s something that renews every year.

George Washington University: 401K/403B Retirement Match & TIAA CREF/Fidelity Partnerships

Ruchi G (04:26): My name is Ruchi Gupta and I work with George Washington University, and I think we have the benefit of having the 401k and 40- 403B, um, with my university and the university matches 1.5 times of that. So that’s a good benefit. Uh, and the university invests have the partnership with the fidelity and the TIAA, and you can either choose or they choose on your behalf. They help you with that. Uh, and not many people are aware of that, and they kind of lose on that benefit. So I think it’s a good idea to be aware and take advantage of the resources available to you.

Penn State: TIAA CREF Consultant

Jennifer N (05:03): Jennifer Nicholas, director of Postdoctoral Affairs at Penn State, and my answer is the TIAA CREF consultant because postdocs could benefit from more mindful planning of how they would save for retirement at this stage of life, and they can often use those services for free, um, because those services are available to those who work at Penn State.

University of Michigan: TIAA CREF/Fidelity Wealth Managers

Mark M (05:27): Hi, I’m Mark Moldwin, the director of the Office of Postdoc Affairs at University of Michigan. And the resource I would recommend is that they would contact, uh, either TIAA, CREF or Fidelity, the two financial service providers for their 403B. Uh, so they would have a, uh, wealth manager help set up, uh, their goals for investing in retirement and get them thinking about, um, how valuable it is to start early.

Massachusetts Institute of Technology: Communication Lab & Teaching + Learning Lab

Alex Y (06:01): My name is Alex Yen. My pronouns are she, her, hers. I am the program director for postdoc Career Advising and Professional Development at MIT, so Massachusetts Institute of Technology. So in terms of resources on my campus that I always encourage my postdocs to know more about and use are services outside of my own office that really emphasize written and verbal communication, which are skills that they can take with them even after they leave MIT. For us, that’s the communication lab. That’s their writing and communication center. That’s the Teaching + Learning Lab. And I encourage postdocs to go and see where can I learn how to improve that grant application I’m putting in? How do I refine the data and the graphs that I’m putting on slides? Is there some type of teaching certificate that postdocs can, um, can get? So that’s what I encourage. Go find those other resources beyond just your career resource center and also your office of Postdoc Services.

University of Michigan Medical School: Therapists

Michele S (07:05): Hi, Michele Swanson, director of Postdoc Office at University of Michigan Medical School. I’m very proud that our Office of Graduate Postdoctoral Studies now has two licensed therapists, counselors, um, who are available to meet with our pred docs and our postdocs for up to six sessions at no cost confidential to describe any kind of personal or work related challenge. And then they can introduce them to resources in the community if they, if longer term, uh, relationship is important.

University of Michigan: Centralized Shared Services

Kaylee S (07:35): My name is Kaylee Steen. I work at the University of Michigan. I’m the Associate Director of Professional Development and Trainee Support, and I would say one of our resources on campus is our centralized shared services. So if you have expenses and you need reimbursement, it’s all a one stop shop to submit a ticket to make sure you get all your money back.

Massachusetts Institute of Technology: Welcome Session

Bettina (07:54): I’m Bettina, I’m a postdoc at MIT, at the Brain and Cognitive Sciences Department, and, um, I happen to be a current president of the PDA and, um, resources on campus. I think looking back into three years of being in a postdoc at MIT I think the resources are there. It’s just that the point in time when you have the bandwidth to access them is way too late because we have the community at MIT is incredibly international, and when you change countries, con- continents, social spheres in starting a postdoc, it’s just too much to adjust to to spend. Any thoughts on your 401k and now looking back? I wish I had the bandwidth back then because I, I’m aware now at I lost money, but also I’m aware now that I’m out in a year, so it’s not even worth putting in the effort anymore, which is unfortunate. What I’m recommending everyone I meet now being a new postdoc is take the welcome session when you, when you arrive, and then take them again six months in because the info out there, it’s just a matter of how much you can digest at a time.

Massachusetts Institute of Technology: 401K and Reimbursement Resources

Expery O (09:04): My name is Expery Omollo. I’m a postdoc fellow at MIT. There are a few things that, uh, a few resources on campus that can benefit postdocs at MIT. One of them is the benefits, uh, and to be specific, the 401k, I feel like it’s very useful for postdocs to be educated on the power of compounding interest. Um, I feel like most people tend to wait until they get a real job before they start investing, and in that time, they’re wasting five years is enough to, let’s say, make a few thousand dollars that they didn’t know about. Um, so that’ll be one thing. Another thing is, um, there are other aspects of saving money when it comes to transit. For example, MIT has a free, uh, transit across Boston to use the public transit system. Uh, if you use your bike to go to campus every day, you can get reimbursed. Um, if you, the MIT health, if you go to the gym, you can apply to get reimbursement from the health provider as well. And most people don’t know this, but this is a free 150 to $300. Um, and another thing is they do have a pension. But it’s very hidden and there’s a lot of, uh, it’s so hard to find that information. But MIT offers it. I think there’s a, you have to be at MIT for limited for some time before you can apply for it. But it’s somewhere there. I saw it recently. And, um, maybe as Bettina was saying, having all of this information during orientation may be the solution and maybe reiterating it over time through email or, you know, in other postdoc meetings, just mentioning it so that people can know about all of it.

Medical University of South Carolina: Library Rental System

Lyndsay Y (11:04): Hi, I’m Lyndsay Young. I’m a postdoctoral fellow at the Medical University of South Carolina. And I think a resource that, um, our postdocs need to know about is actually our library rental system. So you can rent laptops, speakers, uh, projectors, screens, anything technology-wise from our library that for a certain amount of time it’s for free and you can utilize that for your own personal benefit, for your events, for anything really that is that you wanna do. So I think it’s a really underutilized resource that our people should be more knowledgeable about.

Argonne National Lab: HR Resources

Evelyna W (11:38): Hi, uh, my name is Evelyna Wang . I’m a postdoc at Argonne National Lab, and our HR department actually provides a lot of good resources about personal financing and benefits that are available to postdocs. However, I think postdocs need to access and attend some of these seminars and really gain the information that’s being shared with them.

Salk Institute for Biological Studies: Financial Advisors

B. Bea R (12:01): Morning, my name is B. Bea Rajsombath from the Salk Institute for Biological Studies, and I think our postdocs need to take advantage of the onsite financial advisors to schedule one-on-one appointments, so they have access to, to that in understanding how to invest their portfolio.

Massachusetts Institute of Technology: 401K App

Alex Y (12:19): Hello everyone. My name is Alex Yen pronouns, she, her and I am the Career Advising and Professional Development Program Director at MIT Massachusetts Institute of Technology. So the resource that I really like, and I do think this is a resource many, many postdocs I work with postdocs have, is if you have a, if you have a 401k with your university, you should download whatever app that is associated with. So for MIT, that’s fidelity, and there you can actually plan out and do projections of what would it look like, say if you put aside the certain amount of money and they can project, what will that look like to get to your retirement goal? So look at that. It’s nice graphs, it’s nice numbers and data, and I really, really like this resource for helping you understand why it might be helpful for you to put money into a 401k

Fidelity Student Programs

Emily (13:19): Emily here. Adding on Fidelity actually has amazing financial education resources around investing. They have a special program for college students, but it’s rolled out at certain campuses, and I’m guessing it’s also available to graduate students. Not sure about the postdoc side of things, but please check that out if you have access to it.

Villanova: Lifelong Career Resources and Services

Casey H (13:37): Hi, my name’s Casey Hilferty. I’m Associate Director for Career Management at Villanova University. Um, one thing that we would love to remind our grad students of is that we offer lifelong career resources and services, um, including lifelong career appointments. So they don’t need to contract a career coach. If they ever need one, they can always return back to Villanova.

University of Texas at Arlington: Fellowships, Grants, and I-Engage Mentoring Program

Leah C (14:01): My name’s Leah Collum. I’m the program manager for graduate student Academic and professional development at the University of Texas at Arlington. And on our campus, we have several resources that graduate students should be aware of. We have, uh, dissertation fellowships, we have travel grants, we have writing group grants. We have the I-Engage mentoring program, which offers a stipend and all kinds of other internal funding opportunities, um, that graduate students should be aware of, and they can find them all on our website, which is uta.edu/gradschool.

UNC Chapel Hill: Impact Internship Program

Patrick B (14:36): My name’s Patrick Brandt, and I’m the director of Career Development and Science Outreach at UNC Chapel Hill. So one of the programs that I run is called the Impact Internship Program, and it’s a short term internship, uh, local to the RTP or to the triangle area of North Carolina. And it gives the UNC grad students a chance to be able to do an internship and gain some, um, some hands-on skill, uh, development so that they can be more competitive as a candidate, uh, for whatever career they’re interested in.

Georgia Tech: Campus Closet

Megan E (15:09): My name’s Megan Elrath and I’m a online Career Services manager at Georgia Tech. And a resource on our campus that grad students or postdocs should know about that would help their finances is our campus closet, where students can access professional attire for interviewing, um, presentations, maybe even to defend their dissertations or proposals so that they can have that professional look and feel confident when they go into those high pressure settings.

Commercial

Emily (15:35): Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2025-2026 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator to your university, graduate school, graduate student association, medical school, postdoc office, or postdoc association? My workshops are usually slated as professional development or personal wellness. Orientations, postdoc appreciation week, or close to the start of the academic year would be a perfect time for tax education or general personal finance content. Ask the potential host to go to PFforPhDs.com/financial-education/ or simply email me at [email protected] to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

George Washington University: Alumni Network

Autumn A (17:12): My name is Autumn Anthony and I serve as the Assistant Director of Graduate Postdoc Affairs at George Washington University. And one way that we’ve been investing in financial success and career development for our students is within the presidential fellowship, um, which I have the privilege of directing, and it’s a small group, so hopefully in the future we can expand this out to more students. But we’ve been tapping into our alumni network and finding those individuals who have established careers, um, in managing your financial portfolio. And we’ve been able to set up some really great, um, mini seminars and workshops where these folks will come and, and present on how to make the most of your finances and set yourself up for success. And it’s been low cost so far. So that’s something that, um, I would recommend people tapping into their alumni network.

UT Southwestern: Internships

Leah B (18:06): My name is Leah Banks and I’m the director of Graduate career, uh, development at UT Southwestern in Dallas, Texas. Uh, and a resource that I feel would be really helpful for grad students and post-docs, um, is, um, having the opportunity to do internships. And so we recently were able to change the policy in which would allow for them to do research internships. Um, before that they were only able to do consulting venture capital type internships, but this allows for them to really build out their toolkit to tap into those resources outside of UT Southwestern to, um, be more exposed to, um, technical type internships that could really help them to be more, um, marketable when they, you know, leave grad school and their postdocs.

University of Michigan: Career Services and Clothes Closet

Maggie G (18:59): My name is Maggie Gardner. I’m the Senior program manager for STEM Professional Development in the Rackham Graduate School at the University of Michigan. Generally speaking, resources that I believe grad students and postdocs should take advantage of while they’re at Michigan that would help them financially are broadly our career services, but more specifically taking advantage of cv, resume, cover letter review, interview preparation, negotiation workshops. All of these are available to them free of charge while they’re at the University of Michigan. And these are services that they’ll have to pay for, um, if they choose to, to seek them out outside of the university. Um, so these are long-term very beneficial to their financial wellbeing. Um, we also have a clothes closet at the University Career Center that graduate students can take advantage of. Uh, they’re allowed to pick out, I think, two items per semester for interviews or networking events, whatever it is that need, they need professional attire for. Uh, we also have a, um, a food pantry that students are eligible or able to take advantage of. Um, they can stop by every day, every week, whatever it is they need, you know, when they need just a little bit of extra help to, to get by and to, to sustain themselves.

University of Buffalo: Internship Equity Fund

Gina B (20:25): Hi, this is Gina Bellavia, graduate career design consultant at the University of Buffalo. And one thing that would help graduate students improve their finances that we offer is our internship equity fund. So if you were to get an internship that was unpaid, uh, and with either a government agency or a nonprofit organization, you could apply to be paid through through this fund. And usually we have it available each semester and then in the summer as well.

Vanderbilt: Beyond the Lab Podcast

Aubrie S (20:53): Hi, my name is Aubrie Stricker. I am a part of the Vanderbilt Biomedical Career Development Office. And the resource that I think our campus provides for our students is the Beyond the Lab podcast, where it provides informational interviews to give our trainees insights as to how the, uh, alumni got to the positions that they’re in and along the way, they share their career advice, including the financial advice they may have to help the trainees get to where they want to be.

University of Illinois Urbana-Champaign: Campus Web Store

Derek A (21:19): I’m Derek Attig, Assistant Dean for Career and Professional Development in the graduate college at the University of Illinois, Urbana Champaign. And a resource on our campus that I, I think grad students and postdocs could take advantage of that could improve their finances is the campus web store, which has a wide variety of free or, uh, reduce costs software, uh, to, you know, support your work, help you develop new skills, right? And often people don’t know it’s there.

