transcript

This New PhD’s Salary Tripled But Her Scarcity Mindset Lingered

September 7, 2020 by Meryem Ok

In this episode, Emily interviews Dr. Samantha Snively, a PhD in literature who recently transitioned to a non-academic job at the University of California at Davis. Samantha tells the story of her financial and logistical transition out of graduate school with an emphasis on the unexpected emotions that arose upon receiving a much higher and steadier income. Samantha and Emily also discuss how to shed the scarcity mindset imparted by academia and the distinction between lifestyle inflation and lifestyle catch-up.

Links Mentioned in the Episode

Teaser

00:00 Samantha: And you get so used to doing a lot of work as a graduate student for very little pay that it does distort your sense of what you’re worth, what your skills are worth, what anyone wants to pay for your skills.

Introduction

00:16 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 seven, episode one, and today my guest is Dr. Samantha Snively. Samantha transitioned out of graduate school last year and into a nonacademic job at her Alma mater. Samantha’s income tripled and became much more reliable upon taking the job which brought forth some unexpected emotions. We discuss the mental shifts that Samantha is working through, such as healing her scarcity mindset, as well as processing the difference between lifestyle inflation and lifestyle catch-up. I highly recommend listening to this very insightful conversation. Without further ado, here’s my interview with Dr. Samantha Snively.

Will You Please Introduce Yourself Further?

01:06 Emily: I have joining me on the podcast today, Dr. Samantha Snively. I’m very excited to have her on. She’s going to be talking to us about kind of the emotional and financial rollercoaster of transitioning out of graduate school and into a professional career. So, Samantha, I’m so delighted to have you on. Will you please introduce yourself a little bit further for our listeners?

01:27 Samantha: Absolutely. Thank you for having me, Emily. I am delighted to be talking about this topic with you. My name is Samantha Snively. I am currently working as a proposal writer in higher ed development for the University of California Davis, but just this past June, I received my PhD from UC Davis, a PhD in English literature, and I focused on and wrote a dissertation on experimental culture and scientific knowledge-making in 17th century England, particularly focusing on women’s writing and women’s work in the household. So, I finished that and moved pretty quickly into a nonacademic job in service at the university, but not on the tenure track.

Transition Out of Grad School

02:08 Emily: Gotcha. So this is actually really fresh for you. We’re recording this interview in January, 2020. So, it’s only in the last six, nine months. Can you tell us a little bit more details about the timing of your transition out of graduate school and those sorts of other logistical details?

02:24 Samantha: Absolutely. So I realized in my second to last year in graduate school that I didn’t want to make a tenure track run. More importantly, that I did want to work in a job where I could advocate for the importance of research and the importance of universities and higher ed and the importance of the humanities. So, I started looking for jobs in November, 2018 because I wasn’t in a position financially to not have a job after graduation. So, I wanted to start that search early. I started my search in November with the goal of having a job by June, 2019 graduation time.

02:59 Samantha: And just very briefly, I think I had my first phone interview for a job in late December. My first in-person in early January. And then in the job I’m working in now, that moved pretty quickly. I applied back in November, had no sense of what was happening. I had thought they’d forgotten about me. And then I got a surprise phone screen in late January from the person who’s currently my boss. And from there, it moved really quickly. They asked for writing samples. I sent them in. They sent a writing test. That was a model of what we do on a day-to-day basis. They seemed to like that, so I had an in person interview, another writing test. They called me back for another in-person interview and a conversation with leadership. And I think I had a job offer by mid February, 2019. So, I started the job this past April, and I got my degree in June.

Was this Good Timing for You?

03:55 Emily: I see. It’s actually, it’s so hard to get the timing of this right, right? When do you apply? When do you reasonably think you will get a job offer and then what your start date is going to be? All of that against already the complications we have of timing a defense date and writing the dissertation. And there are a lot of moving parts at once. And so I’m wondering was that a good timing for you the way it worked out for you? Or if you had your ideal world, would it have been a little bit different?

04:23 Samantha: That’s a great question. Yes and no, this job search has been an exercise in getting what you need and not necessarily what you want. So, I think in an ideal world, I would have liked to finish the dissertation, graduate, and then start a job. But the way it worked out ended up working well for me, because it avoided the anxiety of being unemployed after finishing the degree. And I intentionally made the choices I did to avoid some of that anxiety. So, I’m very happy with the way it turned out, because it alleviated a lot of my biggest worries, but also the job search taught me that sometimes you have to compromise. I targeted my search in Seattle where my longterm partner lives. And I am not in Seattle. I am working in Sacramento. So, it works out in a way that is good for you, but perhaps not the way you originally envisioned. So, I’m very happy now, but I don’t think that this is where I thought I would be like a year ago.

Negotiated Start Date

05:23 Emily: It is really hard to see, especially with your transitioning to a job outside of academia, if you don’t have prior work experience, it’s really hard to know all these things, but that’s why we tell these stories, right? Because it’ll help people coming along behind. You mentioned that you weren’t in a financial position to have a lapse in income. Did your paycheck from the university, the one part of the university end over here on a Friday and Monday it’s going to pick up in this other part of the university, or did you actually have a little bit of a gap? Did you take any kind of a break, or what was the situation?

05:57 Samantha: The answer to both is no. But again, I was grateful for that. So, I got the job offer in February. I negotiated to be able to start a bit later than they would have liked. So, I had to finish out the quarter. UC Davis is on the quarter system. I had commitments in the quarter. I had a couple of part time jobs I needed to transition out of. And so I finished up the last week of the quarter, which was the second to last week of March. I took a break for the final week of March and then started the first day of April. And so there was no gap financially because I think the March paycheck from grad school got me into April and then the next pay cycle got me into May. I don’t know that I’d recommend that fast of a transition if you are able to do it, but it was anxiety-relieving for me. And it helped me focus on other things rather than stressing about money.

06:50 Emily: Yeah. And you just mentioned negotiation there. You negotiated the start date. Did you attempt, or were you successful in negotiating any other aspect of your package?

07:00 Samantha: I did attempt to negotiate. But because I work for UC Davis, which is part of the state of California, the salary bands are all set and were publicly posted. So, I did know the range that I would be going in. And so there was, I suspected there was not a lot of room to negotiate and I was correct. But I did ask for the practice, and I’m glad I did, but no, I did not have the opportunity to negotiate. But the financial compensation package was, I was very happy with it. So, the negotiating start date with what I needed.

Emotional Response to the Salary Offer

07:34 Emily: You mentioned you have a little bit of financial precarity. You receive this job offer, you receive the salary offer, you’re looking at it, what’s running through your mind? What are you feeling?

07:44 Samantha: Frankly, shock at first. The posted salary band was part of the reason I originally thought I wouldn’t be qualified for the job because it was almost three times what I was making as a graduate student. And you get so used to doing a lot of work as a graduate student for very little pay that it does distort your sense of what you’re worth, what your skills are worth, what anyone wants to pay for your skills. So, at first I couldn’t believe it. It’s like, is there a number of extra here? Is something going on? And I think perhaps the second emotion was relief because I realized I didn’t have to worry about the things I’ve been worrying about for the past several years. Honestly, where is the next paycheck coming from? Will I be able to ever take a vacation? Will I ever be able to live in the same city as my partner? Will I ever be able to save for further than six months down the road?

08:38 Samantha: So, relief was a big part of it. It allowed me to settle in to my new life and to have a bit of space to breathe and to really reflect on what I wanted to be doing and who I was and who I had become after graduate school. So, that was good. And I think the next big emotion that I noticed was guilt. Surprise, surprise. You spend six years in a graduate program, working continuously and in a culture of overwork that can often be toxic. And so when I moved into a job that was an eight to five schedule with a very generous boss, everyone was very flexible about their hours. I started to have feelings of guilt about taking a lunch break because I thought, well, if the, if the pay is so high, surely I must need to work enough to meet that pay. And it took me a while, several months, and it’s even still lingering today, to realize that it is okay to take a lunch break. It is okay to have a doctor’s appointment, period. You know, working through those feelings of guilt because the value of my labor is suddenly so much higher than it was a year ago, even though I’m doing very much the same kinds of things, that was an adjustment as well.

09:56 Emily: This is so interesting. I want to comment on both of those emotions. If you don’t mind, I’m going to tell a slightly lengthy story. It’s actually not about myself, but it’s about my reaction when my husband got his first post-PhD job offer. I’ll link in the show notes to a blog post where I wrote about this, but basically what happened is my husband was in Seattle interviewing for the job that he ultimately took. They offered it to him and he took it. And while he was actually flying from Seattle back to Durham, I knew the flight times and knew he was in the air, I was using his computer and I saw an email come into his inbox that was from the company that he had been interviewing with. And it was the job offer, and it included the salary. And, you know, listeners are probably pretty familiar with my story, like my husband and I worked very hard and we’re very fortunate. And actually were in a very good place with our finances for graduate students during the time when we were in graduate school, especially by the time we finished. We had cash in the bank. We had investments. We had very little debt that was very manageable.

11:01 Emily: But still, when I opened up that email and I saw that salary offer–and we knew the ballpark of what it was going to be–I started bawling, and I felt this huge sense of relief. And I thought to myself, we don’t have to struggle anymore. And I thought, I didn’t even know that I thought we were struggling. I thought we were succeeding. And we were succeeding definitely by external measures, but still I had that emotion somewhat, that feeling somewhere inside that sort of erupted out of me when I saw that that salary offer. And so, it was a great deal of relief, shock as well, and shock at my own response to it, I guess, and relief seeing that number. So, I think we’ll come back to the actual transition of well, does that salary turn out to be what you think it’s going to be once you actually move out of your grad school mindset and so forth, but that’s the first story I want to tell.

Money Mindset: Overcoming Feelings of Guilt

11:52 Emily: The second one is I find this guilt emotion so interesting. And I guess I can understand where it’s coming from because it’s almost like, how much harder can you possibly work? Like you’re in graduate school and you’re working yourself to the bone for a very low salary or pay or cobbled together funding or whatever it is. And then I can see you going into this job and making about three times as much and thinking, “I just can’t work three times harder.” And, you know, you can’t work three times harder, but “Oh my gosh, I’m not even expected to work three times harder? It’s actually okay to have all this flexibility and I can leave my work at work and go home.” We haven’t said that you actually do that, but you know, that’s the case for some people. What a rollercoaster ride and what a shift. Right? At that point. So, do you want to elaborate on that any further?

12:45 Samantha: Absolutely. You are describing spot-on things. I think it was certainly an adjustment. And it was the realization moving into something in a work environment that was more normal. And that allowed me to leave my work at work and, you know, to be able to have weekends, to be able to spend time with friends and family and settle into it made me realize how toxic and draining–and I use toxic mindfully–that that culture can be that expects incessant production from people who also have families and have, you know, the right to rest and to care for their bodies who are doing intense intellectual work, which is, you know, it is not physical labor. And so it is a certain kind of privilege to do intellectual work, but also to keep it up all the time is draining.

13:42 Samantha: And it is only increasing in academia, the pressure to do more and do more. And for less, especially for people from marginalized groups or minoritized groups, a lot of that labor is put onto them by a structure that just exists to extract as much value with as little pay as possible. And so, it did help me realize how erroneous my own thinking had gotten, because I’d internalized a lot of academia’s self-valuation. As I started to transition out, I started to withdraw from that feeling a little bit. It got to a point where I heard a colleague gleefully tell us that she had worked from 10:00 PM to 2:00 AM last night, as if it was something to be proud of. And that’s when I realized, I don’t want this. Something is terribly wrong if we have gotten here.

14:33 Samantha: And it’s not the only field in which this happens, right? There are other work cultures where this sort of overwork is valorized, but yeah, it was simultaneously realizing that I didn’t want it. I didn’t choose it. And yet it was in my mind still. It still affected the choices I made and the way I thought about my own work. But it was honestly very healing to take a nonacademic job. It allowed me, as I said earlier, to rethink what I’ve been taught by the Academy and from my familial background. And it allowed me to think about what my values actually were.

15:09 Emily: Yeah. I can definitely see how that increase in pay and also the more work that has better boundaries around it and more reasonable expectations can, you finally have a chance to breathe, take some space for yourself. Take some time for reflection. Yeah. When you’re in graduate school and in some kinds of jobs, this training period, it’s just push, push, push, push, push, and you can end up going quite off course and in a weird direction, if you don’t take that time periodically to reassess.

Appreciating and Using Privilege to Help Others

15:37 Emily: Okay. So, you’ve talked about the initial shock of the salary offer and this feeling of guilt that cropped up, but then realizing that your mindset was also changing as you were moving out further away from the graduate school experience. Were there any other emotions that you wanted to bring up along that path?

15:54 Samantha: I think another thing that surprised me was how quickly people started to say things like, “Oh, well, you can afford it now.” And how often that was my fellow graduate students. So, I think it was, you know, this is not a critique, but more of an illustration that this mindset affects us all. So, that was surprising. I didn’t expect that to come or to come so quickly. That would be a big one. And I think, now that I am almost a year through the new job and I’m navigating this transition, I’m thinking a lot more about the ways in which even, as I came out of graduate school, that all the different ways in which I’m privileged and the fact that I have landed on my feet and landed in a space of calm and restoration only motivates me more to want to change things and to use the fact that I am being paid decently well to help others and advocate for others who still are not. So, that’s something that’s been coming up more often is realizing like I am in an interesting position in the university and I have a lot of privilege. How can I use that to improve things moving forward?

How Would You Describe the Scarcity Mindset?

17:06 Emily: Mhm. That’s awesome. So, you’ve brought up some aspects of your mindset that you have started to shed as you’re putting more time between yourself and the end of your degree. And you use the term with me scarcity mindset. I think some of those ideas around scarcity have come up so far. We haven’t used that term yet. How would you describe the scarcity mindset that is developed in academia by many people?

17:30 Samantha: That’s a great question. I understand it, knowing that there are others who actually study it and have a much better understanding, but I understand it as the scarcity mindset is a combination of not making enough. So, not making a living wage. I live in a part of California that is lower cost of living for California, but high cost of living compared to anywhere else. It’s not in the major cities of the U.S. So, realizing that the money you earn through hard work does not go as far as you need it to. And there’s nothing you can do about that except work more. So, there’s that, you’re not being paid enough, but also realizing as grad students do, that you might not be paid continuously. And so, if you make enough money one month where you can pay all your expenses, the scarcity mindset is knowing that you might not be paid for four months out of the summer, which we were not. We don’t get paid from July to November. Hurray. So, it’s that too. It’s knowing that no matter what you do, you may have to weather the summer, a health crisis. You could be one blown tire away from having to take loans. So, that’s how I understand it. And it creeps into everything. It affects health, it affects community function, all sorts of things.

18:51 Emily: Hmm. So, what I have been interested in lately is I’ve been learning about scarcity mindset as well, almost from like an entrepreneurial, like side of things. And then it has caused me to think a little bit more about it in the academic setting. But there’s scarcity mindset, and there’s like actual scarcity that sort of objectively is going on in your life. And graduate students often have both of those things overlapping, but they can also exist independent of each other. You can have a scarcity mindset and not actually be experiencing scarcity. Maybe it’s something that happened in your childhood. Maybe it’s something that was going on during graduate school, but you’ve moved past it. You have a higher salary now, but the mindset can still follow you. Likewise, you can have a very tight financial situation and not have a scarcity mindset around it, even if it is pervasive in the community around you. I think that academia itself tries to impart upon us a scarcity mindset, even if not every member in that environment is actually experiencing scarcity. So, I’m wondering for you, as your income has gone up even though, okay, you’re still living in a high cost of living area. I’m sure there are still financial challenges associated with it, but have you been able to move past or sort of work to heal the scarcity mindset that you developed during your time in academia?

Moving Past the Scarcity Mindset Developed in Academia

20:14 Samantha: I’m starting to, and that’s a wonderful way of expressing it. That it can be both from the way you were raised and an environment that cultivates it, sometimes artificially. We think about how grants work. Grants and the publish or perish culture is the artificial scarcity mindset. From my own experience, I definitely felt it coming up when I transitioned to a nonacademic job, and in surprising ways. The first place I noticed it was with my own health. I suddenly had the means and the health insurance to be able to get new glasses, for example, and deal with a couple of health things that my parents could not afford to deal to treat as a child. And I couldn’t afford to treat in graduate school. And even though I knew on paper, I had the funds, I still felt like it was indulgent, which is ridiculous.

21:09 Samantha: Not that I thought it, but the fact that taking care of your health could be ridiculous ever, but it popped up there. It pops up even still, and as I’m working through this, but it pops up now in the difference between cost and value. So, what something costs versus how much you will get out of it. And for me, the big test was my car. I could not afford a car in graduate school. And so, I needed to buy a car for this new job and for the next phase of my life. And I found myself, you know, I had saved in grad school and, like you and your partner, had done okay, asterisk for graduate students. So, I had some savings that I had earmarked for a car, but I found myself as I researched thinking like, “Well, why don’t I just save as much money on this car as possible, buy the cheapest thing I can find?” And only through the advice of some friends realize that, yes, it might be upfront cheaper, but what about increased maintenance costs? I could buy a jumper, and for many people that’s what you can do. And so you do what you can. But I was on the verge of making a decision where I spent as little as possible, but would incur greater costs down the road. And so thankfully, through some wiser people in my life, I ended up spending all of my budget, but got a 10-year-old car with 44,000 miles on it. And so, it has saved me in gas and insurance and maintenance costs. And that’s not something that was intuitive to me coming out of grad school. I was looking for the lowest bottom line and not thinking about the future.

Pro Tip: Get Comprehensive Car Insurance

22:48 Samantha: And that is, I think, also part of the scarcity mindset is not having the means to be able to plan for the future. If you cannot afford to save, you cannot make longterm financial decisions. It’s as simple as buying what you need in the moment versus buying bulk. And many people are not able to do that. So, it shows up there. It shows up with health, and it showed up when I took my first vacation, again, something I’d saved up for, I split costs with my best friends, had a wonderful time. It was the first vacation I’ve ever been able to take, and it was wonderful. But when I got back, found out someone had stolen my catalytic converter out of my car, and that is a $2,600 repair. So, one of my tips to your listeners will be, if at all possible, get comprehensive car insurance.

23:37 Samantha: Again, something I didn’t do because I thought it was a way to cut costs. And it was at the time. And then not. But when that happened, I didn’t think, “What a terrible thing that someone has committed a crime.” I thought, “How stupid of me. I shouldn’t have gone on vacation. This was a terrible decision. I never should have taken time to take pleasure and enjoy time with friends.” And that’s messed up, too. So, I’m trying to remind myself that that’s what savings are for. That’s what insurance is for. That’s what the fact that the next paycheck is coming is for. You save money precisely to weather things, not that something you weather is a moral stain against you. And if you have to spend money, you’ve saved, you have somehow messed up. It does me no good if I hoard it.

24:31 Samantha: So, that’s been a little bit healing. Is remembering that I am saving, I am managing my money. I have people who will help me, either through advice or through the loan of a car at first, or a tip about a cheaper flight, or something like that. And people who are gentle about money. And also to remember that at least for now there will be another paycheck. And that’s something that is still not intuitive to know that I won’t have to be saving for when June hits. So, it’s a slow process, and it’s been kind of an expensive lesson to learn. So, if that answers your question.

25:12 Emily: Yeah, it definitely does. Your comments are reminding me of a distinction that we tend to draw in the personal finance community between frugal and cheap. And cheap is, it sounds a bit, you know, pejorative, but when you’re in that scarcity mindset and the actual scarcity in your life, you don’t have any other choice, right? There’s no choice to be frugal. There’s only the choice to be cheap, unfortunately. This is a big complaint kind of around frugality actually, is that it does take a little bit of upfront capital to be frugal sometimes with certain like verbal tips or strategies that you might use. Like you just mentioned buying in bulk. That’s one where it takes some upfront capital to be able to spend more over the longer term. But when you’re stuck in this very short-term cycle, you can’t even make those little mini investments in your future of a frugal tip or something like that. So, it’s a position that people are forced into. If you cannot do it in some way, you will eventually sort of snowball. You can eventually start to snowball frugal tips together and overall be spending less money, but like you have to get it started somehow. And that’s really a difficult thing to overcome. Thank you so much for sharing those anecdotes.

Commercial

26:25 Emily: Emily here for a brief interlude. I bet you and your peers are hungry for financial information right now, especially if it’s tailored for your unique PhD experience. I offer seminars, webinars, and workshops on personal finance for early career PhDs that can be billed as professional development or personal wellness programming. My events cover a wide range of personal finance topics, or take a deep dive into the financial topics that matter most to PhDs like taxes, investing, career transitions, and frugality. If you’re interested in having me speak to your group or recommending me to a potential host, you can find more information and ways to contact me at pfforphds.com/speaking. We can absolutely find a way to get this great content to you and your peers, even while social distancing. Now, back to our interview.

Change Financial Attitudes with Positive Self-Talk

27:24 Emily: Something I’ve been learning about, and actually, I’ve had a couple other interviews have been published, one with Lucie Bland, one with Cortnie Baity, kind of around how to change your financial attitudes. And something that I have, again, been learning more from the entrepreneurial community is the use of affirmations, is what they’re called. Which the first time I heard about–the first dozen times I heard about affirmations–I was like, “Whoa, that is a weird, like, I don’t want to get into this,” but really what it is, is it’s just, self-talk. Like, it’s just kind of, if you notice yourself saying, like, you just mentioned a few things, you’ve said yourself, “Oh, I don’t deserve to have a rest or pleasure,” when you notice yourself saying something like that, just having something there to yourself to counter it. “But no, I do deserve periodic rest. I work very hard and I earn enough money that I can invest in my future.” Like whatever it is for you that needs to be there in that self-talk can be really useful in starting to combat this mindset. I’m wondering, do you use that strategy or has it been something else that you’ve been using to work through this mindset?

28:27 Samantha: I mean I will always plug the value of therapy, not necessarily as a specific answer to your question, but more as you know, the chance to have someone else to talk to and to reflect on the ways in which you’ve been trained to think, and to have someone else say, “You don’t have to do this all the time.” So, if at all possible, find affordable affordable therapy. I don’t know that I use affirmations specifically, but I do receive affirmation from my community, from my partner who will say as I’m in tears after having the car parts stolen, like, “This is not your fault.” Or people who say, “It’s okay to have these questions about how do I manage my finances? What is the best form of insurance?” I don’t know that I repeat them to myself, but I’m trying to have more gentleness towards myself and to everyone else around me. And to understand that you don’t know where everyone is coming from. You don’t know what the background might be. And so, you don’t know the ways in which someone’s actions are a production of years of training and experiences.

29:37 Samantha: I’m very much still learning. So, I think that’s probably the answer. I haven’t figured out everything that works. Still seeking advice. A lot of it is experiential and realizing, “Okay, if I do this, what happens? If I try this, what will happen? Will I be okay if I have to weather a large expense?” And then experience does teach you, you will be okay. No one will shun you. Your worth does not diminish as a human being because you take a weekend off. These sorts of things. A lot of it is just learning by doing.

How to Combat Lifestyle Creep

30:10 Emily: Yeah, I’m really glad that you mentioned the supportive people you have around you to try to help you counter the residual scarcity mindset. But you mentioned earlier that you’ve also heard from people, “Oh, you can afford it.” And so something that I try to talk about when I have the opportunity is combating lifestyle inflation or lifestyle creep. When, you know, we come out of the PhD or out of a postdoc and you finally have that three times higher salary or whatever it is, you, maybe yourself, or maybe people around you, start to say, “I can afford this now.” And that’s potentially true, but you know, maybe there are some other reasons, other financial goals you might want to work on. So, what’s been your experience with lifestyle creep with this job transition?

30:55 Samantha: Great question. Absolutely, I have felt it. I mean, no one is buying diamonds and furs here, but certainly the realization that I could buy the nice olive oil and also get work pants when I needed them, was new to me. And so, I certainly experienced a certain amount of pushing the boundaries of my budget. Not necessarily intentionally, but suddenly just realizing, “I can afford this. I can afford these modest things.” For me, I think the danger is that the modest things add up. And so, I have to, you know, be mindful and ask myself if I need it and also pace out my consumption.

31:39 Samantha: I think the other thing that happened was there were a lot of high ticket purchases all at once. So, I moved, I had to purchase a car. I did a lot of health things. And that very much, I suppose you could think of that as lifestyle creep. You could also think of it as catch-up. So, a lot of, you know, health catch-up. Moving to a space where you feel safe and comfortable, moving out of a town that is rapidly outpricing all of its student inhabitants was one of the things that I decided to do. So, definitely there was some lifestyle expansion. Also, to be gentle to myself, I have to think about what is the startup cost of a new light versus, you know, going to the grocery store and buying the fancy stuff that you don’t need or luxury goods. So, thinking about what was important, what I needed. I needed to fix certain things about my health.

Think About Needs vs. Wants

32:42 Samantha: I probably could have gotten away without a car, but it would have made life incredibly difficult and sometimes unsafe. So, thinking about needs versus wants and realizing that it is okay to have expensive needs if you can meet them. That’s also an obligation to make sure that other people can meet their needs, but that it’s still important to temper your wants. So, just because I can afford it, doesn’t necessarily mean I need it in my life. And so, I’m trying to acknowledge the fact that I’m building a new life and catching up from years of not being able to take care of certain things, but also keeping an eye on the expansiveness of my wants and trying to make sure that I’m not spending to create a feeling. So, do I want this because I will use it a lot and it fills a need and might give me joy? Fine.

33:40 Samantha: Am I using this to create a feeling of joy? That’s a different question for me. So, those are sort of the things I’ve discovered so far for combating it. Prioritizing financial goals is, as you say, a lot of the grad school skills that I learned have helped so far, you know, shopping second-hand, being a coupon pro, repurposing or reusing, reflecting on how you spend your money, that has all been useful. But I think in this new phase, I’m also allowing myself to experience joy. And the more I do that, the more I realize actually you don’t need necessarily to spend money to experience joy. If I have the freedom from financial anxiety, I am finding that I am finding joy in things that don’t require me to outlay money. So, that was was unexpected.

34:38 Emily: So, so insightful. Thank you so much for that. Listeners, I want you to go back a couple of minutes and listen to that whole section again, because I think it was just amazing. And there were actually multiple things I wanted to pull out, but I think the couple most important ones were one, I love this distinction between lifestyle creep or lifestyle inflation, but then also lifestyle catch-up, because sort of the whole idea behind lifestyle creep and it being a negative thing is that it’s mindless. Like, “Oh, I got a raise. That means money’s going to disappear. I’m just going to spend it on whatever, and it’s not very intentional.” And this can happen when you are living an okay lifestyle to begin with that you’re comfortable with. But what you’re talking about is when you have been living for an extended period of time, well below what is to you a reasonable lifestyle, like many graduate students are during training. And once you have the means to step out of that, it’s not unintentional at all.

Mindfulness with Long-term Financial Commitments

35:40 Emily: You need to increase your spending in certain areas because you’ve been artificially deflating it prior to that point. So, that’s perfectly fine and no one will fault you for that. Another kind of point I’d like to make, and you talked around this a little bit, I think, is that one of the real dangers with lifestyle inflation, especially something where like you have three extra incomes, some large jump like that, is getting yourself into big long-term commitments, like housing and transportation. Maybe there are some others in there, that you didn’t really realize that you were biting off so much because you were so giddy from seeing that high salary. And those are the really dangerous ones, right? So, that’s the part to be really careful is these fixed expenses. When you inflate those really rapidly, or without a whole lot of planning, but you know, to do what you were saying and just have like some startup costs, okay. They’re sort of one-off things. Even if you have a few of them at once, as long as your budget can absorb them, like that’s not going to hurt you in the longterm. It’s really those fixed expenses, especially the contracts that you’re in, that you need to be careful about.

36:49 Samantha: Something you said about, you know, suddenly the mindless spending, got me thinking it is scary how quickly it happens, too. And I think this has been instructive for me, realizing how it is possible to be, you know, the stories you hear about. Someone making $300,000 a year and saying that they don’t have any disposable income. It’s the lack of mindfulness. It’s the lack of, you know, checking yourself, checking your privilege. But I’ve learned enough in these past nine months to realize those patterns can transfer. If you don’t have contentment or if you don’t have the reflective mindset at 60, $70,000, I understand how you can get to be a rich person who thinks the same way. And not in an empathetic, like “Let’s all pity the rich,” but in a, “Oh, we really need to be checking at every level.”

37:49 Emily: And it’s part of human nature rather than necessarily a character flaw. It’s just kind of present in all of us. It’s something we all have to combat a little bit.

37:59 Samantha: And time as a graduate student doesn’t exempt you from that. Like you have to do the work no matter where you are.

Best Financial Advice for Another Early-Career PhD

38:04 Emily: Yeah. I agree. Last question here. What is your best financial advice for another early-career PhD?

38:11 Samantha: I think the advice works the same for many people and will scale. Save what you can, always, and that does not have to be a certain amount, right? What you can, can be $20, $10, $5, a quarter. It’s more about prioritizing your future in whatever way you can. And also high yield savings accounts are pretty great. I did not discover them until a few years ago, and it’s wonderful. The rates right now are pretty great. So, save what you can and put it in a place where it will work for you, but you will also be able to access it. Another tip would definitely be, if you can afford it, get comprehensive car insurance. I think it was like $5 extra a month for me. And if I’d had it, I would not have to spend multiple thousands of dollars to fix someone else’s crime.

39:05 Samantha: So, I did not know that going in. I want to share that with your listeners because sharing financial knowledge is how I got to where I was. And there’s a lot I still don’t know. So, I want to pass that on. So, I think the biggest one though, and we’ve been talking around and about this, is to think about income and personal value in the ways in which they are divorced in graduate school, the ways in which if you step into a non-academic career job, they can suddenly become linked. And so, I think my biggest piece of advice would be to make time to ground yourself and to think about what you value and what your values are. So that even, you know, no matter what income bracket you’re in, especially if you jumped tax brackets, that you are always in touch with what matters to you, the non-monetary things that are of value, your worth as a human being, your rights as a human being, all of these things are not tied to the income you make.

40:02 Samantha: And that it’s okay to return to that. You can remind yourself of this. It can be difficult if you’re in a workplace or in an environment or a culture where suddenly you see a lot of conspicuous consumption. If you jump out of graduate school to an industry where that’s the norm, the industry I work in, we will use phrases like, “Oh, that’s only a million dollars,” all the time. And that was a shock. So, I think, keep returning to the fact that your personal value is not connected to your income. It wasn’t in grad school, and that was the problem. And that is a problem that should be fixed, but that also means that it’s not in the world beyond academia as well. Money is something you use to pay your bills, to care for your family, to build a better world, to save for your future. It’s a tool and not a marker of value. And so, just finding ways to return to that and to reflect on what you value, how you express your values through consumption, if that’s something you decide you want to do. How you can use your income and your consumption to build a better world for others. If you have the financial freedom to do that, that’s some advice that I’m starting to learn, and I would like to encourage our listeners to do. I’m sure they’re already doing it.

41:26 Emily: Thank you so much for that Samantha. Thank you so much for this delightful interview. I am so glad to have your voice and your perspective and be able to share it with the listeners.

41:36 Samantha: Well, thank you for having me. It was a pleasure to talk. I wish we could talk more.

Outtro

41:40 Emily: Listeners. Thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

Best Practices in Side Hustling During Graduate School

August 31, 2020 by Lourdes Bobbio

In this episode, Emily interviews Lourdes Bobbio and Meryem Ok, two PhD students who work on this podcast as virtual assistants. Today’s conversation is all about side hustling! Lourdes and Meryem each give their perspectives on why and how they started side hustling, how they manage their time, and how they handle their self-employment income with respect to taxes and budgeting. Throughout the interview, you’ll get a behind-the-scenes perspective on how this podcast is produced. The end of the interview is a discussion of the unexpected benefits Lourdes and Meryem have experience from working on the podcast.

Links Mentioned in the Episode

Find Lourdes Bobbio on Twitter @lourdesb1012 and Meryem Ok on Twitter @Meryem_T_Ok
Related Episode: This NDSEG Fellow Prioritizes Housing and Saving for Mid- and Long-Term Goals
Related Episode: This PhD Student in Texas Side Hustles to Overcome Her Unique Financial Challenges
Personal Finance for PhDs: Financial Coaching
Personal Finance for PhDs: Podcast Hub
Personal Finance for PhDs: Subscribe to the mailing list

Teaser

00:00 Meryem: Every once in a while, if I need to make an extra purchase or a gift, I will kind of rationalize with myself, “Okay, I was able to make some extra income this month with the side hustle so it’s okay to spend that extra money.” And essentially that’s not a super cut and dry method, but it sort of helps me at least to rationalize my additional expenses and not get too anxious about finances during grad school, which is really, really nice to have that cushion outside of my usual budget.

Introduction

00:36 Emily: Welcome to the Personal Finance for PhDs podcast and higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 18 and today my guests are Lourdes Bobbio and Meryem Ok, who are both PhD students and work with me as virtual assistants on this podcast. Today’s conversation is all things side hustling. Lourdes and Meryem each give their perspectives on why and how they started side hustling, how they manage their time, and how they handle their self employment income with respect to taxes and budgeting. Throughout the interview, you’ll get a behind the scenes perspective on how we produce this podcast. We close the interview discussing the unexpected benefits. Lourdes and Meryem have experienced from working on the podcast. Without further ado, here’s my interview with Lourdes Bobbio and Meryem Ok.

Will You Please Introduce Yourselves Further?

01:31 Emily: I’m bringing you a little bit of a different interview today. This is the first time on the PF for PhDs podcast. We have had three people on the call at once, that is two guests interviewees, and it’s really special to me because the people I’m interviewing today are my virtual assistants who work on the podcast with me, Lourdes Bobbio and Meryem Ok, and they’re both PhD students. We’re going to get into more about side hustling today, like the side hustle that they do with me and their experience with that, maybe their experiences side hustling with other people. So yeah, we’re talking side hustling today and I have my two guests with me. I’ll have you introduce yourselves, so Lourdes, why don’t you go first?

02:10 Lourdes: Hi everyone. My name Lourdes Bobbio. I’m a fifth year PhD candidate at Penn State University in the Department of Materials Science, and I work on additive manufacturing of metallic materials.

02:23 Emily: Yeah. Lourdes was actually a guest on a previous podcast episode and we will link that from the show notes. We did a budget breakdown with Lourdes, so we talked through her budget there in State College and Meryem, please introduce yourself.

02:35 Meryem: Hi, my name is Meryem. In 2016 I started the MD PhD program at the University of North Carolina at Chapel Hill — go Heels. After completing the first two years of med school in 2018, I started my PhD in UNC-NC State’s joint Department of Biomedical Engineering. Currently I am working in the Magnus Lab, developing tools to better understand human intestinal STEM cell fate. And I’m happy to say that I’m officially a PhD candidate as of two days ago.

03:05 Emily: Yes. Congratulations! We will record and release this in August 2020, so it’ll still be fresh news by the time this episode comes out. I’m just delighted to have you both on.

Why Side Hustle In Grad School?

03:17 Emily: First question here is why did you decide to start side hustling in graduate school? Why don’t we still go with Lourdes first?

03:25 Lourdes: Financially, I was doing actually pretty okay with my stipend. As Emily mentioned, I was previously on an episode where I discussed my NDSEG fellowship, and so I generally have a somewhat higher stipend than my peers and State College has a generally low cost of living. So financially I was doing, in terms of I had enough money to live on and for extras and to save, but the reason that I got into side hustling was so that I could have money to contribute to a Roth IRA. I think Emily has done an episode on this earlier in the year, but as of this current year 2020, fellowship recipients are now eligible to contribute to a Roth IRA, but previously they were not. I started one before I was being paid on fellowship and I wanted to try to contribute at least a little bit of money monthly to that, so having that side hustle, self employment income helped me to be able to do that and continue to contribute, even though I couldn’t with my general fellowship income.

04:32 Emily: That’s so strategic. I love that. It is the advice that I was giving out for people who had multi-year fellowships, is to consider that self-employment side hustle. Meryem, why’d you decide to start that side hustling.

04:44 Meryem: For me, I guess coming into medical school, I had actually taken a gap year and was able to transfer a lot of those funds into starting an IRA, so for me, it was less of a strategic approach and more just that I’ve really always had a lot of interests in gaining new skills and collaborating with other people outside of my primary career interests. I think specifically, actually, as far as video and podcast editing, I was inspired by my dad who is always the one recording all of our family memories and making home videos. And he actually founded and produced a public access TV show called Turkish American TV. That’s been going on for 15 years, completely as a passion, volunteer project. I remember many times he’d rope me into his projects and show me how to use video and editing software, and I really just felt lucky to have his guidance. I feel like I inherited his eye for detail since that’s helped me be more confident in marketing myself as a freelancer who just really genuinely enjoys editing. I guess for me, just as someone who needs to have hobbies and tasks outside of work, I wanted to try something new and also make a little extra income in line with my career development goals.