Boston University: PF for PhDs Podcast and Campus Workshops

Béné (21:50): Hi everyone. My name is Béné. I am the Director of Professional Development at Boston University in the Graduate School of Medical Sciences. And I think a resource that has been very inspiring for me is your podcast, Emily, because you’ve been able to actually meet with postdocs who having the same financial constraints as what I had as a postdoc were still able to really think their finances through, we’re able to decide, okay, this is how much I want to invest, this is how much I want to learn about investing. Um, and they’ve stuck with our goals and they were able to actually achieve things that they wouldn’t have without having done so. So I’m looking forward to having you on my campus to talk with our students and helping them really take a step back and make set important financial and budgeting goals.

University of Minnesota: Student Legal Services

Amelia C (22:34): Hi, my name’s Amelia Casas. I’m a one-stop counselor at the University of Minnesota. And one resource to look for on your campus is student Legal Services for help with any sort of renters disputes, immigration, things like that. It’s like having a personal lawyer on retainer for the cost of your tuition and fees.

UC Berkeley: Center for Financial Wellness

Anne X (22:59): Hi, my name is Anne Xiong. I manage the Center for Financial Wellness at UC Berkeley. Um, so the resources I want to introduce to our grad students are actually the Center for Financial Wellness. I encourage all grad students at uc, Berkeley to advantage of this free service. Go to our website, we have online resources, and then we have our peer coaching and workshops.

UNC Chapel Hill: Carolina Cupboard and Bus Passes

Sara L (23:23): My name is Sara Lorenzen. I’m the Assistant Director of Financial Wellbeing at the University of North Carolina at Chapel Hill. Um, and a resource on our campus, um, that I think a lot of students don’t know about is we have a food pantry network, um, called the Carolina Cupboard, um, which is four food pantries on campus that are available, but also, um, UNC students get and employees get a free bus pass through our bus system. And the Chapel Hill Bus system is free to everyone in Chapel Hill. So I think people don’t utilize that nearly enough to save money.

University of South Carolina: Gamecock Community Shop

Tharangi F (23:59): Hi, my name is Tharangi Fernando. I’m the peer consultant manager for the Student Success Center at the University of South Carolina. Our Gamecock community shop, which is our basic needs, um, like school supply closet, it does food meals, it does clothing, um, basic needs of any type like hygiene, and I think that really does help our graduate student population and they’re actively using it.

University of Chicago: Webinars

Emmy (24:21): I’m Emmy, I’m the Communications Manager at the Office of Bursar at the University of Chicago. Our main resource that would definitely be a benefit to our grad students and postdocs would be our webinars. Um, we offer a webinar series for new students, including grad students, and over the course of the year, we offer a ton of webinars that educate on financial wellness in general, but also just the services that our office provides.

University of Utah: International Student and Scholar Services

Katie D (24:46): Hi, my name is Katie DeSau. I am the case manager for the International Student and Scholar Services on the University of Utah campus. Um, my job is to connect students to campus services and the resources that we have for grad students and postdocs, especially international students, would be the International Student and Scholar Services or the IS office. And you can come talk to me about any problem that you have, uh, financial or otherwise, and I can help coordinate contact with, uh, campus resources, especially Financial Wellness Center, where they have options for credit counseling, one-on-one counseling, budgeting, and also finding other financial resources for you. Um, you can also come to me to get connected to the basic needs, uh, collective. Um, they’re all about basic needs. We also have a Feed you pantry. Um, so there are resources that you’re already paying for in your student fees, so please come see us and get help.

New York University: Stern Graduate Financial Aid Office Website

Tina B (25:45): Tina Bird, I’m the Assistant Director of the Stern Graduate Financial Aid Office at NYU. Um, and, uh, some of the great resources that we have is our website. Um, we have a lot of information on our website about, uh, external scholarship sources, um, teaching our graduate fellowships, um, and, you know, veteran assistance. Uh, so yeah, our, our website is specifically designed to help out our students.

University of Missouri: VITA Program

Alex E (26:11): My name is Alex Embree and I’m the interim manager at the Office for Financial Success at the University of Missouri in many communities and on many campuses, uh, there will be a VITA IRS tax resource where students can receive free tax preparation in addition to some tax education, so they can learn about how their, uh, assistantships or how their other funding sources are taxed and can make more, um, knowledgeable decisions about how they’re preparing for their tax burden, um, or how they’re saving for that, how they’re, um, establishing their financial security around their funding sources. And I’ll just add these VITA clinics are for both citizens, residents, and non-residents, depending on the certifications of the people involved. So don’t think it’s not for you if you’re an international student.

UNC Charlotte: Niner Finances

Nicole B (26:57): Hi, I am Nicole Benford. I’m the director of Niner Finances at UNC Charlotte. And to answer the question, what resource on your campus could grad students or postdocs access to improve their finances? I would say that’s my office. Uh, we offer workshops, presentations, and one-on-one coaching, and we also have self-study material on our website at NinerFinances.charlotte.edu. Um, but we are happy to help.

Oregon State University: Student Legal Services

Rebekah H (27:23): Hi, uh, I’m Rebekah Hahn and I’m a graduate assistant at the Oregon State University Basic Needs Center. We have a student legal services team, um, and they’re able to provide free legal services on a variety of issues. Um, I actually completed my divorce, transferred a house, and, uh, made new advanced directives with them all at no cost. And legal services are extremely expensive, so I think that all schools should have something like this.

University of Tennessee Knoxville: Financial Wellness Coaches

Philippa S (27:53): Hi, I’m Philippa Satterwhite. I am the coordinator, uh, for the Center of Financial Wellness at the University of Tennessee. Knoxville. And my answer to be, to make an appointment with, uh, our financial wellness coaches, a one-on-one appointment. Every student can make one. It’s free where we can sit down and help you think of through like your cost, but balancing of budget, thinking about life after grad school, thinking about, uh, you know, the job search. So all those things that we do at a one-on-one counseling, you can make as many appointments as you want. As many if few or as many, um, you’re there to help.

Washington University in St. Louis: Emergency Assistance Fund, Grad School Prep Funds, and iGrad

Andrea S-D (28:24): Hi there, I’m Andrea Stewart-Douglas, director of Financial Wellbeing at Washington University in St. Louis. The resources on my campus to help graduate students, um, we actually have a fund that provides emergency assistance to graduate students. Um, we also have funding available to undergraduate students who are looking to go on to graduate school. So we support their studies for things like the mcat, the lsat, the GRE. We will provide funding to help them purchase their study materials, to cover their test exams, to even cover their fees, um, as they’re applying. We’re also supporting them by providing them with funding. If they do a visit, if they are interviewing at the school and need to travel to that college or university will provide the funding to purchase their plane ticket, cover their hotel fees. We also, um, have a online platform called iGrad, and that’s available to not only graduate undergraduate students, but our graduate students as well. And so we’re encouraging all graduate students to check that platform out. It has tons of great information, uh, for budgeting, uh, planning for retirement, if they’re interested in buying a home. Um, there’s great information on that. So it’s a really, really, uh, robust resource, uh, articles, um, courses, videos, um, pretty much every way of uh, or mode of, um, learning is available on that platform. So, um, we’re also available in our office to provide one-on-one support if students want to come in and just talk about their situation, maybe sit down with us to do a little goal setting. And we’re gonna do our best to provide whatever support we can. And if we can’t do this internally, we have places people that we can connect them to outside of the university as well.

UNC Chapel Hill: Carolina Financial Wellbeing Center

Gilbert R (30:23): My name is Gilbert Rogers. I’m the Director of Financial Wellbeing at UNC Chapel Hill. One resource that I’ll highlight is the Carolina Financial Wellbeing Center. We are a fairly new resource to campus where graduate and professional students, uh, can come and ask questions about personal finance. We can get them connected to outside of the community resources that can help them increase their overall financial knowledge or, uh, get help with, uh, specific situations that graduate students need support with.

University of Oregon: Financial Literacy Workshops

Tennille W (30:52): So my name’s Tennille Wait. I’m the assistant director at the Financial Wellness Center at the University of Oregon. Um, the resources that we have for grad students, uh, recently what we’ve had happen is one of our grad students reached out, uh, to find financial literacy information. So they got hooked up with me. Um, from that we have put together a whole series, or I should say a three part series of workshops for specifically for grad students, um, kind of based around financial literacy, budgeting, um, learning how to make, what their financial aid they’re receiving work for what they’re doing. Um, there’s gonna be a tax component on making sure that they understand any tax implications with the funding that they’re receiving. Um, and then we are also working with, um, you know, other, other campus partners to just make sure that, uh, if they have travel expenses and things like that, how to make sure that all of those things, um, how they impact their financial aid, but then also how to budget for those and make sure that it’s fitting into their financial plan.

Outro

Emily (32:09): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by me and show notes creation by Dr. Jill Hoffman.

How This PhD Student and Her Higher-Earning Partner Manage Joint and Separate Finances

February 19, 2024 by Jill Hoffman Leave a Comment

In this episode, Emily interviews Tram Pham, a 3rd-year PhD student in economics at Uppsala University in Sweden. Tram describes the financial aspect of her relationship with her boyfriend, Markus, from discussing money on their first date to how they structure their joint and separate accounts now that they live together. Even though Tram is the lower earner, she came into the relationship with savings and has guided Markus into starting to save for joint goals, such as emergencies, vacations, and gifts. She knows that her future in academia is likely to require flexibility, so she saves for the unknown. Tram and Markus have learned how to moderate one another’s natural saver/spender tendencies so that they both plan for their finances and live in the moment.

Links mentioned in the Episode

How This PhD Student and Her Higher-Earning Partner Manage Joint and Separate Finances

Teaser

00:00 Tram: I try and always try to make our saving plans fun and interesting because for me, from the beginning, I’m more just focusing on saving, saving, saving, even though I don’t know what I’m saving for. And Markus is like focusing on living, living, living, just living at the moment. So right now we are trying at least to balance those things. Hey, I save, but also I don’t forget to live. And those savings will be spent on the things that I love to do or make my life more meaningful.

Introduction

00:36 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

01:04 Emily: This is Season 17, Episode 4, and today my guest is Tram Pham, a 3rd-year PhD student in economics at Uppsala University in Sweden. Tram describes the financial aspect of her relationship with her boyfriend, Markus, from discussing money on their first date to how they structure their joint and separate accounts now that they live together. Even though Tram is the lower earner, she came into the relationship with savings and has guided Markus into starting to save for joint goals, such as emergencies, vacations, and gifts. She knows that her future in academia is likely to require flexibility, so she saves for the unknown. Tram and Markus have learned how to moderate one another’s natural saver/spender tendencies so that they both plan for their finances and live in the moment.

01:51 Emily: The tax year 2023 version of my tax return preparation workshop, How to Complete Your PhD Trainee Tax Return (and Understand It, Too!), is now available! This pre-recorded educational workshop explains how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. Whether you are a graduate student, postdoc, or postbac, domestic or international, there is a version of this workshop designed just for you. While I do sell these workshops to individuals, I prefer to license them to universities so that the graduate students, postdocs, and postbacs can access them for free. Would you please reach out to your graduate school, graduate student government, postdoc office, international house, fellowship coordinator, etc. to request that they sponsor this workshop for you and your peers? You can find more information about licensing these workshops at P F f o r P h D s dot com slash tax dash workshops. Please pass that page on to the potential sponsor. Thank you so, so much for doing so! You can find the show notes for this episode at PFforPhDs.com/s17e4/. Without further ado, here’s my interview with Tram Pham.

Will You Please Introduce Yourself Further?

03:16 Emily: I am delighted to have joining me on the podcast today, Tram Pham. She is a therapist. third year PhD student at Uppsala University in Sweden, uh, in economics. And we are going to talk today about finances in a relationship. And this is going to be exciting because Tram and her partner do something very different than what I do and what I’ve covered on the podcast in the past. So I like this new perspective. So Tram, would you please introduce yourself a little bit further?

03:39 Tram: Thank you so much, Emily, for having me. Uh, I am Tram Pham, a PhD student. I am a student in economics at Uppsala University in Sweden, yeah, very far away. Uh, and, uh, I am doing research in labor and health economics. I am originally from Vietnam. Uh, as you said, currently I am staying with my boyfriend partner in Stockholm in Sweden.

04:05 Emily: Excellent. Um, and your partner’s name is Markus, is that right?

04:08 Tram: Yeah. So he is a Swedish, yeah.

04:11 Emily: All right. And what does Markus do for his profession?

04:15 Tram: So he is a machine learning engineer. And he is, uh, yeah, so he just had his master finish it two, three years ago. And now he’s working in a real job.

04:28 Emily: Gotcha. But he spent some time in academia, so he understands. Well, we’ll get into it, right? So how did you two first meet?

04:35 Tram: So, yeah, so we was introduced to each other through our mutual friend.

Early Financial Conversations With Your Partner

04:42 Emily: Awesome. And so when you started dating, when you first got together, how soon did conversations around finances or conversations around lifestyle, how did that start?

04:53 Tram: So, uh, I am very conscious in finance and I have been reading a lot of books and also practicing finance independence for a long time. So I think that finance is a really important topic for me. So I brought it up in the first date. Yes. So the first day meeting Markus, I was asking him about his view about finance, how he is practicing, uh, with his own money. Of course, it’s not very in detail, but like just a brief perspective to see whether he also considered that finance is important or not. And in the second date, we asked more question about, Hey, what do you like to do in your life? And, uh, what do you think that finance can help you to achieve that? And how have you planned out and things like that? So yeah, very early in the dating process.