06:03 Emily: Maybe we should say what you all actually do for me with the podcast, to give you credit where credit is due. As the listeners know, I conduct the interviews for the podcast, but kind of everything that happens after that, I hand off to you two. So you do all the video and audio editing of the interviews, and you compile the show notes, which are actually full transcripts. It’s more work than it sounds actually. We use an automated tool to generate the first transcript, but then you go through with a careful listen and make it actually readable, which I really appreciate. And you also write the social media posts that we do for each episode, and you schedule things. There’s a few other tasks in there too, but those are the major pieces of work. It’s been an amazing help for me.

How did you find your current and previous side hustles?

06:44 Emily: I know how you two landed this side hustle, which is that I reached out to my mailing list when my last VA decided to leave the position. Thankfully, she gave me a lot of notice. I reached out to my mailing list and said, “Hey, podcast listeners, do you want to work on the show?” And you two both volunteered to do a trial episode and ultimately your work was great, so I hired both of you. But I don’t know if that’s the first side hustle you’ve had in graduate school, or whether you were even particularly looking for that kind of side hustle, or really how it came about kind of from your end, so why don’t you tell us. Lourdes?

07:19 Lourdes: I had done a couple of side hustles through freelancing websites. There was actually one particular one that was captioning and transcription of usually short audio files through this company called Rev. It’s basically just pick and choose these audio files and you get paid. It’s a very low paying job, but it was something that I did just sort of in my spare time. When I heard about the opening on this podcast, I was like, “Hey, this is perfect. This is like what I was doing before, but on sort of like another level and sort of a next step up.” It seemed like a perfect fit for what I like to do in general anyway, just on a higher level.

08:07 Emily: Yeah. Meryem, how about you?

08:09 Meryem: Yeah, that’s so funny, because actually that’s the first time I’m hearing this. For those who don’t know Lourdes and I actually went to undergrad together, so the fact that we serendipitously ended up as virtual assistants for the same podcast and kind of working together was phenomenal to experience and to find out. For me, I also was trying to look into doing these things independently through similar websites, but it was not really a sustainable effort or something that was really worth the rate that they were paying. And I felt like it’s so much more useful to be able to use these skills and also benefit from all of the knowledge that I’m gaining as I’m editing these episodes, which is relevant to us as graduate students trying to better our personal finances. Really it was a no brainer when I saw that email from Emily and reached out and I’m just so glad that it worked out and that we were able to take turns, Lourdes, and still have an activity shared together despite the distance and the years since college.

09:15 Emily: Yeah, that’s why I reached out to my list first, to try to hire for this position. I hoped that there would be people who would actually be interested in the material as well as having the skill set to work on the episode, instead of going with an independent agency or something, which I could have done, maybe if it hadn’t worked out, initially. I wanted to go to people who I sort of had a relationship with, and actually it happens to be the fact that I had corresponded with both of you over the years before that — we mentioned Lourdes had been on the podcast and Meryem has been on my mailing list for a long time, so we had exchanged emails and I think had call or two in that time. It was really helpful that I knew your names at least, when it came time for people to apply for that position. Meryem you have, since we started working together, taken on another podcast editing position, why don’t you talk about how that came about?

10:08 Meryem: Yeah, that’s right. Actually, I owe it to you, Emily, for alerting me to another side hustle opportunity in podcast editing with the AcaDames podcast, which is another awesome podcast focusing on women in academia. Earlier this year, I remember Emily sent an email to us, letting us know that AcaDames was looking for help since their previous student executive producer was graduating soon, and they wanted to have somebody to overlap during that period of transition. I reached out to them about that position and thankfully we were a good fit. Now I just feel really lucky that I get to work with these two amazing podcasts. My work with them partially involves editing, but also involves a little bit more of administrative and social media management work. I’ve just learned so much from both podcasts and I’m excited to be involved. And also again, benefit from all of the career development advice that I’ve been receiving just by working with both of them.

11:09 Emily: Yeah. I think it’s kind of interesting that for these positions, this podcast virtual assisting position and the AcaDames one, it sounds like we’re looking for someone who’s going to be doing a multiplicity of different things and you come in with maybe some subset of the skills, like Lourdes, you had the transcription type experience, but then we’re asking you to learn a bunch of other stuff which expands your skillset overall, even if you’re not going to be career podcast editors. I assume you’re going to do something with your PhDs, but it’s nice to have that kind of side work, I think.

Balancing Side Hustles, Grad School, and Personal Life

11:36 Emily: Between the side hustle, your graduate work, everything else that’s going on in your life. I know you two are both in relationships — Meryem, you recently got married. Lourdes, you’re engaged. You have a lot of stuff going on in your lives. And so how do you fit in this side work that you’re doing, along with everything else? Lourdes?

11:55 Lourdes: I guess for me, what attracted me to the side hustle specifically was that it’s something that I can work on from home. I don’t have to go anywhere to do anything, and I can kind of fit it into my schedule. It’s very flexible. Emily is super nice, in that she gets us a lot of heads up time between when we get audio files and when they’re going to be released. So there’s a lot of flexibility in the position, which is definitely something that I was initially looking for in side hustles, as well, when I was doing the more freelance, low paying transcription job, it’s something I could do just in my own time, so that’s been helpful in terms of being able to work it into my schedule, work my schedule around it.

12:38 Lourdes: Also, like Emily mentioned, I’m engaged, but for the last year I’ve also been long distance, and so I’ve had a little bit more free time. It’s also been really great during this work from home time, to have something else to do. Now that you’re pretty much primarily at home, we’ve all been at home, things can get a little bit stale, but having a lot of different activities to do has been really helpful in managing my own mental health. I don’t feel like I’m only at home to do work and I get to sort of have some variety in my day, so that’s been nice.

13:22 Emily: How about you Meryem? How do you do the time management aspect?

13:25 Meryem: Yeah, I want to echo everything that Lourdes said. I think it’s really nice, even without a pandemic, but especially during a pandemic, to just have something else to turn to when you need a break from grad school or just want to use a different skill set for a bit, or just kind of escape from the world. And right now, especially because of COVID, I tend to work a later shift in lab, and my understanding is Lourdes does as well, so the rest of our work is pretty much done remotely, which makes it easier, but also I have to be a little bit more diligent about priority setting and setting boundaries, because it is so easy to kind of just switch between projects both between my main job as a grad student and then my side hustles and leaving room for my personal life.

14:07 Meryem: Usually I’ll try to do this by reserving chunks of time to work on the podcast editing, either in the mornings or late in the evenings after my shift and maybe the weekends to kind of catch up, which is very useful for particularly busy weeks. I think just like setting deadlines and trying to stay organized to prioritize all the things that are going on is helpful. I will say that I recognize that it’s probably easier for me to manage everything that I have to do given that I don’t have too many responsibilities outside of my work and extracurriculars right now. I don’t have any human babies, but I do have a fur baby named Sabine, but she’s pretty self sufficient. I think overall it is pretty much managing expectations with myself and now with my husband, but overall I think, much like Lourdes said, you get into a workflow and we do have a lot more time at home so that does help a lot.

15:06 Emily: I’m just thinking how I would answer if I asked this question of myself, of how do I manage my time? Because I do have two human babies and no childcare in a pandemic and it is definitely more challenging now than it was a few months back to be handling my schedule. But I think what Lourdes brought up initially, the fact that in our schedule we have basically a two week cycle from when I get the raw interview to you two and then we have a two week process before publication, and Ithink that really helps. I know a lot of side hustle jobs are really quick turnaround, like super short deadlines, and it’s not even really so much on your end, like I’m giving you guys a lot of time. I need a lot of time to do my part of the process as well, because I can’t necessarily jump on a response right away, because it’s just a busy long day every day right now.

Commercial

16:00 Emily: Hey, social distancers, Emily here. I hope you’re doing okay. It took a few weeks, but I think I have my bearings about me in my new normal. There is a lot of uncertainty and fear right now about our public and personal health and our economy. I would like to help you feel more secure in your personal finances and plan and prepare for whatever financial future may come. You can schedule a free 15 minute call with me at PFforPhDs.com/coaching to determine if financial coaching with me is right for you at this time, I hope you will reach out, if only to speak with someone new for a few minutes. Take care. Now back to our interview.

Budgeting Side Hustle Income

16:46 Emily: Okay, so personal financial show — let’s talk about the money that’s associated with the side hustle income. What are you doing with the money from your income? Does it have a particular job to do in your budget or how are you handling it generally? Lourdes, why don’t you go first?

17:01 Lourdes: In general, I put most of my side hustle income into savings, whether that be more long-term savings or shorter term savings, kind of depends. If I have an upcoming trip, it might go a little bit towards that. In general, how I work my budget is that, I pay myself first, in that I put money aside for savings first, and then any money leftover is my money that I get to spend for the month.

17:31 Lourdes: One of the tips I learned from the first episodes I edited was a side hustle episode, I think it was Allie Judge, and she mentioned how she holds off on paying herself her side hustle income until the month after she’s earned it. So sort of working on a delayed schedule, in terms of using the money that she’s earned. After I heard that, I’m like, that’s a great idea, so ever since then, I’ve been doing the same thing, where I count basically any money I earn in August goes towards my September monthly budget. That helps me in terms of planning and not using the money before I’ve actually earned it. That’s how I mainly handle it in terms of budgeting.

18:22 Emily: Yeah. Thank you. Meryem, how does it work in your budget?

18:26 Meryem: I’ll be totally transparent in that I don’t necessarily have a specific allocation for my side hustle income, because for me it was primarily a chance to essentially have a hobby and use a different skillset. But I kind of do try to visualize it in a way that permits me to have those extra side expenses during the course of the month that you might not otherwise be able to do. For me, it’s kind of a mental exercise, and I do have the money go straight into a savings account that I don’t really touch, but every once in a while, if I need to kind of make an extra purchase or a gift, I will kind of, I guess, rationalize with myself like, okay, I was able to make some extra income this month with the side hustle, so it’s okay to spend that extra money and think of my extra purchases outside of my needs in terms of how much of my work and effort that is worth. And essentially that’s not a super cut and dry method, but it helps me at least to rationalize my additional expenses and not get too anxious about finances during grad school, which is really, really nice to have that cushion outside of my usual budget.

19:41 Emily: Yeah. That trick, that mental framework of translating the cost of a purchase into your time, or maybe number of episodes, or however you want to structure it, is a really powerful one, a really common one for people sort of were advanced in their personal finance skills to think about really carefully, like whether they want to make a purchase and how they want to spend and so forth to translate into time. That’s a really good tip.

20:07 Emily: I’m particularly thinking about this question of how to handle your irregular income with respect to your budget because, so in August 2020, I launched a community PFforPhDs.com/community, if you want to find out more about that, but every month I’m creating new content for it. Right now I’m working on the September content, which is on how do you handle your irregular income with respect to your budget?

20:28 Emily: Lourdes, the tip that you gave is basically the first one that I’ve already put into this, which is count up your income from one month and put it towards the next month budget, that you got from Allie. It’s absolutely perfect, because you never know when something could go wrong with your side-hustle income. Like if one of you became ill, for example, maybe you need to skip an episode. That’s not a problem for us, but it would be a problem for your budget if you’d already spent the money that you expected to come in. That’s number one, baseline tip for handling side hustle income is give it a delay. Meryem, you’re doing a similar thing by putting it directly into savings, and then later on thinking about, well, how do I want to spend it, or do I want to keep it here? Different articulation, but kind of the same principle there. I’m really glad to hear that.

Side Hustle Income and Taxes

21:13 Emily: Now we come to one of my favorite subjects within personal finance, which is taxes. So you two are both self-employed, you are contractors for me, and Meryem, now you have this other contractor, essentially you’re like a real true contractor working for multiple people with the same skillset. Self employment taxes are kind of a whole other ball of wax. You’ve been doing this for a year, do you have any systems that you’ve put in place or just what are you doing with it, with respect to your taxes? Lourdes?

21:40 Lourdes: For me, it’s a little bit of two different things. I generally set aside about 30% of my self employment income for taxes. That’s taking into account the about 15% self employment tax and then income tax being around 12%. But also, I am on a fellowship that requires me to pay estimated taxes quarterly, and so at the beginning of every year, I basically estimate how much — well, I know how much I’m going to earn from my fellowship, and then I basically estimated how much I anticipate earning from doing this virtual assistant for the podcast. Basically, I have ahead of time, I know how much I have to set aside each month for both my fellowship income and this side hustle income. I immediately put that into savings and I just don’t touch that money. It’s not even money that I think about. And then I tend to over save just a little bit in terms of taxes, just because I’d rather have a cushion. Last year, I think I was off by like $150 just because of other things. I also have some investments that will change throughout the year and change my tax situation, but I do tend to oversave just so I have that little extra cushion and I don’t have to take it out of other pockets of my savings. Then if I have extra money left over, I kind of use it as my own personal tax refund. So the government isn’t giving me any, but I have some extra money left over in my tax pot. I use that and just reallocate it usually to different savings categories.

23:23 Emily: Yeah. I handle my income from my business exactly the same way, so it sounds like you’re just incorporating the self employment tax issue into your existing structure for paying quarterly estimated tax. Meryem, I want to give you a chance to answer that one as well, because I know this is shifting for you right now,

23:39 Meryem: Actually I’m absorbing all of Lourdes’ tips because for me, I just, in the month also started receiving fellowship non-W-2 income. Prior to that, I wasn’t really thinking about estimated quarterly taxes as much because I didn’t have to deal with all of that. But now moving forward for tax year 2020 into next year, I will have to kind of be thinking about that. Even though the actual amount of taxes that I’ll from the side hustle income will be less than the amount that is necessary to be able to pay estimated quarterly taxes — so my original strategy was just to collect all of the receipts that I’ll receive from PayPal and then make sure that I back calculate the amount that I have to pay for the self employment tax and pay that come tax season. That original plan is fine if you know that you’re not going to owe the amount that you would need to, to not have to pay fees for not paying estimated quarterly taxes, but I like the strategy of kind of building it in so that by the time tax season does roll around, you’ve already paid everything.

24:45 Meryem: I actually think that I’m going to adopt that policy rather than shifting it and waiting until tax season. And as for my other side hustle with AcaDames, their structure is also changing since they’re recently going through the process of incorporating and becoming an LLC. Previously, and currently during the transition, I’m being paid through W2 income because it’s very easy to me to be able to do that as a UNC student and the cohost, or at least one of the coasts now is based at UNC, so it was really easy to deal with that through payroll and not have to worry about freelancing or independent contracting. But I imagine that that will also shift within the next year as they’re making this transition into becoming an LLC. So having all of these strategies in place now will probably be really useful moving forward.

25:38 Emily: Yeah, that’s good for me to know. Interesting. I should mention also, I just brought up the Personal Finance for PhDs Community, but for the last several years, I’ve had a workshop available for individuals on quarterly estimated tax and helping them fill out their estimated tax worksheet and form 1040. That workshop is now coming under the umbrella of the community. So anyone who’s wondering about how do I file quarterly estimated tax on my fellowship, that’s where to go for that particular workshop PFforPhSs.com/community. And I just told you, I’m thinking about in September, the training that I’m going to release on handling your irregular income with respect to your budget. Later on this fall, I’m planning on doing another full workshop on the self-employment side hustle that is so common for graduate students and PhDs, and how to handle that for your taxes, so a whole other tax workshop just on this topic of self employment taxes. That’ll be available if anyone needs help with that sort of thing. I’m really excited about creating because I’ve been doing my own taxes as a self employed person for a number of years, so I have a basic familiarity with it and I’m excited to do a bit more research to figure out how it works for other kinds of businesses as well. That’s where to find out more info there.

Unexpected Benefits from Side Hustling

26:54 Emily: As a second to last question here, have there been any benefits to doing a side hustle that you didn’t anticipate when you first took on the position? Lourdes?

27:05 Lourdes: Specifically for this podcast, Emily interviews a wide range of guests and a lot of them also have social media that they promote. I’ve been able to connect with some of the different guests on social media, just as a result of sometimes promoting the episode. They’ll see that I promote it, and then we connect, we end up talking, following each other on Twitter. That’s been like something I didn’t really expect to happen, but it’s been really cool because q lot of them are fellow grad students, and then just getting into that academic sphere of Twitter has been really interesting just to see all these different graduate experiences from people all over the country and all over the world. That’s been one of the most unanticipated benefit from this particular side hustle.

27:57 Lourdes: And then also, as has been brought up multiple times, I think Meryem brought this up, just learning a different skillset that’s something very different from what I do in my normal day to day graduate work. And I, in particular, am starting to figure out what I want to do after grad school. I’m a fifth year student going into my sixth year, so I’ve been leaning towards maybe some more like alt-academic jobs, and being able to have this completely different skill set is definitely something that I think adds to my resume and adds to potential job options and sort of also gives me ideas of what other type of work is out there. Along with what I was mentioning before Emily does have so many different types of guests on the podcast, just seeing what opportunities are available to graduate students after they’ve defended and after they graduated, has been really interesting and something that I hadn’t even considered or even thought of prior to really getting to know some of these guests through the podcast.

29:04 Emily: Yeah. That’s really great for me to hear. I know that this too was an unexpected benefit for me of doing the podcast is I didn’t expect it to be such good networking. I knew some things that would happen from it, but not the networking aspect, so I’m really glad that you’ve been able to tap into that as well. So Meryem, how about you?

29:24 Meryem: Yeah, I agree completely with the networking component as this amazing side benefit of being involved with editing the podcast. And I think for me also, I just find it inspiring how relevant the episodes have been in my own personal journey as a student, often in real time. In fact, I’ll never forget that the very first trial episode that I edited was with Dr. Katie Wedemeyer-Strombel about her decision to change labs and how to prepare for the unexpected in grad school. And it just so happened that that exact same week that I was editing that episode, my former PhD advisor surprised that our lab with an announcement that she would be leaving UNC and moving across the country, and all of this was happening while I was trying to plan a wedding with my fiance, and now husband, who had just moved down to Chapel Hill to start a new job, to be with me after we’d been long distance for so many years. And anyways, it ended up working out and I was able to switch into an amazing collaborating lab and stay at UNC, but unbeknownst to Katie, her advice at that time was so timely for me and helpful for me as I was going through that transition. So I always rave about the podcast to pretty much every grad student I come across and I try to send along helpful episodes and resources to them if it sort of just happens to come across in conversation. It’s just amazing to me how many times that, that has just happened, where I’m editing an episode and realizing, wait, I really need to pay attention. This is really relevant to my life right now.

31:00 Emily: That’s really good to hear. Of course you told me at the time that that episode was striking you in that way and I’m so glad that I could help. I think that, as Lourdes, as I was saying earlier, I’ve been doing this podcast for about two years now and I have quite a few interviews under my belt and it’s not always the same type of person, as you were saying. It’s a lot of different kinds of personal finance stories coming from a lot of different sorts of people who have been in academia for a time at least. There is a good trove of episodes there, that you might find something useful to your current situation, if you do a little diving into the archives.

Best Financial Advice for Early Career PhDs

31:34 Emily: Last question here, which, you know, I ask of pretty much all the guests who come on the podcast. I’ll give you a chance to give your answers as well. What is your best financial advice for another early career PhD? And we’ll go to Lourdes first again.

31:48 Lourdes: For me, I think one of the best things for me is having a yearly budget. At the beginning of the year, and I’ve been doing this for quite a few years now, I lay out my plan for the year financially on a spreadsheet, and it really helps to be able to see a longer term plan for my money for the year. I think, especially with self employment income, side hustling, it kind of gives you an idea of…Maybe I have a trip planned later in the year, or I have some big event that I’m going to need to save up money for, and being able to more strategically allocate your money on a larger scale rather than just month to month. I think that’s been one of like a strategy that I’ve been employing for a couple of years now, and it’s just been super helpful for me, and it’s something that I will see myself doing like far into the future

32:44 Emily: That is, I think, typically a good piece of advice, but I want to know how it’s going in 2020.

32:50 Lourdes: It’s been interesting to say the least. There have been a lot of…I had some trips planned that have gotten canceled, so I have this extra money, but also different expenses that I didn’t anticipate come up. And it’s been a little bit of am eye-opener in terms of plans change as the year goes on, but I think sort of having that framework to begin with helps me realize that even if…I go back to this budget every month, it’s the same spreadsheet I use for my monthly budgeting, so it changes and updates and it’s a very fluid document, but just having that outline there to begin with has also been something that provides some structure, especially when the year got so different than what everyone anticipated.

33:43 Emily: Yeah, I also use the year as the sort of standard timeframe when I talk about irregular expenses, so expenses that come up non monthly, and you and I talked about this in our interview from a year or so ago. I think it’s a great strategy to think about what budgetarily is coming up for you — trips, as you mentioned earlier, or maybe some other kinds of irregular expenses, so you can anticipate them over the course of about a year. So yeah, I like that time frame as well. Meryem, how about you? What’s your best advice?

34:12 Meryem: Yeah, so my best advice is probably to be honest with yourself and keep an open mind about your personal finances. A wise friend once told me that disappointment happens when our expectations don’t match up with our reality, which was really helpful for me to hear at the time, as an optimist, because I used to feel a lot of guilt or disappointment if I couldn’t maintain an unrealistic budget, or if I couldn’t resist making an impulse purchase on something that maybe wasn’t necessary, but made me or someone else really happy. But I also think it’s really important for our mental and physical wellbeing to work towards a healthy relationship with money, which I know can be particularly challenging on a grad student’s stipend. So with that in mind still, I think as best as you can try to be honest with yourself and set realistic goals for yourself, not based on anybody else’s priorities or spending habits, but whatever matches your needs. That being said, if something really isn’t working for you, that’s probably a good time to have an open mind and try to adapt, effective strategies from others. I guess I would say it’s okay to experiment and even take calculated risks, while figuring out what works best for you, but being honest yourself and keeping an open mind is probably my best financial advice and general life advice as well.

35:44 Emily: I love that as well. I often think about the mismatch between expectations and reality, and how that provokes us, so I try to keep my expectations low, basically. I really love that advice and I think that’s unique. I don’t think we’ve heard that on the podcast before, but I think it’s perfect. And something that graduate students can sometimes be discouraged around their finances because they are working with such a low income, it’s for such a long period of time, and I talk a lot about investing and saving stuff and that’s just out of reach for a lot of graduate students, but they can implement your advice, Meryem. They can like learn to just figure out what’s going to work for them in managing their own finances right now and carry that skill set and that habit, whatever it is that they determined as the right system or whatever, forward into their career and post-PhD income, and hopefully have a lot of financial success at that time, having been honest with themselves and really using the time in graduate school to get to know what their preferences are with respect to managing their finances. That’s good advice for anybody, anytime. You can always implement it.

36:46 Emily: I’m so glad to have had you two on the podcast and thank you so much for volunteering to do this. Thanks for coming on.

36:53 Lourdes: Thank you, Emily.

36:54 Meryem: Thanks Emily.

Outtro

36:56 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

How a Freelancing Career Can Take You from Academia to Affluence

August 24, 2020 by Meryem Ok

In this episode, Emily interviews Courtney Danyel of Academia to Affluence. Courtney became a successful freelance writer after leaving her PhD program in anthropology and moving to one of her field sites. She now teaches other academics how to launch freelancing careers through her course, Endless Freelance Income. In this interview, Courtney gives us her #1 piece of advice for new freelancers, which all academics need to take to heart! She also outlines the simple steps it takes to get your freelance career off the ground. Courtney’s location-independent business has enabled her to earn a very nice income on very part-time work, which will be attractive to academics looking to freelance for a side or main income.

Links Mentioned in the Episode

Teaser

00:00 Courtney: I actually do not work full time. I work maybe 15 or 20 hours a week. But I actually still earn a full-time income because I get paid well.

Introduction

00:16 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 six, episode 17, and today my guest is Courtney Danyel of Academia to Affluence. Courtney became a successful freelance writer after leaving her PhD program in anthropology and moving to one of her field sites, but it wasn’t all smooth sailing. She now teaches other academics how to launch freelance careers through her course, Endless Freelance Income. In this interview, Courtney gives us her best advice for new freelancers, which all academics need to take to heart. She also outlines the simple steps it takes to get your freelance career off the ground. Courtney’s location-independent business has enabled her to earn a very nice income on a very part-time schedule, which I know is attractive to academics looking to freelance for a side income or main income. Without further ado, here’s my interview with Courtney Danyel of Academia to Affluence.

Will You Please Introduce Yourself Further?

01:17 Emily: I am delighted to have joining me on the podcast today Courtney Danyel of Academia to Affluence. And I just want to tell you, in one second, how Courtney and I first met online, which is that I saw a post that she wrote a few months back on Jobs on Toast, and I saw her business name, Academia to Affluence, and I was like, this is going to be a good fit. I need to talk with Courtney. So, Courtney, will you please tell us a little bit more about yourself and why your business name is what it is and what you’re up to?

01:47 Courtney: Okay. Yes. So sure. My name is Courtney Danyel. I am an anthropologist by training, but I actually wear quite a few different hats. I’m a freelance business writer also. I’ve been doing that for the past seven years. And as an anthropologist, I’ve worked in Africa in the Central African Republic and Ethiopia. And I actually currently live in one of my field sites, which is Ethiopia. I’ve lived here since I started freelancing seven years ago. And another thing that I started doing late last year was I started mentoring other academics and other people with an academic background to help them transition into freelancing and actually have created an online course for that purpose.

Top Advice for an Academic to Start Freelancing

02:30 Emily: Yeah. So the course name is Endless Freelance Income. I’m actually affiliate for Courtney’s course. I had an opportunity to check it out, you know, before this interview, I think it’s fabulous. And if you want to find out more about that on my end, you can go to pfforphds.com/freelance and find out more about Courtney’s course. And I actually have a couple of bonuses for people in my audience who want to sign up for her course. So, first, you know, right up front, we’re going to get some insights from this course. And then we’ll learn a little bit more about Courtney’s background and her personal story that got her to this point. So, Courtney, your absolute top advice for an academic looking to start freelancing, what is it?

03:10 Courtney: My number one piece of advice for academics who want to start freelancing is to command high pay from day one. That’s because that’s a major mistake that I made when I first started freelancing. I had finished my master’s and I had done part of my PhD and I ended up dropping out of my PhD and decided to switch to freelancing. And as far as I was concerned, I thought I was starting from zero because I was doing freelance writing and I’m writing about topics that aren’t related to my academic discipline. And so, “I don’t know what I’m doing.” And that’s basically what I thought about myself. And so for that reason, I didn’t think that I deserved very high pay. And then I took a lot of jobs that didn’t pay very well at all.

03:57 Courtney: Actually, for the first year and a half or so that I freelanced I was not paid well at all. And then one day I was doing some research for an article that I was writing. I did a lot of ghostwriting back then, which is you write content for other people and it’s published under their name. And I was doing some research for an article that I was ghostwriting for a client. And I Googled something and I clicked on an article that was on forbes.com and I looked at it and it looked familiar. And then I realized that it was written by me. And after I realized that, I started doing some more Googling and I found that my content, stuff that I had written for my clients, had been published on Forbes, Vice, Business Insider, entrepreneur.com and like all these different top business publications. So, that’s what made me realize that, wow, I guess I am a really good writer in other niches besides just anthropology. And I do deserve to be paid well for the work that I do. And after that, I raised my rates, tripled them really, and basically never looked back.

05:05 Emily: I think that this advice is, one, good advice just for everybody, but two, something that academics or post-academics really need to hear, because we are kind of conditioned during graduate school to undervalue ourselves. And it takes really a lot of mental work–and for you a year and a half of actually working in your new field–to undo that conditioning, that mindset that’s been instilled in us. So, I think that it’s something that this audience really, really needs to hear. And I have found as I’ve been involved in academic entrepreneurship spaces, this is one of the top pieces of advice that we pass to one another, which is just raise your rates, raise your rates, raise your rates. I mean, we’re so conditioned. Yeah. We’re so conditioned not only to undervalue our time, undervalue our work, but also think that service is something that you have to do for your job, which I guess in academia, yes, you do have to, but outside of that, no, you should be paid for the value that you bring.

Courtney’s Course Covers Base Pay in Different Freelance Fields

06:09 Emily: So, anyway, it’s a wonderful, wonderful piece of advice. So, actually one thing I wanted to mention is, something I liked in your course is that you speak, of course your experience is in writing, but in the course, you cover a lot more than that, right? Freelancing is a lot more than just freelance writing. And so you talk about base pay rates that you can kind of expect in different fields. Right? I thought that was really that you just got the research jump-started a little bit for the people in the course.

06:40 Courtney: Yeah. You know, for me, I’m basically almost a hundred percent at this point, just a writer, but I actually have a lot of experience freelancing in other areas also, including doing editing and data science and different things. Because you can dip your nib in a lot of different freelance niches. And I also wanted to make the course really open to people who have different skill sets from what I have. Not everybody’s an anthropologist. They have different things, different skills that they bring from academia that they can earn good money from in freelancing also. And so, the course actually introduces several different popular niches, including writing and editing, translation, data science, consulting, sales, and marketing. So, you can kind of discover which one is the best fit for your current skills.

07:30 Emily: Yeah. I mean one of the fields you just mentioned, consulting, is always one that’s very attractive to me when I find other PhDs or graduate students who are consulting. One, because it’s a very broad in flexible kind of terms. So, a lot of people can be consultants in different ways, but also because it tends to command a nice high pay rate if you’re consulting in an area of expertise. I mean, you mentioned earlier that when you went into freelance writing, you were kind of moving away from anthropology. You were writing more about business. But you know, many other people who might be listening to this, they want to double down in their field of expertise. Right? And that’s how they can command those really high pay rates that you mentioned earlier.

08:07 Courtney: Absolutely.

Get Noticed as a Freelancer

08:07 Emily: Okay. So, let’s say you’ve convinced people, people are in your course, they’re going to go down this freelance route, whether it’s writing, consulting, some other field. What’s the best way for them to get started kind of hanging their shingle and letting people know I’m a freelancer now, you can hire me?

08:27 Courtney: Yeah. So, I think the first and most important thing is to build a website. Which, surprisingly to me, I know a lot of people in academia who were like, “Wow, you have your own website. That’s so cool. I wish I could do that.” And I’m like, “Well, you can. You can set up a website in one day. It’s not very difficult.” Yeah. So, building a website is the first and most important thing you can do to make yourself look like a professional freelancer. And that is another thing I discuss in my course. I take you through step by step, how to buy your domain hosting and set everything up, and what the important information you should put on your freelance website to make yourself look like a professional. So, that’s the first step.

09:02 Courtney: And then the next thing that you should do is use networking and cold pitching to get clients. Because there are a lot of freelance websites out there that you can get on where you can apply for jobs and stuff. And I’m not kicking that. I think that’s great also. And I do recommend that you do that, but you won’t get really high-paying clients from those kinds of gigs. You want to first start with networking. And even if you don’t have anybody, you can’t get any clients through your personal network. That’s fine. You can do it through cold pitching. And for me personally, over the years, the clients that I’ve had that have earned me hundreds of thousands of dollars are always the ones that I got through cold pitching. So, that’s what I recommend.

09:43 Emily: Yeah. You know, I actually went through a similar process. I don’t, I guess, identify as a freelancer, I identify as a business owner. But I went through a similar process when I started my business, which is how do I let people know that I’m available for speaking engagements and the other work that I was doing? And so I went through several years as I was building my network where I was cold emailing people. So, I know I don’t really love to be on the receiving end of most cold emails. And so I don’t love to send them either, but honestly, that was the necessary step in the overall process. So, I did a few years of a lot of cold emailing, built up my network, got some responses from that. And now I have basically stopped that. I kind of only do warm-emailing or cultivating my existing network at this point. So, I like that I’ve moved past that, but I feel like it was a really, really necessary start to the whole thing. My business would not have gotten off the ground if I hadn’t just been reaching out to people and trying to start establishing that network. So, it’s not necessarily pleasant, but it is necessary.

10:46 Courtney: It is necessary. And I always found it intimidating in the beginning, especially because you can send 50 emails and not get a response on a single one of them. That’s just the reality of cold pitching. But once you get that one gig and then it earns you a bunch of money, and then it’s like, “Oh, totally worth it.” And you feel motivated to do it more. And so, it can be intimidating. But that’s another thing that for the people who sign up for my course is that they have email support from me. And so, I will help them out with any questions they have. So, if they want to start cold emailing, but they’re not really sure where to start or what to say, they can ask me about that and I’ll give guidance based on the experience that I’ve had over the years.

How Freelancing Enhanced Courtney’s Life

11:28 Emily: That’s actually really nice. Because I know one of the sort of major challenges when you’re starting a business or starting a side income, like freelancing could be at first, is not really having colleagues who you can talk with about the work that you’re doing. And so, that’s just a really great sort of addition, in addition to the excellent content in your course, is also to be able to have interactions with you to get that support, again, as you’re building your network of your peers who are also freelancing or doing other kinds of work like that. So, I find that really valuable. I’ve been part of a couple of communities and I love just, you know, some people process things by talking to other people and they want some outside input, and you’re providing that. So, that’s super valuable. Now that we’ve gotten those excellent nuggets of advice from you, let’s talk a little bit about you and your story. I know you gave a quick overview at the start of the interview as to how you got into this, but why don’t you dive into a little bit more detail about what freelancing has done for you?

12:30 Courtney: Yeah, so, I flew through my bachelor’s degree and flew through my master’s holding my breath. I did that all really young and then I was starting my PhD. By the time I started my PhD, I was completely burnt out. It was just, I don’t need to explain how difficult academia is to anybody who’s listening to this podcast, but yeah, it was just too much for me and I needed a break. And the thing that I always loved about anthropology, the one thing that I love the most about it was being able to do field work. But field work was something that I was only ever able to do, if I was lucky, one or two months out of the year. And the rest of the year was spent in a windowless office doing research and data entry and stuff like that.

13:17 Courtney: And so, I wanted to just have the field work experience without the office experience. I just wanted to do something different. And so I was like, “Okay, I’m going to move to my field site. I love it there. I think it’s great. And I want to go live there. How can I do that? I don’t know.” And so, I actually ended up talking to my mom about it, who she actually works online. And she’s like, “Well, why don’t you start freelance writing? You don’t need to earn a lot of money in order to earn a living, especially if you’re in Africa. So, just give it a go.” And so, that’s what I did. I dropped out of my PhD program. I sold my car, used that to buy a plane ticket, and I left and I started freelancing here in Ethiopia and I’ve actually been here ever since.

13:59 Courtney: So, that has enhanced my life a lot because I get 12 months of sunshine, which is really important to me. And I love the environment and I love the culture and learning languages. And so that location-independence was really, really valuable to me for my mental health and just my personal happiness. And then the other thing that is always important is money. So, I earn very, very good money as a freelancer. I didn’t the first year and a half, as I mentioned before, but once I figured out that I was worth it, I started demanding it and asking for it. And I got it. And I continued to get it every time I raised my rates. People say, yes, somebody says yes. You know? And so, that’s really important, especially compared to academia, unfortunately. After the first two years of freelancing, I started earning more money than my former PhD advisor earns. And they’re a tenured professor. So, that’s something.

Location Independence and High Pay Rates

14:58 Emily: Yeah. I want to explore each of those points a little bit more because they’re both super attractive. The first one, the location-independence, you explained how that played out in your life. It enables you to move to the place that you want to live at one of your field sites and have sort of your whole life feel a little bit more like what you enjoyed the most about your academic experience. And of course, if someone else wants to do that and wants to make freelancing the way they make it happen, that’s awesome. I can think of some other benefits, which is, as you know, academic careers and PhD careers, you don’t have a lot of control over where you live, especially if you’re in academia. But even if you’re just a highly specialized professional, there are certain industries that are concentrated in certain cities, and so forth.

15:44 Emily: So, there may be reasons related to your PhD why you want to stay in a certain place, and this freelancing can follow you wherever you go. Side note, I as a, what’s called a trailing spouse–so we live where we live because my husband’s job is here and we anticipate moving because my husband may be changing jobs from time to time and he’s highly specialized–I get to take my business wherever I go. So, I don’t have to start over in a new job every time I might need to move. So, that’s a real, real benefit that I see that location-independence. And then of course on the money side, because this is a personal finance podcast. So, commanding the high pay rates, getting paid very well for your time.