05:47 Emily: Okay. I’m, I’m really curious about this now. Um, because the way you phrase that it sounded very interviewee, but is that how it, is that how it felt for him or for you in the moment? Or was it more like casual, like I’m going to ask a little subtle question about finances and, you know, 30 minutes later, maybe another little question, or was it really like, no, we need to be on the same page right now?

06:09 Tram: Yeah. So now that you mentioned that, I think for me, it came out really naturally because I like talking about personal finance with my friends and things, but yes, with Markus, it’s felt like an interview, like I came in as a teacher or someone interviewing him about his perspective about finance. So from the beginning, he was a bit hesitant, of course. And also he was like, yes, but then I. I think that I explained it to him that, yes, I’m not coming here trying to like interview you or something, just that because I am more serious about relationship. I don’t want to play around. I’m coming and searching for a partner and commitment and things. And I think finance is important for a relationship. That’s why I’m asking these questions. So yeah, I think after my explanation, he became a little bit more open, but of course also not like, in very details, as I wished it could be, so.

07:11 Emily: And in these early conversations, what kind of answers were you getting? Like, were you seeing that he was kind of on the same page as you, although maybe a little bit more reticent to share? Or was it like, oh, no, I’m actually detecting some differences in practices or differences in values?

07:26 Tram: Yes. So. I think that Markus know what is fire movement, what is a financial independence movement, but also in general, he and me, even, even though I am super interested in personal finance, but I don’t consider money as the most important part in my life. I just want to have the freedom and the opportunity to choose whenever I want to have. So I think for that, Markus and I was really on the same page. Like we think that yes, money is important because it allows us to, to live the life we want. And, but also in the just first few days, I could not ask in very detail about, Hey, how much you earn? Or like, what is your expenses? What is your saving? And that kind of thing. Just that On the surface, yes, it’s, it’s very similar. Hmm.

08:18 Emily: So, I haven’t been in the dating pool for a very long time, um, but what I remember reading in terms of like advice for talking about finances was to share first, like to share your, if you want to take that step with the person you’re dating, like, okay, we’re going to talk about our income or our debt or whatever. Like. You reveal first and you set the model and the tone. Is that what you did? Were you more sort of leading the way in the openness?

08:42 Tram: Yeah, so the thing about Sweden is that I think that the gap between different incomes is not a lot. It’s not very much, right? And also kind of like pay and things like is kind of very transparent and also our mutual friend is also a very close friend to Markus and she and her husband also are doing PhD. So I think that Markus kind of has some sense about the salary range that I am in. So yes, I didn’t specifically say how much I earn, but I, I expect all I could hypothesize that he knew kind of not exact, uh, amount, but kind of the range. Yes. But for me, I had zero, zero clue about how much he’s earning.

The Interplay Between Relationship, Financial, and Career Goals

09:28 Emily: So you mentioned earlier that Markus had a master’s you’re in your PhD program. And that one of your values, shared values was freedom, being able to do what you want to do, having money be a tool along that path. I’m wondering how you think about your being in a PhD program at this time, and maybe what your future career plans are and how that interplays with like the fire pursuit. And then the next layer on top of that, of course, is how Markus would feel about you being currently in academia or maybe in the future. So can you talk more about how you think about that with your finances and your career and the relationship and all that stuff?

10:05 Tram: Um, so I think that I, I really love doing research. I love my job and everything like that. But I am also aware that I, I cannot earn a lot of money or like become a millionaire just being a researcher. So, uh, since my childhood, I, my parents had taught me to save money and that kind of thing a lot. So like, I am always a saver. Yeah, regardless of how much I earn, I usually try to save at least 10 percent or even sometimes more than 50%. And also because the prospect of PhD, especially after PhD, if we want to get a good job. we have to be willing to move. So all of these also went into my consideration that, hey, I need to save money because I don’t know where I would end up to be. And also, how about the cost of moving? And, uh, how about later if I want to have babies? If I move so much, I would not receive the social benefit and that kind of thing. So for me, saving is important. And I have always been practicing that. Uh, at the same time, I think that like, Sweden has a really good social assistance, uh, security and that kind of thing. So, usually, like, okay, so I am generalizing here, but I think at least with Markus and my friends, they don’t, they don’t save a lot. Because they don’t think that it’s necessary to save even. Because, uh, after the salary, a large, uh, a large part of your salary already go for the tax and which will be paid for your pension and unemployment insurance later. So at least in term of Markus, before meeting me, he had zero saving because he didn’t think that it’s important. Yes. He think that money is important, but maybe now he’s young and also in the tech sector, he’s earning a lot. So, uh, why should I save? I, I can do that later or something like that. So yes, so when we, uh, entered relationship, I already had some amount of saving, even though my salary is always much lower than Markus and he with large salary, but, uh, yes, he, he didn’t have any saving at that time. And. As I said, I was really very transparent and honest from the beginning, so I also brought up these topics with him from the first few days. Hey, I have to move a lot. Of course, I would love to stay in Sweden, but, uh, I’m not sure whether I have that option. After my PhD,and also, yes, my salary would generally be lower than yours in, in good times. I mean, assuming that he still has a job because yes, in fact, the turnover is also very high. Uh, he understand that. I think that’s the thing that I like so much about Markus also, really very open and also trying to learn things. So yes, because of that, even though he aware of all of these things, but he know that, as long as we are more suitable in our values, and we want to build a family together. It doesn’t matter. So, yeah.

13:20 Emily: Okay. Yeah. So you’re preparing for the possibility of moving out of Sweden, um, depending on where the job opportunities are. And yeah, like that is, that is a really different, um, perspective, I think for people who are, you know, like your, your peers, maybe who are Swedish, like who are used to having that social safety net. I mean, if you moved to the U. S., it’s going to be all on you. Um, right. So that’s just so interesting to think about, like, depending on that, but making that assumption that you’re always going to be living in that country and it’s always going to have the same kinds of benefits. And you’re introducing this, like, well, Maybe I won’t always live here and why not prepare for that like sort of uncertain or like the possibility of a change in the future. And I just think it’s so interesting as you’ve been talking how you’re the lower earning, uh, partner, but you have quite a bit of financial acumen. Um, and least maybe not now, but maybe when you started the relationship more so than Markus did. It depends, of course, on the things that we’ve been talking about, like whether or not it’s necessary to save or to what degree, depending on where you live and so forth. Um, but yeah, I just think it’s interesting, you know, you’re, you’re coming in with savings with the lower income and he doesn’t have that even with the higher income.

Combining Finances With Your Partner

14:27 Emily: So let’s fast forward a little bit. You two live together now, right? And you have some, some degree of joint finances. Can you talk about that process of sort of, uh, joining up more financially?

14:38 Tram: Mm hmm. So, yes, I think as you already mentioned, at the moment we have shared economy. So, um, how it happened is that when we was considering whether to move in or not, Uh, I talk with a lot of my friends about finance and how they are doing with their partner, whether they share economy or whether they separate it. So I think that most of my Swedish friends that I talk with, they have a separate, uh, economy. But most of the Asian friends that I talk with, they have shared economies. So I could hear a lot of pros and cons also about different perspectives. And personally, I think that I also prefer the joint economy. And then I discussed that with Markus, and I discussed why I think it’s a good thing. And because I think that we are living in one household, so it’s better to join. We also will be able to check and see what each other are doing. And if we have a shared, uh, goal of buying an apartment or later moving somewhere, all of these will need to be shared. So I think it will be much also transparent and honest. It’s, it’s, it’s good. And yes, as I said, from the beginning, Markus is really, really open and supportive. He just say, yeah, let’s test it out. I don’t know how it will be, but, uh, let, let’s try it. And if, uh, it doesn’t, um. If it’s not suitable for us, then we can adjust or even change to another method. So yeah, so far we have been practicing joint, uh, account, and I think that we are doing quite well on that.

16:22 Emily: So I love that, uh, openness to experimentation. So that’s, yeah, it’s a great attitude. So you have, it sounds like. A joint account, is that right? Is it like joint checking, joint savings?

16:35 Tram: For example, my salary will go directly to my separate account, and Markus’ salary will go to his separate account, but then we already calculated like a per month how much we need as a fixed expenses, like for the bills and for the groceries for the saving. So I think 90 percent of our joint salary will go to the joint account. So we have like 10 percent left. That means that 5 percent for me and 5 percent for him. So that we can just spend as our individual allowance, like if we want to buy gift for each other, or if we want to hang out with friends, so we don’t have to ask for each other, uh, opinions or something like that. So the 90 percent will be shared between saving, and yes, I can explain that later, but the saving and the bills, the grocery, and also another account called play account, like something that we can use together when we hang out together. And for us, we eat out every week once just so that, uh, yes, it’s, it’s also helps us to understand why money is important and also like. Yeah. Energize us.

17:57 Emily: Okay. So what I’m hearing is that, um, your incomes start separate, but then almost all of them become combined, um, into this joint, joint checking and joint savings model. Um, so the separate, what you keep separate is very, a small percentage of your overall income. Um, and I think the, the listeners will like be curious about this because you mentioned that Markus has a higher salary than you do. How you both, I understand mechanically how it’s working, but how you both are like feeling about it or how he feels about it. Right. Because he’s. Subsidizing, you know, your lifestyle to a degree. So, like, have you had conversations about that?

18:32 Tram: Yeah, yeah. So, uh, I think, yes, because that was also my concern from the beginning. Hey, I am having a much lower salary. Would it be fair for you also to, to give the majority of your salary? And so far, I would say that, let’s say, if our joint account is 100%, then I am contributing around 35 ish percent, and his one is 65%. Uh, yes, Markus agrees with that, of course, but also because he entered into the relationship with a small loan, also from his student loan. So he thinks that it would be fair for him to put more in the joint account because from that we also take out some part to pay for his private loan.

19:20 Emily: I see. Okay.

Commercial

19:24 Emily: Emily here for a brief interlude! Tax season is in full swing, and the best place to go for information tailored to you as a grad student, postdoc, or postbac, is PFforPhDs.com/tax/. From that page I have linked to all of my free tax resources, many of which I have updated for this tax year. On that page you will find podcast episodes, videos, and articles on all kinds of tax topics relevant to PhDs and PhDs-to-be. There are also opportunities to join the Personal Finance for PhDs mailing list to receive PDF summaries and spreadsheets that you can work with. Again, you can find all of these free resources linked from PFforPhDs.com/tax/. Now back to the interview.

Savings Goals and Using Sinking Funds

20:16 Emily: So you mentioned that you have like a few different savings goals going on right now. Can you talk about how you are, like what you’re working towards and also how you are, um, maintaining finances within your relationship, not just how it’s structured, but how you are having conversations and communication around that.

20:33 Tram: Yes. So, I think for the saving goals, the biggest, uh, saving goals right now is, uh, the coming trip to the U. S. Next year, hopefully for my exchange. So for this, uh, we estimated that, hey, we would need around 10,000 USD. I mean, because I already received the scholarship for that, um, uh, exchange, but. 10,000 would be an extra thing in case things happen or also help us to visit other states because we will stay there only for six months. So we would want to utilize the time there as much as possible and also to help us to purchase the flight tickets and insurance, that kind of thing. So for that, Every month, so far, we, uh, try to save around 2,000. So whatever we do, it doesn’t matter. Whenever the money come in, we immediately take out 2,000 for the, for the saving account. So I think, uh, that goal will be completed next month or so, and then we will try to move in other long term savings, such as, like, wedding expenses or apartment expenses. And another, uh, smaller, smaller saving goals would be, like, uh, gifts, such as, like, Christmas is coming. And I think for Swedish people and also in my family, we have a tradition of giving each other gifts. So we are so like each month so far, we add in that around 100 or 200 USD so that we will have some, some amount to buy gifts for our loved one. Another one is a vacation. We also add in, um, yeah, I think 100 or 100 ish around every month, hopefully that next year or the year after that we can afford our trip to Japan. So, yeah, so those are the common and biggest saving account so far. And oh yes, and we also have emergency fund, if you also can count that as saving. Uh, yes, so we have around 500 or so. Uh, yes. Going for the emergency fund. Actually, so far, sometimes we would take out some money from the emergency in case we spend so much money in cooking or eating outside. But we are trying to stick to that as much as we can.

23:00 Emily: I like that you’re, so the way that, the way that I talk about this is, is sinking funds or targeted savings funds. Um, and I like that so much of your saving is for like. Fun, exciting things that you get to do together, because I think that’s a really good introduction to saving for someone who maybe hasn’t practiced it or is less familiar with it. It’s like, it’s really just like planning. Like, do you want to have a December when you’re stressed because you have to buy all the gifts at once and you have no savings for it? Or would you rather build up gradually over time and be more generous because you’ve already planned for it? Like. It’s such a positive, you know, thing.

Plans for a Potential Visiting Fellowship at Harvard

23:36 Emily: Um, I want to hear more about your exchange in the U.S. Um, I’m so excited you’re going to be spending six months and you want to travel and so forth. Like, are you going to a particular university? Is it, you know, for research purposes? Just tell us more about, um, the sort of official, like, career wise reason that you’re doing the trip and then also what you plan to do for fun.