16:26 Emily: Not just for people like you who are doing this full time, but as a side hustle. If that’s the way this starts, or that’s the way you want to keep this as you move forward in your freelancing career, as well as your academic or PhD-type career. It’s really nice when you can make a good amount of money for not that much time invested. As a PhD student, for example, you might be able to work, I don’t know, two hours a week, five hours a week, some pretty small number, but still get a really, really nice amount of money out of that small, small side hustle. And when you compare that, when you’re thinking about hourly rates to the other kinds of work that some PhDs do, or some people do when they’re still in graduate school or PhD training, it’s really nice, right?

17:10 Emily: To not have to work so many hours and also to have maybe a more like stimulating type of work, intellectually that is, yet something that is different probably from what you’re doing as your main day to day job, if this is still a side hustle. I think that’s really attractive in terms of having balance in your life. It’s awesome that you’ve been able to command these high pay rates and put together this full-time career, making a very nice income from Africa, from where you wanted to live. And I definitely want others to consider following your tracks.

17:44 Courtney: You were saying that this is like a full-time job for me, which it kind of is. But a lot of other people who listen to your podcast are people who are in academia to stay and they would like to have some additional stream of income to add on top of that. So, one point that I would like to make is that I actually do not work full-time. I work maybe 15 or 20 hours a week. But I actually still earn a full-time income because I get paid well. And this is something that I choose for my personal life because I have three foster kids and I homeschool them. And between that, and being a mom and, keeping my yard clean, I work 15, 20 hours a week on freelancing and that’s about it. And so you could do this as a part-time gig and still earn a lot of money. It doesn’t have to become like your full career. You don’t need to invest a hundred percent of your time in it. I don’t even invest a hundred percent of my time and I don’t even have another source of income. So, that’s something.

18:41 Emily: Yeah. Thank you so much for adding that. That’s awesome that you’re earning this like great, full-time income from part-time work. I actually also work part-time as well. I work about 25 hours a week and I’m quite happy with that balance actually. So, I really like that you added that point because the whole working 40 hours a week thing is so job-centric. That’s what our culture has decided–well, really not just 40, much more than 40 hours a week–is like the proper amount of time to be working. And once you start your own business, once you strike out on your own, all the rules are out the window, right? You can define what you want your work life to look like completely. And that goes both location and time and amount of money as we talked about earlier. So, I’m so glad that you added that. Thank you.

Endless Freelance Income: What to Expect

19:28 Emily: Let’s say someone is super excited about what we’ve been talking about. They want to start down their freelancing career in whatever field that might be in, and they want to sign up for your course, which again, they can do through pfforphds.com/freelance. And you can get the couple of bonuses that I created there. So, what can someone expect to find when they start your course?

19:49 Courtney: Okay. Well, first I guess I’ll explain who the course is for specifically. After I started freelancing, even in the first year or two I started freelancing, I got emails from people that I know. From people in my former cohort, professors that I know, people in grad school who heard, “Hey, I heard that you left academia and started freelancing. And I’d like to do something similar. Can you give me some advice?” And so, I’ve been giving advice to people for years. I get emails several, 10 or 15 times a year, I get an email from somebody, or I get a referral from somebody who’s in academia and they want to make the switch, or they want to add on to an additional stream of income through freelancing. And so, after years of basically kind of helping people just as like a side project, I decided to create a course to basically do what I was already doing, but do it in a more organized and formal way to help people.

Ch. 1: Intro to Freelance, Ch. 2: Identify Your Valuable Skills

20:47 Courtney: So, that’s what I created this course for. It’s called Endless Freelance Income, how to turn your liberal arts degree into an endless freelance income. However, even if your background is in science or any of the STEM areas, it can also be relevant to you. So, the course at the very beginning, it just introduces you to the online freelance world. So, if you don’t know the first thing about it, don’t worry. I will explain it to you in the course. That’s the first chapter. And then the next chapter, which I think is probably the most valuable one for people, is helping you identify what your most valuable and profitable skills are, from academia, that you can translate into freelance income. Through the mentoring there, I also kind of help people–people tend to overlook their skills. They think, “Oh, I guess I can write,” or like, “I guess I can do some data analysis, but I don’t have a degree in that. So, I’m not qualified to do that.” So, kind of just help people break that down. Imposter syndrome follows you outside of academia. I learned that the hard way. And so, just kind of help people to understand, no, these are valuable skills and you can utilize them.

22:08 Emily: What I liked about that portion of your course, what I noticed there is that you have worksheets in here, right? So, it’s not just like, I’m just reading all this material. It’s a very engaging format, right? So, you’re giving people some little tools they can use to do things like brainstorm about their own skillsets, which I totally agree with what you said. We tend to discount our own skills or our own areas of expertise unless we have a degree in it. That’s very important to us in academics that we have a degree in XYZ. But I know, personally, like my field is now personal finance and I don’t have a degree in personal finance and that’s okay. I’m still confident at this point that I am an expert in this area because of my long experience. But I think that for people who aren’t quite there yet, it is a little difficult of a hurdle to overcome. So, your course definitely helps with that.

22:55 Courtney: Yeah. And you know, same story for me, I’m an anthropologist, but I write in marketing topics, marketing and entrepreneurship. And I am an expert because I became one. And that’s it. And so, you can do it, too. That’s basically what the course helps you to figure out. So, once you’ve kind of broken down and pulled your skills out, then the next chapter teaches you about several different major freelance niches that you can get into. And I already mentioned before, there’s writing, editing translation, administrative support, design and creative, customer service, consulting, data science analysis, and sales and marketing are the ones that I go through. So, those are the main ones. And then it walks you through how you can look at your current skills and line them up with what each of these niches demand, or what they need.

How to Look Professional as a Freelancer

23:46 Courtney: And then it also helps you think about which one’s most interesting to you too. Because it’s not just about your skills, it’s also about what you want to do, right? And then you can choose your niche. And then after that, the course goes through how to make yourself look professional as a freelancer. One thing that I discovered when I left academia is that I needed to tone down my CV. What’s professional in academia and what’s professional in the online business world are very different. And so I kind of teach people how to make yourself look professional online as opposed to professional as a 10-page CV, or something like that. So, that’s the next step. And then the next thing after that is teaching you how to research your niche so that you can figure out what the going rates are in your niche, the going rates for somebody with your skill level, and just kind of also to weed through the riffraff.

24:47 Courtney: Because a lot of people out there, you know, they say $10 an hour or something like that. Yeah. You don’t need to pay attention to those people. So, to figure out how much you should be charging in the beginning. And then after that, the course takes you through step by step how to create your website, which I mentioned before. And then it walks you through what you need to do to land your first client. And that is the course in a nutshell, as it is right now. I plan to add onto it. Like I said before, I think cold pitching is important. So, one thing I plan to add on to it in the future is more information about walking people through how to set up a cold pitching scheme. And so, that’s something I plan to add onto it in the future. And the good news is that if you have access to the course, you buy it now, you’ll have access to all that future material as it comes up.

Bonus Content from Emily

25:34 Emily: That sounds awesome. As I said earlier, I read through the course prior to this interview, and it really breaks things down and simplifies them and doesn’t make it seem so intimidating to start down this path of freelancing. You really don’t over complexify anything. It’s very simple steps to follow, to get started. So, I wanted to mention for my audience, if you choose to buy Courtney’s course through my affiliate link again, pfforphds.com/freelance, I’ve created a couple of extra bonuses for you. So, one that everyone will receive who buys through my link is a free video training on how to budget with an irregular income, right? So, like I’m really confident, you go through Courtney’s course, you’re committed to this. Like you’re going to be starting down that path of having freelance income.

26:18 Emily: And you know, that’s a really great thing, but it can also pose some budgeting challenges. So, I’ve created a training that you’ll get for free when you buy the course on how to manage that. Like manage your finances when you have a side income stream that’s irregular, maybe growing into a full-sized income stream over time. So, it’ll help you with that. And then for the first five people who buy the course, so not everyone, but just the first five, I’m going to offer a free 20-minute financial coaching session. So, what I think will be really great about this is if you schedule this for maybe like two months out from when you start taking the course, it’ll be a nice little accountability point to meet with me at that time and say, “Okay, Emily, here’s the income stream. I’ve established it. I got my first invoice over here. I’ve gotten paid for the first time.” And so we can talk more about what you want to do with that money. How it’s going to help you reach your goals. How it’s going to fit into your budget. Do you want to be paying debt? Do you want to be investing it? So, we can talk about all that kind of stuff. So, that’s how I recommend you use that bonus if you’re one of the first five to sign up is schedule it a little ways out. So you actually have that income stream established by the time we meet together. And I’ll certainly be asking you, have you been implementing everything from the course? So again, pfforphds.com/freelance is where you can sign up and of course link through to find out more about the course from Courtney.

Best Financial Advice for Early-Career Academics

27:38 Emily: So, Courtney, we’ve come to the end of the interview. Thank you so much for what you’ve shared with the audience today. I think it’s been excellent advice and thank you for telling us more about Endless Freelance Income. So, final question that I ask all my guests is what is your best financial advice for another early career academic or maybe recovering academic like you?

28:00 Courtney: My best advice would be don’t put all your eggs in one basket. Something my dad told me when I was 17 years old and I didn’t know what it meant at the time, but now I do. So, even if you’ve got your dream job, even if you’ve gotten that research position or that tenure track job or whatever, you never know what’s going to happen in the future. That’s something we’ve learned this year in 2020, I think. And so, having an additional stream of income is really valuable. And I know that’s what Emily talks about all the time on her blog. And the thing about freelancing is that there’s no risk in starting and giving it a try. And you can just work on it in your spare time and you can build it up over time in whatever time you have. And if you don’t have time to work on it, you don’t have time to work on it. And it doesn’t hurt you to work on this and build up this extra stream of income. You don’t have to be like me where you leave your job and leave your country and change your whole career. I think that all academics should be doing something on the side, some kind of freelancing, blogging, something. So, that’s my advice.

29:06 Emily: Yeah. I totally agree. You know, not all the eggs in one basket can apply it to a lot of different areas, but certainly when it comes to your income, having a job or even being in graduate school means you’re dependent on another institution to decide to continue to give you work. But the advantage of freelancing is that you spread that around to a lot of different clients and it’s much less risk. Yeah, one client drops off, no big deal. You can supplement that by hustling up a few new clients. But if your employer decides they don’t want to work with you anymore, that’s kind of a devastating like life thing. So, excellent, excellent advice. What I also like about what you said is that if you do the work, for instance, by going through your course. If you do the work to establish yourself as a freelancer, and you devote even something like an hour a week to it, like I mentioned earlier. As long as that income stream is established and in a field like freelancing, it’s something that you can decide to turn up or turn down as you need in your own life.

30:00 Emily: So, for example, if you have an unfunded summer, you know, some people–again, you mentioned 2020–some people in 2020 have late in the game discovered that they don’t have summer funding in the way that they thought they would. Yes. Their funding will pick up again in the fall. It’s not like they’re going to drop out of graduate school and get a full-time job or whatever. But for a few months, the income that they thought was secure is not there. So, once the situation is upon you, it’s very difficult to scramble and kind of fix it. But if you’ve already established that one hour per week freelancing job, then that’s something you can ramp up or ramp down as your life allows, as your money situation requires. So, I just think that’s a real advantage to establishing yourself. Even if you’re not going to do it, like you just said, 15 hours a week to make the equivalent of a full-time income. So, great, great advice. Courtney, thank you so much for joining me on the podcast today. It was a real pleasure to talk with you again.

30:54 Courtney: Thanks so much, Emily. Thank you.

Outtro

30:55 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This Fulbright Fellow Supplements Her Stipend with Prior Savings

August 17, 2020 by Lourdes Bobbio

In this episode, Emily interviews Dr. Caitlin Kirby, a graduate student at Michigan State University and former Fulbright fellow in Germany. Caitlin has been greatly financially challenged on the Fulbright, namely by: 1) the large amount of money needed to move and settle into her new city and university, 2) the high cost of housing relative to the stipend, and 3) the additional expense of bringing her husband with her. Caitlin and the majority of her peers are supplementing their Fulbright income with prior savings. Fortunately, Caitlin and her husband grew their net worth in advance of starting the fellowship through house hacking and savings goals.

Links Mentioned

Find Dr. Caitlin Kirby on Twitter
Personal Finance for PhDs: Speaking
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Teaser

00:00 Caitlin: We’re paying about €1,025 a month for a furnished apartment with all bills included, which is the norm in Germany, and that’s 85% of my base stipend.

Introduction

00:18 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode 16, and today my guest is Dr. Caitlin Kirby, a graduate student at Michigan State University, and former Fulbright fellow in Germany. Caitlin details the financial challenges she experienced on the Fulbright, namely the large amount of money needed to move and settle into her new city and the university, the high cost of housing relative to the stipend and the additional expense of bringing her husband with her. Caitlin and the majority of her peers supplemented their Fulbright income with prior savings. Fortunately, Caitlin and her husband built up savings in advance of starting the fellowship through house hacking and savings goals. This episode is valuable, not just for future Fulbright fellows, but also anyone facing a career transition or move. By the way, we recorded this interview in February, 2020, and I’ve included an August, 2020 update from Caitlin after the interview. Without further ado, here’s my interview with Dr. Caitlin Kirby.

Will You Please Introduce Yourself Further?

01:25 Emily: I have joining me on the podcast today, Caitlin Kirby, and we’re discussing something that I haven’t had the opportunity to before, which is actually the Fulbright fellowship, super exciting, that is as a PhD student. And Caitlin will also be telling us in the second half of the episode about how to prepare for financial challenges that you don’t even know you’re preparing for, like the Fulbright. So Caitlin, I’m really excited to have you on the podcast. Dave, thank you so much. And will you please introduce yourself a little bit to the audience?

01:53 Caitlin: Yeah. Thanks. I’m glad to be joining you. I am a PhD candidate at Michigan State University in Environmental Science and Policy. My dissertation looks at environmental decision making in cross cultural spaces, and I also engage in science education research in university classrooms.

02:13 Emily: Yeah. How did you decide that you wanted to do the Fulbright? I guess maybe my own bias coming into this is that I really think of it as something people do after undergrad while not yet enrolled in a graduate program, but you know much more about this. So how did this come on your radar and why’d you decide to apply for it?

02:31 Caitlin: Yeah, so the program you’re thinking of is probably primarily the English teaching assistant program, which is primarily students who have graduated undergrad and not moved on to a graduate degree program. And then a smaller subset of the Fulbright is study and research grants for graduate students. I have always enjoyed international travel. Like I said, my dissertation is looking in cross cultural spaces. I did some research in South and so it was always something that was kind of on my radar. And actually I was thinking about doing it for a post doc. And in my last couple of years of grad school started looking at the application requirements and figured out that it was going to be simpler to apply as a graduate student, so I did, and here I am.

03:18 Emily: And is this, I know it’s playing into your dissertation, but is this kind of you taking like an extra year or is this really not extending your time to degree at all and it’s just going to go right in with your overall plan?

03:31 Caitlin: Yeah. So a little bit of both. I actually defended my dissertation in October, so it’s kind of an extension of my dissertation and degree time. Although I probably would have graduated in May anyways and now it’s August instead.

Financial Support Provided by Fulbright

03:47 Emily: Gotcha. Well, congratulations on already defending. We’re recording this in February, 2020, so for the listeners reference. Okay, so what financial support does the Fulbright give to you?

04:01 Caitlin: Yeah, so it is different for every country. I am speaking about Germany Fulbright grant. Although I also looked at a lot of the Western European ones. They get a lot of applications as well, have a lot of grants and are fairly similar in that they are relatively expensive places to live. Hopefully this is generalizable across a lot of those spaces. My understanding from folks that I’ve heard from who are in spaces that have lower cost of living is that the stipend is a little bit more generous in those spaces.

04:34 Caitlin: What Fulbright does provide in Germany, if you are a graduate student or an English TA, you get €850 a month. If you’re a PhD candidate, so you’ve passed your comprehensive exams, then it goes up to €1,200 a month. So if you are a PhD student and you can wait until after comps, I think it’s worth it.

04:58 Emily: Yeah, that’s a big raise, surprisingly.

05:01 Caitlin: Yeah and €850 is actually the lowest, I’ve seen for countries in this area. Other countries in Western Europe range from about €1,300 to €1,500 a month. These stipends are not posted on the actual application website. You have to go to the Fulbright website for each individual country to find those, and sometimes they’re not available and sometimes they don’t include all the details.

Financial Challenges of the Fulbright

05:26 Emily: Yeah. So I understand that you have encountered some financial challenges based on that stipend and also maybe a lack of clarity up front about exactly what was going into this whole package. So can you explain a little bit more about what you’ve found?

05:41 Caitlin: Yeah. There are some challenges that are specific to my situation and then some challenges that some other Fulbrighters have also experienced. I would say sort of summarizing those across from what I’ve seen from others and for myself is that the three really primary challenges are that you need a lot of savings at the beginning to cover your first couple of months and some initial expenses. Then number two would be that housing is really kind of the make or break factor in how far your stipend goes. And so if you can look ahead of time when you’re deciding what institution to work with at the cost of living in a city, maybe try and find one that’s not so high. And then the third thing would be, think about any extenuating circumstances that might make it more costly for you as an individual.

06:33 Emily: This actually sounds like really good advice for anyone approaching any financial or location transition whatsoever, so people going into graduate school, going to a post doc, going to your first job, so I really want you to expand more on each one of those points.

#1: Expected and Unexpected Upfront Expenses

06:48 Caitlin: For the initial costs,, or the one-time costs when I arrived here in Germany, first of all, like everything else in academia, the Fulbright stipend model is built on reimbursement. So you buy everything ahead of time, and then after you get your bank account in your country, they will reimburse you, which for Germany can also take a long time. It’s a very bureaucratic country. A lot of the Fulbrighters in Germany were paid late, like two or three months after their grant had started, and it was really inconsistent across different fellowship recipients. Or sometimes they were paid in consistently. So having that initial savings is really important to be able to get you through.

07:34 Emily: What kinds of upfront costs were you experiencing?

07:39 Caitlin: Yeah, so moving costs in general, right? You have to get your travel, which Fulbright covers some of, and sometimes again, depends on the country. My flight was covered and then they provided an additional, like €150 for other expenses, but I decided to fly out of Chicago, which was far away, so I needed hotel and transit and it didn’t really cover all that. Then once we arrived as well, there was a lot of traveling around the city that we had to do to get everything settled. I’m saying we, because I came here with my husband, and that transit was eventually covered by my university pass, which I also had to pay about 300 euros to enroll at a university. And some folks will have to pay tuition as well.

08:29 Emily: Wow. That is a lot, and it sounds like it’s quite variable too. Going into this situation, it sounds like actually you’re in contact with other people doing the Fulbright. And so is there like a network already of people that you can tap to find out, okay, what are all these expenses, or does the program make it really, really clear once you have a host university?

08:51 Caitlin: It was more hearing from other people that I got this information. I don’t remember how I was contacted about this initially actually, but there was a Fulbright Facebook specifically for folks in my year. And some alum had joined that as well. I believe the Fulbright did actually connect me with these social networks. So they are very good about getting you in contact with alumni and folks that you can engage with, and then beyond that, it’s kind of up to the folks in each cohort to decide what to share and how often and all of that.

09:26 Emily: This actually sounds very familiar to what I understand is the experience of many international students coming to the US — the place where they get the most information from, is the network of students from their country already at that university or who are coming in at the same time, which can be truly an amazing resource in many ways. However, if that group doesn’t already have the correct information or the best information, then it can kind of be passed along and not like optimized. It’s probably 80% awesome and then 20% maybe someone else could give you better information, but like that is really the best go to resource.

10:05 Caitlin: Yeah.

10:06 Emily: Not being paid, that is reimbursed for two to three months sounds really long. Were there any other kind of upfront reasons why you needed to tap savings or expenses that you wish you’d known about in advance?

10:22 Caitlin: Yeah. This one is perhaps unique to Germany in that when you get an apartment in Germany, when they say unfurnished, they mean like unfurnished. There are no light fixtures, there are no cupboards, there’s no kitchen sink. So your choices are to come and basically furnish a whole apartment, which I know another married grantee did this year, or you can pay a premium to get a furnished apartment, which are much less available and so much more expensive than —

10:58 Emily: Wow, so it’s typical to bring in your own appliances and like all of that? Do people move that stuff when they move from place to place?

11:06 Caitlin: There’s a reason that Ikea is a big deal here because you can just kind of pack it up and take it with you or you can sell it to the person who’s renting your apartment next, which so then if you’re renting an apartment and they’re offering the kitchen, then you can pay like 1200 euro to, I’ve seen up to like €4,000 to keep the kitchen in the apartment

11:28 Emily: Wow, that is a lot of upfront costs. Anything else to add to that list?

11:34 Caitlin: Some bureaucratic stuff in general. I think most Fulbrighters would be aware of this, but maybe not necessarily how much of it or how much it might add up. So passport photos, the passport itself, some places have expensive visa applications and then myself coming in as a married grantee, there’s extra documentation that we needed around our marriage certificate, getting that translated, paying for my husband’s visa, that kind of thing.

12:02 Emily: It’s a lot of costs. It’s a lot of costs you’re listing. Are you being completely supported by the Fulbright in this year or is Michigan State supplementing at all?

12:11 Caitlin: You’re not allowed to really have significant other income. It’s up to 450, I don’t remember dollars or euro a month is allowed as a Fulbright grantee. And that again, may be specific to Germany that amount, but still the fact that you’re not supposed to have significant outside sources of income holds true. I did receive an award in the semester that I was awarded the Fulbright, from Michigan state. I got some money from them as an award for receiving this fellowship that I then tucked away and said, okay, that’s going to supplement when I am on my Fulbright.

12:52 Emily: Yeah. That’s a great thing to have upfront going into this process.

12:56 Emily: Okay, so we’ve talked about upfront expenses. Sounds like you need massive amount of savings to undertake this. What was the second point that you were going to make?

#2: Cost of Living and Housing in Your New City

13:06 Caitlin: Yeah, housing is definitely the biggest factor in how far your stipend is going to go. That’s again where you might want to consider, because as a Fulbright grantee, you decide which institute you’re going to work with or which university you’re going to attend, and if you somehow have a choice between some different costs of living areas, you might want to choose one that’s a little bit easier on the wallet. Then the other thing that sort of made housing more difficult for myself as an older grantee, and a married grantee is that there’s not really shared housing options available as a married couple. We had to get our own apartment, and that makes it a lot more expensive. It’s a lot more reasonable if you’re able to share space, but a lot of graduate students might not be able to, or might not want to for a variety of reasons.

13:57 Emily: So when you’re talking about sharing space and that not being available to you as a married couple, are you still talking about having like individual bedrooms or is it like a dorm situation or what would other people do if they were single?

14:11 Caitlin: Yeah, so they’re called veh has in German, or WG is the abbreviation for it. And it’s basically everybody has their individual bedroom in an apartment that’s shared with people.

14:24 Emily: Okay. And you can’t share a bedroom then as a couple?

14:28 Caitlin: It’s just extremely rare, so rare that on the websites where you can like search for these housing options, there’s no option to have a couple, or like a male/female mix going into these rooms. So it’s a little bit of a cultural thing.

14:47 Emily: Yeah. Interesting. I mean this point is also super super applicable to anyone moving anywhere. Rent, or your housing expenses more generally, is most likely going to be the largest expense in your budget. It’s very difficult to change once you — I mean, you can change it maybe after a year or something, but once you sign that lease, you’re locked in for a little while. It’s so important to put really the bulk of probably the research that you’re doing into that housing choice. And it does sound like yours was further constrained by bringing your spouse along with you. Anything else you wanted to add about the housing cost?

15:22 Caitlin: I think that about covers it, but just to give an idea, we’re paying about €1,025 a month for a furnished apartment with all bills included, which is the norm in Germany, and that’s 85% of my base stipend. I do also get, I think I didn’t mention that I get some dependent support for my husband being with me. It’s about €270 a month, so not a huge amount. That really has been, that was the biggest shock to me, I think, because I could see on apartment websites, things that were cheaper, but they weren’t able to fit to our needs.

16:05 Emily: Yeah. And do you have any other source of income right now? You’ve mentioned the Fulbright grant, the additional support for having a spouse and then the upfront award that Michigan State gave you to help a little bit with that. Does your husband have any income right now?

16:19 Caitlin: No. He’s not allowed to have income either, both because of visa issues, and then if he did earn significant income, then we would just say, okay, we don’t need the dependent support from Fulbright. But with visa issues and also language issues, it would be very difficult for him to work. So it’s savings and Fulbright.

16:43 Emily: Yeah. Wow. Okay, well, we’ll get into how you’re making that work in a moment. And what was that third point that you wanted to say about everyone’s unique situation?

#3: Individual Personal Finance Situations

16:53 Caitlin: Yeah, so there’s a lot of difficulties that I’ve had with the Fulbright, but I don’t think overall it’s necessarily an unfair stipend. I think that you need to weigh it against your individual needs. So again, myself bringing my husband, that’s two people living on one income, obviously it’s going to be more difficult. If you have student loans that you’re still paying, some of them are eligible for deferment, depends on who your loan provider is, in some cases. If you have pets that you either want to try and bring with you or need to get taken care of. If you have a lease at home that you need to break or keep paying on or storage for your items, regular bills at home. So our car right now is on storage insurance, which is luckily not very much, but still something to consider. Prescription drugs — there is some level of health coverage provided by Fulbright, but they do not pay for regular expenses like that. And accessibility needs too. Our apartment would not be accessible to someone with a wheelchair. And even though there’s great public transportation, you might need to be closer to the city center than we are. Just all kinds of things that maybe are easily or more integrated into your life before you leave that become very obvious as challenges when you’re on your way.

18:20 Emily: A lot to think about there. Actually going back to your second point, I think I was getting the impression that the Fulbright grant is the same across every country. Is that right? The income, that is, that you would get as the same across the country, or is it actually different depending on which university you land in?

18:40 Caitlin: So for Germany, it is the same across the country. Some other countries vary it depending on what the cost of living is in the city that you’re in.

18:50 Emily: Okay. So in some cases you might have a cost of living adjustment built into your income, and in some cases you might not, and that’s why you were saying, okay, let’s be really careful about, which institute you choose to go to in that case.

19:01 Caitlin: Yes. And Germany did actually announce a few months into the grant that they have extra money for a housing stipend. So folks who are in those higher costs of living situations will be able to receive up to €250 a month. And there is some kind of, I think as an American, maybe kind of ridiculous size requirements and that single people get 200 something square feet for that stipend and as a married couple, you can get a 320 square foot apartment, which is tiny. That’s like a studio with like a hot plate and a toaster oven, right? For us, cooking is really important, so we opted to get a prorated stipend and have somewhere with a full kitchen.

19:47 Emily: Gotcha.

Commercial

19:51 Emily: Emily here for a brief interlude. I bet you and your peers are hungry for financial information right now, especially if it’s tailored for your unique PhD experience. I offer seminars, webinars, and workshops on personal finance for early career PhDs that can be billed as professional development or personal wellness programming. My events cover a wide range of personal finance topics, or take a deep dive into the financial topics that matter most to PhDs, like taxes, investing, career transitions, and frugality. If you’re interested in having me speak to your group, or recommending me to a potential host, you can find more information and ways to contact me at PFforPhDs.com/speaking. We can absolutely find a way to get this great content to you and your peers even while social distancing. Now back to our interview.

Making it Work Despite the Financial Challenges

20:50 Emily: So, I’m freaking out a little bit for you when you mentioned the percentage of your income that your rent takes up. How are you making this work? What have you been doing in the years leading up to going on the Fulbright that makes you not freak out right now about money?

21:09 Caitlin: Yeah. So one piece that I do want to say, is that I’m not necessarily unique in that I am having to use a lot of other savings. On the Facebook group, I mentioned that to the other Fulbrighters in Germany, I just did an informal poll and 62 out of 91 responded, so that’s about 70%, said that they would not be able to financially survive without significant additional savings, gifts or income. So —

21:37 Emily: Is that something that the program makes clear earlier in the application cycle or is this something that comes as a surprise once people are really starting to look into the financials?

21:49 Caitlin: I think it’s more of a surprise. They are pretty upfront about what support is provided, like you can go look at the numbers. I was surprised that that many people were struggling with it because I was thinking like, yeah, this makes sense, I’m supporting two people on this income and my savings, so of course it’s going to feel like a, a stressful year. But I was surprised that that many people expressed that they, they had to use significant outside sources. There were like 15% of people who said that they had money left over for savings, so again it’s working for some people.

22:27 Caitlin: Yeah, but not the majority. All right. Yeah, go ahead. How are you making this work?

22:33 Caitlin: Yeah, so I think like with anything else in academia or life, it’s a combination of luck and privilege and decision making. My husband and I were in a low cost of living area, Michigan State University is in East Lansing right next to Lansing, Michigan’s state capital. We were living in Lansing where houses are fairly cheap and we were able to buy a house when I started graduate school, because I had funds, enough for a down payment, from a relative who had passed away. We intentionally bought this house within biking distance from the university, so we sold one of our cars once we arrived, and we ended up having roommates for almost the entire time that we lived there.

23:23 Emily: How large is your house? How many bedrooms?

23:26 Caitlin: It was a three bedroom.

23:28 Emily: Okay. And so you had one or two tenants that entire time?

23:34 Caitlin: Yes. Usually one, sometimes two.

23:38 Emily: I love this strategy. It’s come to be known as house hacking. It’s actually something I’m excited about covering even more on the podcast. Either — well, whenever this is released — maybe in the recent past, or maybe in the soon to be future. But I love the strategy for graduate students. Of course, it’s only possible in relatively low or moderate cost of living cities, where the housing market is something that a graduate student can kind of grasp. It definitely helps to have two incomes, like presumably you and your husband have, and also to have acquired down payment money from somewhere. Those are things that are very, very helpful, although not strictly necessary, but go into the likelihood of house hacking being possible. Overall, has that single tenant paid your entire mortgage, half of your mortgage? How much of a financial boost has that situation given you?

24:31 Caitlin: We were doing it both for personal and financial reasons. Every single person who lived in our house was someone we knew, either friends or family members. So we charged the actual cost to them, of living there, which maybe doesn’t quite work out in our favor because we were also then paying for maintenance costs and that kind of thing, but it was what we decided to do. All of the income that we got from renters, we put into savings or paying off my husband’s student loans, which we had to do at the beginning of graduate school, or IRAs, retirement accounts.

25:17 Emily: What was your husband’s income like during this time? Did his income far exceed yours, or was it similar to what you were making?

25:25 Caitlin: His income was similar to what I was making, similar to a graduate stipend?

25:29 Emily: Yeah. Okay. Not a huge boost there, but good for two people living in a lower cost of living city. Great, so you were beefing up your savings. Anything else that you were doing during that time to help you prepare for this challenging year?

25:43 Caitlin: Well, so I knew relatively ahead of time that the Fulbright was a possibility and if I didn’t get the Fulbright, we were going to take a trip to travel around Europe anyway, so we had this designated savings account for a Europe trip or Fulbright supplement and we were able to put $5,000 in that. I was also keeping pretty good track of how much money we were spending, so I knew in general how much we would need to supplement the Fulbright and was able to funnel that away in the months leading up to it.

26:18 Emily: How long did you take to directly prepare for the Fulbright and, or generally going to Europe?

26:26 Caitlin: Hmm, that’s a good question. It has been a goal in my financial tracking account for over two years.

26:37 Emily: Okay. Yeah. That’s a great time horizon. I usually encourage people to think out at least a ahead, like what major expenses may be coming their way, but two years is even better, if you can do it. That’s a great kind of baseline to have to prepare. I forgot to ask, what are you doing with your house right now? Is it fully rented out?

26:55 Caitlin: We sold our house before we left. We didn’t want —

26:58 Emily: Oh wow.

26:58 Caitlin: Yeah. And because I’m graduating at the end of the Fulbright, I’ve been applying for jobs. We don’t know where we’ll land, so it just made sense.

27:05 Emily: Okay, so you’re not planning on returning to Lansing, and you’ve closed everything out there that you need to before leaving.

27:13 Caitlin: Yeah.

27:13 Emily: That’s great. So presumably you also had some capital gains from that sale?

27:18 Caitlin: We did, yeah.

27:19 Emily: That’s awesome. Anything else that you’re doing to make your financials work this year?

27:25 Caitlin: Just keeping track, basically, which is a little bit harder in Germany. It’s very much a cash economy and I like to keep track of my purchases with card, but instead I’m out paying cash and euro and then coming home and converting that and remembering what went to what. Keeping track so that we can then also have some money set aside for travel, since that’s part of the mission of the Fulbright, as well as this cultural exchange.

27:56 Emily: That sounds awesome. Anything else you want to say to another potential Fulbright applicant, regarding the finances of, of doing the fellowship?

28:05 Caitlin: I would say don’t be dissuaded based, based on what I’ve said. I think it tends to be most overwhelming at the beginning and then things kind of level out. You either figure out where to make sacrifices, or there are options for you to earn up to an extra 400 euro a month, which is pretty accessible. I would say that it’s still definitely worth it, if in your situation it’s not going to be too burdensome.

28:36 Emily: I think it’s kind of like with any other life transitions, as I was saying earlier. Having cash in your bank account and your savings account is going to help you so much through that transition, and it’s not necessarily like vital, but it is going to make it a lot smoother. And it’s something that you can then repay out of your ongoing income. Like you said, with the reimbursements coming slowly, that can go right back into refilling the savings for the next transition that will be happening at the end of the year, or whatever. So the earlier you can build up savings kind of for whatever comes your way, as you did, the better okay.

Final Words of Advice

29:10 Emily: Caitlin, I end all my interviews by asking my guest, what is your best financial advice for another early career PhD?

29:17 Caitlin: I would say find a way to enjoy or kind of make a game out of financial management, with the caveat that I understand that some PhDs are not in a position where they can really even sustain themselves. You’re allowed to feel stressed out about it if that’s the situation you’re in, but find what works for you and what interests you about your finances, so that you can keep track in a way that makes sense for you. For example, I do not like to budget out where every single bit of my money is going. Instead I set aside, this is for retirement, this is for long-term savings, this is for this specific short term savings goal, and then everything else can get spent because everything’s taken care of. But if you don’t want to even want to look at a spreadsheet, then make a visualization or make it into a presentation, make it interesting for yourself.

30:18 Emily: I love that tip. I don’t know if this is a widely used term, but I call it the “unbudgeting” method. So for those people who don’t want to be down in the weeds with this category versus this category, as long as you have that high level savings or debt repayment or whatever you’re doing, as long as that’s taken care of and ideally through like automated transactions, so you don’t even have to think about it. As long as you’re paying attention to that balance in your checking account, just spend what’s there because you know you have your big goals already taken care of. And it actually — seems like it doesn’t sound like this is your preference — but in a cash economy, budgeting without putting a ton of spreadsheet effort into it can be possible because you just say, here’s my cash for eating out, here’s my cash for groceries, and just spend that down, and don’t worry about having to keep track specifically because you did it ahead of time.

31:09 Emily: Well, thank you so much for joining me on the podcast today, Caitlin. As I said, I’m really excited to discuss the Fulbright. It’s a first for me.

31:16 Caitlin: Yeah. Great, and I’m excited to discuss personal finance.

31:20 Emily: Thank you.

August 2020 Update

31:22 Caitlin: Hi, Caitlin Kirby here with an update on what happened with coronavirus and Fulbright. In March, Fulbright programs around the world started sending people home as coronavirus was coming into those countries. For me in Germany, that meant a couple of weeks of sort of confusing communication from Fulbright, followed by eventually them suggesting that everybody go home, followed shortly by all Fulbright programs, worldwide, being suspended. Again, things were different on a country to country level. For Germany, we were given funding for changes in travel plans to head home. As per regular in the Fulbright program, that was only for the grantee and not for any dependents. And then we were also given our stipend through June 30th, which for me meant that I was receiving a month and a half less of payment. For most people that’s when the program was ending anyway.

32:31 Caitlin: And then Fulbright Germany was also able to provide folks with, I think it was a thousand euros just as additional transition funds. This information kind of all came piecemeal, so it was a little bit stressful in the moment. But I did end up then going back to the United States in March. I was fortunate enough to be able to, at least from the research standpoint, work remotely with my research team back in Germany, so I still got to complete a lot of my goals for the Fulbright, as far as research goes, but obviously missed out on the rest of that experience of being in the country, in Germany. I was also fortunate to then be able to start my postdoctoral research position at the University of Nebraska, Lincoln a little bit early, so I didn’t have gaps in funding, which obviously was really helpful.