23:53 Tram: Uh, yes. So, uh, hopefully again, it also depends so much on the situation, but I will have a visiting fellow position at Harvard in Boston for six months. I’m still, I already applied and I got a scholarship from Sweden, but I still need to, uh, um, get the offer. Again, they have the possibility to reject still from Harvard. But if everything goes well, I will be there from January to June, like the spring semester. And most of the time, yes, I will be doing research in Boston area. And Markus also is going with me. So that, that will, that, that is a plus. Uh, but beside that, we also plan to visit California where my own sister is staying with her husband. And I also do have other friends there. Markus and me also plan to go to Texas where we can try out the real Texas food. We watch so much YouTube videos about that and maybe Mexico. So, yeah. Those are the plans so far, and I think, as you said, I try and we try to make our saving plans fun and interesting because for me, from the beginning, I’m more just focusing on saving, saving, saving, even though I don’t know what I’m saving for, and Markus is like focusing on living, living, living, just living at the moment, so right now we are trying at least to balance those things, hey, I save, but also I don’t forget to live, and those saving will be spent on the things that I love to do or make my life more meaningful.

25:35 Emily: Yeah, I love that approach. Um, it actually reminds me, I, I reread Die With Zero recently by Bill Perkins. Have you read it?

25:41 Tram: Oh, not yet. Okay.

25:43 Emily: Well, this is definitely a recommendation to you, um, because it just reminds me that like all the saving that we do, whether it’s for retirement or whatever, like pretty much all of it is for your own spending in the future. And hopefully to have a great lifestyle that you really enjoy in the future, uh, maybe some of it is leave a legacy, right? For other people, but probably primarily for most people who are not super high earners, it’s like to provide for yourself in the future. Um, but it’s not all about the future. Um, it’s also about living in the present. So it’s really nice that you do have that balance, but it sounds like it’s not really causing a lot of conflict, right? It’s like a, a healthy, um, I’m going to, you know, moderate you and you’re going to moderate me in terms of your like, you know, um, natural preferences. So I really like that. I’m so excited. I hope you get to do that exchange and that you get to do the traveling that you want to. I’m curious, is Markus going to continue working during those six months or is he taking like a leave of absence?

26:37 Tram: So I think that’s a blessing. thing also because his company allow him to work online during that period of time. I think that is also a thing that I like so much, uh, about his job. I mean, the flexibility to work from home or online sometimes, of course, you cannot check like that for two years or three years, but, uh. If you can explain the reason and if you still can maintain the quality of your job, you have that possibility. So yeah, it’s, uh, it’s, it’s good that we can be there together.

27:12 Emily: And that’s like a really kind of fire thing, right? Of like having the financial flexibility to work somewhere else if you want to for a while to set up your job so you have that flexibility. Like. Yeah, that’s awesome.

Communication Practices for Maintaining Finances in Your Relationship

27:22 Emily: Okay. I asked you a way too complicated question earlier. The second part of that was, um, what are your like practices around communication and finances, uh, for like maintenance purposes today?

27:32 Tram: Hmm. Okay. So I think I, I must say that the foundation of everything is that we already kind of agree with each other that we will be very transparent and honest with each other from the first, from, from everything. And from the first few days, we already had that kind of condition. So, um, yes, even though finance topic is kind of really sensitive, but, uh, we bring it up whenever we think that, Hey, for example, if I look at the joint account and I see like. Markus spend 20 or 50. So usually when we spend something, we try to write out, like when we transfer the money, we try to write out the reason why we’re spending that money. But sometimes the Markus would forget. I usually don’t. Uh, so I would say, Hey, I’m looking at the money today, it seemed like you are spending 50 somewhere. Uh, did you have something fun to do or did you eat something nice or something like that? So we would bring it up to each other and ask to know, Hey, where are the money is going? Because for me, I would be very frustrated if I don’t know where the number is going. And at the end of the month, I’m like, Hey, why are we? In short of money, why, what is going on? Like, should we readjust the budgeting things or things like that? And another thing is that every month when the salary comes, we will sit down and we call that like finance days. So we will try to discuss, Hey, this month we have spent this much on this, this, this, it seemed like we eat a lot. Or it seems like we spend a lot on buying clothes or something like that. Should we adjust something? And, uh, so far, I think it goes super well for us and, uh, to have, um, so usually what we do is we have some fun things to do. When we discuss finance, usually we could eat out in a restaurant and when we were waiting for the food to come, we would starting discussing finance or like we say, okay, first we sit here, we discuss finance and after that we can go for sauna or like a beer or something like that. So we try to incorporate some fun activities again to go in so that, like, especially for me, it’s already become a habit. But also I agree that from the beginning, Markus would find it a bit difficult and also, hey, why every time about money, money, money. So to reduce that frustration, we try to incorporate things that we would like to do and also talk about the topics, constantly discuss with each other, being transparent and honest. I think that helps so much. Another thing we also have been practicing is that we try to celebrate our wins, even though sometimes it’s super small. So for example, last week or so, I received a small scholarship. So we also went out to eat, even though every week we already go out and eat, and in the same week Markus could sell his computer, the one he doesn’t need to, need to use anymore. So we also celebrate that. So actually last week we went out and eat three times. Uh, but I think it’s, it’s, it’s good. It give us some motivation that, hey, we, we really enjoy life and, uh, we have the meaning and we like to do things together.

31:00 Emily: And I, I’m sensing that that is coming from Markus’s side, right? Like if you, like when you weren’t with him, when you were single, if you had a financial win, were you celebrating that or were you just like, great, it goes on my savings?

31:11 Tram: I do not think so. I just like, Oh, you did great. That’s all I would do. But yeah, yes, like literally celebrate and go out and buy something nice for ourselves. I think I’m also learning so much from Markus. Yeah.

31:25 Emily: And it just creates that again, like the positive cycle, right? Of like, we did something positive and we get an immediate, like nice reward to it and it encourages you to keep going. And yeah, I think that’s just beautiful. So what I was hearing about for your communications was that you have at the top of the month, you have like a planning period. Um, and then you have maybe just light check ins throughout to make sure you’re sort of, Oh, was this part of the plan? We need to adjust the plan. Um, But I like that balance. So it’s not all like reactive. It’s not all like, Oh no, we overspent. How did this happen? Blame, blame, blame. You know, it’s, it’s more like, okay, we’re, we’re getting on the same page and then we’re just going to sort of check in and make sure that everything’s going fine. And then you have that reset for the next month where you plan again, but it’s also not just planning. It’s not just like, okay, this is what we’re going to do. And we have no idea whether it happened or not. Right. You have to do like both those sides of process. So I like that you’re doing that together. Um, yeah, it reminds me, my husband and I were both pretty involved with our finances when we were both in graduate school, but I would say in the years since then, he’s kind of let me like do what I want. And like, I will ask him questions like, Hmm, okay. You spent 75 at Home Depot. What, what was that? And he’ll be, oh, remember I bought this thing. Okay. Okay. As long as we’re not like spending for spending sake at Home Depot, now that we’re homeowners, that’s the kind of problems we have. Um, okay. Well, this has been such a fun conversation and I’m so glad that you shared these elements of your relationship with us. It sounds so fun as we’ve been talking about.

Best Financial Advice for Another Early-Career PhD

32:49 Emily: As we wrap up here, would you please share with us your best financial advice for another early career PhD? And it could be something that we’ve already touched on in the interview or it could be something completely new.

33:00 Tram: So I think I would say that, yes, maybe learn to save, even though the PhD salary is not that high, but I think that, uh, saving give us the freedom and the liberation, literally to choose and also in the future. We don’t know what will happen. But at the same time, I think this I’m also learning like saving, but also do not forget to live, like try to do something fun, even though it’s just a small thing, but also make you feel like, oh, the money I’m earning really bring the meaning. So by that you can keep going in a long time instead of like, drop out in the middle of, of the journey.

33:42 Emily: yeah. Great point. Very well said. Thank you so much for coming on Tram, and it was lovely to to meet you and thanks for volunteering.

33:49 Tram: Thank you so much for having me.

Outtro

33:57 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

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

May 1, 2023 by Meryem Ok Leave a Comment

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

Links Mentioned in the Episode

PF for PhDs Subscribe to Mailing List (Access Advice Document)
PF for PhDs S14E9 Show Notes
PF for PhDs S8E3: Knowing Your Worth in an Environment that Devalues Your Work (Money Story with Sam McDonald)
PF for PhDs Season 15
Emily’s E-mail
Sailing Ambrosia (YouTube)
PF for PhDs Podcast Hub (Show Notes)

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Teaser

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

Introduction

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

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

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

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

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

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

Will You Please Introduce Yourself Further?

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

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

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

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

Cost of Living Expenses

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

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

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

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

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

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

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

Money Mindset in Grad School

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

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

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

Minimizing Recurring Costs

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

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

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

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

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

Retirement Saving and Discretionary Spending

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

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

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

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

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

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

Commercial

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

Spearfishing

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

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

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

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

Self-Sufficiency and Knowing What Makes You Happy

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

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

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

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

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

Sailboat and Seabattical

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

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

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

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

32:33 Michael: Thank you.

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

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

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

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

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

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

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

National Laboratory Postdoc Funding

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

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

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

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

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

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

Financial Independence, Retire Early (FIRE)

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

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

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

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

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

Best Financial Advice for Another Early-Career PhD

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

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

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

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

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

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

Outtro

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

This Grad Student Deferred Her Acceptance to Work on Her Finances

February 20, 2023 by Meryem Ok Leave a Comment

In this episode, Emily interviews Brittany Trinh, a PhD student in chemistry at the University of Wisconsin-Madison. Brittany originally applied to grad school in fall 2018, but she elected to defer her acceptance for two years in favor of taking a job. Brittany shares how she developed her finances, side business, and professional life in the 2.5 years she worked prior to matriculating. She started graduate school in fall 2021 in a much stronger financial position—and more confident in herself—than she would have in fall 2019, even though it was a bit of a rough transition. At the end of the interview, Brittany explains for whom deferment of grad school acceptance is a good option.

Links Mentioned in this Episode

Set Yourself Up for Financial Success in Graduate School (Workshop)
PF for PhDs S14E4 Show Notes
PF for PhDs Tax Center
Brittany Trinh’s Website
Brittany Trinh Twitter
Brittany Trinh Instagram
PF for PhDs S11E8: Semester-Proof Your Academic Side Business with Digital Products (Money Story with Dr. Toyin Alli)
Brittany’s E-mail Address
Upwork
PF for PhDs Subscribe to Mailing List (Access Advice Document)
PF for PhDs Podcast Hub (Show Notes)

PF for PhDs S14E4 Image: This Grad Student Deferred Her Acceptance to Work on Her Finances

Teaser

00:00 Brittany: I think the biggest thing was just, one, knowing how the PhD stipend is, and just the whole grad school process. I was just really afraid about like how like setting up my like financial future when like the stipend makes it kind of difficult to do that, savings and things. Like it is possible. But just at that time, I knew that like with my job, I could do that a lot faster than like going to grad school right away. And we know that like with time and investing, like time is like the most valuable thing.

Introduction

00:41 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 14, Episode 4, and today my guest is Brittany Trinh, a PhD student in chemistry at the University of Wisconsin-Madison. Brittany originally applied to grad school in fall 2018, but she elected to defer her acceptance for two years in favor of taking a job. Brittany shares how she developed her finances, side business, and professional life in the 2.5 years she worked prior to matriculating. As a result, she started graduate school in fall 2021 in a much stronger financial position—and more confident in herself—than she would have in fall 2019, even though it was a bit of a rough transition. At the end of the interview, Brittany shares from her perspective for whom deferment of grad school acceptance is a good option.

01:57 Emily: If you’re a prospective graduate student currently in the thick of admissions season, I encourage you to check out my asynchronous workshop, Set Yourself Up for Financial Success in Graduate School. You can pick and choose which modules are most relevant to you now and over the coming months. For instance, if you’re staring at a cryptic funding offer letter, you might want to join “Interpret and Compare Offer Letters.” If you’re not sure if your stipend offer is really livable for a certain city, you might want to join “Stipends vs. Cost of Living.” If you know already that your top-choice program is offering a sub-par stipend, you might want to join “Negotiate Your Stipend and/or Benefits.” You can learn more about Set Yourself Up for Financial Success in Graduate School and the various modules at PFforPhDs.com/setyourselfup/. You can find the show notes for this episode at PFforPhDs.com/s14e4/. Without further ado, here’s my interview with Brittany Trinh.

Will You Please Introduce Yourself Further?

03:06 Emily: I am delighted to have joining me on the podcast today Brittany Trinh. She is a first-year graduate student at the University of Wisconsin Madison in chemistry. By the way, we are recording this in April, 2022, but I’m expecting to publish it in early 2023. So, for reference, you know, Brittany will now be a second-year graduate student at the time of publication, we expect. Okay, Brittany, thank you so much for joining me. Will you please introduce yourself further to the listener?

03:31 Brittany: Hi, yeah, my name is Brittany and I’m, like you said, currently a PhD student in chemistry at UW Madison and part of the Boydston group studying metal-free ring-opening metathesis polymerization. And before that, I was getting my BS chemistry at the University of Houston and then also working at a polymer company for about two and a half years before I became a grad student.

Timing of Grad School Application and Deferment

03:58 Emily: Excellent. And that is the subject of our interview today. So, Brittany applied for graduate school, got in, and decided not to go for a bit. So, we’re going to talk about that deferment process and why it happened and how it happened and how she used that time to better her finances and be in a stronger position when starting graduate school. So, I love this topic. Okay, so starting off, what was the timing of this? Like when did you apply for grad school? Were you also applying for jobs that same time? Just like walk us through the beginning of this process.

04:28 Brittany: Yeah, so I actually graduated a little bit later. So, in the fall of 2018 was my graduation semester, so that’s when I started applying for jobs and grad school at the same time. And then throughout that process, I actually only applied to one grad school, which was UW Madison because of like a fee waiver I got from a preview program. And simultaneously applying for a bunch of jobs and we all know how job searching goes.

04:59 Emily: Interesting. So, when you, because you were graduating like at that end of fall semester timing, were you already anticipating that you would have to have a job between, you know, let’s say January and August or whenever it was that you would matriculate if you had gone directly to graduate school?

05:16 Brittany: I think that I wanted to do something but I wasn’t expecting to honestly get into the graduate program because I did get the job offer by October, 2018. So, I had already like accepted the job offer before I even knew that I was getting into grad school.

Receiving an Acceptance Letter

05:38 Emily: Okay, great. So, when you got the acceptance to UW Madison, what were your thoughts at that time? Were you thinking that you wanted to enroll or were you already thinking by that point that deferring was going to be a good idea?

05:51 Brittany: So, this is actually a really funny story. I got my acceptance letter the same day that I came home from like my first day at work. And I was super surprised because I did not think I was going to get in. And so, of course I’m like kind of freaking out and thinking like, well, what do I do? You know? But ultimately I decided that it was better for me to just stay at my job because I literally just got started. And so, I wanted to see if there was an option for me to defer just for some time so I could get the work experience but then still pursue grad school later.

Role of Finances in Decision

06:27 Emily: And what role did finances play in that decision to defer?

06:33 Brittany: I think the biggest thing was just, one, knowing how the PhD stipend is and just the whole grad school process. I was just really afraid about like how like setting up my like financial future when like the stipend makes it kind of difficult to do that savings and things. Like it is possible. But just at that time, I knew that like with my job I could do that a lot faster than like going to grad school right away. And we know that like with time and investing, like time is like the most valuable thing. And then of course there were other some like emotional things related to that. Yeah, and I think the thing was that my job offer was really good and I just really could not turn it down. And that was why I ended up deferring my grad school enrollment.

07:32 Emily: Yeah, I think it definitely makes it easier to imagine what else you would be doing if you didn’t go directly to graduate school already being in that job, which is awesome. I’m wondering, did you have any particular financial concerns? Like I know generally things are hard, right? For grad students and finances, but I don’t know, were you like looking at like student loan debt that you wanted to pay down? Or were you like, “Oh, I have zero in savings and I really want a certain amount in savings.”? Like was there any specific element of your finances that was a top concern?

08:01 Brittany: Oh, yes. So, I am very fortunate that I did not have any like student loan or other like personal debt. But for me it was definitely zero savings. Because I obviously just graduated from school, and I had just like a little bit of savings from like summer research or things like that. But yeah, I really wanted to build up my emergency fund, my 401(k), and just kind of let it sit there while I’m in grad school and things like that. Those were like the main concerns.

Informing the Grad Program About Deferment

08:37 Emily: Okay. So, we’ve talked about like the decision to defer why you did it, what you were planning on doing with your time anyway. How is it actually like telling your program <laugh> that you got into that that was your plan, that you would like to exercise a deferment option? Like, I don’t know, like how did those conversations go?

08:55 Brittany: Yeah, so I don’t remember exactly like how I came up with the idea of deferring. But I think maybe I’ve seen it somewhere. So, I think I was just like searching the department’s website to find any reference in like the handbook or their FAQ or whatever about the deferral process. And so, I remember seeing this on their FAQ page saying that like, yes, it is possible because they’ve granted it to people before, you just have to like let them know and it’s up to two years. So, what I did was I waited until I went to the official visit weekend and I wanted to talk to the graduate program coordinator personally as opposed to like over e-mail. And it was actually a little bit awkward because it was at like a poster session when I approached her because the schedule is like pretty packed.

09:45 Brittany: But she had just finished chatting with another student and so when I came up to her, I introduced myself and explained to her my situation and I just said like, could you tell me more about the deferral process? Like I would love to come here, but like as of right now, I’ve just started my job and it’s only been like two months and I don’t really want to leave that yet. And in the end she was very kind and reassuring about it and she just told me it’s totally possible just like stay in contact with her and she would like follow-up with me and let me know what the steps were.

10:15 Emily: It’s actually like, I hadn’t thought about this before, but sort of thinking about it from the program director’s perspective, you’re going to be an even stronger candidate when you actually join the department in like a year or two or whatever having had that relevant work experience. So, it actually feels like they’re getting like a bargain or something, like, we’re going to get an even better grad student than like the one we accepted. Like that’s amazing. So, I can see how that would maybe be attractive. But something I hadn’t asked you yet is, when you were admitted to the program, were you admitted already like knowing who your advisor was? Or was that a process that would maybe happen during like your first year?

10:52 Brittany: Yeah, so when I was admitted, we don’t know who our advisors are yet. It’s just like you’re just generally admitted, and then once you enroll whatever semester, that’s when you go through like the whole rotation process and stuff. So, that wasn’t a concern at that point.

What About Funding?

11:07 Emily: Yeah, I can imagine if, you know, for anyone listening to this who’s maybe going to consider this, if you’re admitted directly with an advisor, that’s the way I was admitted to graduate school, then it’s like two levels, like you have to make this okay with the department level, their program level, and also with your advisor. And the other like sort of wrinkle in there is like, what about your funding? So, what was your funding situation and did the deferment matter at all in like, you know, was your funding automatically going to come again? Or did you have to like apply again? Or how did that work?

11:36 Brittany: Yeah, so I think when I was accepted, they offered me full funding as a student and then they also gave me an additional fellowship which was a surprise to me, but when I followed up with her about deferring and such, I just asked her what the situation was like. Because I would understand if they decided to rescind the additional fellowship which I think was like an additional $4,000 or $5,000 just for the first year because I deferred, but actually she said, “No, your funding will [I guess] transfer.” And I was really surprised. And so I think it, it just is a matter of just asking very directly. Like it was a little uncomfortable for me to be so forward about it because I didn’t want to seem like, you know, I’m just only concerned about money, but it was something that they offered me and I just wanted to see if that was still available to me.

12:36 Emily: Yeah, well that’s great. I mean, it sounds like this person was like very receptive to the process. I mean, even them having it on their website is a good indication that yeah, this is something there that happens from time to time, and they can handle it. And especially like you were saying, just being admitted generally to the program I think makes the whole process easier since you’re not negotiating with like a certain person with a certain number of spots that are available or whatever the case might be.

Finances During Gap Years

12:57 Emily: Okay. So, let’s move beyond like the decision to defer and talk about what you did with your time about two and a half years, you said, between when you started your job and when you ultimately entered graduate school. So, we talked earlier about like the financial reasons for why to pursue this job instead. What actually ended up happening during that period of time with your finances?

13:18 Brittany: Yeah, so during that time while I was working, I was able to save over like $60K in my 401(k). And so, I’m like really proud of that, and a lot more like for emergency funds, my future house, as long as like PhD expenses because I know that like moving would be expensive and like school fees and such. So, I wanted to have like an additional fund for that that I could tap into in case I needed it. The other thing was I also just learned a lot more about my own financial habits and values and such. And so, all of those were like really good to know before coming to grad school just in terms of like spending and how you save and such. And then of course the last thing was like, I started my business, which was really a fun learning experience.

14:12 Emily: Yeah, let’s put a pin in the business for just a second. I definitely want to talk about that further. But I just want to like congratulate you because it sounds like you made great use of the time that you’re working to like build up 401(k) balance and the savings and all that. And just like hearing all that, I’m just so happy for you like starting graduate school in such a strong financial position. You’re not precarious in the same way many other graduate students are. Especially having those like investments in place because, I mean, maybe you’re still adding to them, but even if you weren’t able to add your investments at all during graduate school, like I mean five years or more in graduate school, like that money is going to grow. I mean, we’re like assuming the market behaves like sort of average over a long period of time, but it’s going to grow like a lot, like at least 50%, maybe even, you know, closer to doubling during just that period of time that you’re in graduate school. So, it’s amazing to have that wind at your back is what I call the financial wind at your back of having investments. So, that’s just awesome.

15:04 Emily: One thing I did want to ask you though is that like since you had this plan of eventually going to graduate school, were you concerned at all about like your lifestyle or like experiencing lifestyle deflation upon entering graduate school? Because I know that I’ve heard that as like a reason against deferring or against taking time between undergrad and graduate school. It’s like, oh no, what if I become used to spending $60,000 a year and I can’t do that in graduate school, that’s going to be painful. So like, what was your thought process around that, like lifestyle setting aspect of the question?

15:38 Brittany: Oh yeah, that’s a really good point and question. Some other people also brought this up to me as well. But for me there was a little bit of a transition, which I guess we can talk a little bit more later, but the reason why I was able to save so much was because like I was already, I never saw that money because it was always like going direct deposit to my 401(k) or to my savings accounts and things like that. So even though yes, I was making like was like $65K a year or so, I didn’t see that $65K every year. It was like most of it’s already gone to savings. And so I was kind of living as if like I was making more of like $40K or something like that. And so, it wasn’t as bad. And then again, like I mentioned, I learned a lot about like my own habits and values and such. And so then once I came into grad school, I was able to kind of realign that with my current budget.

16:42 Emily: Yes, that makes total sense. And yeah, just having those extra couple of years of experience, as you said, learning about yourself, learning about your own like systems and habits and mindset and so forth with respect to money can be so super helpful with that.

Commercial

16:55 Emily: Emily here for a brief interlude! Tax season is in full swing, and the best place to go for information tailored to you as a grad student, postdoc, or postbac is PFforPhDs.com/tax/. From that page I have linked to all of my tax resources, many of which I have updated for tax year 2022. On that page you will find free podcast episodes, videos, and articles on all kinds of tax topics relevant to PhDs. There are also opportunities to join the Personal Finance for PhDs mailing list to receive PDF summaries and spreadsheets that you can work with. The absolute most comprehensive and highest quality resources, however, are my asynchronous tax workshops. I’m offering four tax return preparation workshops for tax year 2022, one each for grad students who are U.S. citizens or residents, postdocs who are U.S. citizens or residents, postbacs who are U.S. citizens or residents, and grad students and postdocs who are nonresidents. Those tax return preparation workshops are in addition to my estimated tax workshop for grad student, postdoc, and postbac fellows who are U.S. citizens or residents.

18:11 Emily: My preferred method for enrolling you in one of these workshops is to find a sponsor at your university or institute. Typically, that sponsor is a graduate school, graduate student association, postdoc office, postdoc association, or an individual school or department. I would very much appreciate you recommending one or more of these workshops to a potential sponsor. If that doesn’t work out, I do sell these workshops to individuals, but I think it’s always worth trying to get it into your hands for free or a subsidized cost. Again, you can find all of these free and paid resources, including a page you can send to a potential workshop sponsor, linked from PFforPhDs.com/tax/. Now back to the interview.

Web Design Business

18:58 Emily: Okay, let’s come back to the business. So, what is the business that you started during this time before entering graduate school? And I guess, you know, did you have it in mind that you would continue it after starting graduate school?

19:12 Brittany: Yeah, so the business that I ended up creating is a web design business specifically for scientists, researchers, and academics, helping them build their online presence and their websites and such. And so, I started this business unofficially in April of 2019. So that’s like about four months after I started working. That was like kind of the, beginnings of it, but I didn’t start like actually getting clients until September. And that’s when I officially launched. And then since then, I’ve been working with a lot of clients one-on-one and doing workshops, collaborating with organizations and such and all those like fun things that come with an online business. And throughout the process, I made about like $15K in revenue, which most of it was reinvested into the business. But I always did have the intention of continuing it in grad school because I wanted to have that additional income.

20:14 Brittany: I think that was like the thing that really was also another concern for me was that I didn’t want to feel limited by my stipend and I wanted to do other things. One of them being visiting family because I’m in Wisconsin now and I’m from Houston, so, you know, flying home at least like three or four times a year is kind of a priority for me. And so, if I’m able to have like this extra side income, then I don’t need to worry about it, like cutting into like my daily expenses.

20:48 Emily: I just love how intentional you were with the choice of the business to start. And also just using again, your time before starting graduate school to establish it. Like you mentioned, you know, your revenue was like largely put back into the business as an investment and that actually makes a lot of sense to do that while you were working your job because the point at that time was not to get income from it, it was to, I assume, it’s to establish the business so that you can really reap that income once you have your graduate student stipend that you’re living on. So yeah, I just, this is so great and like of course also the subject matter of your business is still like related to like academia and like science and so forth, so it’s still like, it’s something that isn’t totally out of left field for like a graduate student to be doing, right? So, I love that choice because you can still sort of market it and it makes sense like even once you start graduate school. So, just to commend you on all of that. That’s great. Is there anything else that you want to say about the business? Where can people find you by the way, if they want to work with you?

21:43 Brittany: Yeah, if you want to work with me, you can find me on my website, brittanytrinh.com. Or you can also just connect with me on Twitter and Instagram, which is b r t t n y t r n h. So, that’s basically my name without the vowels. Yeah, so all the things about like website design start building and starting your website. That’s what I love to do and yeah.