33:24 Caitlin: Fulbright, in this coming year, again is a little bit country to country. I know some programs have been canceled because of coronavirus. Some programs are starting late, in January, and that is really all that I’ve heard. If you are just considering applying to Fulbright now, I think chances are better that things will be a little bit more normal by the time you start or at least Fulbright will have better contingency plans for what happens if outbreaks do occur so that you’re not sort of waiting week by week, or really day by day to figure out what’s happening at the commission level or with the Fulbright program, overall.

34:08 Caitlin: One other note, if you are applying this year, there is potential for you to have increased competition because Fulbright did offer for folks whose grants were interrupted to be able to reapply in the coming cycle. They don’t have any priority over folks who are applying for the first time or second time, but that is a possibility for folks who are in situations where they’re able to come home and then apply for Fulbright again, which is not for a lot of people I know who were doing the Fulbright, but it’s, again, a possibility.

34:46 Caitlin: If you want a little bit more information about some of the impacts of the changes in the Fulbright program in different countries, there is a group on Twitter called Fulbright Crisis and they have been cataloging some of the difficulties that people coming back from different countries have had, or people coming back in general. Like for example, the health insurance that Fulbright provided was only in the country that your Fulbright was in so when folks were sent back home, some of them did not have health insurance. And some folks were not provided stipends throughout the program. Like once the programs ended in March, some countries were not providing stipends for their grantees. Again, the Twitter handle for that is @FulbrightCrisis and they’re showcasing some of those difficulties if you want a little bit more information about what that has looked like and maybe what that will look like in the future

Outtro

35:49 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

How This Entering PhD Student Has Set Himself Up for Financial Success in Graduate School

August 10, 2020 by Emily

In this episode, Emily interviews George Walters-Marrah, a rising first-year PhD student in biophysics at Stanford. In the last year, as George has been applying to and preparing to attend graduate school, he’s been on a financial journey as well. We walk chronologically through the financial steps he’s taken this year, from applying for fellowships last fall to taking a personal finance course this past spring to drafting a budget this summer for how he plans to use his stipend in Palo Alto. Additionally, Emily and George have an insightful conversation on what George learned about investing in his personal finance course and how he’s already implementing some of the strategies.

Teaser

00:00 George: I’ve been investing for a while now. And it’s like, it’s not really time-consuming at all. I kind of like check it at least once a day just because I like looking at it. But other than that, it’s not like I’m constantly fidgeting with my stuff. And I think the more you fidget with it, the more fees you get. So, it’s like, it’s kind of like passive investing. It’s kind of like a win-win.

Introduction

00:21 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 six, episode 15, and today my guest is George Walters-Marrah, a rising first-year PhD student in biophysics at Stanford. In the last year, as George has been applying to and preparing to attend graduate school, he’s been on a financial journey as well. We walk chronologically through the financial steps he’s taken this year, from applying for fellowships last fall to taking a personal finance course this past spring to drafting a budget this summer for how he plans to use his stipend in Palo Alto. Additionally, we have an insightful conversation on what George learned about investing in his personal finance course and how he’s already implementing some of the strategies. This is a perfect episode to listen to if you are near the start of your financial journey, whether that’s at the beginning of graduate school or further on in your career. Without further ado, here’s my interview with George Walters-Marrah.

Will You Please Introduce Yourself Further?

01:26 Emily: I have joining me on the podcast today George Walters-Marrah. He is a rising PhD student. We are recording this interview in July, 2020, and within the next month or two, he’s going to be starting his PhD program at Stanford. And he’s already been on a financial journey. So, we’re going to talk through about the last year, how he’s been preparing financial aid to go into his PhD program, as well as he’s done an awesome amount of career preparation to get to that stage as well. So, George, it’s a real pleasure to have you on the podcast. Would you please introduce yourself to the listeners?

01:58 George: Thank you for having me. So, I just graduated with my bachelor’s in molecular microbiology, and I have a research interest in interdisciplinary sciences. But I’ve also been kind of really obsessed with personal finance over the last year. So, I’m glad to be able to talk about it. Because whenever I get the chance, I kind of get excited because I’ve been so involved and kind of like consumed with it for a while. So, thanks for having me.

Financial Preparation Before Grad School

02:28 Emily: Well, it’s really exciting for me as well. And the way we actually met was over Twitter, and you prepared this fabulous document of personal finance resources and included a lot of mine in there, which I’m really grateful for and you shared it. And I happened to see it and was just so flattered that you did that, and it was a fantastic document. So, I’m really excited that you have been sharing this material with your peers. We’ll get into that, why you’re doing that during the course of the interview. So, let’s take it back to almost a year ago. How were you starting to prepare financially for graduate school even, you know, well, well, before you finished your undergrad degree?

03:05 George: Yeah. So, about a year ago I was like kind of oblivious to personal finance. But what I did know was that there were things called fellowships and scholarships and stuff that I could apply to. So, like about a year ago during the summer, I was looking into scholarships and fellowships and I applied, I was starting to apply to the NSF GRFP, the Ford Fellowship, and other things like that. So, I started that pretty early and I would suggest to start that over the summer, if you can. If not, start it at the beginning of the fall, because I was able to get a couple of fellowships and I think a really big reason I was able to do that was because I started so early, kind of like reaching out to my letter writers and starting my personal statement and kind of like collecting the different, like papers that I would need to write my research proposal.

Balancing Coursework with Grad School Applications

03:54 Emily: Yeah. We’ll link in the show notes because I’ve done a couple other interviews with fellowship winners and that was a common thread of advice: start early. So, even right now, you know, July for the people who are going to be applying in the upcoming, you know, starting about six months from now, they need to really be working on this, you know, the preparation process getting started now. How did you–so I applied for graduate school and all of these fellowships after I finished my undergrad, I had a post-bac year–how did you manage sort of balancing your coursework, your thesis work, I assume, with doing these, you know, intensive applications?

04:30 George: So, full disclosure, I was a fifth year student, so I graduated in five years. So, I had most of my class requirements done. So, I had the luxury of kind of decreasing the amount of classes I had. So, I still had 12 credit hours, but I was able to kind of like pick and choose classes that weren’t like super intensive. So, I kind of did that. And I also had the luxury of having a class that could be like a placeholder and I could use that time to do my personal statement and prepare to apply to graduate school and fellowships. But I would say that, try to decrease the amount of classes that are super intensive. Try to kind of pick classes that, you don’t have a lot of, like, time-consuming, like it doesn’t consume a lot of the your time, and kind of learn how to say no to things.

05:25 George: If you can kind of just say no to a few things so you can use that time to kind of work towards your fellowship applications, work towards your grad school applications. I think that would kind of like, it builds up, like when you keep saying yes. So, if you kind of learn how to say no to things that may not be helpful to you in the future, or may not be worth the time, I think that would kind of really be helpful with allowing you to find that time to kind of complete all that you need to do that last semester.

Which Fellowships Did You Win?

05:54 Emily: Yeah. I think it’s a great idea that you actually had space in your core schedule for doing these applications, because that’s really how you need to treat it. You need to treat it as at least one class, if not multiple classes. That’s the amount of time it’ll take. So, you were successful in winning some of these fellowships. Which ones did you win?

06:12 George: So, I was able to get like three fellowships. It was kind of like three different types of fellowships. So, I had got an external fellowship and two internal fellowships. So, I got the NSF GRFP, which was external, it kind of followed me wherever I went. And then I got an internal Stanford fellowship, which is, they kind of reviewed my application and you kind of get considered for this just by applying. And they gave me that fellowship based on my application. And then my last fellowship is one I got actually pretty recently. And it was a fellowship that I got by applying to a program, a first year program, after I got accepted and after I decided to come. So, it was kind of like the first one, I applied to it way before I applied to grad school, and then I got the external one. The second one, like they considered me just by applying, and I got that one. And the third one, I applied to it after I actually got into the program. And it was like a separate first-year program at Stanford. So, like, there are kind of several different ways that you can try and get these fellowships, which I think is like really nice.

07:16 Emily: Yeah. So, the fellowship applications did not stop, you know, just after the fall of your application season. That’s awesome that you won so many different ones. I have a post that I’ll link to in the show notes where I list a bunch of these portable external fellowships, like the NSF GRFP. So, I’ll put them in the show notes if people want to kind of peruse through. A lot of people know about the NSF fellowship, but there are some other ones that are a little bit less known. You mentioned Ford earlier. That’s another great one. So anyway, there’ll be a list there, several ones you can probably apply to, you know, in the year that you’re applying to graduate school and then in a few years after that, but you’re taking care of for a few years. So, that’s amazing.

Lessons Learned from Undergrad Personal Finance Course

07:53 Emily: Okay, so now we’re going to fast forward, you know, that was kind of the fall of your last year of undergrad. And then I believe in the spring semester you took a personal finance course. So, tell me a little bit about that course. Like why did you elect to take it, and maybe like two to three big takeaways from the course that you think would be really instructive for other PhDs to know?

08:14 George: Yeah. So, my school like offers this course called Personal Finance and Investments. I actually learned about it the fall that I was applying to graduate school. And I always wanted to take a personal finance class because I didn’t really know anything about personal finance. I didn’t know how to invest. I didn’t know how to make a budget. I didn’t know any of that stuff. And in my first few semesters, I thought of like, “Oh, maybe it’s microeconomics or macroeconomics or something like that,” but I read the summary and it didn’t make sense. So, I finally found this class and that’s like, “Oh, this is the class.” So, I took it and it was a great class. Like, it was a kind of a learning curve. You had to kind of learn the language of personal finance. Like what’s a dividend and all these different stuff.

Lesson 1: You Don’t Have to be an Expert to Invest

08:55 George: But after I got the hang of it, it kind of went very smoothly and I got like way more invested in it. And if I was to say to like three things that I thought that I learned from that class that were very helpful to me, the first big one is that to invest, you don’t really need to like follow the stock market and be like an expert and kind of like, look at it every single second of every day. There are like a lot of different kinds of innovative ways that allow kind of like people who are super busy or people that are kind of inexperienced to actually have a good experience investing.

09:29 Emily: If I can summarize that first point or what you were starting to say, it’s that, I mean, I love the way you phrased it. Like investing does not have to be something that you are paying attention to all day long every day in and out. I think that is an image that we have in our culture of what investing is, maybe from like, I don’t know, the eighties or the nineties or something, like it’s kind of archaic at this point. Because index funds, which I think was what you were starting to talk about there. They’ve been around for, I don’t know, four or five decades at this point, but only have really been gaining in popularity in the last couple of decades. But index funds, like you were saying, just are a diversification. Like you get a lot of different investments, stock investments often in one bucket and it’s representative of kind of the whole market or an entire sector of the market. And so you can buy, you essentially buy everything when you buy an index fund and it’s in a given market sector. That means you’re buying the winners. It means you’re buying the losers. But it turns out that that’s a more effective strategy than trying to pick the winners and avoid the losers. Is that what you were learning through your course?

10:31 George: Yeah, so, it was big because like, I think like a lot of people think they have to beat the market, but if you match the market, you kind of avoid that pitfall of like losing to the market. Because it either could go really bad or really good, or you could just match it. And then the market kind of like trends up. So, I decided to go that way, kind of like passive investing. So, that’s like the one, the first big thing that you don’t have to, it’s not a full-time job to invest, which is really nice, since as a grad student, I’ll be very busy.

11:04 Emily: Actually, if I could expand on that for one more second. So, I also tell people like investing should not be your side hustle. Like you should not be spending a ton of time working on your investments. And I always say to them, like, if you want a full-time job doing investing, get a full-time job as an investor, be a hedge fund manager or go do that kind of thing. Like, make a ton of money off of this. Don’t just play around with your own money. If you’re going to be, you know, actually investing that kind of time into the process, which again, I don’t think is necessary or a good idea. So to me, investing is kind of like learn about it for a little while, you set up what you need to set up, and then you just let it run and you just do maintenance and you don’t have to, you know, mess around with it a whole lot.

Lesson 2: Make an Emergency Fund

11:45 George: Yeah. I totally agree, because like, I’ve been investing for a while now and it’s like, it’s not really time-consuming at all. I kind of like check it at least once a day just because I like looking at it. But other than that, it’s not like I’m constantly fidgeting with my stuff. And I think the more you fidget with it, the more fees you get. So, it’s like, it’s kind of like passive investing. It’s kind of like a win-win. But I guess two more points that I would say that are really nice that I got out of it is that kind of making an emergency fund. I never really thought of that. Kind of like before, an emergency happens, you just have the money in your savings account. So, I’ve been trying to get my emergency fund kind of like they say at a minimum is three months but I’m hoping to get it like higher, maybe to nine months, if possible.

Lesson 3: Time Value of Money

12:29 George: And I’m kind of slowly building towards that. And another thing that I learned that was pretty interesting is that, kind of like this thing called, I think it’s called time, money value, a time value of money. It’s kind of like a dollar today is worth more than a dollar a year from now. So, if you can get money today and kind of put it in your investments or put it into your savings account, maybe like a high yield savings account, that will be worth more than kind of like $50, maybe a year from now, that you weren’t able to get that interest off of by having it in your account. So, I never really thought of it that way. I kind of, I always thought that like, “Oh, if I have a thousand dollars today, it’s the same as having a thousand dollars in 10 years.” So, those are kind of like the three big things that I would think of that I got from the class.

13:15 Emily: Yeah. I think the time value of money is also just a, it’s a mind-blowing concept. Like once you kind of understand like compound interest and how much your money can work for you. And I think the point that, you know, graduate students especially should take away from that is it’s okay–it’s great–to start investing now with a very small amount of money. It will not be a small amount of money decades from now when you actually reach retirement. So, what I like to say is that graduate students should not dismiss whatever tiny amount of money they might be able to start investing right now. Maybe it’s $10 a month. Maybe it’s $50 a month. That money will add up over time with this factor of compounding with the time value of money applied to it. And so, yeah, it’s not something that you should just say, “Oh, well, I can’t really save that much, so I’m not going to bother. Like, it’s still something you should pursue, even if it’s a small amount of money today.

14:05 George: Yeah. Totally agree.

What Financial Changes Did You Make?

14:08 Emily: And so, what did you actually, you know, you took this fabulous course, you learned a lot from it. What changes did you actually make? So, you’ve already mentioned that you started investing. Can you talk a little bit about how you started down that road?

14:20 George: Yeah, so I started investing well, like the first thing I did was I tried to get my financial life together, trying to get like my financial health in order because I didn’t really know anything. So, I started tracking my finances. So, I got the Mint app. I started tracking how much money I spend in a month. And the first month I wasn’t really trying to make a budget. I was just trying to understand my money habits and see what I could change. See what I wanted to keep. And then I started thinking about budgeting. And then after that I started my emergency fund. I also started collecting all of my important documents, like my birth certificate and my social security number and putting them in one place. They were kind of like scattered around. So, I wanted to put them in one place and kind of like, just get all of my stuff, like organized, like the first few months.

15:05 George: And then after I got myself situated and kind of like knew what was going on financially, that’s when I started investing. I decided to do a Robo Roth at the start until I get kind of like experienced with the stock market. And then I plan to transfer it over to a manual one to kind of like start my own Roth. So, my manual Roth–I mean not my manual Roth, my Robo Roth, I’m kind of like, “invest stuff for me,” and it’s kind of in the safest way possible. So, I don’t kind of like put it in something that kind of like blows up in my face and I lose all my retirement money. And my brokerage account is kind of just, it’s a tax account, but I only put money in there that I put in there so I can kind of gain experience with buying stocks and selling stocks and stuff like that.

15:50 George: So, and now that I think about it, one other thing that I learned from my class is that, when I’m looking at stocks and stuff, there are these things called like target-date retirement kinds of funds, which is like kind of nice. And I plan when I make my manual Roth, I actually planned a large part of it to be a target-date fund, which will kind of like change based on how close I am to retirement. And so after I did all of that, I kind of like started thinking about like different things that I learned about in my class that I should think about when I’m kind of like investing my brokerage account. Like don’t invest what I’m not willing to lose. And like, if you don’t understand it, don’t invest in it. And I started kind of like building up my portfolio and now I have like a pretty decent nest egg. So, I’m pretty proud of how I’ve gotten so far in the last few months.

Choosing a Robo-Advisor

16:42 Emily: I know, you haven’t even started graduate school yet. I mean, which is arguably I guess not a job, and you’re just getting out of undergrad, and I don’t know, it’s a fabulous amount of progress that you’ve made in this time. Which robo-advisor did you choose to start with?

16:57 George: Oh, so I actually chose Betterment. So, there are several different websites, I think there’s NerdWallet, that kind of review all these different things. Something else I learned from my class is don’t take it from one source alone, kind of go to multiple different sources and then based on all the sources together, make a decision. And kind of like across the board people suggested Betterment. So, I kind of went with Betterment since it had such great reviews all across the board.

17:31 Emily: Mhm. I think, I don’t know specifically, this is true for Betterment. It might be because you chose them. But one of the advantages that robo-advisors have is that they often have $0 minimums to start investing. So, it’s a great place like you’re doing when you’re just at the very, very start of your journey to use something like that, as you were saying, sort of some more familiarity, get some experience. And then you can switch over as you were planning on doing to a Roth IRA that you manage yourself through one of like the discount brokerage firms, like Vanguard, Fidelity, Schwab. I’m sure you’re looking at one of those three, if not something similar, for once you switch, but those often have some kind of minimum. So, I know like my strategy when I started my Roth IRA was I started with Fidelity because they, at that time, they waived their minimum if you had a $50 per month automated investing plan. So, I did that until I had $3,000 and then I switched over to Vanguard, because that’s where I really wanted to be, once I had the Vanguard $3,000 minimum. So, it sounds like you’re probably doing something similar with your robo-advisor to, you know, a Roth IRA that you’ll manage yourself strategy. Is that right?

18:34 George: Yeah. And there are like multiple different reasons as well. Like a big one is like the minimum so that like I could start investing now so that even if it’s a little bit, I could still start growing my investments. And also, when I get to a decent amount, I’ll be able to get, like, I think there are minimums in mutual funds as well. So, it’s like in order to invest in mutual funds, you need to have a certain amount of money. I’m not there yet. So, I think I’ll keep it in my Robo fund, which is kind of very low expense. Very kind of like, easy to, well, not low expenses–you can put as little money there as possible, and then it starts going in investments. But I feel like with the robo-advisors, I don’t want to keep it in there too long because they have these expense ratios. And if I have a large amount of money, I kind of start eating at my investments. But I think early on in the process that this was the best decision for me.