Starting Grad School

22:09 Emily: Okay, great. So, let’s go back to our timeline. So, you’re doing great with your finances, you’re liking your job and so forth. How did you decide that it was finally time to start graduate school?

22:20 Brittany: So, the program that I applied to, or at least in my time, it was a limit of two years for deferral. So, what happened was the graduate program coordinator contacted me at the one-year mark which would’ve been fall of 2019 for me to enroll in fall of 2020, to ask if I was still interested. And I said, I am, but I still wanted to defer another year. And she was like, okay, that’s that’s totally fine, just keep in contact. And so then again, she did that in fall 2020 and well, we all know what happened then. And so at that point, at work things were kind of slowing down because of COVID, and I was just thinking, you know, maybe this is a good time now to go back to school. Because I also felt like I could not progress in the way that I wanted to at my workplace with my current credentials. And just in general, if I wanted to move up in the chemical industry, having a PhD would strengthen my application.

23:20 Emily: You know, we didn’t even mention that earlier, I guess because in your case this was a deferment of an acceptance instead of like a choice to just wait to apply to graduate school. But I love that you also ended up using that time to confirm that you really did need a PhD like for the career because of course you could have just bailed if you said, “Oh no, I have plenty of room for advancement, this is great, my BS is awesome, maybe I’ll do a master’s on the side.” Whatever it is. You could have gone that track, but yeah, I love that you really are sort of once again intentionally like choosing the life and career that you want to have, and use that time to like confirm this is the right path. So, that makes so much sense to me. I understand you did have to technically apply again to Wisconsin, right? So, in that fall of 2020, right? So you’re submitting another application to them. Were you also looking around at other grad schools? Because as I said earlier, now you’re a two-years better candidate than you were the first time around. So, tell us about that too.

24:11 Brittany: Yeah, so this was something that I brought up with the graduate program coordinator at Wisconsin. I was wondering if I was allowed, like if the deferment meant that I was kind of confirming my acceptance and she said, “No, feel free to apply to other schools that you want.” And I was like, okay, that sounds great. So then I did end up applying to four other schools, really reach schools like MIT, Colorado Boulder, Rice, and University of Michigan. And so, I applied to those four other schools, but in the end, I still went with Wisconsin because I thought that they were the strongest program for what I wanted and needed for my own career.

24:57 Emily: Yeah, that’s great and it makes sense. I mean, I guess maybe someone else considering a deferment would still have to check with their program, but it doesn’t really make sense that you would be obligated to go. It’s more like they’re obligated to you <laugh> to still like accept you. Right? But you’re not really obligated in the same way to them. So, that makes sense. Okay. So, you technically apply again, you apply to some other schools. You still decide on Wisconsin. Did you go to a second visit weekend? Did you get to do that again?

25:21 Brittany: Yes, but because of COVID, it was virtual but I still came anyways to, originally it was to look for apartments, but it ended up just being hanging out. And actually, I did meet some professors during that trip, and one of those professors is now my advisor, <laugh>.

25:39 Emily: Okay. So that worked out on multiple fronts.

Financial Transition

25:41 Emily: So, let’s then talk about like the transition to graduate school, like specifically through a financial lens. You mentioned earlier that you did have to make some adjustments. But you have the savings in place, you know, for the moving fund, all that. So, how did that transition go?

25:57 Brittany: So, it was definitely rough in the first semester. Like you mentioned, there was a little bit of a time period where I had to transition my finances in that curbing my spending was a thing. So, I was trying to keep a closer eye on spending, especially like online shopping, clothes, and things like that because obviously I wasn’t making as much as before. And then on the other side of my business, I also made the decision to kind of put it on the back burner for the first semester because I was trying to focus on just transitioning, TAing, coursework, and finding a lab group. So, all those things were happening and I was like, my business does not need to be going on right now. The other thing was that I experienced a little bit of financial anxiety which was mostly avoidance.

26:47 Brittany: And this was because I just didn’t want to think about like how much I was spending now that my budget or my income was a lot less. But obviously that’s not the greatest way to go. So earlier this year, like in January I just decided to, you know, kind of clear all those things up on like my spending habits and things and trying to keep track of like, what do I spend for groceries and all those things and kind of get a good better handle on that. The other thing was that like related to the financial anxiety, it was mostly about like financial future because now it’s like I don’t have as much money as I did before to put towards savings, but I definitely still want to keep saving, which was why I decided to kind of get a better handle on my spending. So then I can see like, okay, can I save like $200 a month? Right? That would equal out to be, I think the $6,000 for like a Roth IRA contribution per year, is that right?

27:49 Emily: It would be $500 a month.

27:50 Brittany: Oh no, it’s $500 a month. Yeah. So yeah, actually $500 a month, not $200. But yeah, so those are some of the things that I wanted to do.

28:00 Emily: Yeah, that makes sense. I’m glad you’re being like, so like open about this and honest about it because I bet other people who had a similar experience would have similar emotions around it of like, you know, feeling more insecure and more anxious even though you knew it was coming <laugh>, like still to see like the smaller numbers in the bank account and like your savings going down because you’re, you know, you’re spending on moving expenses and whatever else is going on. But really glad to hear that you sort of eventually like kind of firmed up on the mindset and the processes and so forth. So, that’s great and thank you so much for sharing. And have you re-ramped up with your business? Again, we’re recording this in April 2022. So now that you’re in like your second semester, is that more, is that something you’re spending time on now?

28:43 Brittany: Yes, definitely spending more time on it. Really wanting, I’m really trying to push for teaching more workshops. I’m still taking on one-on-one clients, although it’s just a little bit different than before. So, definitely taking that first semester off to kind of recalibrate to see like how do I want my PhD experience to go and what I want to get out of it has also helped me realign my own business goals as well. So, that’s been really fun.

29:10 Emily: Okay. Well, this is an unexpected tie-in, but in season 11 we published an episode with Dr. Toyin Alli sort of along these same lines of like moving from one-on-one services to more scalable like passive products. So, interesting. If anyone is like jibing with what Brittany is saying, then check out that episode with Dr. Toyin Alli where we talk more about these like strategies.

For Whom is Deferring a Good Option?

29:32 Emily: Okay. So, kind of to wrap up here, for whom do you think deferring is a good option?

29:39 Brittany: I think deferring may be a good option for anyone who’s like at all doubting their decision to do a PhD because that’s how I felt. Like I did not want to do a PhD yet, at the time that I was accepted for not just financial reasons, but also a lot of like emotional and like mental health reasons. I felt a lot of burnout from undergrad and I wasn’t sure if I could complete a PhD successfully given where I was at at the time. And I don’t really think that the decision to do a PhD should be taken lightly, right? And so if you’re not sure, like you’re honestly better off taking that time to work at a job and figure out like what you like to do or like in my case, like do you even really need a PhD for what you want to do? And like just in general learning more about the industry that you want to work in and ultimately you should just do the PhD, or I guess when you decide to do the PhD, it’s because it’s an experience that you want to have in your life. So, getting to like a more like affirming position rather than like feeling FOMO about not doing a PhD.

30:53 Emily: Love that. I had, so I didn’t defer my acceptance to grad school. I just waited to apply until, I was planning on taking two years between undergrad and grad school. I ended up applying so that I enrolled just one year after I finished undergrad. But for some of the same reasons that you just mentioned, like I felt like I was a stronger candidate having had like extra work experience. I wanted to see what science was like in a different kind of setting than what I experienced during undergrad. All of that still just confirmed for me that I did want to do the PhD. What you did that I did not, was really working on the finances in that time because I did a post-bac program, which paid me basically what a grad student stipend is. So, there were no financial advantages there, but there were those other advantages still that you mentioned. So, that’s so great.

31:35 Emily: And where could people find you if they want to follow up? You mentioned your business website earlier, do that again, but let’s say someone wanted to follow up more on like the personal side about deferring or something. Where can people find you?

31:44 Brittany: Yeah, so definitely you can still visit me on my website, brittanytrinh.com. Or you can email me at [email protected] if you want to like send a longer message. And also just again, connect with me on my social media accounts. You can just tag me or DM me as well.

32:02 Emily: Sounds great.

32:03 Brittany: Totally open to share more. Yeah.

Best Financial Advice for Another Early-Career PhD

32:05 Emily: Good, good. Okay, so, we’ll finalize here 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 could be something that we’ve talked about in this episode or it could be something completely new.

32:19 Brittany: Yeah, so I would say that my best financial advice is to find a skill that you like enough to leverage for extra income. So, a lot of people do like tutoring, writing, editing, whatever. And like one of my, like my roommate, she like does like cover art for like, you know, for like for publications and such. So, it’s like having those types of skills or just having something that you like to do. Especially like if it’s something that doesn’t require too much time or effort from you, it’s always more, it’s more beneficial to you anyways. And like you don’t have to build like a whole business, but it’s good to know that you have another way to make extra money if you want to.

33:05 Emily: Yeah, that’s interesting you say that because I mean, I totally agree. I’m so on board with this advice <laugh>. But like furthermore, you’ve built like a business and you have like a brand and all of that, but someone doesn’t need to go to that level to make extra money on the side. Like they could do more like freelancing or like put themselves on, is it called Upwork now? Is that the current name for the website?

33:24 Brittany: Yeah, Upwork.

33:24 Emily: Yeah, Upwork. So, they can put themselves on Upwork or something like that where like you’re finding clients but you don’t need to necessarily build a whole infrastructure around it. At least not at the start while you’re just like trying things out. So, I love that, just like thinking about what skills you enjoy that you have that might be a little bit unique in the marketplace. I definitely see how your skills with like the website building is unique and something very needed. And especially if you can speak like the language of, you know, your clients, that’s a big advantage. Anyway. I love your business so that’s awesome. Brittany, thank you so much for joining me for this interview! It’s been wonderful! I hope the listeners got a ton out of it. Thank you so much!

33:56 Brittany: Thank you for having me!

Outtro

34:03 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Insights from a Financial Planner Who Works with Academics

April 26, 2021 by Lourdes Bobbio

In this episode, Emily interviews Andy Baxley, a Certified Financial Planner who specializes in working with academics and PhDs. Andy pursued graduate school in psychology immediately after undergrad, but quickly realized the career path wasn’t right for him and the financial pressures were too great. He eventually started practicing financial planning, realizing that it is psychology ‘out in the wild’, and decided to serve the academic community he so closely identified with. Andy shares his insights from working with PhD clients nearing retirement about what they are glad they did when they were younger and what they wish they did. At the end of the interview, Andy explains how his career plans have brought him back to graduate school again. Andy brings deep insights to the interview from his years of study and practice in this space—ones you won’t want to miss!

Links Mentioned in this Episode

Teaser

00:00 Andy: It was sort of that long-term existential financial dread mixed in with just the day to day, “I don’t have enough money for anything.” I was living in a big, fairly expensive city and just was very, very much living like the proverbial graduate student. I didn’t mind that, but it was that in tandem with feeling like everyone else was just taking like leaps and bounds beyond where I was in their financial journeys, that confluence of things added a lot of anxiety.

Introduction

00:34 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode 17 and today my guest is Andy Baxley, a certified financial planner who specializes in working with academics and PhDs. Andy pursued graduate school in psychology immediately after undergrad, but quickly realized the career path wasn’t right for him, and the financial pressures were too great. He eventually started practicing financial planning, realizing that it is psychology out in the wild and decided to serve the academic community he so closely identified with. Andy shares his insights from working with PhD clients nearing retirement, about what they are glad they did when they were young and what they wish they had done. At the end of the interview and explains how his career plans have brought him back to graduate school. Again, don’t miss Andy’s deep insights from his years of study and practice in this space.

01:36 Emily: I have my own insights that I will provide to you next week, specifically regarding the home buying process. My husband and I closed on our very first home a week ago. My podcast episode next week is going to be all about our journey to home-ownership. Like many other PhDs and millennials generally, we put off buying our first home for quite a while. I’ve been open on the podcast about my regret that we did not buy our first home back when we were in grad school and I’m pretty bullish on grad students and PhDs buying homes if it’s financially feasible.

02:10 Emily: To that end, I’m publishing the episode next week on our personal home-ownership journey, which I hope you’ll listen to. I’ve also scheduled a special event with my brother, Sam Hogan, who is a mortgage originator specializing in grad students and PhDs. You’ve heard Sam on the podcast previously in season eight, episode four; season five, episode 17; and season two, episode five. We are going to do an AMA style live call over zoom on Thursday, May 6th, 2021 at 5:00 PM PDT 8:00 PM EDT. We will do our best to answer any question you have about buying a home, especially as a grad student or PhD. You can register for the event and my mailing list at pfforphds.com/mortgage. I hope you will join us.

Book Giveaway

02:56 Emily: Now it’s time for the book giveaway contest. In April, 2021, I’m giving away one copy of Walden on Wheels by Ken Ilgunas, which is the Personal Finance for PhDs Community book club selection for June, 2021. Everyone who enters the contest during April will have a chance to win a copy of this book. Walden on Wheels made a splash when it was published, because the author wrote about how while he was a graduate student at Duke, he lived in a van on campus instead of renting a home so that he could avoid taking out student loans. This was an even more counter-cultural move than it appears to be now because it was before the rise of hashtag van life. I’m looking forward to learning more about the author’s motivation to make such an extreme choice and discussing it with the members of the Personal Finance for PhDs community. If you would like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review and email it to [email protected]. I’ll choose a winner at the end of April from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Andy Baxley.

First Go at Grad School

05:12 Emily: Yeah. And we’re going to get ton of that insight later on. I’m so excited for it. But first we want to go back in your own history back to when you were pursuing your own PhD the first time, so could you please tell us about the graduate program that you entered and what you were studying?

05:30 Andy: Yeah, absolutely. It’s funny, when I look back on my own personal history, I would have been really surprised 10 years ago, if I could have gotten in a time machine and seen where I am today, I don’t think I ever would have guessed that I ended up exactly where I am, but I also wouldn’t have guessed that I’d be as professionally fulfilled as I am either. It turned out well, but definitely a number of unexpected turns along the way. To go way back, I think the best place to start this story is probably in high school. I was a really sort of uninspired student in high schoo,l to say the least, and my parents always said, you have to get a 3.0 at minimum, so I always got like exactly a 3.0, I just didn’t really have much direction or passion.

06:15 Andy: All that kind of changed when I got about halfway through college and I just got very inspired by a couple of professors and started doing research assistantships and teaching assistantships in my undergraduate work and ultimately decided to pursue becoming a professor myself in psychology. The second half of my academic career, I think I was an excellent student and that was the first time I’d ever been excellent at anything. I really was just very excited to be good at something. I started thinking about life after undergraduate work and ultimately went to a master’s program, that was well-known for being a feeder into really good PhD programs, and so I thought that was the path. It didn’t end up working out that way, and I can tell you more about that story certainly.

What Drove the Decision to Leave Grad School

07:07 Emily: Yes, please do. I mean, I think we all know the beginning of this path, but where your story gets interesting is when you start to deviate from it. So why did you end up leaving that master’s program?

07:17 Andy: It was a mix of things, it was definitely a confluence of things. First and foremost, I think I got there and I realized that while I was fully funded in the program and I had a stipend, I sort of looked around and I realized that I didn’t have the same sense of purpose or direction that a lot of the other students in the program did. At first it didn’t seem like that big of a deal, but the more I thought about it, the more I realized that the further on I got in that journey, the competition was only going to get fiercer and fiercer. I sort of had this mindset that as long as I can do the next thing, that’s where I’ll find happiness. If I can just get into this master’s program, then my path is paved and I’ll find happiness and all will be well.

08:05 Andy: Then I was like, well, that’s obviously not true and I was thinking, okay, well maybe if I get into a great PhD program, once I do that, all will be well and my life will be pretty much set at that point. And I kept talking to people who were either one step or two steps or three steps along in the journey and realizing that some of them are happy, but a lot of them were under a tremendous amount of pressure financially. They just had a lot of stress in their lives that I wouldn’t have expected, and that wasn’t just true. One or two steps beyond. The more people I talked to, I realized that even all the way up to tenured faculty, those folks were under a lot of pressure as well. Some folks were extremely happy with their lives, but not all of them were and I just realized that I wasn’t on a path to sure happiness or professional fulfillment.

08:52 Andy: Also, I was going up against people who were really super passionate about the research topics that they were focused on and I just didn’t have that. All I had was that I was really excited to be good at something and excited to be a good student, but I just didn’t have that passion and didn’t have that drive. Those were sort of the personal reasons. And then there were certain financial ones as well, which I’m certainly happy to go into.

09:15 Emily: Let’s do that in a moment. I am really impressed with you as a, whatever you were 22, 23 year old person, really being able to kind of take a step back from the day-to-day rush and rigor of the program and evaluate “is this really where I want to go” and to do that, looking ahead to your older people ahead of you in the program and older mentors and so forth and asking yourself if you really want that out of your life. And to do that so early on, right within the first, it sounds like about a year of that program doing that evaluation. I really encourage the listeners to periodically step back and reevaluate and see if the path that you’re on is really the one you went to beyond because bailing out like you did earlier is much, much less sunk cost, than getting to the end of the PhD and realizing that you don’t want the career that’s on the other side of that PhD, the one that you thought you wanted. I really commend you for that. Can you talk a little bit more please about the financial pressures that you were experiencing and observing?

10:13 Andy: Absolutely. And one thing I’ll add to what you just said as well, is that that was the hardest decision I’ve ever made to leave that program. It felt like it felt like my world was crumbling down. So much of my identity was wrapped up in that path that I had chosen for myself. At the time it was truly like crushing at a personal level to make that decision, but looking back, it truly is the best decision that I’ve ever made. That’s not to say of course, that everyone should leave their PhD programs or that everyone should leave graduate school, but it is to say that if you have that hunch, that maybe that’s something worth considering. It may feel like the end of the world in that moment, but it will get better later on as you find your path, it just doesn’t seem like it in the moment.

10:57 Andy: To circle back around to the financial side of things, I think I had this experience that a lot of folks probably do, which is that I was seeing a lot of my peers from college who hadn’t chosen the same path, start to experience some degree of financial success. I always had assumed like, “Oh, financial success isn’t for me like that that’s for other people, that’s, that’s not really a thing for me”. But then I had this weird experience where I started to see other people get jobs and decently paying jobs and I felt a little bit of jealousy there. Also I just felt, my stipend was generous, but it wasn’t quite enough to live on, so I was accumulating more student loan debt on top of what I already had for my undergraduate work.

11:42 Andy: I was by no means into personal finance yet at that point, but I was just doing some very simple math and thinking about when am I actually going to make enough money to start to dig out of this hole? I started playing around with compound interest calculators and realizing how delayed I was going to be, not only in paying off my debt, but also in starting to accumulate assets long-term. It was that long-term existential financial dread mixed in with just the day-to-day “I don’t have enough money for anything”. I was living in a big, fairly expensive city and just was very much living like the proverbial graduate student. I didn’t mind that, but it was that in tandem with feeling like everyone else was just taking like leaps and bounds beyond where I was in their financial journeys, that confluence of things added a lot of anxiety, I think.

12:32 Emily: Yeah. I think what you’re expressing is, again, common enough if people take the moment to think about it. And certainly when you’re actively taking out student loan debt it’s really in your face that this it’s not a long-term sustainable thing to be doing. I think it’s a little harder when you have the stipend and it’s enough to live on, but you don’t quite realize, like when you were playing around the compound interest calculators, you don’t quite realize the long-term effects of not being able to save, not being able to invest, so you can make it day to day, but it’s easier to not think about the long-term. You had the pressure of both the day-to-day and the long-term bearing down on you. I really appreciate those observations.

Life after Leaving Grad School

13:12 Emily: Can you tell us what you did next — after you left your program, after you world crumbled around you? And on that path, how you fell in love with personal finance?

13:22 Andy: Yeah, absolutely. After the program, I spent a couple of months just sort of wallowing in uncertainty and not knowing what I would do. Ultimately what I landed on — I love to travel, so I moved to South Korea and taught English as a second language. I intended to do that for one year, just to sort of get my financial house in order and also have a really neat, unique experience. I actually ended up staying for four just because I really loved it. And I knew that I didn’t want to be — I was teaching anywhere from kindergarten to middle school, depending on which year I was there. I knew I didn’t want to do that forever and I also knew I didn’t want to be a teacher forever necessarily, but I just found the experience kept getting more and more interesting and so it kept me there longer than I thought.

14:07 Andy: Somewhere about halfway through that journey, I picked up a book called Millionaire Teacher by a guy named Andrew Hallam. And first of all, the term “millionaire teacher” seemed like an oxymoron to me, which I think is kind of the point of the title. And again, like I said earlier, building wealth, and certainly becoming a millionaire, never felt like something that was for me. It just always felt like that’s that’s for rich people and I just don’t know anything about that. I sort of always buried my head in the sand and was never a great saver, never even thought about investing. I don’t remember why exactly I read this book, but I started to read this book and realized that actually, if you start early enough and you save even just a bit, and as your earnings increase, if you can save a bit more, there’s a pretty clear path to wealth for a lot of folks. I don’t want to make it seem like it’s, it’s available to everyone because I think we have systemic structural issues that do make it really hard to build wealth. But I think it’s, it’s available to a lot more people than most people think. If you can be prudent, especially in your younger years, that there is a path to wealth and, and that wealth isn’t, we can talk more about this certainly, but wealth isn’t just about, how big your accounts are getting, but it’s also about what does that allow you to do. What sorts of freedom does that allow you to pursue? Once I realized number one, that wealth isn’t just for rich people, you know, building wealth isn’t just for people with trust funds, I think I just started reading every book I could possibly find on personal finance and just became sort of obsessed. So that’s how the interest was born in personal finance and then the career part came later.

15:41 Emily: That’s a fantastic entry point into the subject matter. Finding that perfect book that you could see yourself in — The Millionaire Teacher. And I love that you said it’s a provocative title, it’s an oxymoron. I also have a program called the Wealthy PhD, which is similarly designed to be provocative and “What a PhD can be wealthy? How could that possibly be?” Of course, we’ll talk about that in a moment.

Transitioning into a Career as a Financial Planner

16:05 Emily: You’re falling love the subject of personal finance. How did you make it into your career?

16:10 Andy: The first part was the realization that building wealth isn’t just for rich people, but the most important thing was the second realization, which was that personal finances is not just about finance. It’s not just about the numbers. There’s kind of a corny saying that I’ve heard, but I actually like. It’s that personal finance is more personal than it is finance. I started to make this connection. I was also really deeply immersed in the positive psychology movement at that time. I was reading a lot of work by Marty Seligman and other folks who were really just making the statement that it’s not just about fixing our deficiencies, it’s about how do we get from our baseline and transcend beyond that and live a life that is maybe even better than we ever could have expected.

Andy: I started to make this connection that like, “Oh my God, if building wealth is available to everyone, maybe that can also be a tool for helping people, to use another cliche, live their best life.” How can wealth become a tool to live in accordance with our values and live a life filled with joy and fulfillment? And once I made that connection, that personal finance is the best applied psychology there is, it just clicked for me. I was like, Oh my God, I can do this thing professionally that I’ve become really interested in and sort of honor my love of psychology and that original career trajectory I had set for myself. It was like psychology out in the wild. And that was really exciting for me. I didn’t have to just become, I shouldn’t say just, I didn’t have to become a professor. There were other ways to do that. That was really exciting for me. I was hooked at that point and I haven’t really looked back even a single day since then.

17:49 Emily: That’s such a beautiful expression. I’m completely on board with you, but I hope the audience is hearing this as well, the insights that you just gave, because I think it can maybe explain a lot to them about why they haven’t been successful with personal finance in the past. Even if they’re obviously super smart if they’re PhDs or whatever. But like you said, it’s psychology. It’s personal.

Insights into Personal Finance for PhDs

18:09 Emily: So, you get into this as your career, and I know you’ve had a couple of jobs, but what I want to focus on now is what you have learned from and observed in the academic clients you’ve been working with since you did switch to having a focus on that population in your practice. What does the future look like for someone who is maybe currently in graduate school or otherwise early on in their PhD career? What happens a few decades from now, if they are intentional now with their money?

18:40 Andy: Yeah. That’s such a good question because the answers are very different about when you think about the person who’s intentional versus the person who isn’t. To talk about the people who are intentional, there’s this quote I really love by a guy named Morgan Housel, he just came out with a book called the psychology of money and he says “the ability to do what you want when you want with who you want for as long as you want is priceless. It’s the highest dividend money pays.” And so what comes later down the road for folks who are really intentional and diligent about their personal finances early on is freedom. I guess that’s just the best way to put it. And that can be intellectual freedom, it can be creative freedom, it can be — the one thing I would add to Morgan’s quote is the ability to be wherever you want to.

19:25 Andy: I think when people are investing and saving, it can feel abstract, but the way I think about it is they’re just saving little units of freedom and flexibility and how they end up using those units of freedom and flexibility later on, we don’t necessarily know that on the front end, but when they get there, they’re so happy to have them. I’ve had clients who spend half of the year abroad in South America. I’ve had clients who retired and started a little boutique motel. I’ve had clients who were able to afford to do sort of part-time work very early on, like in their fifties and do a half retirement, half working thing for a period of time. So truly the limits are non-existent. The possibilities are as big as your creativity. What comes later on, I can’t say specifically what comes for each individual person without knowing them, but I can say that everyone I’ve ever talked to who did a good job saving early on was really glad they did. I’ve never once heard somebody say that they regret it.

20:24 Emily: I really love the way you phrased that of, saving up units of freedom and flexibility for the future. I’ve expressed that before as money gives you options. Whatever you want to do, having money is going to make it easier to accomplish that. But I really like the way you phrase it, because I know that for me earlier on when I was in graduate school and so forth, and I still don’t to a degree, didn’t have a clear picture of what my retirement or my long-term future would really look like. I wasn’t really sure what kind of career I would have. I wasn’t really sure where I’d want to live or. I have children now, but when I didn’t, I didn’t know how big my family would be. There was a lot of uncertainty and I think that’s really common for PhDs because if you stay on that track, like you may end up moving many times, it’s very difficult to tell what your life is going to look like many decades from now. That can make it a little more difficult to save for and get motivated about because if you think about the vision board technique, for example, you are supposed to have like a really crystal clear vision of like what you’re going for. When you’re facing reality about what your career might look like as a PhD, it might be difficult to have that clear vision, but I love the way you phrase that of just whatever it ends up looking like, saving up for your freedom and flexibility now we’ll give you your options later on for living wherever, doing whatever with whoever, everything you just listed from Morgan Housel. I really love the way you phrased that.