19:25 Emily: Yeah. And expense ratio, for those in the audience who haven’t started investing yet, is a representation. It’s a percentage representation of the total cost of owning whatever the investment is. So, with something like a robo-advisor, they usually add to the expense ratio of the underlying funds that you buy. Maybe about a 0.25% fee, which is sort of low. It sounds like pretty low. But you can get quite a bit lower if you just manage it yourself. Like you’re planning on doing, you know, in a few months or a year or whatever. You can get down under like 0.1%, 0.05%, even down to 0% expense ratios. So, there are very, very low expense ratios out there, even though the robo-advising fee doesn’t sound very high. Over time, as you were saying, it really does add up. Whatever you’re paying in expenses compounds, as we were talking about earlier, and it could end up being quite a bit of money over your entire investing lifetime. But your plan sounds really great to me. It sounds like you’ve gone about it in a totally intelligent way. So, that’s awesome.

Commercial

20:27 Emily: Emily here, for a brief interlude. I am just bursting with this news. I have launched a Community for Personal Finance for PhDs. The Community is for PhDs and people pursuing PhDs who want to level up their practice of personal finance by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the Community, you’ll have access to a library of financial education products I’ve made in the past. And I’m going to add new trainings to that library every month. There is also a discussion forum, monthly live calls with me, a book club, and progress journaling for financial goals. Basically, the Community is going to help you reach your financial goals, whatever they are. Go to pfforphds.com/community to find out even more. If you’re listening to this in real-time, you have the opportunity to become a founding member of the Community at a discount. The price is going up on August 15th, 2020, so don’t delay. Go to pfforphds.com/community for all the details. I can’t wait to help propel you to financial success. Now, back to the interview.

George’s Financial Resources Document

21:47 Emily: Could you share like why you created the document that you did? Because I think it came out of the course, right? What you were learning from the course?

21:57 George: Yeah so, I was learning all the different stuff and I started kind of looking up all these different, like websites and I found your website and many other websites and I started bookmarking them. And then, since I was kind of so engrossed with it, I would talk about it. So, I’m a McNair scholar at University of Central Florida, and we’re in this kind of like community together. And I always talk about it to other McNair scholars, and they ask me for advice, they ask me, “Oh, what can I learn about this?” And then I would kind of like blow them up with links. And I didn’t think it was kind of the best way to go about it. So, I decided to make an easy to read document with like the links, kind of like embedded in words.

22:36 George: So, you can read through it in kind of a relaxing way, and then click a link if you want to learn more about what I was talking about. And then I posted this in our McNair group chat. But then I thought it would be nice for other people to use this as well as they wanted to. So, I posted it on my Twitter, and I think a few people were able to like use it to learn more about personal finance.

22:58 Emily: Yeah. And we’ll link to the document in the show notes as well because I thought it was really well put together. So, thank you for doing that. Thank you for that, like, community service.

Factors in Choosing a Graduate School

23:06 Emily: Okay. So, now we’re in the spring semester, you have, you know, you have applied to your fellowships, you’ve applied to graduate school. You’re being admitted to different programs. And of course, you know, we’re considering a lot of things when we choose a graduate program, the quality of the research, the mentor that you might work with, maybe overall the program, the structure of it, where it’s located and so forth. But you know, the stipend, I think should be one of those considerations. Did you factor in the finances when you were choosing which graduate program to attend, or were you able to make the decision based on those other factors?

23:41 George: So, I applied to like nine graduate schools, and I think from eliminating the first ones, it was mostly based on like the research and like the faculty and the resources and stuff like that. But then when I got to the end, it was kind of hard to decide. It was a very hard decision. And when I was down to two, like based on cost of living of the two areas, the stipends were very similar, the research interests were really similar. Like everything was very similar. So, it was kind of hard to kind of make that decision. So, I think what it came down to was kind of two things. The first thing was that one school was kind of like calling me and checking up on me, answering my questions and that kind of like had a really good impact on me.

24:27 George: But then the last thing is that the school that I decided to go to, which is Stanford, they offered transitioning costs. So, like transitioning funds. So, I think transitioning to grad, I mean, I haven’t done it yet, but I’ve heard that transitioning to grad school can be really expensive. So, that they offered kind of some funds to allow me to kind of like take that stress off of me was kind of like, I think that’s what kind of pushed me to choose Stanford since it was a really hard decision.

24:58 Emily: I think that’s an excellent, I mean it’s a really, really good insight into your decision-making process. It sounds like, you know, these final two schools, it was really close. What tipped you over was, you know, people at Stanford were really attentive to you, checking up on you, and then they offered you this moving fund. And I mean, that’s something that graduate programs should know about. If something that minor, a few thousand dollars I assume?

25:19 George: It was actually $500.

Consider Stipends AND Cost of Living

25:20 Emily: Oh, $500? Okay. Right. So, $500, which is like nothing to the graduate programs, could tip an excellent candidate like you, you know, you won this outside fellowship, you’re bringing in money. If something like offering you $500 could tip the scales in their favor, that’s something that they all should be doing, frankly, at this point. So, I think you mentioned something in there really quickly, but I believe you said something like after you factored in the cost of living of the two different places, the stipends were similar, is that right? So the stipends themselves weren’t actually the same, but they were similar to another, once you factored in the cost of living, is that right? Can you talk about how you did that?

25:57 George: Yeah. So, like the cost of living at Stanford is much higher. So, the two schools, I guess, were Stanford and Cornell. So, the cost of living in Palo Alto is much higher than the cost of living in Ithaca, New York. So, the Stanford stipend was much higher than the Cornell stipend, but there are different websites where you can put in the location. I think it’s a cost of living calculator. You could put in the location where you plan to live and then the money that you’ll be bringing in, and there are also like tax calculators, because there are different tax rules. So, you can calculate how much tax will be coming out of your stipend. They can calculate how your stipend compares if you were to live in another area. And I kind of compared the two stipends and they were very similar, like almost identical, once you took into consideration cost of living. So, I couldn’t really use that as a reason to choose one over the other.

26:53 Emily: Yeah. Thank you for pointing that out. Like, I mean, even, you know, I also was sort of getting into personal finance in the year that I was applying to graduate school, and I didn’t even do that step that you did of taking that into consideration. I was just kind of looking at, “Oh, the stipends are all sort of similar. I don’t know. I assume the cities are different, but I never sat down and like actually did that little, little bit of math that you did. So, it’s a great idea just for the audience, anyone else going through this. I really like to use the MIT Living Wage database or calculator, livingwage.mit.edu. And it shows you what the living wage is for every, you know, county or metro city area in the U.S. And so, that’s the factor that I like to use.

27:31 Emily: That’s what we use in phdstipends.com, which is my database website where people enter their stipends and then we do this little division, like you were just saying, of divide the stipend by the local cost of living from this database and spit out this like factor, you know, is it more than one? Is it less than one? So, exactly what you were doing, maybe using a different calculator, but I think it’s really, really smart.

Housing Budget and Taxes

27:51 Emily: So, okay. You’ve chosen to go to Sanford, and you already were just mentioning some of the basic building blocks of the budget that you’ll have once you start graduate school. Like you were talking about taking into consideration how much your taxes are going to be. And I know that you’ve been preparing a budget over this summer before you’re moving to Palo Alto. So, can you talk about that process a little bit, and also about your decision around housing?

28:12 George: Yeah. So, I started my budget already. So, the first thing that I kind of took out of my budget was taxes. Because what I kind of like found out that was pretty surprising is that they don’t take taxes out of fellowships. So, like your income tax will be kind of just like given to you and you’re expected to know that it’s supposed to be paid back in taxes.

Quarterly Taxes on Non-W-2 Income

28:34 Emily: Okay. Let’s pause there because I think we need to emphasize that. At most universities, it sounds like it’s Stanford included, if you’re receiving a fellowship, which is what I call non-W-2 income. So, fellowship, training grant, this kind of income. Very likely, they will not be withholding income tax for you, as a domestic student. For international students, they do. So, let’s emphasize that again. You are receiving your entire paycheck, but that does not mean that you get to keep all of that. Part of that is going to go back to the IRS in the form of income taxes, which you may have to pay quarterly. I’ll link in the show notes to my resources on that. It’s probably ones that you found, George, as you were doing this research. But yeah, please keep going. I just wanted to, like–we don’t want to gloss over that. Like, you will probably end up paying income tax and you have to do it yourself. It’s not done for you. And it’s a process that a lot of people just completely miss and they have an ugly surprise when they get to their taxes after their first year of graduate school.

29:30 George: Yeah. And actually, I plan to do quarterly taxes as well. So, I was kind of like putting it together so that every month, like I kind of calculated how much taxes I would owe at the end, and then I divided that by 12. And then I would kind of like save that amount of money every single month. So, when it comes to that time, when I have to pay my quarterly tax, I already have it in my savings account and I can just pay it. But that’s the first thing I kind of put away. And then I went to my housing. So, at Stanford, they have housing on campus which is subsidized. So, it’s kind of nice that I was able to kind of apply to housing at Stanford.

30:06 George: So, I kind of looked at all the housing options, and out all of the ones that I liked, I kind of picked the highest monthly rent, and I put that in my budget. And I was thinking that, if I get a lower one, I could just change that in my budget. It will be easier to change to lower than to higher. So, that was kind of my thought process on that. And then with my budget, I tried to make it so that it’s not a budget that I kind of don’t like looking at. So, I kind of like, as I said before, like I tried to find out how I spend my own money and I tried to make a budget that I can comfortably live within the budget, and I gave myself some breathing room.

30:44 George: I wanted my budget to be kind of pleasant to live on so I don’t kind of like break my budget. So, I kind of was thinking like, “Okay, I spent this much on food. Let me give myself a little breathing room since I can kind of like afford to do that.” And then I also put some money in there for shopping. I put some money in there for transportation because I don’t plan to bring my car with me my first year. And then I also put like 20 to 25% away for investments. So, kind of like putting stuff into my savings accounts, putting stuff into my Roth IRA. And then for my brokerage account, I don’t plan to put monthly in there until I have a good amount in my savings account, but then I plan to start putting monthly into my brokerage account. For now, I’ll just kind of like, if I have some money from the money I put away for shopping and for like kind of random stuff, I’ll buy some stocks if I feel like I want to, but it won’t be like a monthly thing that I put money specifically away for yet. But that’s kind of like what I decided to put in my budget.

Ranking Housing Options

31:53 Emily: I want to go back just to the housing point for a second, because I think you’ve made a really good decision, which was like, okay, so you’re applying for all this, you know, subsidized on-campus housing. You account in your budget for the highest possible rent you would be paying. But is that actually how it turned out? Like what housing did you, when you were saying where you wanted to live, was that the one that you put at the top of your list? Or like how did you rank order that list and what did you actually get into?

32:18 George: So, I ranked the list, so there’s like really new housing that’s coming out. It’s going to actually debut this fall semester. So, I put that at the top of my list and that was actually the most expensive, and I was able to get it. So, I didn’t change my budget, but I also had these different ones that were a little bit older, but they had good amenities. They would have good spacing. And I actually got the tour it when I was at my interview. So, I would be fine living with it. It’s not like I would be like, “Oh, I can’t live here and I’ll have to live somewhere else.” So, that’s how I ranked it.

32:53 George: But, there were other options that were really, really expensive. So, I kind of listed those. They say to list everything, so I listed them, but they were like in 30th place, like it was kind of ridiculous how much they cost. So, I tried to kind of combine quality, but also the cost of living because I feel like housing, I think when I was reading my budgeting you should try to keep housing as close to 50% as possible. My housing is a little bit, it’s still over 50%, but I think it’s kind of difficult to kind of get 50% or lower as a grad student. So, I tried to get as close to that as possible. And with some of the other housing, it was like well over 50%. So, I tried to take into consideration that I should try to be close to 50%, if at all possible.

33:43 Emily: Yeah, I think I don’t know exactly what you were learning in the course, but according to the balanced money formula, which is a framework that I like to reference, you should keep all of your necessary expenses below 50% of your net income, which is really, really challenging to do on a graduate student stipend and also on a graduate student stipend in a high cost of living area, which is what you’re doing. So, it’s not surprising at all to me that even you, you know, making a prudent housing choice, it’s still over 50% of your income. That is pretty common for graduate students in high cost of living areas. But yeah, so it sounds like you were, you know, really thinking through both the finances and the lifestyle that you wanted to have with that housing decision. So, super happy that you were, you know, really intentional about that.

Long-Term Emergency Savings Goals

34:29 Emily: And you were mentioning just now, like some of your financial goals for your finances in graduate school. You mentioned that you were going to be saving/investing 20 to 25% of your income and then possibly doing a little bit more investing if you wanted to at any particular time. And I think you also mentioned earlier that you wanted to save up an emergency fund of nine months of expenses. Is that right? Is that your ultimate goal?

34:54 George: Yeah, I’m trying to, one day I hope to get to nine months. So, I would say my kind of goals for personal finance and graduate school, in particular, are kind of modest. I’m not looking to have like a huge, huge thing by the time I graduate. I hope to kind of like build habits and get into the habit of kind of like investing, get into the habit of staying on my budget, getting into the habit of putting money away monthly. Because like in undergrad, I didn’t have any of those habits, and I think that’s something I’m going to have to kind of build. And also, have at least like three months, hopefully nine months, of my emergency fund. Because I know that emergencies are emergencies and I doubt I won’t have any emergencies in graduate school.

35:37 George: So, hopefully by the time I graduate, I’ll have at least three months, hopefully nine months. And then kind of have a decent amount in my kind of Roth IRA as well as in my brokerage account, and that I’ve kind of stayed consistent throughout the five, six, or maybe seven years that I’ll be doing my PhD of monthly, always, putting some money away and not falling into blowing money on stuff. But also giving me that kind of flexibility to have fun and to do things that I find kind of amusing so that I don’t get too stressed through graduate school.

36:13 Emily: I think that’s such an excellent point that you made. Like yes, it would be great to come out of graduate school with savings, with investments, with a nice nest egg. That’s what happened for me. My husband and I defended with quite a good nest egg, and it was really fabulous for our subsequent life. But, the more important thing, actually, is the habit formation. And it’s sort of changing your–like becoming a person who budgets, becoming a person who invests. Now, I know I said earlier that it matters a whole lot. Like if you do that with a small amount of money, it’s great, and yes, that’s true. But, even more powerful is the habit. And so, when you have that nice post-PhD salary, and you’re already in the habit of investing or you’re in the habit of saving, you can then apply those habits to that fabulous higher income and really make some fast progress with your, you know, financial goals.

Any Other Goals for Grad School?

37:02 Emily: So, I think that was such a good point that you made, and even for people who aren’t able to do what you plan on doing, which is still, you know, saving and investing during graduate school. Even getting into the habit of budgeting, like that can be a great goal for your time during graduate school is just to make those changes in yourself and who you are. Even if you aren’t able to come out with more savings, again, once you have the post-PhD income, you’ll be able to keep applying those habits and really make some fast progress. So, such an excellent point, George. Any other goals you have for graduate school, aside from the ones that we just talked about?

37:37 George: I guess like, I mean, there are like nonfinancial goals, like kind of building like skills and kind of building my network and traveling and learning all the different stuff from different people. But financial-wise, I just hope to kind of pay as little in taxes as possible, learn how to file my own taxes. Kind of learn like all the financial things that I need to know to kind of like succeed. I think for my brokerage account, I’ll be kind of investing. I think the money in there is probably going to be used as a down payment on a house in the future. That’s kind of like, well far off, but I’m kind of thinking, “Oh, I’m investing in my brokerage account. I’ll probably use it to kind of buy a house or have some money towards a house.” Kind of things like that. Those are kind of like the goals I’m thinking of, but I don’t really have like super hard, concrete stuff yet. But those are kind of the things I’ve been thinking about.

38:30 Emily: Yeah. I think it’s great that you identified like, “Okay, I know it’s important to have an emergency fund.” You’re going build that up. “I know it’s important to save for retirement. I’m going to build that up.” And then, “Okay, whatever else comes, I have this other brokerage account, you know, other savings I can use for that. If it’s a house down payment, if it’s something else.” I think that’s a great way to structure your finances when you have a lot of unknowns in the future, as is very, very common for PhDs, because we never know where we’re going to live. You know, after, it’s a lot of uncertainty that we live with kind of longterm.

38:59 Emily: But George, it was a real pleasure to talk with you today. Thank you so much for coming on the podcast and sharing this beginning part of your journey. I hope that we’ll catch up with you again in maybe a few months or a year and see if it’s all panning out the way you thought it would. Thank you so much for sharing your insight.

39:15 George: Yeah, no problem. It was a pleasure to be able to talk about it.

Outtro

39:17 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

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

April 20, 2020 by Meryem Ok

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

Links Mentioned in This Episode:

Teaser

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

Introduction

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

Will You Please Introduce Yourself Further?

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

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

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

Kelsey’s NSF GFRP Workshop Updates

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

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

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

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

Major Decision Points for NSF GRFP Recipients

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

When To Start Receiving the Stipend

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

Consider Timing (and Adequate Payment) for TAships

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

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

Check with Your Advisor About Research Grant Cycles

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

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

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

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

09:48 Kelsey: No, I don’t think so.

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

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

25% TAships Possible During GRFP

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

Financial and Career Opportunities for GRFP Recipients

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

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

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

Get the Snowball Rolling, Start Early

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

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

Internship and International Travel Opportunities

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

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

Even Without the GRFP, Talk to Your PI About Collaborations

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

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

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

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

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

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

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

Timing of Internship Programs During Fellowship

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

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

Design a Custom Internship

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

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

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

Commercial

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

Financial Advice for Fellowship Recipients

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

File Estimated Quarterly Taxes (NOT Yearly)

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

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

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

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

Personal Finance for PhDs Tax Center

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

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

Start Saving Immediately

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

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

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

Stipend Negotiations and Bonuses for Fellowship Recipients

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

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

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

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

Details on Kelsey’s NSF GRFP Course

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

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

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

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

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

Focus on Broader Impacts, Know Your Audience

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

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

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

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

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

Best Financial Advice for Early-Career PhDs

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

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

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

37:10 Kelsey: Yeah. Thank you.

Outtro

37:12 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.