Commercial

21:51 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 your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the, or have a question for me. Please join one of my tax workshops, which you can find links to from pfforphds.com/tax. 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.

Pitfalls to Avoid as an Early-Career PhD, According to a Financial Planner

22:57 Emily: Do you want to talk about the converse side about mistakes that you’ve seen your clients make or pitfalls that younger people earlier on in their career should avoid?

23:08 Andy: Yeah, absolutely. The number one mistake is a pretty obvious one and it’s just not saving. It doesn’t have to be, Oh, I didn’t have a super high savings rate, it’s people who just decided, I’m going to wait until much later to start saving. And the thing about investing and saving is that time is your best friend. A lot of people think Warren Buffet’s secret is that he’s this fantastic investor, but the truth is Warren Buffet’s secret is that he’s a fantastic investor and he’s been investing now for like 80 years or something like that, so he’s had that time for, for compound interest to take effect. I think starting really late is one thing that a lot of folks end up regretting. When I meet clients who are 60 and maybe they didn’t start saving until they were 45 seriously and they’re a bit behind or a lot behind, I think what really rings true for me is that it makes it very clear in meeting with these folks is that money doesn’t buy happiness, certainly, but it does pave the way for you to build happiness and joy and fulfillment over the time.

24:13 Andy: Conversely, a lack of money can make it really hard to achieve those things. When you’re 60 starting to think about retirement, but knowing you don’t have enough money to fund a decent lifestyle in retirement that you can enjoy, that’s a really tough place to be. And that stress really weighs on people, in my experience. I think a piece of advice I would give to younger people sort of like cautionary advice is just we’ve all probably experienced some version of resource scarcity at some point in our life, especially folks who’ve gone through graduate programs where you just feel like it’s really hard to make ends meet. And we know how stressful that is. I guess the pieces of advice I would give to a lot of folks is that that stress is amplified by 50 to a hundred times, if you’re at the end of your career, because you no longer have three or four decades of earning potential in front of you. It can be really scary for folks. That’s one of the things I’m most passionate about when I work with younger clients is these small changes we can make on the front end, end up making these tremendous differences on the back-end.

25:15 Emily: Compound interest truly amplifies your actions from early on, given that timeline that you were talking about. I’m thinking about someone in the audience who — you mentioned earlier, systemic barriers to building wealth that many people experience. Of course, we have a student loan crisis now that did not exist for the people who you’re working with who are nearing their retirement years. I’m thinking about someone in the audience who is really struggling, or maybe they were really struggling until recently and only in their thirties or forties, they’ve finally gotten to a point where they feel like they have a career and they have the paycheck and they can start saving. What can someone who is struggling or has been struggling do to — I know that time is your best friend, but like what can we do to make up if the time has already passed?

26:04 Andy: What I often tell clients who come to me with that question, because I do get clients who are like, honestly, it’s too late for me. What I tell them is certainly the best time to start building wealth is the first paycheck you get. That’s the best time to start doing it. Knowing that the vast majority of people don’t start then, the second best time is just today. Just start today, wherever you are, whether you’re 30, 35, 45, 55. And I think the best advice I can give people is just start really small. If you don’t have a lot to save, if you don’t have huge amounts that you can put towards paying off your debt, start very small and build up from there. Even if say you’re almost done paying your student loans off and you’re starting to think about saving for retirement, even if you can start saving 1% of your pay and then commit to moving it up by a percentage point, say every three or four months, programs like that eventually will get you on track.

26:58 Andy: And I think taking those baby steps is important because the idea of saving for retirement, it’s one of the biggest financial burdens we’ll ever have to face and it can be really overwhelming. I think for a lot of people, when they hear numbers like, Oh, you need to save 15 or 20% of your income, they think of it in this very binary way. They’re like, well, can’t do that, so I guess I just won’t do it at all. I think what I would really emphasize is just start small and just build up incrementally and you will get there and no matter how much you’re ultimately able to save, you’ll be really glad you did it.

27:32 Emily: Yeah, I completely agree, especially about people being turned off by the big numbers of savings percentages. I remember when I was in graduate school and reading the advice of like have a three to six month emergency fund, I was just like, no way, there’s no way I can save up whatever that would have been at the time, $6,000 or something like that. I saw that as totally out of reach and so I really just didn’t even try. I fell prey to the same kind of psychology that you just said there. But like you said, just saving as much as you can or putting as much as you can towards debt — could be $5, could be $10 — I think one of the most transformational things about that is not necessarily the amount of money that you’re putting towards savings, but just the fact that you have changed your identity to “I am a saver, I am repaying my debt and I am a person who invests” and that alone can be super powerful and is a great building block on this path towards wealth, even if the numbers are not that big yet.

28:31 Andy: Absolutely. I couldn’t agree more. I think that identity piece is as important or more important than those initial dollars that you’re able to save. I hope people take heart and realize that when you’re just starting on the journey, it’s a little bit like when you watch a rocket ship take off, like watching a space X launch or something. It starts super slow at first. It’s really hard. There’s a gravitational pull that you have to get past, but the momentum builds over time. And once you start to build that momentum, it gets easier and easier. The hardest dollar to save is that very first dollar and every dollar will just get a little easier beyond that. Then eventually once you’ve started to invest as well when you’re at that stage, those dollars will be making more dollars for you while you sleep. That’s the idea of compound interest. Just know that it will never be harder than it is right now and that it does get easier progressively over time.

29:26 Emily: Yeah. Thank you so much for adding that insight. I totally agree. You hear it in the personal finance community: the first hundred thousand is the hardest to get to in terms of your investments and then getting to the $200,000, $300,000 is so much easier, it takes so much less time. But if we’re talking to grad students, let’s lower that scale — the first $10,000, the first $1,000, the first $100 — every order of magnitude that you go down, it is the hardest at that stage. Once you get that compound interest working in your favor, it happens while you sleep, as you said. I know I’ve experienced this in my own life from grad student years, scrimping to save even $5 more per month was like a big accomplishment and now things look very different 10, 15 years later, in terms of the compound interests working in my favor. I can kind of personally attest that yeah, that first hundred thousand, which I’ve well-documented in the first podcast episode that I published actually, was definitely the hardest. It’s been a lot easier since then.

Going Back to Grad School After a Career Shift

30:25 Emily: Andy, I want to get back to your own story because that’s taken another twist. You’re a CFP, you’re working with clients, but you’ve also recently decided to go back to graduate school. Tell us about that decision

30:40 Andy: There’s still that part of me that identifies as a great student and a person who loves school and I’m actually really grateful to have held onto that identity and so a couple of years ago, I started thinking about going back to school and I ended up signing on for the Masters in Financial Planning Program at Kansas State. I did a dual concentration. Half of the degree was really focused on advanced financial planning, so kind of the numbers side of things — taxes, estate planning, that kind of stuff. The other half was focused on financial therapy, so really taking a very deep dive into the psychology of money.

31:18 Andy: I’m finishing that degree actually in March, so I’ll be done in March and my next juncture is to decide if I want to do the PhD, which it’s so funny to me to think that I might yet again, be considering a PhD, but I think I’m doing so with a different head on my shoulders than before. If I decide to do the PhD program, which I think I will at this point, it’ll really be to further what’s been done with regards to academic research around the field of financial planning because not a ton has been done. It’s a very under-researched field.

31:52 Andy: I wouldn’t want to stop being a financial planner. The way a lot of folks do it in the industry is they get the PhD and then they sort of spend 70% of their time in practice and then the other 30% of their time doing research and publishing and doing some teaching. That for me seems like a pretty good balance, kind of having my foot in one door and the other as well, right now. We’ll see! Hopefully we can check in again in a couple of years and I’ll tell you what I decided.

32:17 Emily: Yeah, that would be excellent!

Best Advice for an Early Career PhD

32:18 Emily: Andy, I wrap up all my interviews by asking my guest, what is your best financial advice for an early career PhD? We’ve obviously already said a lot of advice throughout the course of the interview, but did you have something that you wanted to underline for us or maybe something new that you wanted to throw in?

32:34 Andy: Absolutely. I don’t know if it’s new, but I would definitely say that if it isn’t new deserves to be reemphasized and that is to me, the best investment you can make at any age, if you haven’t already made the investment is in your own financial education. Before you even start thinking about index funds and long-term savings and 401ks and things like that, just investing in your own knowledge and establishing a baseline understanding of personal finance, I think is the best possible thing anyone can do.

33:05 Andy: One critique I have the financial services industry is that I think a lot of the messaging has been set up to tell people this is too complicated or too time consuming or whatever “too this” or “too that”. It’s not for you to do, it’s for you to hire us to do. I think in some cases that’s true. When things do get complicated, it is really helpful to have a professional. I believe that obviously as a financial planner. But the basics are not complicated. It’s not to say it’s easy to master them because you know, saving money is never easy, but the principles are not complicated. I always just recommend folks, if you can take 10 or 12 hours, you will basically have mastered the fundamentals of personal finance.

33:49 Andy: A couple of books that I always recommend to people — one is The Index Card by Helaine Olen and Harold Pollack, which is rooted in this idea that basically everything you need to know about personal finance can fit on one five by seven index card. I love that idea and I tend to agree. A second one I’ve already mentioned is The Psychology of Money by Morgan Housel. If The Index Card tells you how to do it, The Psychology of Money is like a user’s guide to your money brain, which is a pretty interesting part of your brain as it turns out. And then the third is The Millionaire Next Door by Thomas Stanley. That’s probably my all time favorite because it really shows that the type of people who become millionaires actually aren’t the ones who you would think become millionaires. It’s not the people driving Mercedes and BMWs and living in fancy neighborhoods. It’s the people who have high savings rates. You don’t see their wealth because it’s all stowed away in investment accounts. I find that book just to be very empowering. Invest in your education, that would be my advice.

34:51 Emily: Yeah. I completely, completely agree. And also starting with books, I really love that idea. It’s kind of old school, but it’s how I started my journey into personal finance as well was reading some well curated material. Actually since you mentioned books, inside the Personal Finance Community, we are currently as of December, 2020 reading The Millionaire Next Door in our book club. Morgan Housel’s book is on the slate for January, 2021. And then The Index Card is one I have not read before, but it’s actually been on my list as another book to consider for that. I’m not sure when this will be published, but when it is, if you’re interested in reading these kinds of books along with some of your other peers, check out the Personal Finance for PhDs community, pfforphds.community, you can see what the current book is we’re reading, the next one on page. If that’s your thing, please come and join us and have some discussions around these books because I love taking these sort of general personal finance texts and bringing it into, okay, well, how does this apply to graduate students and post-docs and early career PhDs? What is this really saying to our population with our particular psychology and career path and so forth. I totally agree with your advice about investing in your education. That’s one way people can do it if they want to do it with me and with others in our community.

36:03 Emily: Andy, last, last question here is where can people find you if they have really connected with you during this interview? Or maybe they want to recommend you to someone in their life?

36:13 Andy: Yeah, absolutely. ThePlanningCenter.com, you can find me there. You can find my email there as well, which is [email protected]. I’m on LinkedIn, very active on LinkedIn for a time. Tried to get active on Twitter so you can find me on Twitter, but I will say I’ve neglected my Twitter page and find the whole thing to be a bit overwhelming. So probably email or website or LinkedIn would be the best.

36:36 Emily: Thank you so much for joining me today and for giving us your insight

Listener Q&A: Are Fellowships Taxable

Question

36:47 Emily: Now on to listener question and answer segment. Today’s question was asked in advance of one of the live Q and A calls I host as part of my workshop, “How to complete your grad student tax return and understand it too.” Here is the question. “Is the NSF GRFP fellowship taxable? It’s not listed on the 1098-T form. I have no tax documents relating to it.”

Answer

37:12 Emily: Yes, the NSF GRFP is, generally speaking, taxable income, even if it’s not reported on any tax forms, I’ll quote from publication 970, page five: “A fellowship grant is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research.” Fellowships can be tax-free under certain conditions, which implies that they are not tax-free if they don’t meet those conditions. Publication 970 page five further states: “A scholarship or fellowship grant is tax-free only to the extent it doesn’t exceed your qualified education expenses.”

37:52 Emily: There are two additional points that further limit the conditions under which fellowships are tax-free but just going off of that first one, if your fellowship exceed your qualified education expenses, it is not tax-free. The NSF GRFP is composed of two parts, a $34,000 stipend and $12,000 for a cost of education allowance. If the $12,000 to the institution goes entirely to qualified education expenses, for example, tuition and required fees, that portion would be tax-free. To whatever extent the $34,000 stipend goes toward qualified education expenses, it would also be tax-free, but I suspect that little to none of it does, perhaps just some required course related expenses at most. You probably use the stipend for your personal living expenses and savings and that means that it’s not tax-free. Strangely enough, the IRS does not require universities and funding agencies to report fellowship income in any way. Some universities do report the NSF GRFP award on the form 1098-T, but others do not. It’s completely up to their discretion.

39:03 Emily: If you would like to learn more about the taxability of fellowships, please listen to season two, bonus episode one. To go even deeper into how to calculate your taxable income and higher education tax benefits as a grad student, whether you have a fellowship or not, please join “How to complete your grad student tax return and understand it too” at pfforphds.com/taxworkshop. If you’d like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

39:41 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.